WOW - Fundamental Discussions, page-3

I did an assignment on WOW for my MBA a little bit back now and dug into their operating model and threats from Amazon etc.

The costs associated with their pick and pack / online store are well and truly high, in saying that, the adoption rate is currently slow but ever growing as the population becomes more urbanised. A threat from Coles is not in their mind, WOW is clearly leading the pack between those two. Aldi is a small threat but one to watch. I don't think the online component will come at a cost to investors or shoppers; they're looking at ways to increase efficiencies and margins in this area so if anything shoppers would see prices decrease, however, that probably won't happen because WOW are in the business of making money.

I think the Big W demerger will be a positive for the group, definitely a drain in costs at the moment, but will be interesting to see whether they find a buyer - I'm thinking an international buyer would be ideal, similar to DJ's being bought by South Africa. If Wallmart purchased Big W it would be an optimal outcome IMO.

On another note, the board and management appear to be very experienced, with a bunch coming from BCG so I've got all the confidence in them, they'll be playing the long game, even if it's at cost now.