Business Analysis | Assessment | 1

STRATEGIC ANALYSIS OF
BUSINESS
Running Head: STRATEGIC ANALYSIS OF BUSINESS 0

ANALYSIS OF BUSINESS 1
Table of Contents
Executive summary....................................................................................................................2
PESTLE analysis........................................................................................................................3
Political...................................................................................................................................3
Economic................................................................................................................................3
Social......................................................................................................................................3
Technological.........................................................................................................................4
Legal.......................................................................................................................................4
Environment...........................................................................................................................4
Three influences for future industry change..............................................................................4
Five forces analysis of Wesfarmers industry environment........................................................5
New Entrances........................................................................................................................5
Power of suppliers..................................................................................................................5
Power of buying.....................................................................................................................6
Competitive rivalry.................................................................................................................6
Substitute threat......................................................................................................................6
Three key forces.........................................................................................................................6
Strategy canvas of Wesfarmers and its rivals Woolworths and Myer.......................................7
Five critical success factors........................................................................................................8
Inbound logistics....................................................................................................................8
Operations...............................................................................................................................8
Outbound logistics..................................................................................................................8
Marketing and sales................................................................................................................8
Services...................................................................................................................................9
Blue Ocean Strategy...................................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

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Executive summary
The strategic analysis of Wesfarmers will present the business practices with effective macro
(PESTLE) and micro (five forces) environment with a strategy canvas and Blue Ocean. The
following report will also highlight the capabilities and components of Wesfarmers. An
information system will also provide the current strategies of business operations. This report
will also include a brief analysis and statement.
This organization was recognized by a complete group of a farmer by their demand for less
working hours and better pay in 1914. This organization led by Walter Haper as supports to a
rural community. He gave opinion that farmers should support and co-operate in trading its
production without the interference of politics. This organization was registered on 27 June
2014. This organization started its trading in a location known as 13 Howard Street, Perth.
This was initiated by product marketing by many cooperative agencies that are known as a
farmer company (Verba, 2015).
This organization has diversification from many sectors like convenience stores, hotels, and
home improvement including retail stores and supermarkets. This organization has turn into
one of the leading private-sector industry that hired 220000 employees and has a good
number of stakeholders around 530000. The share of this organization is addressed and
incorporated in Australia. Wesfarmers is listed in Australian security exchange with codes
‘WES’. The three main trades of Wesfarmers are fertilizers, chemical energy, and the
industrial resources, and safety. This organization has generated new industrial division and
has control center in Western Australia (Verba, 2015).
This organization has a strategy to increase profits by increasing the number of customers
each year through the satisfaction of employees. This organization treated employees as an
Asset. This organization has proud to represent employees as representatives. This
organization has a strategy to strengthen its diversified business portfolio by committing and
determining sustainable business practices to generate long term values and deliver adequate
returns to shareholders (Reutrers, 2016).
This organization is affected by external and internal factors that are necessary to assess and
identify the strategic position. This supports an organization to understand and evaluate
opportunities for growth in the market. Wesfarmers effective strategies enhance the
competitiveness of the organization. The micro and macro environment factors have a large
impact on the Wesfarmers with many operations because of its versatility and exposure.

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Analysis of competitors it’s a most important factor to understand the trend of performance
with future planning and scope (White, 2016).
PESTLE analysis
To analyse the external environment of Wesfarmers, PESTLE analysis will explain the
outline of macro-environmental aspects like political factors of the economic factors directly
impact the profitability and growth of an association (Rubel, 2016). The following discussion
will cover the PESTLE analysis of Wesfarmers.
Political
This factor has implied the level to which government of a nation plays an essential role to
influence the trade of an organization (Ponting, 2017). This is in the form of legal regulations
and taxes, duties, and so on. Coal mining is one of the important department of Wesfarmers.
Federal Australian government has made it compulsory that the utilization of the mining
business has to be agreed by the respective government or state government. The policies of
the Australian government are more attentive to eliminate protectionism of trade and
restrictive policies (Sreeramana, 2016). This has proved a result that permitted trade can be
directed by foreign groups more conveniently. This free trade policy does not facilitate
Wesfarmers economic growth. Many non-Australian trade sectors can get easy access to the
market (Athanasios & Read, 2013). This can be implied a competition at large number for
Wesfarmers.
Economic
The economic factors like rates of interest, rate of exchange, rates of inflation at large number
can affect the organization growth. The sector of services has an important role in the
Australian market. This is remarkable that 71.1% of Australian GDP is subsidized by service
sector (Athanasios & Read, 2013). Services and finance are the most important factor for
Australian organizations (Burrel, 2012). This is easy to point out that Wesfarmers market
holds a highly profitable place in the Australian market.
Social
The Australia social environment has an important role in Wesfarmers future growth. Social
factors like cultural trends, demographics, and population analytics have a vital role in
organization success (Rouff & Christina, 2015). There is a large number of Australia citizens
rely on one-stop shopping method (Marttunen & Lienert, 2017). These also prefer to
purchase required items in a bulk each week so it can be sufficient for rest of week. This is a

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favorable condition for Wesfarmers to holds the chain of departmental stores and
supermarkets in Australia.
Technological
This should be necessary to recognize that a supportable method of conducting businesses
has an essential role in Australia (Bartlomiej, 2016). Organizations like Wesfarmers relies
more on technologic progress in terms of production that supports the nation to retain
ecological sustainability in the future. This organization uses low emission coal technology
that is a changed innovative. This is expected that with the support of this change
organization will make their business sustain in future (Mahesh, et al., 2012). This
organization works in most important areas like energy, coal mining, fertilizer, and chemicals
productions. These are the most important parts and good technologically foundations to
continue the innovation that is an extreme need for the development of the future for the
organization.
Legal
There are many new ruling laws and governing the trading system of Australia like business
laws, labor laws, resource law, and so on (Mark, 2013). This is necessary for Wesfarmers to
abide by each other for conducting trade.
Environment
Ecological sustainability has an essential role in conducting procedure of a business in
Australia (Agrawal, 2012). Wesfarmers has been creating sincere engagement for customers
and shareholders for a varied range of ecological issues like prevention of environment
pollution, energy conservation, and so on. Wesfarmers operates activities according to
principles of environmental impact and has set the guidelines for energy-efficient of
production. This initiative has taken by the organization for the well-being of the community,
decreasing packaging of a product, and maintaining ecological sustainability to support the
conduct of organization to smoothly run the business.
Three influences for future industry change
Wesfarmers is the main employer in Australia as holds an enormous base of employees and
shareholders. This organization has purchased the Coles group that enables it to target more
than 22 million people (Goyder, 2014). For this Wesfarmers has taken many initiatives
regarding the upliftment of the society by holding many engagement and employment
strategies with Aboriginal and Torres Strait Islander People.

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Around the whole portfolio of the industry, it has special protective measures to reduce
damage on environment at large scale (Appelbaum, 2012). This organization has built
investment in technology to reduce resource wastage and should improve the resilience of
change climate by maintaining high standards for protecting environment damage.
Industries in Australia has presented good growth potential that added a change in many
factors like lifestyle of the customer, supply chain, digitalization, and so on. These factors
have precious the abilities of Wesfarmers. For this organization has present good potential to
an organization by improving and enhance the chain of supply, and with retailers by
extending better growth opportunities (Kaplan, 2011). This organization has adopted the
change by implementing the strategy of multi-option to complete and cope up with the
required changes for customers.
Five forces analysis of Wesfarmers industry environment
This is necessary to embrace the most operative strategy to increase the competitiveness of
business (Lee, 2014). The following discussion will cover the five forces analysis of
Wesfarmers.
New Entrances
One of the most recognized brands in Australia is Wesfarmers, as this organization deals with
retail trade and production of many items like safety and industrial chemicals, energy,
hardware, fertilizers, insurance, and so on. Owing to its gratitude, and awareness of brand in
addition to its diverse market, threat of new competitor is low. This is very hard to achieve an
economy of scale in which Wesfarmers operates. This supports Wesfarmers to produce large
capacitates to have an advantage of costs. The organization operates a business with a
different product rather than a standardized product (Malte, 2014). The choice of customers is
also a differentiated product (Warrick, 2011). The required capital for Wesfarmers is very
high and for this new entrants need to set up business needs high expenditure.
Power of suppliers
This organization avails resources from many different markets. This organization deals with
many diverse varieties of products. This organization has limited rivalry in the market of
supplier. This is a main barrier for Wesfarmers as it rely on many suppliers in a single time.
Suppliers of Wesfarmers has no connection with other products within the industry. The
profile of industry is tied with suppliers (Rothaermel, 2013). These suppliers provide
reasonable pricing to suppliers that are a weaker force surrounded by the industry (Bengtsson

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& Kock, 2014). These suppliers provide products that are standardized and less differentiated
by having low switching costs.
Power of buying
The organization has many options to regularly conduct sufficient research on the market
(Xiuquin, 2011). This supports Wesfarmers to understand the modern trend and changed
buyer expectations. This organization promotes a sustainable approach to conduct business
fetches that has by this organization as a recognized brand. The product differentiation in the
manufacturing is very high that presents purchasers are not capable to catch alternative firms
which are producing a particular product. The product quality is very important for buyers
(Vining, 2011). The buyer makes frequent purchases as holds less price sensitive.
Competitive rivalry
This organization is renowned brands in Australia. This is easy to state Wesfarmers is
dominating the retail market of Australia. This organization has a competitive advantage in
the region as the risk of competitive rivalry is low for Wesfarmers. The competitors of
Wesfarmers has a large market share. It engages competitive actions to get a position and
become a leader of the market. This organization has a growing industry each year and
estimated to carry on for few years (Holder, 2016).
Substitute threat
The threat of substitute is extraordinary for Wesfarmers in previous years. This organization
has adopted a method of energy-efficient production, environment-friendly and has very good
quality customer services that present a competitive benefit over its competitors. This
presents the threat of substitute is low (Warn, 2017).
Three key forces
This organization purchases raw material from many suppliers at low cost. If the product cost
is not suitable than an organization can switch its suppliers as the costs of switching are low.
This organization can have many suppliers in its chain of supply. For example, this
organization can have many suppliers for its geographical locations. It can confirm efficiency
within the chain of supply. This will support the organization to maintain a close relationship
with a supplier that will support and benefit both of them (Richard, 2012).
This organization can focus on differentiation and innovation to attract a large number of
buyers. This is very important to focus on more customers by efforts of marketing to build a

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loyalty brand. An organization can take advantage of setting a low-cost price to low-income
buyers (Scutt, 2012).
This organization can focus more on providing a greater quality of its products. This will
provide better quality at lower prices to choose products as compare to its competitors that
provide great quality at a high price. An organization can focus more on the differentiation of
the product. This will provide the surety to buyers about the unique product and do not move
easily to substitute product that not provides unique benefits. This can provide a too unique
benefit to customers by considerate their needs with research on the market that customer
needs (Seaton, 2016).
Strategy canvas of Wesfarmers and its rivals Woolworths and Myer
Products (or services)
to compare
Wesfarmers Woolworths Myer
Attributes of
competition factors
Ratings
Fresh food 99 60 70
Groceries 66 52 50
Household goods 90 84 80
Liquor 71 23 36
(Perry, 2019)
This strategy canvas presents business aspects operations of Wesfarmers, Woolworths, and
Myer. This canvas is formed to analyse the many aspects of business enterprises for detailed
information. These organizations perform in the same areas and need to be improved. It is
very necessary to analyse different aspects. These aspects are closely related and offer an
organization to understand the cost structure of the organizations. If the structure of cost
changed than the activities indulged by the firm will undergo a certain change. The strategy
canvas presents that Wesfarmers has good ratings compare to its rivals Woolworths and
Myer. Strategy canvas presents the in the sectors in which it operates effectively as business

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leads and has a good market position over its competitors as holds good competitive strategy
with the changing environment (Vaugh, 2011).
Welsfarmers Woolworths Myer Optional weighted
score
0
20
40
60
80
100
120
Strategic Canwas
Fresh food Groceries
Household goods Liquor (Perry, 2019)
Five critical success factors
Inbound logistics
This organization has developed a strong relationship with suppliers as supports stores to
distribute products. By the support of inbound logistics, the organization has developed phase
of product development. This presents that inbound logistics helps Welsfarmers to store raw
material, inputs and internally distribute the components and raw material to start production
(Taylor, 2011).
Operations
Wesfarmers analyses operational activities to process raw substantial into end product. This
consists of service and manufacturing operations. This is an important factor that
organization use to enhance productivity, increase the efficiency and ensure to get
competitive success. The increased operation of productivity support to achieve consistent
economic growth that increases profitability on a powerful base of competitive advantage
(Hillier & Comfort, 2016).
Outbound logistics
This consist of activities that delivers a product to customers by many intermediaries. These
logistics activities support to warehousing, scheduling, material handling, order processing,

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transporting, and deliver to the destination. This explores sources of competitive advantages
and supports the growth of objectives. The organization manages activities timely to handle
optimal costs and product delivery process to minimize the negative influence on quality and
maximize customer satisfaction to increase opportunities for firm growth (Holder, 2016).
Marketing and sales
Wesfarmers highlights remunerations and points of differentiation of offered merchandises to
persuade the customer that offers better than rivals. This organization offers a high-quality
product at reasonable prices to distinctive features. This organization has marketing and sales
activities like Salesforce, promotional activities, advertising, and selection channel, pricing.
This organization uses a funnel approach of marketing to structure the marketing and sales
initiatives. Marketing strategies of Welsfarmers also includes pull in or push nature
objectives, brand image, current standing, and competitive dynamics to stand in the market.
This organization avoids false commitments to develop brand equity to stand out from the
competitors. Fort this organization has coordination between different activities of the value
chain (Coles, 2016).
Services
This organization provides post and pre-sales services that play a significant role to develop
customer’s loyalty. In today's time, modern customers prefer post-sale services that are as
important as activities like promotional and marketing. This organization analyses support
activities to enhance brand opportunities and use as per tool to feast positive words of mouth
for quick, efficient, and timely services to support (Satches, 2017).
Blue Ocean Strategy
Blue ocean strategy presents a product market of Wesfarmers. This presents a particular
product that no competition or less competition. This strategy revolves around to search for a
new product in which few organization operates and has no pressure of pricing (Gayle, 2012).
This organization has a competitive advantage over its competitors. It is applied to
Welsfarmers business. It is not limited to one organization. This organization operates a
business under competition and do everything to achieve market share. There is limited room
to grow and the organization looks to avenues or verticals to find new business as enjoy to
uncontested share of the market. Blue ocean strategy targets to hook up new demand & make
competition irrelevant by introduced a product with meaningful features. It supports an

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organization to make profits in large number as roduct can be priced at a little steep as holds
unique features.
This organization can introduce a new healthy product that supports health effectively by less
exercise. It will support the organization effectively as there are very less and effective
products that support the health of customers effectively. This will bring a good number of
customers for an organization. This will enhance profits effectively by putting customer
health first. It will present a competitive advantage over competitors. This planning will
support Welsfarmers to approach this product during market executions. The organization
will get success to orient analysis and prove ideas. It supports to outperform the competition
as the best in the organization. It will aim to redraw the boundaries of the industry to operate
within the new space and make the competition immaterial (White, 2016).
It will delight customers to shop frequently and make the surety for customers to visit again
and shop frequently. This will enhance the shopping experience by personalized service at an
affordable price. There will be a critical factor to the success of Wesfarmers by online
segment compare to its competitors by doing well compared to its competitors by best deals.
It works in each segment with an intensive strategy of distribution. Making the product
available online support to work professionally by shopping on weekends at their
convenience (Warne, 2011). Going online will enhance promotion. With the support of social
media sites like Facebook, Instagram will provide special inaugural promotion. An
organization can also tie-up with many sponsors to promote the product. The business of
product will satisfy the customers in term of product and services that are important to
provide a delightful experience of shopping to visiting in stores again.
Conclusion
The increased flow of information will support the Welsfarmers to evaluate value chain by
filling important gaps that can affect the production. Effective operation of value chain
exploration will enhance the product and material flow due to an increased forecast of sales
and demand. The inventory management will also improve as Wesfarmers is minimizing the
delays by following activities of supply chain. Present customers are placing high importance
regarding convenient access and quick response to significant product-related information.
Value chain analysis of Wesfarmers and its implication will point out and eliminate
bottlenecks to information flow.

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Wesfarmers will enjoy a diversified market by an enormous variety of diverse organization
by comprising of Coles, aim many more very easily by experience determined growth
without downturn the impact of the industry. Globally expansion will support the
organization by increased profitability and revenue as it is widely recognized organization.
This will be easy for the Wesfarmers to establish outside Australia and New Zealand.
Wesfarmers can enhance the service and quality as a level of the income of customers is at a
constant increase.
Many of the competitors of Wesfarmers has developed their strategy within the industry. This
will pose a threat to this organization as new technologies attract customers. The overall
market share of Wesfarmers will decrease. The cost of input can be increased as the suppliers
bargaining power has increased and it will decrease the number of suppliers. There have been
many new organizations has entered into market and gaining share of market for existing
organizations. Wesfarmers has threat as it will lose customers by these new entrants.
Competition has increased in the industry that put the downward pressure on rates. This can
lead to decreased revenues of Welsfarmers if this organization adjust to changed price or
loosed share of the market if it doesn't.
Substitution of product is also available and enhancing threat mutually for the organization as
consumption or current product decrease. Competitors have increased promotion as further
clutter than ever. The customers are bombarded by multiple messages. This will decrease the
efficiency of promotional posts by Wesfarmers. In the present market, this is necessary to
develop technologies, for this Welsfarmers employees and staffs need to be trained according
to the technologies. The inability to move with these alterations can increase the loss of
Wesfarmers.

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