Business Strategy for Wilmar: Challenges and Recommendations

This report discusses the major issues being faced by Wilmar in their business operation and evaluates their business strategies based on their vision and mission statements. It also analyzes the internal and external business factors of Wilmar to identify the major and relevant factors and provides recommendations for sustainable business practices.

Running head: BUSINESS STRATEGY
Business strategy
Name of the student
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Executive summary
The aim of this report is to discuss about the major issues being faced by Wilmar in their
business operation. In doing so, this report discussed about the business strategies followed by
them based on their vision and mission statements. It is identified that Wilmer is following
growth strategy. In addition, this report also analyzed the internal and external business factors of
Wilmer to identify the major and relevant factors. On the basis of these factors, a few
recommended had been discussed.

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Table of Contents
Introduction......................................................................................................................................3
Identification of the problem...........................................................................................................4
Evaluation of the business strategies...............................................................................................4
Determination of the triple bottom line approaches....................................................................5
Determination of the internal business factors................................................................................6
Strengths......................................................................................................................................6
Weaknesses..................................................................................................................................7
Opportunities...............................................................................................................................7
Threats.........................................................................................................................................7
Determination of the external business factors................................................................................8
Political factors............................................................................................................................8
Economical factors......................................................................................................................8
Social factors...............................................................................................................................8
Technological factors...................................................................................................................9
Analysis of the issues.......................................................................................................................9
Recommendations..........................................................................................................................10
Impacts on the stakeholders...........................................................................................................10
Conclusion.....................................................................................................................................11
Reference.......................................................................................................................................13

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Introduction
In the current business scenario, social responsibilities should be looked after in order to
gain competitiveness in the marker. This is due to the reason that environmental factors are the
major determining force for the business operation in the current time. Contemporary business
organizations should be considerable towards meeting the environmental standards and initiate
sustainable business processes and practices. However, in meeting the environmental standards,
one of the major challenges for the business organizations is aligning with the business
objectives (Bansal and DesJardine 2014). This is due to the fact that meeting the sustainable
business standards can affect the profit margin of the business. Moreover, with the emergence of
stricter emission rules and standards, it is becoming further challenging for the business entities
in ensuring their profitability.
The impact of the environment factors are more for the agribusiness because their
business is based on the agricultural products. Hence, the impact of the agribusiness is more on
the environment and nature. Wilmar is one of the leading palm oil producers in the world with
having their operations across the world (Von Geibler 2013). They along with other palm oil
producers are often accused for deforestation for their palm cultivation. In the recent time, the
joint venture between PZ and Wilmar in investing in palm oil production in Nigeria is attracting
criticisms for destroying the natural biodiversity.
This report will discuss about the major problems relevant according to the business
operation of Wilmar. In addition, the business strategy of Wilmar will also be evaluated based on
their mission and vision statements. The internal and external business factors will be analyzed

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and based on the identified issues, a few recommendations can be concluded. The potential
impacts of the recommended steps on the stakeholders will be discussed.
Identification of the problem
The major problem or challenge for Wilmar is meeting the environmental standards in
their business operation and aligning with their business objectives. This is their major challenge
due to the reason that meeting all the environmental standards will hamper their business
potentiality and on the other hand, focusing only on the profit maximization will increase their
impact on the biodiversity (Vijay et al. 2016). Hence, gaining the alignment between the two
factors is the ultimate challenge for Wilmar.
Evaluation of the business strategies
The mission statement of Wilmar is to be a dynamic organization in providing the
maximum value to the customers in a greener way. On the other hand, their vision statement
states about their intent of becoming the market leading in the alternative fuel sector and to be
the most environmentally sustainable palm oil producer in the world. Thus, from their vision and
mission statements, it can be concluded that both the economical and environmental factors are
being considered (Dyllick and Muff 2016). However, certain and specific strategies should be
initiated by Wilmar in aligning these two factors and creating the congruence. It is identified that
they are following growth strategy and in terms of this, strategic alliances are given the
maximum preferences. For example, the joint venture between PZ and Wilmar in doing business
in Nigeria is an example of their growth strategy. In this case, it is important for Wilmar in
reviewing and ensuring the corporate goodwill of the partnered firm (Wagner and Svensson
2014). This is due to the reason that unethical business strategies of the partnered firm will affect

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the brand value of Wilmar. However, there are different new strategies should be initiated, which
will discussed in the following sections.
Determination of the triple bottom line approaches
According to the triple bottom line strategy, there are three dimensions namely social,
economical and environmental should be considered in becoming the most sustainable
organization. Evaluation of the business strategy of Wilmar from the perspectives of the triple
bottom line approach will help to identify the areas for improvement for them. According to this
model, the first dimension is the economical factor. Profit maximization is the core objective of
any business organizations and considering this factor will ensure the long term business
viability (Govindan, Khodaverdi and Jafarian 2013). In the case of Wilmar, they are operating in
high investment sector and thus they should consider maximization of the profits for long term
growth. The next dimension is environmental dimension, which states the consideration of the
factors related to environmental impacts. This is important for Wilmar due to the reason that
their business activities are having direct impacts on the biodiversity. However, according to the
annual reports of them, it is identified that different environment related strategies are being
initiated by Wilmar. One of the major strategies is the deforestation free business activities. This
refers to the fact that Wilmar was previously accused for causing deforestation due to their
businesses and hence they have taken the initiative of preventing the same for the Business (Gray
and Milne 2013). In addition, they are offsetting the emission from their business by means of
plantation and becoming a carbon neutral company.
Thus, it can be concluded that there are number of activities being initiated from the
perspective of economical and environmental dimensions. However, on the other hand, it is also

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identified that they are lacking in terms of social dimensions. This is due to the reason that
internal and external stakeholders are being given the least considerations. For instance, the
external stakeholders who will be affected from the business activities are not considered in the
business process of Wilmar (Devika, Jafarian and Nourbakhsh 2014). For example, the
stakeholders to be affected due to the palm oil projects in Cross River State, Nigeria are not
considered during the inception. Thus, preventing deforestation will not be effective for Wilmar
in gaining the business sustainability.
Determination of the internal business factors
Determination of the internal business factors is important due to the reason that it will
help to understand the effectiveness of Wilmar SWOT model will be used in determining the
internal effectiveness of the entity. The following sections will discuss about each of the
elements of the SWOT analysis.
Strengths
One of the major strengths of Wilmar is the global market presence and brand value. This
is due to the reason that they are the leading palm oil brand in the world and are having number
of strategic alliances with different companies. For example, Wilmar is having tie up with Adani
from India and with other companies in other countries. This is helping them in gaining the
market penetration across the world. Thus, with having the higher market penetration, Wilmar is
also catering to larger customer segments (Rahman, Aziz and Hassan 2013). Thus, it can be
concluded that initiation of the sustainable practices will further bolster the growth for Wilmar.
In addition, the access to the financial resources will also help Wilmar in initiating the extensive
process of business sustainability (Umar, Jennings and Urmee 2013).

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Weaknesses
It is identified that one of the major weaknesses of Wilmar is their past accusations.
There are number of instances including their investment in Nigeria are also being accused for
harming the biodiversity and environment. This has created negative branding for Wilmar and is
challenging for them to enter in the new markets especially in the developed countries (Ludin et
al. 2014). Moreover, it is also identified that their major dilemma is to meet the growing demand
of palm oil and acquiring area for palm tree cultivation. This is contradictory in nature. Hence, in
this case, Wilmar is having the need for an effective strategy, which will help to prevent the
deforestation even as the palm oil production is getting increased.
Opportunities
One of the major opportunities for Wilmar is the increase of demand of palm oil as
biodiesels across the world. With the growing reputation of palm oil as the alternative fuel, it is
expected that Wilmar will witness huge growth in their business in the coming years. In addition,
it is also identified that health benefits associated with the palm oil over other vegetable oil is
also increasing its demand. Customers across the world are increasingly opting for the palm oil
for its health benefits. This is another potential area for Wilmar in terms in terms of their long
term opportunities.
Threats
The major threat for Wilmar is their unsustainable business process. This is due to the
reason that rapid deforestation will cause severe lawsuits against them, which will further cause
negative branding. In addition, emergence of newer alternatives can also reduce the potentialities

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of the palm oil (Azhar et al. 2014). This will cause Wilmar in having lower market potentiality in
the coming years.
Determination of the external business factors
Political factors
In terms of the political factors, the major challenge for Wilmar is the diplomatic
relations between the countries. This is due to the reason that Wilmar is based in Singapore and
diplomatic relationships between Singapore and other countries will determine the extent to
which the Wilmar will be able to invest in palm tree farming (Brandi et al. 2015). In addition,
fewer countries are having stricter rules regarding the palm tree cultivation, which might also
restrict their business.
Economical factors
In terms of the economical factors, the major challenge for Wilmar is the huge
investment required in the operation process. Even though the potentialities of palm oil in the
market will compensate and the investment, but the growing criticism might put a hold on it.
This is due to the reason that if the acquisition of the new land areas for palm tree cultivation get
stalled, then it will be difficult for Wilmar to maintain their production rate (Choong and McKay
2014). In this case, it is important for them to have the technologies and approaches in increasing
the production from the available resources. This should also be noted that with the emergence of
lawsuits against the company, Wilmar will also witness the increase in the operation cost.
Social factors

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Social factors will be the major determining factor for Wilmar in terms of managing the
environmental standards. The new land to be acquired for the palm oil cultivation will uproot the
local communities that will further increase the negative social impression for them. It should
also be noted that Wilmar sells finished consumer goods, which will be affected due to the
negative branding in the market (Abood et al. 2015). This situation also denotes that Wilmar is
having the need for more sustainable business practices in order to ensure their ethical as well as
positive branding in the market.
Technological factors
Technological development is important for Wilmar in order to maximize their
production rate from the available resources. Thus, the average rate of output from the certain
inputs should be increased in order to initiate the optimal utilization process of the resources. In
addition, this should also be noted that investments should be made in development of the
technologies as the competing firms are also improving their technologies in reducing their
average cost of production.
Analysis of the issues
Thus from the determination of the above internal and external business factors, this can
be concluded that maximization of the business operation is the major problem. This is due to the
reason that in accordance to the huge opportunities in the global market, Wilmar should have to
increase their production rate and areas. However, they are facing the sustainability issues in
acquiring lands along with facing criticisms for destroying the biodiversity. In this case, Wilmar
is having the need for effective and sustainable strategies that will help Wilmar in enhancing
their production from the available resources.

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Recommendations
 It is recommended that technological development process should be initiated by Wilmar
in order to enhance the production level from the existing areas. This is due to the reason
that productivity of the available land areas should be increased by different means. This
will enable Wilmar to cater to the increasing demand of palm oil in the market without
having the need for acquiring lands further.
 It is also recommended that Wilmar should target the regions where palm trees grow as
native plants. This strategy will be effective for them because acquiring land with
existing palm trees will reduce the need for deforestation along with the increase in the
available resources. Moreover, acquisition of the land with native palm trees will also be
beneficial for Wilmar in facing lower legal and regulatory issues. This is due to the
reason that without the provision for deforestation, there will be no issues in acquiring
lands
 Lastly, it is also recommended that external stakeholders should be involved more in
process of land acquisitions. This includes the local communities and will help Wilmar in
having the understanding about the expectations of the stakeholders. Wilmar is also
having responsibilities towards compensating the challenges of the local communities
getting uprooted. Hence, as per the triple bottom line approach, the social dimensions can
be met.
Impacts on the stakeholders
Based on the above identified recommendations, the two major stakeholders, who will be
affected, are the external stakeholders (communities) and internal stakeholders (directors). This

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is due to the reason that if the productivity can be increased without acquiring the new lands,
then the biodiversity will not get destroyed and the local communities will not get uprooted.
Thus, they will be benefited. On the other hand, if they can be involved in the business process
and focusing more on their welfare, the market impression for Wilmar will be positive. The
market opportunities of Wilmar will also get increased due to the ethical approach of the firm.
Hence, it can be concluded that local communities will be benefited from this approach. On the
other hand, it is identified that managers will also be benefited due to the reason that with the
implemented strategies, they will face less number of lawsuits from governments and NGOs.
This is the due to the reason that if no news forest lands are getting acquired. Moreover, they will
also witness higher profits due to the enhanced productivity rate of the available resources.
However, there are few ethical dilemmas also being identified from recommended steps. One of
the major ethical dilemmas is the management of the profitability. Investing in the welfare of the
external stakeholders might hamper the profit margin of Wilmar. Moreover, different
communities will have different expectations, which can cause ethical issues. Meeting the
expectations of a community will not meet the expectations of another one.
Conclusion
This report concludes that the major problem of Wilmar is acquiring the new forests land
for palm tree cultivation without preventing lawsuits and criticisms. It is also identified that
Wilmar is following growth strategy and initiating number of strategic alliances in different
countries. The internal and external analysis is also being done in this report and a number of
issues and challenges are being identified. Based on these challenges, a few recommended steps
are discussed, which will further help Wilmar in overcoming these factors. It is recommended
that Wilmar should focus more on increasing the productivity from their existing resources rather

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than acquiring more areas. Lastly, the two major stakeholders are identified, which will be the
most impacted due to the recommended steps. The potential consequences are also being
discussed in this report.

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