Strategic Management of High-Growth Firms

This assignment delves into the strategic management of high-growth firms. It examines various theoretical frameworks and concepts, including value capture theory, knowledge management, and stakeholder analysis. The analysis draws upon relevant research papers and a case study of Wesfarmers to illustrate the application of these principles in real-world settings. Students are expected to demonstrate their understanding of key strategic management concepts and their ability to apply them to the context of high-growth firms.

Running head: PART A
Contemporary Business Issues: Part A
Name of the Student:
Name of the University:
Author’s Note:

1PART A
Part A
Executive Summary
Strategic management cycle examines the strategic issues of an organization and suggests
improved strategies for gaining high level of competitive advantage. It is an ongoing process of
creating, implementing and evaluating business decisions, which enables an organization
towards achieving organizational goals. The study has analyzed the strategic marketing
management of Wesfarmers. Wesfarmers is an Australian conglomerate providing services like
retail, coal mining, industrial and safety products, chemicals and fertilizers. As per the survey of
2016, Wesfarmers has become the largest Australian company based on its revenue with
AU$65.98 billion revenue.
The stakeholder analysis matrix has demonstrated that shareholders, customers, suppliers and
employees are the most important stakeholders of the organization. The study has analyzed its
external market though PESTLE and Porter’s Five Forces model. From this analysis, it has been
found that economic development and stable political condition of Australia has boosted the
business development of Wesfarmers. However, the organization faces tough competitive
pressure from Woolworths and Washington H. Soul Pattinson. From the competitor analysis, it
has been found that Wesfarmers has wide products and service ranges as compared to
Woolworths and Washington H. Soul Pattinson. The study has also assessed its internal market
though VRIO and SWOT analysis. From the internal analysis, it has been found that strong
brand image and worldwide distribution network has built sustained competitive advantage for
Wesfarmers. The study had analyzed the strategic options for Wesfarmers through Porter’s
Generic Model and Ansoff Matrix. From such analysis, it has been found that Wesfarmers
follows cost leadership strategy. The organization has high potential for wide geographical
expansion in international markets.

2PART A
Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Sustainability.............................................................................................................................4
2.1 Stakeholder Analysis.............................................................................................................4
2.2 PESTEL Analysis..................................................................................................................6
3.0 Governance................................................................................................................................7
4.0 Strategy......................................................................................................................................7
4.1 External analysis....................................................................................................................7
4.1.1 Porters 5 Forces Analysis...............................................................................................7
4.1.2 Competitor and Customer/Market Analysis...................................................................9
4.2 Internal analysis...................................................................................................................10
4.2.1 Capabilities (VRIO)......................................................................................................10
4.3 SWOT Analysis...................................................................................................................11
4.4 Porters’ generic strategic choices for competitive advantage..............................................11
4.4.1 Cost Leadership............................................................................................................11
4.4.2 Differentiation...............................................................................................................12
4.4.3 Focus.............................................................................................................................12
4.5 Ansoff Matrix......................................................................................................................14
4.5.1 Market Penetration........................................................................................................14
4.5.2 Market Development....................................................................................................14
4.5.3 Product Development...................................................................................................14
4.5.4 Diversification..............................................................................................................14
5.0 Operations................................................................................................................................15
5.1 Recommendations................................................................................................................15

3PART A
5.2 Proposal of Recommendations through McKinsey 7S Framework....................................15
6.0 Conclusion...............................................................................................................................16
Reference List................................................................................................................................17

4PART A
1.0 Introduction
Strategic marketing defines the way in which an organization differentiates itself from its
competitors though capitalizing its strengths towards providing unique value to the customers
consistently. This study will assess the strategic marketing management of Wesfarmers.
Wesfarmers is an Australian conglomerate with interest of retail, fertilizers, chemicals, industrial
and safety products and coal mining (Wesfarmers.com.au 2017). The study will the stakeholders
of the organization though stakeholder-mapping analysis. The study will also analyze its external
market through PESTLE, Porter’s Five Force analysis and competitor analysis. The internal
market of the organization will be assessed through VRIO and SWOT analysis. Apart from that,
the study will also evaluate some strategic options to the organization through Porter’s Generic
Strategy and Ansoff matrix. Based on the strategic analysis, the study will also provide some
recommendation to Wesfarmers for fulfilling the expectation of the stakeholders. Furthermore,
the study will also apply McKinsey 7S Framework for implementing the suggested strategies.
2.0 Sustainability
2.1 Stakeholder Analysis
Stakeholder Mapping Analysis
Stakeholders Environmental Analysis
Impacting Stakeholders
Stakeholder Value Expectation Power
1-10
Interest
1-10
SHAREHOLDERS  Low interest rate and
low growth rate can
reduce return in
investment
 Decreasing growth
rate in conglomerate
industry
 Extreme industry
concentration in
Customer market
 Satisfactory and high
return on investment
 Acceptable and adequate
level of dividends
 Evidence of high growth
potential
6 9

5PART A
CUSTOMERS  Changing consumer
trends
 New low cost
providers in market
 Price sensitivity
 High brand image
 New product
development
 High quality products
9 8
EMPLOYEES  Demand for
extremely favorable
employment
condition
 Increasing demand
for ethical and
purposeful reputation
of the employers
 Adequate remuneration
and favorable
employment condition
 Flexible work structure
and career growth options
 Creation and
maintenance of flexible
work culture
5 9
SUPPLIERS  Unpredictable
international pricing
of raw materials
 Maintenance of
relationship with the
suppliers
 Reliable and regular
commercial supplier
agreement
 Development and
maintenance of long term
relationship and
partnership
4 7
COMMUNITY  High level of
community
expectation
 Miscommunication
with community
Inclusive and cohesive
community environment
Long-term commitment to the
community for its development
5 6
GOVERNMENT  Strict regulatory
reforms
 Changes in tax
reforms
Government expects
Wesfarmers to be good
corporate citizen
Expects adequate contribution
to country’s economy
8 8

6PART A
Table 1: Stakeholder Analysis of Wesfarmers
(Source: Missonier and Loufrani-Fedida 2014)

7PART A
LowInterestHigh
HighPowerLow Shareholders
Government
Customers
Community
Suppliers Employees
Keep Satisfied Manage Closely
Monitor Keep Informed
Figure: Stakeholder Analysis of Wesfarmers
(Source: Bettis et al. 2016)
2.2 PESTEL Analysis
PESTEL ANALYSIS OF WESFARMERS
POLITICAL
FACTOR
 Stable political condition of Australia develops business growth of
Wesfarmers
 Frequent change in government policy often hampers business
conditions
 Restrictive trading hours can limit the profit potentiality of
Wesfarmers
 Reduced tax rate is favorable for Wesfarmers
ECONOMICAL
FACTOR
 Growing economic condition of Australia ensures high level of
business return on investment
 Increased strength of Australian and New Zealand dollars ensure
business profits
 Higher wage cost of Australia increases business cost
 Frequent changes in inflation rate often hamper the pricing policy of
the organization

8PART A
SOCIAL FACTOR  Modern and sophisticated life of people leads them towards make
shopping from supermarkets and hypermarkets
 Inclination of people towards online shopping can be threats for
Wesfarmers
 Increased disposal income of customers can positive impact the
organization
 Increased demand for industrial safety in organizations has also
increased the demand of Wesfarmers
TECHNOLOGICAL
FACTOR
 Advanced technology in understanding customer preferences
 Usage of social and digital media for effective promotion
LEGAL FACTOR  Free trade regulation assists in international business
 Restriction in employment policy can hamper the business
ENVIRONMENTA
L FACTOR
 Wesfarmers needs to report its emission report under NGER act
 Restriction to reduce landfill waste by 6%
Table 1: PESTLE Analysis of Wesfarmers
(Source: Bettis et al. 2014)
3.0 Governance
According to Bergh et al. (2014), the board of Wesfarmers is elected by the shareholders
for observing their interest in long-term financial stability. The board of directors set the
governance framework for effectively governing the organization through effective rule and
regulations. The organization provides adequate return on investment to the shareholders.
Furthermore, the organization uses strict code of conducts for managing the behavior of the
organizational members (Vogel and Güttel 2013). The public policy and corporate reputation
council maintain the community relationship of the organization. Furthermore, the code of
business conduct ensures ethics compliance of the organization.

9PART A
4.0 Strategy
4.1 External analysis
4.1.1 Porters 5 Forces Analysis
PORTERS 5 FORCES ANALYSIS OF WESFARMERS
THREATS OF NEW
ENTRANTS
 Investment cost is quite high for new entrants in conglomerate
industry
 New low cost providers are threats to Wesfarmers
 It is quite tough for new entrants to beat the high established
conglomerate like Wesfarmers
 Low threats of new entrants
THREATS OF
SUBSTITUTE
 Face extreme pressure from the substitutes like grocery shops,
individual retailers, shops and others
 High quality of products facilitates the Wesfarmers to beat with the
substitutes
 Moderate threats from substitutes
COMPETITIVE
RIVALRY
 Tough competitive pressure from the competitors like Woolworths,
Washington H. Soul Pattinson and Best & Less
 Large market size facilitates in minimizing the competitive pressure
 High competitive from competitors
BARGAINING
POWER OF
SUPPLIERS
 Extreme dependency on Suppliers
 Powerful suppliers use their negotiating power on Wesfarmers
 High needs for quality products have increased the demand of unique
suppliers
 High bargaining power of Suppliers
BARGAINING
POWER OF
BUYERS
 Wide availability of retailers and other shops have increased the
bargaining power of buyers
 Strong price competition has increased the bargaining power of
buyers
 Moderate bargaining power buyers
Table 3: Porters 5 Forces Analysis of Wesfarmers

10PART A
(Source: Simon, Fischbach and Schoder 2014)
Figure 2: Porters 5 Forces Analysis of Wesfarmers
(Source: Gans and Ryall 2017)

11PART A
4.1.2 Competitor and Customer/Market Analysis
Factors Wesfarmers Woolworths Washington H. Soul Pattinson
Products and Services  Retail
 Chemical
 Coal mining
 Industrial and safety
products
 Fertilisers
 Supermarket
 Petrol
 Liquor
 General Merchandise
 Home Improvement
 Hotels and Gamling
 Coal Mining
 Bulk Handling
 Telecommunication Carrier
 Retailing pharmaceutical
products
 Fruit juice
Pricing and Cost Price is higher than Woolworths
but lower than Washington H.
Soul Pattinson
Price is lower than both
Wesfarmers and Washington H.
Soul Pattinson
Price is higher than Wesfarmers
and Woolworths
Distribution Channels  Hypermarket
 Supermarket
 Wholesale
 Retail Channels
 Supermarket
 Wholesale
 Retain channels
 Retail Channels
Market Share 45% (FY2015-FY2016) 39% (FY2015-FY2016) 34% (FY2015-FY2016)
Sales Revenue 68,099$M (FY2017) 53578 (FY2017) 55896 (FY2017)
Strength  Sales through online
channels
 High brand reputation
 Wide product portfolio
 High brand reputation
 Low cost of products
 Efficient Operation
 Reputed brand recognition
 Wide ranges of products
Weakness  Limited international
expansion
 Low skilled employees
 Limited in online sales
 Inadequate employee
 High price
 Lack of operational
efficiency
Target Customers  Target customers from
households to business
persons
 Mostly seeking customers,
who needs high quality
products
 Major customers are
benefit seeking
 Repeated customers to
purchase products
 Customers seeks high
product quality
 Customers seeking online
advantage to purchase
products
Table 4: Competitor and Customer Analysis of Wesfarmers
(Source: Greco, Cricelli and Grimaldi 2013)

12PART A
4.2 Internal analysis
4.2.1 Capabilities (VRIO)
Resource and
Capabilities
Value Rarity Imitable Organization Competitive Advantage
Worldwide
Distribution
Network
Yes Yes No Yes Competitive Parity
Differentiation Yes Yes Yes Yes Sustained Competitive
Advantage
Brand Image Yes Yes Yes Yes Sustained Competitive
Advantage
Financial
Strength
Yes No No Yes Temporary Competitive
Advantage
Human Capital Yes No No Yes Temporary Competitive
Advantage
Consumer
Marketing Skills
Yes Yes Yes Yes Sustained Competitive
Advantage
Table 5: Capability Analysis of Wesfarmers
(Source: Boyd et al. 2013)
According to Balmer and Wang (2016), strong worldwide distribution network of
Wesfarmers has ensured smooth flow of the products from the organizations to end users.
Moreover, the organization is highly capable of maintaining long-term relationship with the
distributors for smooth flow of products. On the other hand, Powell (2014) opined that the
organization has wide range of products in its product portfolio, which has made it unique in the
market. The strong brand image of the organization attracts huge customers group and has added
to the loyalty level of the customers. Furthermore, Shen and Gentry (2014) stated that dedicated
and highly talented human capital has built the success of Wesfarmers. The organization also
uses unique consumer marketing skills with customized approach for getting sustained
competitive advantage over the rivals.

13PART A
4.3 SWOT Analysis
SWOT ANALYSIS OF WESFARMERS
Strength  Strong brand reputation attracts huge customer groups
 High quality of products
 Large numbers of in-store staffs, stores, strong workforce almost over
200000
 Sales through online format enhances overall sales volume of
Wesfarmers
 Convenient customer service
Weakness  Strong brand reputation can be vulnerable to breakthrough even for any
small reason
 Being a market leader, Wesfarmers can always be under the scrutiny of
critical decisions
 Limited geographical expansion in only few countries across Australia
Opportunity  Potentiality to expand in more international markets
 Enhance service, quality, experience benchmark across the stores
 Customer and employee loyalty across businesses
Threats  Extreme competitive pressure from the competitors like Woolworths,
Washington H. Soul Pattinson and many others
 Economic downturn of the countries can hamper the business
profitability level
 Special offerings of products and services at equitable price level can be
threats to Wesfarmers
Table 6: SWOT Analysis of Wesfarmers
(Source: Demir, Wennberg and McKelvie 2017)
4.4 Porters’ generic strategic choices for competitive advantage
4.4.1 Cost Leadership
According to Felin, Lakhani and Tushman (2014), cost leadership strategy suggests for
being low cost producer in the industry for a certain level of quality. Moreover, low price of the

14PART A
products helps in gaining higher market share over the rival organizations. On the other hand,
Lacerda, Ensslin and Ensslin (2014) opined that low cost leadership strategy requires efficient
distribution channels. Likewise, Wesfarmers always sticks with low price strategy for gaining
high marker share within its industry. The low cost of the products has increased the sales
volume of the organization, which has in turn increased its market share.
4.4.2 Differentiation
White et al. (2016) pointed out that differentiation strategy suggests for offering unique
attributes to the products and services, which provide unique value to the customers.
Furthermore, unique values added to the customers often allow an organization towards charging
premium products from the customers. As per Parker, Parsons and Isharyanto (2015),
Wesfarmers always adds unique value to its products and services, which provides unique value
to the customers. The Officeworks section of Wesfarmers delivers unique value to the customers
through its unique one-stop-shop via its ‘every channel’ strategy. The Target section of the
organization offers greater value to customers through improved online and in-store offerings.
4.4.3 Focus
According to Merat and Bo (2013), focus strategy suggest for focusing on a narrow
segment of customers and offering either low price or unique value to the customers. In case of
Wesfarmers, the organization is highly focused on both business clients and regular customers
for offering their products. Moreover, the organization provides unique value to the customers
for gaining high level of competitive advantage over the rivals.

15PART A
Figure 3: Porter’s Generic Strategy Model for Wesfarmers
(Source: Abdelmoneim Mohamed and Jones 2014)

16PART A
4.5 Ansoff Matrix
4.5.1 Market Penetration
According to Shen and Gentry (2014), market penetration strategy suggests for achieving
organizational growth in the existing markets with existing products. It is the least risky strategy,
as it leverages existing resources and capabilities of an organization. On the other hand, Vogel
and Güttel (2013) opined that market penetration strategy indicates an increase in market share,
if the competitor companies reach their limit in those markets. In case of Wesfarmers, the
organization sells its existing product and service ranges the existing markets like Australia, New
Zealand, Ireland, United Kingdom and Bangladesh. It can help the organization towards
increasing its market share in existing markets.
4.5.2 Market Development
According to Missonier and Loufrani-Fedida (2014), Market development strategy
suggests for market growth through offering its existing products and services to its new market.
This strategy seeks for additional geographical market segments. On other hand, Bergh et al.
(2014) opined that market development strategy could gain huge profit, if the core competencies
for an organization are related to its products and services. In case of Wesfarmers, the
organization can expand beyond its existing markets for offerings its new products and services.
The markets can be like USA, India, Japan and others. It will increase the overall sales volume of
Wesfarmers with wide geographical expansion.
4.5.3 Product Development
Powell (2014) pointed out that product development strategy develop new products and
services in its exiting market. The success of this strategy relies on loyalty level of the existing
customers for the acceptance of new products. In case of Wesfarmers, the organization can
develop new product and service for its existing markets for getting high level of business
growth.
4.5.4 Diversification
According to Gans and Ryall (2017), diversification strategy suggests for offering new
products and services to the new markets. The high risk of new product development can even

17PART A
provide high rate of return from the new markets. In case of Wesfarmers, the organization can
develop new products and services like business consultation, fitness centers and lot more for the
new markets like USA, India, Japan and others.
5.0 Operations
5.1 Recommendations
 Offering more discounts and attractive offers
 Diversification of product ranges
 Wide market expansion in the countries like USA, India, Japan and others
 Increase in the quality of the products and services
 Improving the online presence of the products and services
5.2 Proposal of Recommendations through McKinsey 7S Framework
RECOMMENDED MCKINSEY 7S FRAMEWORK FOR WESFARMERS
STRATEGY  Enhancing the quality of products and services
 Offering attractive offers and discounts
 Enhance online presence of the products and services
STRUCTURE  Flexible organizational structure would be followed
 The employees will be flexible enough to interact with the management
for resolving their issues and add quality in their work
SYSTEM  Wesfarmers will use advanced technology for distributing its products
and interacting with its customers
SHARED VALUE  The core values of the organization will be relied in shared value of the
employees towards integrating organizational goals
STYLES  The organizational leaders will follow transformational leadership
styles for adding innovation in the quality of the products and services
STAFF  The organization will hire highly skilled and talented employees for
adding quality in services, products and customer services
SKILLS  The employees of Wesfarmers will have high level of technical,
marketing and customer interaction skills

18PART A
Table 7: Recommended McKinsey 7S Framework for Wesfarmers
(Source: Created by Author)
6.0 Conclusion
While concluding the study, it can be said that Wesfarmers holds a well-established
market in Australia, UK, Ireland, Bangladesh and New Zealand. Shareholders and customers,
employees and suppliers are extremely important stakeholders of the organization. The
organization gets support of stable of political condition and developed economic condition of
the Australia for high level of business growth. However, the organization faces high level of
competitive pressure in conglomerate industry from the competitors like Woolworths,
Washington H. Soul Pattinson and Best & Less. Strong brand image and worldwide distribution
network has formed sustained competitive advantage for the organization. The organization has
gained high level of market share through offering low price for the products. Wesfarmers
should enhance the quality of products for gaining further business growth. Furthermore, the
organization should also expand beyond its existing markets for enhancing its sales volume.

19PART A
Reference List
Abdelmoneim Mohamed, A. and Jones, T., 2014. Relationship between strategic management
accounting techniques and profitability–a proposed model. Measuring Business
Excellence, 18(3), pp.1-22.
Balmer, J.M. and Wang, W.Y., 2016. The corporate brand and strategic direction: Senior
business school managers’ cognitions of corporate brand building and management. Journal of
Brand Management, 23(1), pp.8-21.
Bergh, D.D., Connelly, B.L., Ketchen, D.J. and Shannon, L.M., 2014. Signalling theory and
equilibrium in strategic management research: An assessment and a research agenda. Journal of
Management Studies, 51(8), pp.1334-1360.
Bettis, R., Gambardella, A., Helfat, C. and Mitchell, W., 2014. Quantitative empirical analysis in
strategic management. Strategic Management Journal, 35(7), pp.949-953.
Bettis, R.A., Ethiraj, S., Gambardella, A., Helfat, C. and Mitchell, W., 2016. Creating repeatable
cumulative knowledge in strategic management. Strategic Management Journal, 37(2), pp.257-
261.
Boyd, B.K., Bergh, D.D., Ireland, R.D. and Ketchen Jr, D.J., 2013. Constructs in strategic
management. Organizational Research Methods, 16(1), pp.3-14.
Demir, R., Wennberg, K. and McKelvie, A., 2017. The strategic management of high-growth
firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.
Felin, T., Lakhani, K.R. and Tushman, M., 2014. Special issue of Strategic
Organization:“Organizing crowds and innovation”. Strategic Organization, 1, p.2.
Gans, J. and Ryall, M.D., 2017. Value capture theory: A strategic management review. Strategic
Management Journal, 38(1), pp.17-41.
Greco, M., Cricelli, L. and Grimaldi, M., 2013. A strategic management framework of tangible
and intangible assets. European Management Journal, 31(1), pp.55-66.