Environmental Analysis of Wesfarmers

This report analyzes the environmental factors of Wesfarmers and provides recommendations based on the analysis. It includes a Pestle analysis, SWOT analysis, and recommendations for promoting juice drinks.

Running head: INTRODUCTION TO MARKETING
INTRODUCTION TO MARKETING
Name of the Student:
Name of the University:
Authornote:

1INTRODUCTION TO MARKETING
Executive Summary
Environmental analysis primarily facilitates a business enterprise to realise the events
occurring on both internal and external level and further to elevate the probability that the
developed organisational strategy will suitably reflect the organisational environment. Analysis
of business environment chiefly helps to recognise strengths, weaknesses, opportunity and
threats of the organisation. Furthermore, comprehensive environmental analysis enables an
organisation to realise political, social, economic, environmental, technological and legal factors
related to its business operations in country. Pestle Analysis is regarded as a strategic
management tool which Wesfarmers managers can implement in order to make improved
decisions regarding the organisations' business procedures. The report has analysed the
environmental factors of Wesfarmers. In addition to this, the paper recommended new product as
per the environmental analysis and provided relevant recommendations.

2INTRODUCTION TO MARKETING
Table of Contents
Introduction......................................................................................................................................3
Background of the Wesfarmers...................................................................................................3
Discussion........................................................................................................................................4
Marketing Environmental Analysis.............................................................................................4
SWOT Analysis.........................................................................................................................10
Segmentation of Wesfarmers Limited.......................................................................................12
4p’s of Wesfarmers....................................................................................................................13
Recommendations for Wesfarmers in promoting Juice Drinks.................................................15
Conclusion.....................................................................................................................................16

3INTRODUCTION TO MARKETING
Introduction
Environmental analysis is essential due to the rapid changes and trends taking place in the
environment which tends to create immense impact on the functioning of any business
organisation. Environmental analysis primarily facilitates a business enterprise to realise the
events occurring on both internal and external level and further to elevate the probability that the
developed organisational strategy will suitably reflect the organisational environment (Fleisher
and Bensoussan 2015). Analysis of business environment chiefly helps to recognise strengths,
weaknesses, opportunity and threats of the organisation. Furthermore, comprehensive
environmental analysis enables an organisation to realise political, social, economic,
environmental, technological and legal factors related to its business operations in country. One
of the highly recognised retailers in the Australian retail sector, Wesfarmers Limited has been
accomplishing the need of its consumers by delivering competitive goods and services for
several decades (Burns, Bush and Sinha 2014). As a result, it is highly essential for the company
to realise its environmental occurrences and further analyse it really to maintain its robust
position in the Australian retail industry. The following report aims to analyse the environmental
factors of Wesfarmers. In addition to this, the paper will suggest new product as per the
environmental analysis and provide relevant recommendations.
Background of the Wesfarmers
From its origins in 1914, as a Western Australian farmer’s cooperative, the organisation
has developed into one of the Australia largest retail companies. According to authors,
Wesfarmers is identified as one of the Australia renowned business enterprises and comprises a

4INTRODUCTION TO MARKETING
shareholder base of around 490,000 (Noe et al. 2017). The primary aim of the company is to
provide a satisfactory return to its shareholders. Hence, Wesfarmers efficiently aims to achieve
this goal by engaging justifiably with their suppliers and sourcing through ethical and sustainable
approaches, supporting the communities where they operate, anticipate the needs of their clients
and deliver competitive products and services. Reports of Brennan (2014) have revealed that
with AU$ 65.98 billion estimated in 2016, Wesfarmers is considered as the largest Australian
company in terms of its revenue, by succeeding supermarket giant Woolworths and BHP.
Wesfarmers comprises of subsidiaries namely, Bunnings, Kmart, Target, bakers, Harris
Technology and many more.
Discussion
Marketing Environmental Analysis
Pestle analysis of Wesfarmers will entail all macro environment factors which tend to
influence the retail industry of Australia such as political, economic, social, technological,
environmental and legal factors. As per the reports of Iyer et al. (2015), Wesfarmers is listed on
the Sydney stock exchange and comprises of a market capital of around 36.50 billion.
Pestle Analysis is regarded as a strategic management tool which Wesfarmers managers can
implement in order to make improved decisions regarding the organisations' business
procedures. As per the study of Carins and Rundle-Thiele (2014), Wesfarmers operates in a
dynamic environment where it is significantly leveraged by government decisions,
administrative framework, increasing regulatory framework for environmental determinants,
consumer spending behaviour patterns, social development, increasing rate of environmental

5INTRODUCTION TO MARKETING
activism among its customers along with technological changes as well as ever evolving legal
system.
Pestle analysis of Wesfarmers Limited
Political Factors-
Governance system- The existing government system in Australia has efficiently served its
purpose for long period and is not showing any indications of undergoing changes. It has the
propensity to introduce leaders who have the capacity to lead divergent regulations from the
historical norm. As a result, Wesfarmers has to maintain close relationship with the industry-
wide government priorities in order to predict its development (Hagyari, Bacik and Fedorko
2016).
Regulatory practices- Blythe and Martin (2019) have mentioned that Wesfarmers has to sustain
diverse regulations in several markets where it executes its business operation. According to
authors, over the past few years Australia along with other emerging financial systems have
undergone changes regarding its regulations not only for its market entry but also the way
companies in retail sector can execute their business in the local market (Ashley and Tuten
2015).
Other stakeholders for example activist movements protest and pressure groups along
with non- government agencies tend to serve decisive role in policy making procedures in
Australia. At this junction, Wesfarmers must closely collaborate with these agencies in order to
contribute in a superior manner to the community objectives and corporate goals. Australian
local government significance (Thompson, Ravindran and Nicosia 2015)

6INTRODUCTION TO MARKETING
On the contrary to other developed nations, local government in Australia serves a crucial
role in the process of policy making and regulations. Thus, Wesfarmers must closely follow the
states as well as territories' regulations where it executes business operations rather than focusing
on devising nationwide policies in Australia (Ko et al. 2015).
Economic
Economic cycles- Wesfarmers business performance in Australia has been increasingly aligned
to the financial performance of the Australian economy. Fleming et al. (2014) have claimed that
the growth witnessed in the past two decades is built upon the elevating rate of globalization and
the utilisation of local resources in order to penetrate into International markets.
Inflation rate- According to McMenamin et al. (2014), the undemanding liquidity in the
market has been due to the great recession of 2018 which has resulted to the augmented
inflation in the Australian financial system.
Accessibility of key infrastructure in Australia-According to McDonald et al. (2015), over
the years Australian government has raised the funding in developing key infrastructure in order
to enable as well as develop robust business environment. Wesfarmers through this improved
infrastructure can access the current infrastructure in order to stimulate the development in the
sector name in Australia.
Impact of Exchange rate- The exchange rate of Australia has propensity to cause impact on
wesfarmers business operations as well as investment plans in direct as well as in long-term
business strategies (Gregson et al. 2015).
Social

7INTRODUCTION TO MARKETING
Australian societal regulations and hierarchical structure- The Australian society
divergences from the home market of Wesfarmers. Moreover, it should strive in order to
establish a local team which can easily comprehend the societal norms and regulations as well as
the behaviour patterns in order to serve the diverse customers in Australia (Fernie 2014).
Migration- The diverse behavioural pattern towards migration is noted to be negative in the
Australian society. Such a negative approach can impact the farmers’ capacity to attract global
leaders and managers in order to direct its operations in the country (Aung and Chang 2014).
Approach towards healthy lifestyle- As per the view of authors, with the increasing
liberalisation, the approach of Australians towards healthy lifestyle are been getting improved.
Wesfarmers should take this approach into consideration, and introduce products for its health-
conscious consumers in order to prevent any kind of failure.
Technology
Reduced cost of production- With the increase of the advanced technology, Australia has been
experiencing a reduced production and service expenses in its service sector. However at this
juncture, Wesfarmers requires refurbishing its supply chain in order to obtain greater flexibility
for accomplishing consumer requirements as well as cost structures (Thompson, Ravindran and
Nicosia 2015).
Capacity of 5G services- Ko et al. (2015) have noted that wesfarmers needs to analyse the
development and improvement of user experience with the rapid speed and accessibility of
technology. With the capacity of 5G services the company can significantly alter the consumer
user experience in its business operations.

8INTRODUCTION TO MARKETING
Development of supply chain associates- Technology has reduced the extent of product
lifecycle and further facilitated suppliers to rapidly developing new products. This has been
posing challenges to the marketing strategies of wesfarmers in order to uphold the satisfaction
level of its suppliers and distributors by endorsing diverse array of products (Bettini, Brown and
de Haan 2015).
Environmental
The renewable technology is identified as one of the striking areas of business operations
for wesfarmers. Such a technology development has been able to influence the trends of the retail
sector. According to Dowling, McGuirk and Bulkeley (2014) Australia has been proficiently
offering subsidies in order to invest in the renewable sector.
Environmental regulations are further changing the precedence of product innovation. In
several cases, products are designed on the basis of ecological regulations and standards instead
of shedding light on customer value propositions.
Moreover, significantly changing weather conditions are impacting the cost of operations
of the wesfarmers as it has to offer financial resources enhancing the resilience level of it supply
chain. Furthermore the process of recycling has been recognised as one of the rapidly emerging
factor for the retail sector in Australia (Ashley and Tuten 2015). As a result, Wesfarmers'
marketing strategies must align to these regulations and needs of the service sector to sustain its
position in the retail industry.
Legal

9INTRODUCTION TO MARKETING
Over the last few decades, data protection has developed as a major part of not only
privacy concerns but also as an intellectual property rights. Thus Wesfarmers has to take into
consideration that Australia chiefly comprises of a strong mechanism to safeguard its
organisations against any forms of data violations.
Slow legal proceedings for business cases- While, few countries follow international
regulations, Australia is one of the countries which have hurried legal proceeding in comparison
to other developed nations. As a result, Wesfarmers must develop vigilance and consider average
time of particular cases before penetrating into global market (Pike and Page 2014).

10INTRODUCTION TO MARKETING
SWOT Analysis
Strength Weakness
Major Player in Retail Sector of Australia and
New Zealand- Wesfarmers is recognised as largest
conglomerate in Australia and comprises of around
49,000 stakeholders with200, 000 workers under its
payroll. Wesfarmers is the retail market leader in
discount departmental stores namely Kmart and
Target along with office supplies segment. The
company is further leading in industrial and safety
equipment category with major leading brands under
its trademark as NZ safety, packaging House,
Blackwood and Greencap (Carins and Rundle-
Thiele 2014).
Major network of stores to target markets across
Australia- Wesfarmers constitutes of over 760
supermarkets under Coles and Bi-Lo brands along
with 830 convenience stores of Liquor and First
choice liquor. The extensive network of stores
facilitates the organization to target supermarket
sector in Australia as well as New Zealand.
Wesfarmers community building- Wesfarmers is
of the belief that a business should be based on
High expense of replacing current employees-
Within the Wesfarmers Limited workers are
accountable for the company's knowledge base and
thus replacing them tends to be extremely
challenging in the current conditions.
Additional expense of building new supply and
logistics network- Burns, Bush and Sinha (2014)
have noted internet and AI has substantially
changed the business model of Australia's retail
sector. It has provided the reduced value of the
dealer network. Thus, Wesfarmers has to form an
improved network supply chain which draws high
expense.
Niche markets and local monopolies which
company’s like Wesfarmers have been able to use
are rapidly disappearing. Brennan (2014) has noted
that the client network that Wesfarmers has
endorsed is proving lower rate of efficiency.

11INTRODUCTION TO MARKETING
sustainability by means of greater inclusion and
enhanced association amongst all clients with
promotion of gender diversity and inclusion of
indigenous communities in the workforce. The
company chiefly accentuates superior social and
environmental practices with the reduction of carbon
footprint which eventually will aid wesfarmers to
gain greater revenues and ascertain increased returns
for the stakeholders (Iyer et al. 2015).
Success of new product mix- Wesfarmers offers
exceptional product offerings to its customers. Thus,
Wesfarmers has been catering into diverse customer
segments into the Australian market.
Opportunities Threats
 Rapid Expansion of Economy-As the
Australian financial system is undergoing significant
developments than any other developed economy; it
will offer Wesfarmers a significant opportunity to
penetrate into global market. Wesfarmers has the
competence to operate into the competitive US
market (Fleisher and Bensoussan 2015).
 Reduced Inflation Rate- The low inflation
rate brings significant stability in the market thus
 Trade Relation between US and China
might impact Wesfarmers growth strategies. These
strategies will lead to full scale trade negotiation
which can impede the potential of Wesfarmers to
expand operations in China.
 Lack of belief of institutions and growing
risk of legal actions for Wesfarmers – Reports of
Pike and Page (2014) have noted that as the WTO
regulations as well as regulations are challenging to

12INTRODUCTION TO MARKETING
facilitating credit at lower interest rate to its clientele
of Wesfarmers. Such a low inflation rate will
increase the use of Wesfarmers’ efficiency and
product services.
 Increased customer base in lower
segments- Hagyari, Bacik and Fedorko (2016) have
noted that since buyers have to migrate from
unorganized workers in the services industry to
licensed players. It will offer Wesfarmers significant
prospect to penetrate entry level market with a no-
frill contribution.
 Accelerated technological innovations
and progress- Increased technological pace has
been improving the industrial efficiency, facilitating
suppliers to manufacture immense range of products
as well as services. Such a strategy can act as an
opportunity for Wesfarmers to considerably
endeavour into adjacent products (Blythe and Martin
2019).
implement in a range of markets, legal procedures
have turned expensive and prolonged process. Lack
of belief of institutions can result to less investment
into emerging markets by Wesfarmers thus resultant
to slower growth (Blythe and Martin 2019).
 Increasing technological proficiency of
local players in the export market – Hagyari,
Bacik and Fedorko (2016) have noted that one of the
major threat of collaboration with the local players
in the export market for Wesfarmers is risk of losing
increasing technological proficiency. The intellectual
property rights framework is not robust in emerging
markets particularly in China.
Segmentation of Wesfarmers Limited
Segmentation

13INTRODUCTION TO MARKETING
By implementing the segmentation technique, Wesfarmers can constrict its extensive,
diversified target audience into explicit and narrowly defined groupings. According to authors, if
Wesfarmers prefers behavioural segmentation, then its buyers will be segmented as per divided
their purchase patterns such as the usage frequency, payback sought, usage occurrences and
brand loyalty. Furthermore, Wesfarmers can merge the diverse segmentation strategies for more
detailed targeting related to Target and Positioning (Brennan 2014).
Targeting
Wesfarmers shows inclination in offering to its diverse range of buyers who prefer
convenience and ease while shopping. Thus to attract various customers coming from suitable
segments of the customers, Wesfarmers has been offering an assortment of amounts of
concessions, paybacks in addition to other complimentary services for its target group (Fleisher
and Bensoussan 2015).
Positioning
Following the segmentation of the customer market and applying the correct target
market, Wesfarmers recently necessitates to establish a clear positioning statement that could
generate a constructive representation of the obtainable product in the customers' mind (Burns,
Bush and Sinha 2014).
4p’s of Wesfarmers
Product-

14INTRODUCTION TO MARKETING
 Wesfarmers Limited advertises its goods under 5 vital broad groupings where each of
these tends to serve as distinguished product lines. Wesfarmers products are sold under
the brand name of Wesfarmers Limited (Wesfarmers.com.au 2019).
 Products sold by Wesfarmers are considered to be of superior quality in comparison to its
competitors. As a result, consumers are prepared to compensate an elevated price for
these.
 Wesfarmers Limited sells products which are renowned in favor of its conventional
design that is also convenient for clientele to use.
Price
 The present pricing tactic to position the price level that Wesfarmers pursues depends on
competitive based pricing strategy. This is for the reason that the data on rivals in
Australian market is easily accessible because of a great number of competitors that
exists within the industry (Fleisher and Bensoussan 2015).
 Wesfarmers also employs an elective product pricing strategy for assured products,
whereby it a price for the base invention along with disconnected prices for the frills that
develop with it.
 Furthermore, the company tends to charges a superior value for the products it sells
through e-commerce services. This is for the reason that delivery expenses have been
incorporated in the value of the product (Carins and Rundle-Thiele 2014).
Place

15INTRODUCTION TO MARKETING
 Wesfarmers comprises a significant amount of online sales with regular traffic on its
websites for executing its online operations. Thus, Wesfarmers has collaborated with
several delivery service providers to offer well-timed deliveries.
 The company supports and promotes an omni-channel allocation system where it has
incorporated its online as well as offline stores to permit consumers trouble-free access to
its products.
Promotion
 Wesfarmers endorses on a variety of social media platforms with primary center of
attention on YouTube, Facebook, Instagram and Twitter owing to the increased monthly
usage of social media by individuals in recent times. On social media platform it mainly
comprises of around innumerable likes or client subsequent on these pages, which are
open to regular content uploaded by Wesfarmers Australia (Pike and Page 2014).
 The company undergoes various sales promotions in a range of trade presentations and
events around the year.
 Furthermore, Wesfarmers operates individual advertising, with a great sales force to
augment its charisma in Australian retail sector.
Recommendations for Wesfarmers in promoting Juice Drinks
Wesfarmers must expand its additional benefits for promoting its new product of juice
drinks that will include guarantees, delivery as well as credit, after-sales service, helpline
services. Furthermore, the company must further introduce its juice brand which will align to
latest trends in the market and preferences of consumers in the market. Moreover, Wesfarmers
must distinguish prospective chances within the Australian retail sector and introduce new

16INTRODUCTION TO MARKETING
products that make use of these opportunities (Hagyari, Bacik and Fedorko 2016). In addition to
this, the company should evaluate the new brand of juice drink in test markets before going for
complete commercialization. Furthermore, it must introduce broaden strategy to its product
portfolio, offering new products in order to accomplish customer needs.
Conclusion
Therefore, from the above discussion, it can be concluded that there is a significant
importance of marketing analysis for companies like Wesfarmers to understand its position in the
market. Market analysis is the systematic process of data collection to understand the
performance of company which has helped Wesfarmers to distinguish areas and to cater to
customers’ needs. Furthermore, effective market analysis has helped the company to attain
helpful insights into shifts in the financial system, competitors, current market developments,
demographics in addition to the qualities of customers’ expenses.

17INTRODUCTION TO MARKETING
References
Ashley, C. and Tuten, T., 2015. Creative strategies in social media marketing: An exploratory
study of branded social content and consumer engagement. Psychology & Marketing, 32(1),
pp.15-27.
Aung, M.M. and Chang, Y.S., 2014. Traceability in a food supply chain: Safety and quality
perspectives. Food control, 39, pp.172-184.
Bettini, Y., Brown, R. and de Haan, F., 2015. Exploring institutional adaptive capacity in
practice: examining water governance adaptation in Australia. Ecology and Society, 20(1).
Blythe, J. and Martin, J., 2019. Essentials of marketing. Pearson UK.
Brennan, R., 2014. Business-to-business marketing (pp. 83-86). Springer New York.
Burns, A.C., Bush, R.F. and Sinha, N., 2014. Marketing research (Vol. 7). Harlow: Pearson.
Carins, J.E. and Rundle-Thiele, S.R., 2014. Eating for the better: A social marketing review
(2000–2012). Public Health Nutrition, 17(7), pp.1628-1639.
Dowling, R., McGuirk, P. and Bulkeley, H., 2014. Retrofitting cities: local governance in
Sydney, Australia. Cities, 38, pp.18-24.
Fernie, J., 2014. 02 Relationships in the supply chain. Logistics and retail management:
Emerging issues and new challenges in the retail supply chain, p.35.

18INTRODUCTION TO MARKETING
Fleisher, C.S. and Bensoussan, B.E., 2015. Business and competitive analysis: effective
application of new and classic methods. FT Press.
Fleming, A., Hobday, A.J., Farmery, A., van Putten, E.I., Pecl, G.T., Green, B.S. and Lim-
Camacho, L., 2014. Climate change risks and adaptation options across Australian seafood
supply chains–A preliminary assessment. Climate Risk Management, 1, pp.39-50.
Gregson, S., Hampson, I., Junor, A., Fraser, D., Quinlan, M. and Williamson, A., 2015. Supply
chains, maintenance and safety in the Australian airline industry. Journal of Industrial
Relations, 57(4), pp.604-623.
Hagyari, P., Bacik, R. and Fedorko, R., 2016. Analysis of the key factors of reputation
management in conditions of city marketing. Polish Journal of Management Studies, 13(1),
pp.69-80.
Iyer, G.R., Xiao, S.H., Sharma, A. and Nicholson, M., 2015. Behavioral issues in price setting in
business-to-business marketing: A framework for analysis. Industrial Marketing
Management, 47, pp.6-16.
Ko, Y., Kariyawasam, V., Karnib, M., Butcher, R., Samuel, D., Alrubaie, A., Rahme, N.,
McDonald, C., Cowlishaw, J., Katelaris, P. and Barr, G., 2015. Inflammatory bowel disease
environmental risk factors: a population-based case–control study of Middle Eastern migration to
Australia. Clinical Gastroenterology and Hepatology, 13(8), pp.1453-1463.
McMenamin, P.G., Quayle, M.R., McHenry, C.R. and Adams, J.W., 2014. The production of
anatomical teaching resources using three‐dimensional (3D) printing technology. Anatomical
sciences education, 7(6), pp.479-486.

19INTRODUCTION TO MARKETING
Noe, R.A., Hollenbeck, J.R., Gerhart, B. and Wright, P.M., 2017. Human resource management:
Gaining a competitive advantage. New York, NY: McGraw-Hill Education.
Pike, S. and Page, S.J., 2014. Destination Marketing Organizations and destination marketing: A
narrative analysis of the literature. Tourism management, 41, pp.202-227.
Thompson, N., Ravindran, R. and Nicosia, S., 2015. Government data does not mean data
governance: Lessons learned from a public sector application audit. Government information
quarterly, 32(3), pp.316-322.
Wesfarmers.com.au., 2019. Wesfarmers Limited. [online] Available at:
https://www.wesfarmers.com.au/ [Accessed 31 May. 2019]