Benefits and Challenges of Wesfarmers: A Management Perspective

This article explores the benefits and challenges faced by Wesfarmers, one of Australia's largest retailers, from a management perspective. It discusses the company's ethical activities, training programs, competitive pay and benefits, and more. It also delves into the problems the company faces, such as divisional challenges and workforce recruitment. The article provides insights into Wesfarmers' business model, critical success factors, and a feasibility study. It offers a comprehensive understanding of the strengths and weaknesses of this prominent organization.

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Management
Name
Institution

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Introduction
Wesfarmers is one of the largest retailers company in Australia. The company was
formed in 1914 as a Western Australian farmer’s association. The company has expanded its
business activities into home improvements and outdoor living, office supplies, general
merchandise, industrial and business chemical, fertilizers, and safety products. Moreover, the
firm deals with business activities such as liquor, supermarkets, and hotels. The company is
ranked as of the largest employers in Australia. The company aims at anticipating the needs of
their consumers and delivering services and goods that are competitive in nature. On the other
hand, the company aims at dealing fairly with suppliers and handling their outsourcing activities
ethically. Moreover, the company also focusses on maintaining a sustainable environment for its
customers, employees, and the community at large. Just like any other organization, Wesfarmers
encounters challenges in its operations. The company also has weaknesses and benefits to
society, customers, and its employees.
Benefits of Wesfarmers
The Wesfarmers has attracted the investors due to its ethical activities. Investors would
like to invest in a firm that does not pose any risk to their investments. Wesfarmers has
maintained a high ethical standard in its business attracting more investors. The ethical issues
that the company has taken into consideration are the environment, social, and governance
ethics. Ethics is important in any business and it maintains the image of the company hence
attracting potential investors (Chileshe & Dzisi, 2012). However, for those who want to join the
company, there are many benefits that can be acquired. The first benefit is training programs.

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The company has several development programs for leaders and employees both the existing and
those that are willing to join. The training program includes safety and development program,
learn program which is a management system assist employees to access the online training at
their own convenient time and pace.
Another benefit of working as an employee of the company is its competitive pay and
benefits. The company offers competitive salary packages. The employees of the firm are
eligible to a paid maternity leave (Steyn, 2014). The employees are also given discounts on
products. Nonetheless, the firm practices reward programs. Wesfarmers celebrates the
performance of its employees by awarding and recognizing them as a way of appreciating their
efforts. Motivating employees is a critical aspect of a firm. This improves their morale and
output which in turn increased the profitability of the company. The current workplaces are
invaded by people with a different culture, language, and different ethnic background. This has
always created conflicts in organizations (Grissemann & Stokburger-Sauer, 2012). However,
Wesfarmers has encouraged diversity in its organization by creating awareness in the workplace.
The company is currently focusing on the problem related to Torres Satrit and aboriginal people
through supporting them and improving their health services and enhancing aboriginal
employment opportunities in Australia.
Problems facing Wesfarmers
Wesfarmers main challenges arise from to divisions. The first division is mostly the
Curragh coal mine in Queensland which suffered from coal prices, weather delays, foreign
exchange hindering, and reduced costs than the ones contracted to the Stanwell power station.
This led to the earning of Wesfarmers to reduce (Yu & Ramanathan, 2012). However, the

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resource division is affected by the company due to reduced capital returns. This division is
affecting the company’s market opinion of its retail business. On the other hand, the supermarket
wars have greatly affected the company (Schaltegger, Lüdeke-Freund & Hansen, 2016). This is a
great threat to the company’s earnings. The economic deflation has remained to be a major a big
concern to the firm. In cases where Woolworths can grow its market share from Coles,
Wesfarmers operations will be challenges.
Another problem facing Wesfarmers is recruiting the workforce. The company faces the
challenge of developing and implementing an effective process of recruitment. The company’s
productivity and profitability are affected by the nature of the workforce (Orel & Kara, 2014).
Most organizations have a diversified workforce which possesses a great challenge to the human
resource department in attracting, retaining, and motivating the required talents in the
organization. Therefore, Wesfarmers as on the largest retailers in Australia faces the issue of
retaining the right the correct type of employees in the company. The company offers
employment to more than 102, 000 employees in its different retail divisions. The company has
struggled to ensure that the employees work in a healthy environment despite age, gender, and
cultural backgrounds (Leskaj, 2017). Incompatibility between demand and supply of labor has
affected the company in deciding the right type of employees.
The company is also facing demographic issues such as managing the aging workforce
and diversity in the workplace. The company’s workforce belongs to different cultural
backgrounds, gender, and age. Due to diversity, the company faces the challenge of
implementing effective conflict management strategies that suits the diversified workforce. If the
company does not come up with appropriate strategies for managing conflict it may lead to
diverse effects that may impact the effective functioning of the organization. Additionally, the

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company is encountering a drastic reduction in sales because of the rapid growth in the online
retailing and conservation by consumers. Consumes [refer shopping online than going to the
stores because of tight schedules. Consumers also view online shopping as time-saving.
Feasibility
Wesfarmers Company is committed to proceeding with a feasibility study worth &3.5
million concerning an environmentally sound paper and pulp mill project. This project has been
viewed to be a major industry new industry in Western Australia. The project will be based on
world-class technology. Additionally, the project is viewed to be environmentally friendly to the
world and lead it into paper and pulp development. The project is projected to increase the value
of timber six-fold through pulp production. The project is approximated to cost $450million to
construct and in turn, it will produce a return of $200 million annually and create 200 full-time
employment opportunities.
Business model
Wesfarmers uses the canvas business model. This model assists the company in
identifying new ways that can add value to its retail business due to the rapidly changing market
(Elmontsri, 2013). The model has assisted the company to identify the economic, environmental,
global, technological, political, local, and national factors that may affect its operations.
Moreover, it has assisted Wesfarmers to plan on how to generate revenue and make a profit from
its retail operations across its satellites. The company created this model by following the
following steps; acquiring high-value consumers who can be easily located and allows the
company to change to a profitable price (Moeuf, et al., 2016). The second step was offering
significant value to the customers through better distribution channels. The third step was by

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providing satisfaction consumer satisfaction by offering services such as great warranty costs.
The fourth step was delivering high margin products followed by maintaining the company’s
market position and funding effectively its retail business. This model has assisted the
Wesfarmers Company to achieve success in its retail business.
Critical success factors
The critical success factors of Wesfarmers include good return on expenditure. The
company has been successful in executing new projects which have produced a good return on
capital expenditure by creating new steam for revenue. Furthermore, the company has reliable
suppliers across its business divisions (Müller & Jugdev, 2012). The firm has reliable suppliers
which have enabled it to curb the supply chain problems. The supplier’s problems may reduce
the number of sales due to delay and may make the company lose potential customers. The
company has maintained a high level of customer satisfaction. The aim of the company is to
build a strong relationship (Buh, Kovačič & Indihar Štemberger, 2015). The company has built
its brand to suit the customers’ needs and offer the best customer services to both the present and
potential customers. Additionally, the company has highly skilled employees which the company
has continued to develop through training programs (Umble, Haft & Umble, 2013). It has
invested a lot in training the employees which have resulted in a skilled workforce. Another
important success factors integrating firms through acquisitions and mergers. The company
successfully achieved this by integrating several technology firms in the past to bring together its
operations and create a reliable supply chain.
Conclusions

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Wesfarmers is one of the largest retailers in Australia. However, just like any other
organization, the company has several factors that affect it positively and others negatively. One
of the factors that benefit the company is the development programs for leaders and employees
both the existing and those that are willing to join. This equips the leaders and employees with
the necessary skills required for business operations. On the other hand, the company faces the
challenge of recruiting the workforce through developing and implementing an effective process
of recruitment. This affects the company’s productivity and profitability. Despite the challenges
that the company faces, it has several critical such as factors such as reliable suppliers, skilled
workforce, and a high level of customer satisfaction.

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