Marketing and Strategy

This report focuses on Business Development strategies of Wesfarmers for the next 12 months. It includes company background, strategic development history, SWOT analysis, PESTLE analysis, development of strategy, impact of mergers and acquisitions, international strategy and alliances, leadership and entrepreneurship, and structure, control, and governance.

Running Head: MARKETING AND STRATEGY
Marketing and strategy
Student’s Name
University Name
Author’s Note

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MARKETING AND STRATEGY
Executive Summary
Wesfarmers Limited was established in the year 1914. The business domain of Wesfarmers has
now spread across various sectors in Australia and outside the country also. The company got
listed in the Australian securities exchange in 1984 and gradually developed as a major retail
conglomerate. The company has established itself as one of the biggest corporate brands in the
Pan-Pacific region through the policy of mergers and acquisitions. Wesfarmers has several other
subsidiaries working in foreign countries like Australia, India, UK, Indonesia, Hong Kong,
China, and New Caledonia and so on. the main subsidiaries of West farmers Limited include
BBC hardware, Coles Group superannuation fund, Fosseys, grocery Holdings Private Limited,
Howard Smith, loyalty Pacific, Viking direct, Coles Ansett Travel and so on. Large numbers of
physical stores of Wesfarmers are there in Australia. Recently the country has ventured for
merger and acquisition with several foreign brands in order to establish the company as a global
brand. They have more than 30 subsidiaries operating in countries outside Australia and in Asia
also, including UK as well. There is little scope for further innovation in the business space of
Australia because of high level of market saturation. This is why strengthening of existing
business is very important by enabling operating excellence and prompt satisfaction of customer
needs. Strategies for better customer service have been highlighted in this report. Saturation in
the Australian market will force Wesfarmers to find scope for foreign markets. The analysis of
most potential acquisitions like Coles and Bunnings have been done in this report and in the light
of the latest corporate policies, recommendations for the upcoming 12 months have been
suggested here.

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Table of Contents
Introduction......................................................................................................................................3
Company background......................................................................................................................3
Strategic development history......................................................................................................3
SWOT analysis................................................................................................................................4
Strengths.......................................................................................................................................4
Weakness.....................................................................................................................................5
Opportunities................................................................................................................................5
Threats..........................................................................................................................................5
Pestle analysis..................................................................................................................................5
Political factors............................................................................................................................5
Economic factors..........................................................................................................................6
Socio cultural factors...................................................................................................................6
Technological factors...................................................................................................................6
Legal factors.................................................................................................................................6
Environmental factors..................................................................................................................7
Development of strategy..................................................................................................................7
Impact of mergers and acquisitions.................................................................................................7
International strategy and alliances.................................................................................................8
Leadership and entrepreneurship.....................................................................................................8
Structure, control and governance...................................................................................................8
Conclusions......................................................................................................................................9
Reference List................................................................................................................................10

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MARKETING AND STRATEGY

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MARKETING AND STRATEGY
Introduction
This report focuses on Business Development strategies of Wesfarmers for the next 12 months.
After providing description of the initial company history and the track of strategic development
detailed analysis of the internal and external business environment of the company has been
conducted in this report. This is to be followed by recommendation for business, corporate and
functional level strategy development of the company for the same time period. The business
domain of Wesfarmers has spread across various sectors in Australia and outside the country
also. Hence strategic analysis of the impact of mergers and acquisitions of the company is crucial
to determination the future strategy. The next section the international Alliance strategy followed
by Wesfarmers has been analysed. Lastly recommendation regarding organisational control and
governance also provided in this report.
Company background
The Australian company Wesfarmers Limited was founded in the year 1914 as a Cooperative
firm for providing services as well as merchandisers to farmers of West Australia. The company
got listed in the Australian securities exchange in 1984 and gradually developed as a major retail
conglomerate. The headquarters of Wesfarmers is situated in Perth, West Australia. The business
of the company is predominantly spread across Australia and New Zealand in the sectors like
retail, Chemicals, Industrial and safety products, fertilizers as well as coal mining
(Wesfarmers.com.au, 2018).
In the financial year 2016-17, Thomas Limited generated and annual revenue of $65.98 Billion
AUD.
Strategic development history
The Westralian farmers Cooperative Limited was established in the year 1914 by the Farmers'
and Settlers' Association of Western Australia. The farm was initially established for acquiring
the Assets of West Australian producers Union and for providing services as well as
Merchandise to the rural community of West Australian. Wesfarmers was able to accumulate 65
local Co-operative forms within 5 years of its establishment. Within 1940, Wesfarmers head
gained countrywide rights for distribution of wool, livestock skin and other producers

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(Wesfarmers.com.au, 2018). They have been also acting as green and fruit exporters, insurance
underwriters as well as acquisition agents for the Westralian farmers Limited.
In the year 1949, Ashburton Transport was purchased by the company and in the next year they
acquired their major competitor Gascoyne Trading, thereby gaining Monopoly of operations in
the Northwest of West Australia. In the year 1984 the name Wesfarmers Limited was listed as a
public company on the Australian securities exchange.
At present the business divisions of Wesfarmers Limited includes home improvement and office
supplies, Kmart, target, departmental stores, supply of industrious like Chemicals, energy and
fertilizers, resources Industrial and safety equipment and so on. Wesfarmers has several other
subsidiaries working in foreign countries like Australia, India, UK, Indonesia, Hong Kong,
China, and New Caledonia and so on. the main subsidiaries of West farmers Limited include
BBC hardware, Coles Group superannuation fund, Fosseys, grocery Holdings Private Limited,
Howard Smith, loyalty Pacific, Viking direct, Coles Ansett Travel and so on
(Wesfarmers.com.au, 2018).
SWOT analysis
Strengths
 Consistency of brand awareness and corporate value since 1914 shows the excellence of
Management and operations of Wesfarmers Limited.
 strong emphasis on taking up initiatives for community development increases the brand
equity of the company in the corporate market
 Wesfarmers delivers convenience as well as customer service promptly
 Quality and performance are key metrics of the organisational culture
 Large number of physical stores located in from locations along with experienced in store
staff is one of the biggest strength of the company
 with a workforce of 200000, Wesfarmers Limited is the biggest retail chain in South
Pacific region
 Along with physical change, the company also have E-Commerce portal. A Coles’
spokesperson reported that their new mobile-enabled website was now live for consumers
who wished to shop online from their mobile device (Ausfoodnews.com.au. 2014).

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MARKETING AND STRATEGY
 There is variety in product and pricing which helps to suit every price points for the
company and as an outcome they can acquire wide range of consumers also.
Weakness
 The main operations of West farmers are limited to Australia which implies low
Geographic presence
 Being a leader in the market, their business decisions are largely criticized in various
platforms
Opportunities
 Recently the country has ventured for merger and acquisition with several foreign brands
in order to establish the company as a global brand. They have more than 30 subsidiaries
operating in countries outside Australia and in Asia also, including UK as well.
 This Rapid expansion rate outside Australia is supposed to give the company a hike of
30% in annual revenue generation within 2 to 3 financial years.
 They are always up to enhancing the quality of service and customer experience, thereby
setting Benchmarks across physical retail stores of Australia
 Significant employee and customer loyalty initiatives have been taken which makes the
company a high rated employer.
Threats
 New entrants in the Australian business sector is one of the biggest threats for
Wesfarmers Limited
 Recent economic downturn and the depreciation of the value of Australian dollars against
US dollars has been plummeting the confidence level of customers and brought about a
dynamic reduction in demand.
Pestle analysis
Political factors
 Restrictive hours of trading limit the sales of the company
 Planning and zoning costs is high in Australia because of which the operational costs also
become higher

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MARKETING AND STRATEGY
 The Ad-Hoc regulations of Australia also affect the business of West farmers
Economic factors
 market situation of Retail Industry accounts for low growth rate in recent times
 the wage rates in Australia higher compared to the Global market because of which the
sales to cost ratio of the company is low
 However, recent increase in strength of Australian and New Zealand dollars is a positive
factor for retail firms like Wesfarmers
Socio cultural factors
 the average life expectancy of Australians is gradually increasing which is why the need
for domestic products is also enhancing
 Active and increased participation of women in the workforce is helping Wesfarmers to
increase Frontline sales
 increase in average education equality among Australians is leading them to prefer
packaged and processed products thereby visiting retail stores for their regular purchases
 The brand affinity of Australians has also increased, which is why they visit branded
retail outlets more often.
Technological factors
 Increment of online shopping tendency will help to faster sales to E-Commerce channels
of the company
 use of disruptive Technology for affecting consumer preferences is also helping
Wesfarmers to increase brand loyalty
 using consumer Data Analytics is helping Wesfarmers to cut down advertisement cost
and thereby generate more business value
 Technology enabled VAS helps a great deal in customer retention
Legal factors
 Sale of insurance broking division to Arthur Gallagher and company in 2014
 The underwriting division of the company has also been sold to Insurance Australia
group

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MARKETING AND STRATEGY
Environmental factors
 The student forms with heavy transport needs, I liable to report the admission rates under
the NGER Reporting Act.
 As stated in the annual reports of Wesfarmers, 2018, waste to landfill has been reduced
by 6%.
Development of strategy
The primary aim of Wesfarmers' business is to provide satisfactory return to their shareholders.
There is little scope for further innovation in the business space of Australia because of high
level of market saturation. This is why strengthening of existing business is very important by
enabling operating excellence and prompt satisfaction of customer needs (Porter, 1996). For
fulfilling these criteria, West Pharma Limited should open up convenience stores for the
customers and develop a 24*7 customer grievance reporting agency. This will help the company
to gain in depth idea about the needs of the customers. They will also be able to understand what
percent of customer needs, they are able to fulfil, thereby also recording the specific
requirements of the customers for which they have to avail products of other brands.
Entrepreneur initiatives like opening more franchise stores across Australia needs to be done in
the next 12 months. Besides that, Wang (2016), states that there should be sustainability
maintained through responsible and long-term management body. That is why it is necessary that
during the implementation of the above mentioned changes at business level, the management
and executive body of the company should be kept unchanged.
Impact of mergers and acquisitions
It can be estimated that after selling out Curragh call assets followed by demerging o Coles and
selling out Bunnings, Wesfarmers are still left with adequate lift capacity for funding acquisition
words 12 billion Australian dollars (Blake, 2018). It is expected that Wesfarmers will make for
acquisition of potential targets like Oil Search, Caltex BlueScope Steel, all with enterprise value
above 10 billion Australian dollars (Mictchell, 2018). However at present, it is recommended
that was promised should more likely acquire the unlisted companies because market valuation
after the demerging of Coles has become too high.
International strategy and alliances

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MARKETING AND STRATEGY
The acquisition of Bunnings in UK and Ireland has been the greatest foreign expansion of
Wesfarmers so far. As stated by Stanton (2016), there is ample scope in the home based services
which is why the Business expansion of this acquired company is supposed to be rapid.
However, in order to create competitive advantage the home retail service based company have
to develop a network of at least 12 to 15 strategic allies within the next 24 months or so. After
UK, Wesfarmers is attempting to enter the home retail market of USA as well as Canada through
their conglomerate strategy. It is evident that they will be adopting the joint venture technique for
development of strategic Alliance. However there are ample risks related to aggressive
expansion like unequal distribution of benefits with partner companies.
Leadership and entrepreneurship
Wesfarmers Richard Goyder has played a significant role in bridging the gap between business
and Federal politics. The significance of his role stretches to brilliant handling of the changes in
competition laws and Bank levied charges that could have had large impact on the company. His
influence on the government has helped to water down company tax cuts and bring about
exemption in the energy bill of the company also. as an impact, the resource-based cost to
company has been significantly low compared to the other major retailers in the Australian
circuit.
Structure, control and governance
The board comprises of nine days at the moment including 8 non executive directors. The
mixture of skills, expertise diversity and experience of the deltas help them to discharge the
responsibilities and deliver the strategic priorities for the company as a corporation with
diversified business. The group managing director of the company is Rob Scott and the company
was able to accomplish the successful Bunnings deal under his tenure only. He played a
significant role in guiding New Zealand economy out of the financial crisis by initiative tax
reforms and implementing partial floats of five government firms (Wesfarmers.com.au, 2018).
Hence, his role is a critical to the company. The same is applicable for Archie Norman who has
significant experience of Retail Management and is currently the director of Coles and Target.
However it is recommended that David Cheesewrighthaving 19 years of retail and manufacturing
management experience with Walmart, should be provided with a more significant role than
being a nominee on the Coles Board only (Blake, 2018).

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MARKETING AND STRATEGY
Conclusions
At present the business divisions of Wesfarmers Limited includes home improvement and office
supplies, Kmart, target, departmental stores, supply of industrious like Chemicals, energy and
fertilizers, resources Industrial and safety equipment and so on. • Consistency of brand
awareness and corporate value since 1914 shows the excellence of Management and operations
of Wesfarmers Limited. Large number of physical stores located in from locations along with
experienced in store staff is one of the biggest strength of the company. With a workforce of
200000, Thomas Limited is the biggest retail chain in South Pacific region. The primary aim of
Wesfarmers' business is to provide satisfactory return to their shareholders. There is little scope
for further innovation in the business space of Australia because of high level of market
saturation. This is why strengthening of existing business is very important by enabling operating
excellence and prompt satisfaction of customer needs. Moreover, Wesfarmers is also destined to
expand the scope of their business. It is expected that Wesfarmers will make for acquisition of
potential targets like Oil Search, Caltex BlueScope Steel, all with enterprise value above 10
billion Australian dollars. However at present, it is recommended that was promised should more
likely acquire the unlisted companies because market valuation after the demerging of Coles has
become too high. In order to create competitive advantage the home retail service based
company have to develop a network of at least 12 to 15 strategic allies within the next 24 months
or so. After UK, Wesfarmers is attempting to enter the home retail market of USA as well as
Canada through their conglomerate strategy. It is evident that they will be adopting the joint
venture technique for development of strategic Alliance. However there are ample risks related
to aggressive expansion like unequal distribution of benefits with partner companies.

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MARKETING AND STRATEGY
Reference List
Ausfoodnews.com.au. (2014). Wesfarmers reveals strategies to grow Coles and other businesses.
Australian Food News. Retrieved on 21st March 2019. Retrieved from
http://www.ausfoodnews.com.au/2014/05/28/wesfarmers-reveals-strategies-to-grow-
coles-and-other-businesses.html
Blake, D. (2018). Shareholders to vote on Coles demerger next month. InsideRetail Australia.
(Online). Retrieved on 21st March 2019. Retrieved from
https://www.insideretail.com.au/news/shareholders-to-vote-on-coles-demerger-next-
month-201810
Mictchell, S. (2018). Wesfarmers' M&A firepower hits $12b post Coles demerger: Citigroup.
afr.com. Retrieved on 21st March 2019. Retrieved from
https://www.afr.com/business/retail/wesfarmers-ma-firepower-hits-12b-post-coles-
demerger-citigroup-20180606-h110zi
Porter, M. E. (1996). What is strategy. Published November.
Stanton, R. (2016). Corporate strategic communication: a general social and economic theory.
Macmillan International Higher Education.
Wang, S. (2016). Corporate Retailing. International Encyclopedia of Geography: People, the
Earth, Environment and Technology: People, the Earth, Environment and Technology, 1-
12.
Wesfarmers.com.au, (2018). 2018 Wesfarmers Sustainability Report is available
atsustainability.wesfarmers.com.au. THE BOARD OF WESFARMERS LIMITED.
Retrieved on 21st March 2019. Retrieved from
https://www.wesfarmers.com.au/docs/default-source/corporate-governance/2018-
corporate-governance-statement.pdf
Wesfarmers.com.au, (2018). Structure and composition of the Board. WESFARMERS
SUSTAINABILITY REPORT 2018. Retrieved on 21st March 2019. Retrieved from
https://sustainability.wesfarmers.com.au/our-principles/governance/robust-governance/
structure-and-composition-of-the-board/