External Environmental Analysis of Wesfarmers Limited
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Added on 2023/06/13
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This paper analyzes the external environment of Wesfarmers Limited using PESTLE tool and discusses the threats and opportunities present for the company in today’s market.
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Running head: EXTERNAL ENVIRONMENTAL ANALYSIS External Environmental Analysis Name of the Student: Name of the University: Author note:
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1EXTERNAL ENVIRONMENTAL ANALYSIS Executive Summary The paper has been carried out on the key objectives of Wesfarmers Limited, an Australia based company. It has been assessed the strategies used by it in order to ensure a smooth flow of the organizational work. Paticularly, the paper is completely focused on analyzing the external environment of this company using PESTLE tool and has also shed light on the threats and opportunities present for Wesfarmers Limited.
2EXTERNAL ENVIRONMENTAL ANALYSIS Table of Contents Introduction................................................................................................................................3 Discussion..................................................................................................................................3 Case background....................................................................................................................3 Theoretical Framework..........................................................................................................4 Environmental analysis..........................................................................................................4 Summary of threats and opportunities:..................................................................................6 Conclusion..................................................................................................................................6 References:.................................................................................................................................7
3EXTERNAL ENVIRONMENTAL ANALYSIS Introduction Competition has always been the central to both the success and failure of a company in an industry. The companies through their own strategy seek to achieve the top most positions within their respective industries and competitive advantage is the potential of the companies in order to gain their desired position through the available resources and attributes. (Ross 2013)The main aim of this paper is to evaluate the key objectives and the strategies of an Australian based company known as Wesfarmers Limited. This paper shall elaborate on the analysis of its external environments by using PESTE tool. It shall further elaborate on discussingthe threats and opportunities present for the company in today’s market. Discussion Case background WesfarmersLimitedisadiversifiedAustraliancompany,whichhasbusiness operations in industrial and retail activities. It was earlier known as the Western Australian Farmer’s cooperative (Gilchrist 2015). The retail activities of this company consist of liquor, supermarkets, convenience stores and hotels; office supplies and home improvements; apparel retailing and departmental stores. Its industrial activities consists of industrial and safety;resources;andfertilizers,energyandchemicals.Thiscompanymarketsand manufactures chemicals, LPG, LNG and fertilizers and is headquartered in Perth, Australia. Its target group includes the shoppers who seek for convenience, variety, services and discounts (Le and Phillips 2015).In today’s date, the company is one among the largest listed companies in Australian area, employing more than 220,000 employees in its business.
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4EXTERNAL ENVIRONMENTAL ANALYSIS Theoretical Framework External marketing environment analysis is a process of identifying all the internal and external elements has the potential to affect the performance of an organization (West andBogers2014).Thisanalysisrequirestheassessmentofthelevelofthreatsand opportunities that might present. It is a primary study of the macro environmental forces, competitor analysis and industry analysis in the purview of the growth of an organization. The external marketing environment plays a very crucial part in shaping up of the future of the whole industries and also those of individual businesses (Hung and Chou 2013). This analysis helps in gaining an insight of the environment that the business is in and the various factors that may influence it. The most relevant environments that need to be analyzed are that of the social environment, political environment, technological environment, and economic environment. Environmental analysis Competition:In the formulation of a strategy for business, the managers must take into consideration the strategies of the company’s competitors (Weatherall 2013). The major competitors of Wesfarmers Limited are Myer, Woolworths, Best & Less and Metcash Limited. Economic growth and stability: 1.There is a low growth rate for Wesfarmers Limited. 2.In comparison to the international markets, the wage costs for Wesfarmers Limited is higher. 3.Increased strength of the New Zealand and Australian dollars. Political trends:
5EXTERNAL ENVIRONMENTAL ANALYSIS 1.The regulations of Ad hoc 2.Restriction in the trading hours 3.Zoning, retail tenancy and planning leases Legal and regulatory issues: 1.The sale of the supporting division to the Australian group 2.The sale of the Wesfarmers Limited insurance broking division to theArthur J. Gallagher & Co in the year 2014 Technological advancements: 1.The technology authorized VAS (Value added services) 2.The use of technology in order to foretell or predict the preferences of the customers and reduce the costs of the business. 3.The increase in online shopping via mobile phones or other electronic or net devices Socio-cultural trends: 1.Increase in the average educational qualification in the population 2.Gradual increase in the average life expectancy 3.Significant increase in the engagement of women in the current workforce Marketing strategies and plan: 1.Transforming their liquor offering 2.Extending the value leadership of the company 3.Increasing the space growth and accelerating the density of the sales 4.Differentiating Coles through growth channels
6EXTERNAL ENVIRONMENTAL ANALYSIS Summary of threats and opportunities: Threats refer to the situation when the eternal factors jeopardize the smooth running of a business, while opportunities are the ones that are present everywhere that must be taken and utilized in order t improve the productivity and profitability of a business. The threats present for the Wesfarmers Limited include that it is facing high competitions in the market from its competitors. The competitors of it are offering specialized products and services to the customers at an equitable price levels. With the same, the economic downturn is leading to lower demand and plunged level of customer confidence. However, there are several opportunities present for this company as well. It can expand its business outside of Australia. It can enhance its service, experience and quality benchmarks across the stores along with taking customer and employee loyalty initiatives across its businesses. Conclusion Hence, it can be said that the paper has been instrumental especially to identify the strategicallyimplicationoftheWesfarmersLimitedcompanyresultingtoitshigh performance in the market. The Pestle analysis and the summary of both the threats and opportunities, using both macro and micro level factors are representative to the development and fluctuation in the company beyond several different product and service portfolio.
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7EXTERNAL ENVIRONMENTAL ANALYSIS References: Gilchrist, D.J., 2015. Antipodean Owenite or colonial socialist: Charles Harper, economic development, and agricultural co-operation in Western Australia, 1890 to 1910. Hung, K.P. and Chou, C., 2013. The impact of open innovation on firm performance: The moderating effects of internal R&D and environmental turbulence.Technovation,33(10-11), pp.368-380. Le, L. and Phillips, J., 2015. LNG: An emerging transport fuel.Energy News,33(4), p.15. Ross, D.F., 2013.Competing through supply chain management: creating market-winning strategies through supply chain partnerships. Springer Science & Business Media. Weatherall, A., 2013.Computer Integrated Manufacturing: a total company competitive strategy. Elsevier. West, J. and Bogers, M., 2014. Leveraging external sources of innovation: a review of research on open innovation.Journal of Product Innovation Management,31(4), pp.814-831.