Corporate Venturing: External Analysis Report for Bunnings Warehouse

This report provides an external environment analysis of Bunnings Warehouse, a leading home improvement retailer in Australia and New Zealand. The analysis covers eight key domains: technological, economic, competitive, labor, resource, customer, legal/regulatory, and global environments. The report examines the opportunities and threats presented by these domains, such as technological advancements, economic fluctuations, and competitive pressures. It discusses Bunnings' strategies to leverage opportunities like mergers and acquisitions, expansion, global ventures, and marketing innovations while mitigating threats like cyber security issues, economic uncertainties, and labor costs. The report concludes with recommendations for the company to enhance its business performance, emphasizing the need for adaptability and strategic planning to maintain its market position and achieve sustainable growth. The report is based on information available until March 2019.

External Analysis Report for Bunnings Warehouse
Assignment 1 IBU5COV Corporate Venturing
3/30/2019
La Trobe University
Student name
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Executive Summary
Bunnings warehouse is a company that provides home improvement products to their
customer with their lowest prices policy. This report will provide the details about the eight-
domain environment of Bunnings Warehouse Company. It will also explain about the
opportunities and threats for the company from different things, such as buying power of
customers.
This report will conclude with major point about the different environment of the
company and recommendations for the company to enhance the business.
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TABLE OF CONTENTS
Executive Summary………………………………………………………………………………………………………….2
1. INTRODUCTION AND COMPANY OVERVIEW.........................................................4
2. EXTERNAL ENVIRONMENT ANALYSIS.....................................................................4
2.1 Technological Environment............................................................................................................ 4
2.2 Economic Environment................................................................................................................... 5
2.3 Competitive Environment............................................................................................................... 5
2.4 Labour Environment....................................................................................................................... 6
2.5 Resource Environment.................................................................................................................... 6
2.6 Customer Environment................................................................................................................... 7
2.7 Legal and Regulatory Environment................................................................................................ 7
2.8 Global Environment........................................................................................................................ 7
3. INTERPRETATION AND DISCUSSION.........................................................................8
3.1 Main Opportunities......................................................................................................................... 8
3.2 Main Threats................................................................................................................................... 8
4. CONCLUSION......................................................................................................................... 9
5. REFERENCES....................................................................................................................... 10
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1. Introduction and Company Overview
Bunnings Warehouse (BW) is a leading retailer company, which is providing home
improvement as well as outdoor living products to its customers in Australia and New
Zealand. It is having a good reputation in this industry because of its good products and better
services. BW is a major supplier to housing industry, projects builders, as well as
commercial tradespeople (Bunnings, 2019).
BW believes that their team members are the soul and heart of the business in
Australia and New Zealand. All the staff member of BW is having special skills to complete
their work in a good way, such as innovation, integrity, achievement, leadership, respect, and
teamwork (bunnings.co.nz, 2019).
They are following the culture and they manage all the work to achieve their vision.
They are also strict about the environment. They pursue sustainability in their operations to
make them economically viable, environmentally aware and socially responsible. Climate
change is a risk in front of the Bunnings warehouse ( Kramer, 2013).
2. External Environment Analysis
There are many things to manage the work and it is a necessary thing that all the team
members should have some missions to achieve company vision. There is eight-domain
environment framework, which is used for the analysis of company from different aspects.
Investors are highly interested in the Burnings Warehouse because of good image in the
market ( Foster, 2019).
2.1 Technological Environment
Bunnings Warehouse is always welcome new technologies in all the operations, such
as production, marketing, management, and many others. BW is having IBM XIV storage
system with 54 Terabytes capacity to store the data and improve stock inventory. It is having
latest technologies in mining process and other management works. Bunnings Warehouse is
having a strong Management Information System (MIS) that can manage all the operations of
the organization. Artificial Intelligence and machine learning is used to manage all the
mining processes and management processes. It has their own SAP system, which provides
different facilities to all the employees and other members. Every business is requiring a
better technical background to handle all the risk and manage different operations of the
company in a proper way (360strategy.co.il, 2011).
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They are having many data and information on their information system. Therefore,
they also have cyber security for their intellectual properties. However, cyber security is a
new concern in present era. Every business is having confidential data in their computer
system. Therefore, cyber security is essential for them (Barkly, 2018). Technologies are
changes but they are having few issues with their privacy and security. Therefore, it is
necessary to secure all the information as well as system from cyber-attacks. Cyber security
is necessary things to secure the resources and information from cyber-attacks (ACSC, 2017).
There are many cyber-attacks possible on technologies, which are as:
Data Theft: Data theft is another issues in that theft can change the data files, because of
physical access in a particular area. Therefore, it is necessary to lock all the devices in a room
with surveillance using CCTV camera and person.
Sabotage: In favor of information system, physical damage affects the working of complete
system. Insiders are having knowledge about the hardware. In addition, they can physical
damage the hardware, because of any personal issues, which can effects the performance of
the organization.
Vandalism: Hardware damage because of any reason is considered a serious threat to IS.
Organization cannot access the services as well as resources. It is necessary to reduce
physical damage. Company should create strong infrastructure to protect hardware of an
information system.
2.2 Economic Environment
BW is having their business in Australia and New Zealand. Therefore, it is affected by
unpredictability of price in different countries. International market is based on the exchange
rates as well. It is a way to manage the exchange rate and take high growth from same
products (Ballantyne, Newcastle Bunnings sells on huge yield, 2018). Business is affecting
from interest rate of the domain country and it is making a huge difference in earning of the
organization. Every country is having their tax policies. Therefore, the company should
consider the tax incentives of the government of selected country to enhance the business and
production (www.bunningscareers.com.au, 2019).
BW is having many plants in different countries to mine the material and sale it in
different places. However, it is so tough work to identify the reasons of degradation. Business
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cycle is a process that can manage all these things. It has $43,400 GDP per capita. According
to many surveys, it is having 2.5 percent inflation rate. BW is having 2.75 percent of interest
rate ( Bailey, 2019).
2.3 Competitive Environment
Bunnings Warehouse is having many competitors in Australia and New Zealand. In
addition, it is a basic thing to have competitors in the same field. Housing is an industry,
which can provide many benefits in high scale. It is a basic need to reduce competition in the
market. The organization is applying different marketing strategies to reduce the competition
in market ( Mitchell, 2015). Bunnings Warehouse is adopting new technologies and
innovations to take competitive advantage. It has research and development team, which
provides ma y innovative ideas to reduce competition in market place. Second and most
important thing is that Bunnings Warehouse makes competitors as a partner or customer,
which reduces competition in market ( Hatch, New Bunnings rival finalised as Home and
Mitre 10 merge, 2016).
2.4 Labour Environment
In home products industry, labour is too costly as this work is having huge risk.
However, all the security arrangements are always ready to handle any risks. Risk assessment
and risk mitigations are analyses through the company before starting the mining. There was
huge loss because of flood and bad weather conditions to Bunnings Warehouse. In present
time, they are having latest technologies, which can reduce risk of different operations and
other issues. Health issues are also affecting the business of Bunnings Warehouse. The
company is having sufficient resources for managing health issues of their employees
(DesJardins, 2014).
Every industry is having few side effects in their work, but it can reduce using proper
precautions as per international standards. Labour is so costly in this field, as this work is
risky and highly professional. It requires professional labour that can manage all the
situations. Home products industry is having new technologies, which requires technical
personal. Bunnings Warehouse is providing many benefits to their employees. It is also
having contract labour for managing different emergencies and other works. Employees are
more mobile and less loyal in this profession. Therefore, it is necessary to provide better
incentives to labour and make them more loyal for company (Donovan, 2017).
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2.5 Resource Environment
Resources are assets of an organization. Bunnings Warehouse is having many
resources and it is necessary to manage all the resources in a proper way. It will increase the
productivity and profitability of the organization. It is an environment, which is affecting the
working of the company. It is a common thing for organization that few reasons can increase
resource scarcity (Hatch, In for $705m, out for £1: Wesfarmers abandons UK Bunnings
disaster, 2018).
Bunnings Warehouse is having skilled workers in their teams and they are having
specialized tools and techniques for different operations and other works. There are many
innovative changes are happened in the mining field. Therefore, older technologies are
replaces by new one (Ross, 2013).
2.6 Customer Environment
In home products field, customers are so demanding with products and services. In
addition, it is so complex to fulfill all the demands of customers. It is directly affecting the
market. It is a necessary step to make their customers satisfied with products and services
(Wynn, 2018). However, customer pays high for desired products and services. There are
many customers, which are having lifetime relationship in this field. Home product is a base
of many industries. It provides many things, which are base of many businesses
(awlnsw.com.au, 2018).
2.7 Legal and Regulatory Environment
In this field, there are many aggressive regulations, as compared to other industries.
The company is following all the rule and regulation for mining and other processes. It is also
having product liability. This industry is also affecting the environment. Therefore, it is
necessary to follow all the legal things according to laws of local and national governments
as well as international standards of environment. It is a huge compliance cost to maintain all
the regularity for mining business. BW is stated their new stone in UK in 2018 (Brook,
2018).
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Source: (Brook, 2018)
In international market, there are many mandatory benefits for employees. Therefore,
it is necessary to follow them in a proper way. Although it works for sustainable development
for free and fair-trades (360strategy.co.il, 2011).
2.8 Global Environment
International market strategy is applied in the business of the company. It is necessary to use
real-time communication in all business processes. BW is having production and distribution
process at huge level. It is necessary to manage the production and distribution processes
virtually from headquarter. Technologies are making distance small in terms of
communication. It is an easy process that production can start and stop any time effective
communication. It affected the cost of the company (Akbar & Ahsan, 2014).
Source: (Wynn, 2018)
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International business is having more sophisticated competitors, customers, and
suppliers located around the world. Therefore, it is necessary to take competitive advantage
through international strategic alliances and global outsourcing ( Albeck-Ripka, 2018).
3. Interpretation and Discussion
There are many opportunities for the BW in the field of home products, as it is
already occupied international market. Still it can have scope to increase the business at
global level (Anderson, Narus, & Narayandas, 2009).
3.1 Main Opportunities
BW is having many opportunities in housing industry, which are as:
1. Mergers and Acquisitions: BW can merge small companies to gain competitive edge.
It provides many advantages in term of human and non-human resources in different
sectors. Collaboration is a best way to reduce competition. BW is targeting 42 pecent
aged between 25-54 in Australia (Ballantyne, Newcastle Bunnings sells on huge
yield, 2018).
2. Enlarging operations: the company is having good financial condition in present time
in Australia. Therefore, they can expand the existing operations. It will more increase
the financial status of the company.
3. Global ventures: BW is already having business in other countries. In addition, the
company can collaborate with local companies to grow. It will enhance the reputation
of the company in global market. BW is having more than 1000 austraian and
international suppliers (Chen, Chiang, & Storey, 2012).
4. Innovations in advertising and marketing: innovation is helping in survive in industry,
as competition level is so high in present time. BW is having an approach of business,
which is Business-to-Business (B2B) ( Ballantyne, Bunnings and supermarket trio on
show at anniversary auction, 2018). Therefore, it is beneficial to use effective
channels for marketing to grow and sustain in industry. Innovations are a fresh idea to
solve a problem of existing system or creating a new system for problem solving
(Chesbrough, 2010).
3.2 Main Threats
Every industry is having threats from different things, such as new entrants, suppliers,
buyers and many others. There are some main threats of BW:
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1. Fluctuations in demand: in present time, different companies are growing their
industries in a high rate. They established their own manufacturing industries in-
house. Therefore, demand of products and services are fluctuating. This can be a
major threat to the BW in future ( Linden, 2015).
2. Increasing competition in global market: the company is facing high competition
from many organisations, which are having a good level of products and services.
This can be a major threat for BW in future.
3. Increasing Cost: Raw material is available in high cost and it will affect the
production cost of the company. It will decrease profitability in future.
4. Political threats: this can be a major threat for the BW, as some mishaps occurred
in present government. Government can change the interest rate, exchange rate,
and tax incentives, which make a huge effect in cost of production and
manufacturing of company. These government agencies forces BW to give their
employees a safe working environment according to the Australian business rules
and regulations (Hutt & Speh, 2012).
4. Conclusion
In conclusion, it is concluded that from the last parts on this report that different
environments are affecting the business of BW. Therefore, it is necessary to identify the
opportunities of the company and take them in proper time. It is also compulsory to identify
threats of company and mitigates them in a better way, such as market mix strategy, and
many others.
BW is having a good image in the home product industry as well as in international
market. In addition, it can take it positive way and use it for the new businesses of the
company. However, BW is having a huge production, manufacturing and marketing
operations.
Finally, it is concluded that external environment are helping in the growth of an
organization. BW is having a better financial condition in present time. It can invest and
expend in different operations. It will provide more benefits to company and it will enhance
image of BW in Australian market as well as in international market.
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5. References
Albeck-Ripka, L. (2018, November 14). Australians Declare Existential Crisis Over Onion
Placement. Retrieved from nytimes.com:
https://www.nytimes.com/2018/11/14/world/australia/sausage-onion-bunnings-
warehouse.html
Bailey, S. (2019, March 21). Bunnings to open up to 14 new stores every year. Retrieved
from realcommercial.com.au: https://www.realcommercial.com.au/news/bunnings-to-
open-up-to-14-new-stores-every-year
Ballantyne, A. (2018, November 19). Bunnings and supermarket trio on show at anniversary
auction. Retrieved from realcommercial.com.au:
https://www.realcommercial.com.au/news/bunnings-and-supermarket-trio-on-show-
at-anniversary-auction
Foster, S. (2019, January 25). Brisbane Bunnings the first to fire up investors in 2019.
Retrieved from realcommercial.com.au:
https://www.realcommercial.com.au/news/brisbane-bunnings-the-first-to-fire-up-
investors-in-2019
Hatch, P. (2016, August 24). New Bunnings rival finalised as Home and Mitre 10 merge.
Retrieved from smh.com.au:
https://www.smh.com.au/business/companies/woolworths-in-trading-halt-as-
hardware-sale-looms-20160824-gqzmro.html
Kramer, M. (2013). Climate change as real business risk. Retrieved January 13, 2019, from
https://www.greenbiz.com/blog/2013/04/24/climate-change-real-business-risk
Linden, A. (2015, July 9). Advancing Business With Advanced Analytics. Retrieved from
www.gartner.com: https://www.gartner.com/doc/3090420/advancing-business-
advanced-analytics
Mitchell, S. (2015, March 11). Bunnings growth at risk as market reaches saturation:
Citigroup. Retrieved from smh.com.au:
https://www.smh.com.au/business/companies/bunnings-growth-at-risk-as-market-
reaches-saturation-citigroup-20150310-13zpxn.html
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First Bunnings Warehouse store in the UK opens for trading. (2017, February 2). Retrieved
from wesfarmers.com.au:
https://www.wesfarmers.com.au/util/news-media/article/2017/02/02/first-bunnings-
warehouse-store-in-the-uk-opens-for-trading
360strategy.co.il. (2011). Business Strategy - Mapping, Identification, Planning and
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http://www.360strategy.co.il/en/services/business-strategy/
Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian
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Hall.
awlnsw.com.au. (2018, Deccember 1). Thank You Bunnings Warehouse! Retrieved from
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Ballantyne, A. (2018, October 18). Newcastle Bunnings sells on huge yield. Retrieved from
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bunnings-sells-on-huge-yield
Brook, B. (2018, Feburary 2). Bunnings is having its Masters moment in Britain. Retrieved
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42e6765a681d1bd8ecd64ae712fadb00
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https://www.bunnings.com.au/our-services
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