Competitive Strategy Report: Applying Strategic Tools to Wesfarmers

This report delves into the strategic management of Wesfarmers, a major Australian company, employing various analytical tools to assess its competitive landscape. The report begins with an introduction to strategic management and the tools used to analyze the environment, including SWOT analysis, PESTLE analysis, Porter’s Five Forces, and Porter’s Generic Strategies. A detailed SWOT analysis examines Wesfarmers' strengths, weaknesses, opportunities, and threats. PESTLE analysis explores the political, economic, social, technological, legal, and environmental factors affecting the company. Porter's Five Forces framework evaluates the industry environment, considering the bargaining power of consumers and suppliers, the threat of new entrants and substitutes, and the intensity of competition. Finally, Porter's Generic Strategies are applied to determine how Wesfarmers can gain a competitive advantage. The report concludes that strategic tools are crucial for organizational growth, enabling companies like Wesfarmers to effectively analyze their environment and make informed decisions. The application of these tools allows Wesfarmers to identify opportunities and threats, enabling them to maintain a strong market position and achieve future success.

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Introduction
Strategic Management is the process of analysing, controlling and monitoring the
environment of the organisation. The process helps to analyse the environment so that the
organisation can adopt the effective strategies. There are different strategic tools that help to
analyse the environment in order to take the effective decision regarding strategies such as
SWOT Analysis, PESTLE Analysis, Ansoff Matrix, Porters generic strategic and many
others (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff, 2019).
In this report, the discussion is made on the topic of strategic management. SWOT Analysis,
PESTLE Analysis, Porter’s generic strategy, and Porters Five Forces Framework are used to
analyse the environment and adopt the effective strategies. Wesfarmers has been taken into
consideration in order to analyse the environment.
Strategic Tools
SWOT Analysis
It is a strategic tool which is used to determine the internal and external factors that affects
the growth of the organisation. It analyse the environment in the four factors and these are
strength, weaknesses, opportunity and threat. Strength, weaknesses are the internal factors of
the organisation. Opportunity and threat are the external factor that affects the growth of the
organisation. It also helps in developing the plan to achieve in order to the objective of the
organisation (Mind Tools, 2018a).
SWOT Analysis of Wesfarmers
Strength
 Large market share in Australia and
Weaknesses
 Local Supplier also arises the

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New Zealand market
 Strong network with the supermarket
 Local Suppliers due to which the
operating cost is less and quality of
raw material is also effective
(Wesfarmers, 2018)
problems for the organisation related
to old material and common material
 Less presence at online platform
 The company has various
departments and it cannot earn the
profit in every business
Opportunity
 It has the opportunity to enter the
online market as it has less presence
in it.
 It can also enter the retail sector to
grow in the market with the help of
effective strategies
Threat
 Face the issue of non-performing
employees
 High level of competition among the
companies such as AECI, ORICA,
Kohl’s , Warrior, and many others
 Less demand due to low prices
PESTLE Analysis
PESTLE Analysis is also a strategic tool which helps to analyse the macro-environmental
factors of the organisation. It is beneficial for the organisation to take decision while entering
the new market. The factors analysed in six factors and these are political, environmental,
social, economic, technological and legal. This tool is applicable on the host country in order

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to analyse the factors that affects the growth of the organisation (Wheelen, Hunger, Hoffman,
and Bamford, 2017).
PESTLE Analysis of Wesfarmers
Political
 Government of Australia restrict the
trading hours due to which the
organisation faces the issues.
 Rules and regulation of Australian
and New Zealand government has to
be adopted by the company with the
operation purpose
Economical
 Australia is a large mixed economy
with the good GDP rate A$1.69
trillion (Focus-economics, 2019).
 High purchasing power of consumers
Social
 High employment rate
 High purchasing power increase
consumers demand towards the
services
 Issue of high wage rate
Technological
 Australia is a fast adopting country in
terms of technology
 The company also adopt the machines
in order to manufacture the product
Legal
 Australian government develops the
laws and acts to protect consumers
 Company has to follow the laws and
acts of government of Australia and
New Zealand
Environmental
 As the company operates in Coal
mining industry due to which
changing weather is also an issue for
the organisation

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Porter Five Forces Framework
It is a strategic framework that helps the organisation in order to analyse the industry
environment. The current position of the company is also evaluated with the help of this
framework. This framework is classified in five step in which the industry is evaluated and
these are bargaining power of consumers, bargaining power of suppliers, threat of new
entrants, threat of substitute and the threat of competitors. The industry of the organisation is
analysed on the basis of these five factors. The main purpose of this tool is to analyse the
environment to adopt the effective strategies in order to grow in the industry.
Porter’s five forces framework of Wesfarmers
The Threat of new entrants
 Low threat
 Requires high capital
Bargaining power of consumers
 High power
 Offer similar services to consumers
Bargaining power of suppliers
 Low power
 Local suppliers who operates in
limited areas
The threat of substitute
 High level of threat
 There are many companies who
provide the different services to
consumers related to chemical and
fertilisers
The threat of competitors
 High level of threat

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 Large number of competitors in the industry
 Kohl’s , Warrior, AECI, ORICA and many others are the top competitors of the
company that affects the sale of the organisation (Owler, 2018)
Porters Generic Strategy
It is strategic tool which helps the organisation to adopt the effective strategy in order to gain
the competitive advantage in the market. It is used by the company in order to grab the high
market share in the market. This tool states the three strategies such as cost leadership
strategies, differentiation and Focus. Focus strategy is also classified in two strategies and
these are cost focus and differentiation focus. These are the generic strategy that helps the
organisation to beat the competitors (Mind Tools, 2018b).
Wesfarmers generic strategies
Cost leadership
It has been seen that the company has to
adopt the cost leadership strategy in order to
gain the competitive advantage
Differentiation
The company offers the innovative product to
consumers
It offers the variety of products as it operates
in different sectors
Focus
The company focuses on the existing product so that it gain the competitive advantage
The marketing techniques help to enhance the sale of product (Wesfarmers, 2018).
Conclusion
At the end, it is concluded that the strategic tools is effective for the organisation in terms of
growth. SWOT, PESTLE Analysis, Porters five forces framework, and Porters Generic
Strategy are the strategic tools which are used by the organisation to analyse the external and

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internal environment. These tools are applied on the Wesfarmers to analyse its environment.
It is observed that the company is effectively in the market with the effective strategies that
attract the consumers towards its services. Wesfarmers analyse the environment in order to
adopt the effective strategies to grab the high market share. It achieves the high success in
near future by analysing the environment with the help of these tools.

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References
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Owler. (2018) Wesfarmers's Competitors, Revenue, Number of Employees, Funding and
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