Strategic Operations Management Report: Wesfarmers' Strategic Analysis

This report provides a comprehensive analysis of Wesfarmers' strategic operations management. It begins with an overview of the company and its market, followed by an examination of the role of operations and its alignment with the overall organizational strategy. The report then delves into the concepts of order winners and order qualifiers, assessing their implications for Wesfarmers' operations. A value chain analysis is conducted to review the company's product and service mix, highlighting the primary and support activities. Finally, the report concludes with strategic recommendations for improving Wesfarmers' operations management, based on the insights gained from the analysis. The report is a valuable resource for students studying strategic management and operations.

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Strategic Management
Strategic Operations Management: Wesfarmers
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3/24/2019

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Contents
Strategic Operations Management: Wesfarmers........................................................................2
Introduction................................................................................................................................2
Overview: Wesfarmers Limited (referred as WL).....................................................................2
Role of Operations in Wesfarmers growth.................................................................................3
Order winners and Order Qualifiers...........................................................................................4
Value Chain Analysis of Wesfarmers........................................................................................5
Primary Activities..................................................................................................................6
Inbound Logistics...............................................................................................................6
Operations..........................................................................................................................7
Outbound Logistics............................................................................................................8
Marketing and Sales...........................................................................................................8
Services..............................................................................................................................8
Supportive Activities..............................................................................................................8
Firm infrastructure.............................................................................................................8
Human resource management (HRM)...............................................................................8
Technology development...................................................................................................9
Procurement.......................................................................................................................9
Conclusion..................................................................................................................................9
Recommendations....................................................................................................................10
References................................................................................................................................10

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Strategic Operations Management: Wesfarmers
Introduction
This report is based on the strategic operations management of the company
Wesfarmers. The paper will provide an outline of the organisation along with the details
about the market it operates within. Operations management is an area focused on the
efficiency and effectiveness of the operations in support as well as development of the
organization's strategic goals. Hence, operational areas for strategic operations
management comprise the design and operations of different systems for providing quality
products and services.
Besides, with the help of this discussion, the role of operations within the Wesfarmers
along with the info about operations strategy will be identified. In addition, how operation
strategy does fit into the Wesfarmers’ strategies will be assessed. Furthermore, a discussion
and analysis over order winners as well as order qualifiers will be conducted. Additionally,
implications of above two for the Wesfarmers's operations as well as the actions of operations
will be covered. In addition, value chain analysis of Wesfarmers will allow reviewing the
organisation’s products and services mix (Gereffi & Fernandez, 2011). Finally, useful
recommendations with the help of the knowledge gained from the discussion will be offered
regarding the role of operations management in the organization (Colquitt, Lepine, Wessaon,
& Gellatly, 2011).
Source: (Wesfarmers', 2019)

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Overview: Wesfarmers Limited (herein after referred as WL)
WL is a well-known business, which has become one of the leading successful
Australian regional firms recently. In this context, Wesfarmers being Australia’s biggest firm
secured its rank through a business research firm IBIS World on the basis of the revenues
(Wesfarmers', 2019). Besides, size of the company can be predicted with the number of
employees working around 210,000. Moreover, the company is functionally expanded,
counting department stores, supermarkets and home developments (Wesfarmers', 2019).
Moreover, Wesfarmers is an expanded corporation which was established during June
1914, while their origin traced as a Western Australian farmers’ cooperative. Initially, it has
worked as a small supplier while operating and structuring within the rural region of Western
Australia (WA) (Wesfarmers, 2018). Later then, Wesfarmers has become top Australian
biggest and listed companies headquartered in Perth, WA. The company’s diverse business
operations comprise hotels, supermarkets, liquor and convenience stores. In addition,
company is also working in home improvements; department stores like Kmart and Target;
office supplies; with industrials division in businesses like energy, and fertilizers, safety,
chemicals, industrial products and coal. Thus, Wesfarmers’ total interest is in a huge number
of subsidiaries and trades across Hong Kong, Australia, India, New Zealand, Singapore, UK,
Indonesia, Bermuda, as well as China (Wesfarmers', 2019).
Role of Operations in Wesfarmers growth
Wesfarmers Limited possesses a wide spread portfolio of several businesses being
operated upon. Wesfarmers company’s products and services range throughout the
supermarkets, gas processing and energy distribution processes, coal mining, hardware and
department stores, chemicals and fertilizers, and industrial safety products’ industries
(Wesfarmers', 2019). In addition, Wesfarmers further divides their operations into diverse
segments (Wesfarmers, 2018). Out of those operational segments retail division has a range
of their operations from the convenience stores to other hardware and main office supplies.
Growth of the company is majorly depends upon its diversified operations like industrial
division includes chemicals, resources, energy, as well as fertilizers (Wesfarmers', 2019).
Additionally, industrial and safety department includes the supply of repairs works,
packaging and safety of products to public and industry sector. Moreover, operations within
investment banks as well as other corporate organizations also enable company to expand

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internationally within all business sectors (Wesfarmers', 2019). Wesfarmers operations’
strategy distinguishes it from others in following way:
 The company owns operational strategy of strengthening already existing businesses
with the help of satisfying customer needs as well as operational excellence
(Wesfarmers', 2019);
 Strategy of securing development opportunities from taking entrepreneurial initiatives
help Wesfarmers to grow internationally (Wesfarmers', 2019);
 Wesfarmers renews the portfolio with the help of value-added transactions;
 Wesfarmers ensures sustainable practices by utilising responsible long-term
management of the resources (Wesfarmers', 2019).
Order winners and Order Qualifiers
Order winner and order qualifiers both are the deciding factors as well as criteria
which are used by the customers to make purchasing decisions (Colquitt, Lepine, Wessaon, &
Gellatly, 2011). In this context, order qualifiers are the things related to any service or
product which must have to be considered by their potential consumers during buying that
product. On the other hand, order winners are the factors which make a consumer select to
buy an organization’s products and services over a competitor’s products and services. Both
concepts can be easily understood with the help of following example:
An individual wants to purchase a car and he or she has listed three cars with their
prices, body styles and gas mileages. Besides, out of all of the above options one model is
having impressive safety ratings as well as an outstanding warranty. Hence, that individual
decided to buy that particular model. With the help of this example, concepts of order
qualifiers and order winners can be illustrated as order qualifiers are body style, price and gas
mileage. On the other hand, order winners are warranty and safety ratings. In addition, order
winners can be considered as the product differentiators or competitive advantages. In this
context, Wesfarmers has acquired competitive advantage over others while making their
products more desirable and suitable for their consumers. For an instance, competitive
advantages are the company’s brand as well as intellectual properties. Moreover, products’
differentiators are those strategic non-priced based differences which make Wesfarmers’s

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products distinct from their competitors. Furthermore, reliability, quality and consumer
service level are some examples of products’ differentiation.
In addition, order winners and qualifiers can change over a span of time as well as
they can change drastically throughout the stages of any product’s life cycle. Here, product
life-cycles are the phases of any product’s time-duration within the market through beginning
to end (Akbar & Ahsan, 2014). Hence, four major phases of product life-cycles include intro,
growth, maturity and decline. In this way, the company Wesfarmers is managing their
products and services’ order winners and qualifiers in a way that consumer will use
Wesfarmers’ products and services over others (Wesfarmers, 2018).
Source: (Lee & Carter, 2011)
Value Chain Analysis of Wesfarmers
In this discussion, Porter’s Value Chain Analysis of Wesfarmers Limited will be
executed because Value Chain Analysis needs Wesfarmers Limited to realise that whole
activities or operational functions do not need similar scrutiny level. In this context, Porter's
value chain framework is extremely popular in the modern business world. Therefore, the
very first step of utilising the Porter Value Chain model is to recognize the major importance
of all activities as per their roles within products or services delivery processes (Lindgreen,
Hingley, Grant, & Morgan, 2012). Thus, there is a list of primary and secondary value chain
activities proposed by Porter as follows:

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Primary Activities
In this context, primary value chain activities of WL are directly involved while
producing as well as selling a particular product to the targeted consumers. Hence, this
analysis of primary value chain activities can easily improve the performance of WL as
elucidated below (Hill, 2008).
Inbound Logistics
From the perspective of inbound logistics, developing strong relationships with the
suppliers is essential for WL as suppliers’ support is compulsory for receiving, storing and
distributing the product and services. Hence, without examining the in-bound logistics, there
is a strong probability that WL will have to face many challenges within the product
development phases. For an example, inbound logistics include repossessing raw materials as
well as storing the input (Fearne, Garcia, & Dent, 2012).

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Source: (Wesfarmers', 2019)
Operations
This part of the value chain analysis depicts the significance of analyzing functional
activities while the raw material reaches, and WL is ready to develop the raw materials into
the final product as well as launch it in the business market. For an example, operative
activities like machining, assembling, packing as well as testing come under operations. In
this way, analyzing operational activities of WL is important for enhancing productivity,
maximizing the efficiency as well as assuring the competitive success (Lindgreen, Hingley,
Grant, & Morgan, 2012).

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Outbound Logistics
In this context, outbound logistics contain the activities which deliver the products
and services to the customers through passing by various mediators. Hence, WL should
analyse as well as augment the outbound logistics for exploring competitive advantage
resources and achieving their business development aims (Akbar & Ahsan, 2014).
Sales and Marketing
During this stage, WL can focus the products’ advantages as well as product
differentiation points to persuade the consumers that WL’s product offering is much better
than its competitors. Thus, all sales agents and marketing persons play a key role here
(Fearne, Garcia, & Dent, 2012).
Services
In this context, all pre-sale as well as post-sale services provided from the WL will
play a significant role while evolving consumer loyalty in future.
Supportive Activities
On the other hand, support activities of value chain model play a key role while
coordinating as well as facilitating all above discussed primary value-chain activities. Hence,
WL should acquire benefits by doing analysis of their support activities as discussed below.
Organization infrastructure
This supportive activity of WL can be controlled through the infrastructure activities
for strengthening the competitive positioning within the international business market.
Human resource management (HRM)
HRM activities of WL should be analysed through evaluating several HR aspects,
counting recruiting, training, selecting, rewarding, performance management as well as rest
personnel management support activities (Akbar & Ahsan, 2014).

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Technology development
In this context, technological integration within distribution, production, marketing as
well as human-resource activities needs WL for realising the significance of technological
advancement (Lee & Carter, 2011).
Procurement
From the support activities viewpoint, procurement owns its connection with multi
value-chain activities; hence WL should sensibly consider their procurement activities for
optimising the operational, inbound as well as outbound value chains (Lindgreen, Hingley,
Grant, & Morgan, 2012).
Source: (Gereffi & Fernandez, 2011)
Conclusion
In conclusion, this report has successfully assessed role of strategic operation
management of an organization into its present growth and future development. With the help
of many examples order qualifiers and order winners have been illustrated in this paper.
Organizational strategies of the WL have been identified, evaluated and discussed in detail.
Furthermore, with the help of Porter’s value chain framework effectiveness of WL’s primary
as well as support activities in the context of future growth and development has been

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evaluated. In this way, an improved productivity may assist WL while achieving constant
economic development, increasing productivity and to set out a powerful base for
competitive advantages in near future.
Recommendations
Post conducting strategic operations analysis with the help of Value Chain
framework, some useful recommendations to the WL can be provided in order to make the
company more developed and successful within international business environment. These
recommendations are as follows:
 With the help of Value Chain Analysis, WL should choose and source premium
quality raw materials as well as develop consumer loyalty.
 WL should use Value Chain Analysis for developing its brand identity within
international market.
 The company should achieve competitive differentiation through speedy up the
products and services delivery to their final customers.
 By utilising Value Chain Analysis, WL should improve their human resource
practices so as to improve job satisfaction and experience at its workplace.
 The company WL should analyse their value-chain activities for reducing the budgets,
finding better deals with the international dealers as well as offering high quality
products and services at economic prices.
References
Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian
retail firms. International journal of Managerial and Financial Accounting, 6(4), 375-
396.
Colquitt, J., Lepine, J., Wessaon, M., & Gellatly, I. (2011). Organizational behavior:
Improving performance and commitment in the workplace. London: McGraw-Hill
Irwin.
Fearne, A., Garcia, M., & Dent, B. (2012). Dimensions of sustainable value chains:
implications for value chain analysis. Supply Chain Management: an international
journal, 17(6), 575-581.

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Gereffi, G., & Fernandez, K. (2011). Global value chain analysis: a primer. USA: CGGC
Duke University.
Hill, C. (2008). International business: Competing in the global market place. Strategic
Direction, 24(9).
Lee, K., & Carter, S. (2011). Global marketing management. Strategic Direction, 27(1).
Lindgreen, A., Hingley, M., Grant, D., & Morgan, R. (2012). Value in business and industrial
marketing: Past, present, and future. Industrial Marketing Management, 41(1), 207-
214.
Wesfarmers. (2018). COLES. Retrieved 09 27, 2018, from
http://www.wesfarmers.com.au/our-businesses/coles
Wesfarmers'. (2019, 03). About Wesfarmers. Retrieved from Wesfarmers:
https://sustainability.wesfarmers.com.au/our-report/about-wesfarmers/