Strategic Analysis of Bunning Local Company: A Comprehensive Report

This report presents a comprehensive strategic analysis of Bunnings Group, a prominent Australian household hardware chain. The analysis begins with an introduction to Bunnings' business background, market share, and industry positioning. Part 1 focuses on external analysis, examining the industry environment, competitive landscape, and identifying opportunities and threats. It delves into economic, physical & legal, demographic, socio-cultural, political, and technological factors influencing the company. Part 2 shifts to internal analysis, assessing tangible and intangible resources, capabilities, and core competencies. The report highlights Bunnings' strengths in supply chain management, branding, and innovation. It also proposes a suitable information system solution, emphasizing the use of technology like IBM XIV storage system and RFID. The conclusion summarizes key findings and provides recommendations for strategic improvement.

bunning local company
Strategic Management

Contents
Introduction......................................................................................................................................1
Part 1:...............................................................................................................................................1
External Analysis.........................................................................................................................1
Business Background...................................................................................................................1
What Industry Is It?.....................................................................................................................2
Environmental Analysis...............................................................................................................2
Industry Environment..................................................................................................................3
Competitive Environment............................................................................................................4
Opportunities & Threats..............................................................................................................5
PART 2............................................................................................................................................5
Internal analysis and proposal.....................................................................................................5
Tangible and Intangible Resources of the firm............................................................................6
Capabilities..................................................................................................................................6
Core Competency Analysis.........................................................................................................7
Suitable Information System Solution.............................................................................................7
Recommendations............................................................................................................................8
Conclusion.......................................................................................................................................9
References........................................................................................................................................9

Introduction
Bunnings Group is one of the trading company with the international household hardware chain.
It is one of the local companies which was founded in 1887 in Perth, Western Australia which
included the expansion into the retail sector and then purchasing the products from different
hardware stores. The company began to expand into the other states as well and comprise of 294
stores with over more than 30,000 employees. The market share of it is 20% in Australian retail
hardware sector with competing chains that include Home Timber & Hardware with other
independent retailers. The company has ben able to work and reach the people by providing the
gardening, craft and other woodwork workshops for the children in store, in schools or in
hospital.
Part 1:
External Analysis
The analysis is based on the Australian leading hardware store which is set in terms of marketing
and the research is for the qualitative research based on secondary source of information. It helps
in marketing and easily focusing on credible and academic sources to understand about the
marketing strategies.
Business Background
The company tends to extend the pillar of service which is not only for aiding the clients to make
decisions for shopping in the stores but also to make it easy to drop by the stores Woolworths has
8% stake for the Australian marketing share which makes use of the subsidiaries like Home
Hardware and Timber, and Masters Home Improvement (Campbell, 2017). It has 7.3% market
share and use True Value Hardware and MITRE. Australia largest and profitable home

improvement retailers are set with 9 lakhs customers who are shopping at Bunning with over the
period of 4 weeks in July 2014.
What Industry Is It?
Bunning is the household hardware company which is financially a secured company with the
growing revenue. The company has been working on handling the largest hardware chain with
195 warehouse that is set with comprehensive hardware range and 42 Bunnings local limited
range stores (Ang et al., 2018). The generated amount of share is 49% and 17% market share of
Home Improvement with Outdoor Living sector.
Environmental Analysis
Economic: The change in consumer or customer trends in the present situation has depicted a
higher value to consumer wants. Consumers have highly proclaimed their part in disposing the
income to the industry. In the concerned case, the private labeled organisations have shown its
contributions in structuring the maximum efforts to the overall business growth showing the
capability to gain the consumer attention.
Physical & Legal: Bunnings is responsible to Product Safety Australia (PSA) for handling the
household home appliances and other hardware industry which is mainly given by Australian
Competition and Consumer Commission. (ACCC) The laws have significantly valued the overall
operations of the retail business (Turner, Kushniruk & Nohr, 2017). The companies have
concentrated on the various policies that are to undertake all the necessary initiatives reflecting
the employment, empowerment and other specific business responsibilities. The criteria have
been structured to set up the governmental policies as in the present situation crusades has been
developed to block the retail organisation by the side of Bunning.

Demographic: An organisation identifies the target market in understanding the demographic
specification of the market in order to the sell the products or services to the market. As based on
the Australian market, the consumer needs and demands have shown a drastic change.
Socio-Cultural Factors: The organisation is more prioritised towards the customer well-being
and health. Moreover, Bunning have stocked the organic food products and materials as per the
moving consumer nature to health-based food products. The current period has shown the
potential threats for the Australian farmers as they are changing their operations to survive in this
changing business environment (Akbar et al., 2014).
Political: It is functioning on the challenging market environment where the market has shown
the full concentration on the business expansions and growth while focusing on innovative
manufacturing and production.
Technological: In the present business process, the technological factors have shown
considerable aspects that have standardised the business grew in significantly to its business
operations. The factors help the organisation to gain the competitive advantage and edge
(Campbell, 2017). Bunning’s managers have significantly installed green-refrigeration
techniques within the organisational structure that supports the fact to implement technological
advancements in its business process.
Industry Environment
Substitution of rivalry: The rising small organisations have shown more potential rivalry to the
organisation like Bunning in the Australian Market. In respect to other aspects that show that the
organisation offers, various requirements that are based upon the product and service nature
considered in the market. The hardware industry has prioritised three major key areas that are to

locate the stores efficiently in the market, considering a consumer valued product price and
understanding the market or consumer requirements and choices. Costco and Coles are the
rivalries of Bunning present in the current Australian market (Roberson, 2014).
Substitution threats: In recognising the Australian market, the threat represents the menace to be
substituted in the market. High or increased changes in this organisation have led the companies
to face several threats or challenges from the special and convenient grocery stores.
Suppliers Bargaining Power: The bargaining power of the business (raw materials) suppliers
have also shown the lowering of the bargaining approaches, as the companies are being
dependent upon more than one local suppliers (Clardy, 2014). Moreover, business giants like
Bunning and Coles have controlled over 81% of the market share in this retail industry.
Buyers Bargaining Power: It is ensured that the increase of aggressive sales requirements is
required to be developed by the federal Government and ACCC in order to refer the purchasing
pattern of the company. Australian Market and its bargaining power of the purchasers are
lowered because of the extreme availability of the consumer-based products in the market.
The threat from New Entrants: The increased intensity of this threat has lowered the chances of
sustained business future for the organisation. The organisation has to incorporate frequent
innovative changes and operations in the technological, manufacturing and in its distributional
channels.
Competitive Environment
In understanding the current market situation, Masters company have created various teething
troubles for Bunning in concern to retain the consumers for its organisation. There have been
issues with focusing on sustainability and advancement in the Timber industry as well (Meath et

al., 2016). The promotional approaches have been effectively handled with social media and
networking sites to secure the task. Bunning has also promoted the organisation through efficient
sponsorships and advertisement. The probable threats are evident to avail the augmented results
timber industry. (Campbell, 2017)
Opportunities & Threats
The opportunities are that it can offer certain online purchasing platform for more people who
want to build their outdoor hangout places in homes. With this, there has been a growth of the
different country home owners as well. The threats and the opportunities of Bunning have shown
the ability that the company has shown appropriate approaches to overcoming the threats and
have utilised the market opportunities effectively in strengthening the organisational functions.
The biggest opportunity for Bunning was to function in the technological innovations and
advancements utilisation. Such innovative approaches have allowed the company to emphasise
free trade agreements and have allowed it to enhance the overall business functions.
The biggest threat identified by Bunning are the irregular supply chains and increased process of
the raw materials (Rastogi et al., 2016). Apart from this, the competition from the similar
hardware retailers in the country where there has been a growth in companies lead to the
contractual maintenance of jobs. It leads to reducing the hardware purchase mainly among the
different users at a domestic level. The global economic standards might lead the people to invest
on houses and the other hardware industry.

PART 2
Internal analysis and proposal
To conduct an appropriate internal analysis will allow the organisation (Bunning) to understand
its capabilities and will allow the company to ensure the factors contributing to strengthen the
business forms and to resolve the weaknesses of the organisation. Bunning is one of the
financially secured company which has a growing revenue with strong and trust brand limits
with wider range of product offerings. It mainly focuses on the community and the proper
reputation for better services of customer.
Tangible and Intangible Resources of the firm
Bunning has shown a decent amount of intangible and tangible resources referring to appropriate
human resource and innovation approaches to implementing products in the organisation. It has
shown more than 3000 stores working all over the Australian market and in New Zealand. The
biggest advantage identified was that the company has compromised the product quality and
have ensured a better quality of services (Campbell, 2017). Bunning has significantly shifted its
focus to consumer-preferred products while supporting the vital stakeholders belonging to the
company management. The tangible resources are listed to show about how Bunning is able to
work on setting the strong assets in the different areas. Bunning brand has been strongly
embedded with the home and the hardware industry where the development of the intangible
resources are for the competitors to imitate and then compete against as well.
Capabilities
Bunning has shown the ability to implement enhanced production techniques that are intending
to introduce define innovation in the organisational structures. The high capability of talented
workforce and performing recruitments have enhanced the organisational productivity hence

manage the supply chain efficiently (Campbell, 2017). The company capabilities are based on
the human resources where the exceptional staff retention rate and the recruitment at different
stages are done efficiently. There is a unique training and development method with distribution
that is done through freight delivery system that helps in creating an efficient delivery with the
vast number of suppliers as well. The marketing standards are set with the implementation that
helps in illustrating about the different levels of the business strategy with the target market
segments.
Core Competency Analysis
The company core competency is based on providing and delivering the customers with the
lowest prices on the prices (Campbell, 2017). It is mainly achieved through better economies of
scale that help in higher power of purchasing with the market competitors that allow the market
to attain a better economy of scale (Atighechian et al, 2016). It includes the formation of the
relationship and alliances with the suppliers with extensively handling the supply chain
management and achieving the competitive pricing at Bunning store nationwide.
World class supply chain: It has been able to manage effectively through competitive
advantage and having the supply chain management. The company is also able to focus on the
efficiency and the cost cutting in management of the different expenses as well.
Branding and Market: The standards are set for the creation of differentiated range of the
quality and the health product ranges at the reasonable price.
Innovation: The company is also able to work on the implementation of different projects which
include the refreshing and the new ideal programs with retailing of petrol products as well.

Suitable Information System Solution
The use of Innovation standards with the Trade Intranet Internet store process has helped
Bunning to growth with focus on handling the IBM Australia stored on the XIV storage system.
This has been helpful to work with improvement in the capabilities of 54TB of the stores and the
volume controller where the software programs are used with IBM XIV management tool. The
RFID is another effective technology that can be helpful in the retail and the distribution centers
to allow the item tags that can be recorded and scanned for improving the shelf replenishment
and then reducing the store stock outs as well. This has also resulted in the reduced cost of labor
and then preventing the loss of thefts with computerized quick access and the reliable data. Here,
the focus is on the sustainability plans and opportunities that helps Bunning to work with the
onsite water tanks to make use of the recyclable canvas bags and sources. The employees are
being trained for the operations and then they are working on implementing the new PAR level
products which are never out of stock. The global international suppliers work on handling the
business operations in Australia and New Zealand that helps the company to aim and dominate
on hardware industry in Australia. The providers of the specialist hardware are focusing on
improving the brand with building the business growth through increased customer market and
focusing on trades of people.
Recommendations
Bunning can work on improving their action plan through better sales growth where the
company needs to handle their service levels, training and the development of categories. The
stock levels and the inventory management needs to be handled where the actions are based on
implementing the system where there is a need to implement the system throughout the
company. The vertical diversification is through the acquisition of the construction and the

business of landscape which helps in working with Jim Group Franchise. There needs to be a
long-term planning for Bunning to evaluate the company with proper acquisition and then
ensuring about the growth and sales effectively. The company has been able to achieve the
strategy with implementing the plan through purchasing the business that operates in Australian
sector. The horizontal diversification with acquisitions are set to do the business with Mitre 10
and Home Timber. The strategy is mainly to ensure that the companies are not major threat to
Bunning. The involvement of community includes local school events and the charity events.
Bunning is looking for the opportunities to get involved with local areas around store locations
that are set worldwide.
Conclusion
Bunning has been one of the merging companies which is working on the financial and the
efficiency that will help in handling the commercial customers with different methods for the
payment(Campbell, 2017). The distribution of the products and then utilizing an expert for the
distributed system, has helped Bunning to work on handling the outsourcing of delivery to ANC
Courier and then handle the delivery of the products to the sites and the other retail centers. The
customer responsiveness through social media and the trends with mobile phone are easy for the
access and search ability with comparison on the prices or the product viewings as well (Sridhar
et al., 2016). Bunning has been working on improving the quality standards with involvement in
Academy of Sport, health and Education that provides the opportunities for the employees to
store and work on the engaging aboriginal youths to work with Bunning employees.

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