Strategic Management Report: Wesfarmers Analysis, MGT5STR, Semester 2

This report provides a comprehensive strategic analysis of Wesfarmers, an Australian agribusiness. It begins with an executive summary and table of contents, followed by an introduction to Wesfarmers, detailing its business units, products, and services. The report then delves into the external environment using PESTLE analysis, examining political, economic, social, technological, legal, and environmental factors influencing Wesfarmers. An internal analysis follows, utilizing SWOT analysis to assess the company's strengths, weaknesses, opportunities, and threats. The report identifies Wesfarmers' resources, capabilities, core competencies, and competitive advantages. Finally, it offers strategic recommendations for the future, emphasizing product differentiation and expansion. The report adheres to academic writing guidelines, including Harvard referencing.

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Running Head: STRATEGIC MANAGEMENT 0

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Executive summary
Wesfarmers has a situation to improve business and target to improve strategies. It has
established many strategies to differential itself from other players. This organization has
changed service and physical environment in-store to operate a business. The objective of an
organization is to refer to abilities by attracting and retain a base of customers. It allows
Wesfarmers to outperform its competitors. It has adopted many strategies with the external
environment to enhance many customers. Wesfarmers has enough resources to compete with
rivals and hold enough capabilities to complete work effectively. It has developed a strategy
to perform according to the demand of customers.

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Table of Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
Wesfarmers................................................................................................................................3
External environment of Wesfarmers........................................................................................4
Political...................................................................................................................................4
Economic................................................................................................................................4
Social......................................................................................................................................4
Technological.........................................................................................................................5
Legal.......................................................................................................................................5
Environment...........................................................................................................................5
Wesfarmers internal organization..............................................................................................5
Strength...................................................................................................................................5
Weakness................................................................................................................................6
Opportunity.............................................................................................................................6
Threat......................................................................................................................................6
Resources and capabilities.........................................................................................................6
Core competencies and competitive advantage.........................................................................6
Recommendation........................................................................................................................7
Conclusion..................................................................................................................................7
References..................................................................................................................................9

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Introduction
Wesfarmers is a retail organization and has a diverse portfolio of business. This organization
focus to develop and establish a trust relationship, loyalty, and commitment to people. This
organization focuses to contribute large growth by operating a high emphasis to protect the
environment. It has complete devotion for employees and believes to provide a good working
environment to an employee with advancement opportunities as a positive reward system.
This report outline Wesfarmers higher performance level of growth and areas of development
in many operations (Booth & Coveney, 2015). It has a unique outlook with attention to
internal and external factors by focusing on customer satisfaction. It has a diverse portfolio
and operation to believe in customer loyalty and a satisfactory return to shareholders. This
paper will discuss the Wesfarmers operations with objectives to understand factors. External
factors have a large effect on Wesfarmers by many operations due to versatility and exposure.
This report describes analysis with a parameter to understand parameter of industry and
identify competitive advantage. The performance of an organization is examined according to
a trend within the industry for future planning and scope (Barnes & Hunt, 2013).

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Wesfarmers
Wesfarmers is an Agribusiness operating in Australia. It produces energy, fertilizers, and
chemicals (WesCEF). Wesfarmers markets gas, fertilizers, and chemicals products. These
products have ammonium and ammonia nitrate product services in Western Australia. It
provides 50% of QNP ammonium services in Queensland. Chemical production services and
PVC resin in Western Victoria, sodium cyanide production services in Western Australia.
LPG and LNG production services in Western Australia and distribution services in Western
Australia. Fertilizer importation and production services in Western Australia (Bhatnagar &
Shyam, 2014). In the last year revenue of Organization was $1830 and 11.7 percent above
last year by fertilizers, chemical, and energy. These all contribute to revenue growth. It is
committed to conducting activities of fertilizers business by sustainably ensuring regular
growth. Demand and risk are transferred and reduced by easing action. This improves and
invests to enhance the performance of safe operations to facilitate and distribute the product
by reducing the impact on people. It has a strong focus to facilitate and reduce the
environmental impact. This monitors emissions from sites. This moderates earning volatility
by the price movement of raw material through variation of price and arrangement with
customers and plan according to demand and forecasting processes (Casadesusa & Zhu,
2013).
External environment of Wesfarmers
This is an important object to devise a strategy that effectively mans oeuvre competition to
enhance Wesfarmers chance of profitability and sustainability. External environment of
Wesfarmers is an initial of many factors that not only affect Wesfarmers but the whole
industry as factors are Political, Economic, Social, Technological, Environment, and Legal. It
provides an appreciated insight into operational challenges that the organization faces (Cheng
& Green, 2014). The competitive landscape of Wesfarmers prevents investors to involve in
any risk. To analysis the external environment of Wesfarmers, it is necessary to conduct a
PESTLE analysis. It explains the framework of external environment factors that influence
profitability or growth (Lambert & Davidson, 2012). The following discussion will cover the
PESTLE analysis.
Political
This is an implied extent to which the government of a nation plays a valuable role to
influence the business of Wesfarmers in terms of legal regulations and form of taxes. There
are many important departments of Wesfarmers and Australia federal government must

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approve the procedure of Agribusiness. The Australian government policies have focused to
eliminate protectionism, restrictive procedures, and free trade for a foreign organization to
much more conveniently by the foreign organization. This facilitates the economic growth of
business at a large number and a good number of Non-Australian retail sector organization
gets easy access to the market (Chung, 2012).
Economic
Economic factors of Wesfarmers like rates of interest, rates of exchanges, inflation rates
affect growth. The service sector has a significant role in the Australian market and 71.1% of
Australia GDP is contributed by this sector. Services and finance are the most important
service organization in Australia and by keeping this into consideration organization stated
that market of Wesfarmers will enjoy a highly profitable position in the Australian market
(Holder & Ponting, 2016).
Social
Australian social environment has an immensely significant role in Wesfarmers future
growth. Social factors like cultural trends, demographics, and population analytics have an
important role in organizational success. This is important to remind that a large number of
Australian citizen likes one-stop method of shopping. People in Australia prefer to purchase
necessary items in large number. It is favorable for Wesfarmers to have chains in Australia
(Thieberger, 2018).
Technological
This is necessary to keep in mind that a sustainable method for conducting business has a
significant role in Australia. An organization like Wesfarmers depends on technologically
progressive means of production to support the nation to maintain ecological sustainability.
This is important to note that it has embraced the use of low emission coal technology as an
innovating change. This sustains the business in the future. Energy, fertilizer, and chemicals
production are the most important areas of Wesfarmers as it has a good technological
foundation to regulate innovation. These all will develop the future of the organization
(White, 2016).
Legal
There is a variety of new ruling and governing laws in the Australia trade system like labor
law, resource law, and business law and so on. Wesfarmers is required to stand with each.
Many rules and regulations are established within the organization to provide a quality level

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and reasonable values for products to keep the customers. It applies to find and elevated costs
of a product (Luftman, et al., 2013).
Environment
Sustainability of ecology has an important role to conduct trade in Australia. Wesfarmers is
generating values for customers, shareholders by proper engagement of a wide range of
environmental issues like prevention of environmental issues like pollution, energy
conservation, and so on. It is important to note that an organization operates business actions
according to the ten communities and environment impact principles. These all set the
guidelines for energy-efficient means of production. This is an initiative taken by the
Wesfarmers to ensure the well-being of the community by reducing packaging of a product
and maintaining ecology sustainability to support the conduct of organization smoothly
(Yuan & Kenny, 2019).
Wesfarmers internal organization
Analysis of Wesfarmers internal organization cannot be overemphasized. This support
Wesfarmers to analytically comprehend evaluate strategies that are necessary for growth.
Internal analysis of Wesfarmers support to identify the factors that enable competitive
advantage. For this SWOT analysis is beneficial for Wesfarmers (Grant, et al., 2016).
Strength
Wesfarmers revel in a diversified market by huge variety in a diverse market. It has
comprised Coles and target of an organization can be easily experienced the determined
growth without effect on industry downturn. It is a reputed organization and earned high
brand recognition in lasts years. It has enjoyed a high rate of growth in the market.
Weakness
It has a high level of presence in the market of Australia and as a large scale industry meets
strong business risk. The profit-generating capacity of Wesfarmers is not good as it would be
to operate the profit. Is has been suffering from the rate of decline in the product. The
business of Wesfarmers is in a highly competitive market. The financial crisis in Australia
can harm the stability of Wesfarmers.
Opportunity
The global expansion of Wesfarmers will support to increase revenues and profits. This is a
widely recognized organization and it will be easier for Wesfarmers to develop beyond

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Australia. By enhancing service and quality organization will increase the number of
customers as the level of customers income has increased.
Threat
The raw material cost in Australia is rapidly increasing. Wesfarmers has a high level of
competition. Increased level of pay can lead to high pressure on a profit of the organization.
New regulations of the environment can lead to a big threat into categories of an existing
product.
Resources and capabilities
It has a large number of stores. Almost 220000 employees are working in the store of
Wesfarmers. This organization generates a large number of sales volumes from online stores.
It has won a large number of confidence of customers and holds higher return for its
shareholders as a strong pillar for growth. It has added a change in many factors like
advancement in a chain of supply, digitalization, and changed customer lifestyle for good
potential growth in factors that support industry. These include computerization and growth
opportunity for retailers. It has adapted changes by a strategy of multi-option retiling to
compete with changes that are necessary for customers (James, 2013).
Core competencies and competitive advantage
Core competencies of Wesfarmers are capabilities of Wesfarmers and distinguish it from
competitors. In today's time, the business of the world is very competitive and requires strong
competitive strategies for growth and sustainability. This organization operates a business in
a very highly competitive sector. Management of an organization has a competitive
advantage and operates in a highly competitive sector. Management of organization views
competitive advantage as an action to generate value against rivals. It faces competition from
ALDI, Wal-Mart, and Macro Wholefoods Limited organization. This organization is striving
to bridge the gap between perceived cost and value of the product to be higher than
competitors. To achieve the competitive edge organization is guided by a mission that is
provided to customers by high quality retails commodities. The organization achieves goals
by applying a competitive strategy. The goals of Wesfarmers enables it to adopt change and
gain a competitive advantage over competitors. The organization has adopted qualities that
not imitated by competitors and provides a competitive advantage. This organization has
established a unique business model that generated a unique opportunity in the market. It has
focused to provide product in line with global trends. This organization focuses more on the

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quality product at a reasonable price. Creation of value is a competitive advantage of
organization and achieved by changed business strategy (Islam, et al., 2017).
Recommendation
Wesfarmers should focus on product differentiation with the trends. It will enable the
organization to differentiate it from competitors. It will support the organization to
understand the more requirements of customers with the latest trends in the international
market. This will allow customers to choose more products with options. Wesfarmers own
range of apparels will support to track the preferences of customers and provide the value to
customers. The wide range of product will meet the international standards and satisfy
customer demands and create a competitive advantage to attract a large number of customer
loyalty. Customers will respond to this favorably as they request a better value product at an
extensive rate. By reducing the rates of discount organization can increase the situation and
attained cost advantage in the marketplace. By enhancing a large number of store Wesfarmers
will gain a large number of attraction of the customers. Management and marketing team can
watch the trend in the global market and revise the existing policies and give them more
options for payment to customers and increase the satisfaction level of customers.
Conclusion
This paper stated that Wesfarmers has a very good position in the market of Australia and has
a vast outlook to flourish in the future. The environmental analysis of Wesfarmers is a
strategic tool and support to assess and analyze factors that facilitate the condition of the
market. It has a leading name in the industry of Australia and brings the desired improvement
to adopt the necessary strategy and stand with a highly competitive market to have a
comprehensive knowledge of economic trend. This report is an instrument to identify and
analyze strategic implication with higher performance in majority sectors of Wesfarmers. The
internal analysis and external analysis are symbolic to growth in different portfolio of
product.

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References
Barnes, S. & Hunt, B., 2013. The business of Wesfarmers. II ed. Sydney: Routledge.
Bhatnagar, A. & Shyam, S. S., 2014. Retail Sector of Wesfarmers. Journal of Business
Research, 67(06), pp. 1293-1302.
Booth, S. & Coveney, J., 2015. The Industrial Food System. I ed. Singapore: Springer.
Casadesusa, M. & Zhu, R., 2013. Competitive Immitation. Strategic Management Journal,
34(04), pp. 464-482.
Cheng, M. M. & Green, W. J., 2014. Assurance of Sustainability. A Journal of Practice &
Theory, 34(01), pp. 131-162.
Chung, F., 2012. Political Environment of Wesfarmers. Journal of Business Ethics, 09(01),
pp. 96-142.

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Grant, R. M., Hackshall, D., Kassis, N. & Sutherland, J., 2016. Internal Analysis. Journal of
Strategic Management, 23(03), pp. 63-96.
Holder, S. & Ponting, S., 2016. Environment. Journal of Business Ethics, 55(02), pp. 123-
654.
Islam, M. A., Jain, A. & Haque, S., 2017. Competencies. Journal of Business Strategy,
06(02), pp. 63-94.
James, D., 2013. Capabilities of Wesfarmers. Journal of Business Strategy, 34(03), pp. 33-40.
Lambert, S. C. & Davidson, R. A., 2012. An Analysis of Wesfarmers. European
Management Journal, 31(06), pp. 668-681.
Luftman, J., Zadeh, H. & Derksen, S., 2013. Legal Environment of Wesfarmers. Journal of
Information Technology, 28(04), pp. 354-366.
Thieberger, V., 2018. Social Factors. Journal of Business Management, 36(05), pp. 96-102.
White, D., 2016. Technology. Journal of Business Research, 29(06), pp. 36-65.
Yuan, H. & Kenny, G., 2019. The environment of Wesfarmers. Journal of Cleaner
Production, 39(08), pp. 01-08.