HI5019 Strategic Information Systems: Wesfarmers Strategic Analysis

This report provides a strategic analysis of Wesfarmers, a leading Australian company with diversified services, focusing on its strategic information systems. The analysis includes an external examination of the business background, industry type, general environment (economic, physical, socio-cultu...Read More

Wesfarmers
strategic information system for business and enterprise

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Table of Contents
Introduction................................................................................................................................2
Part1- External Analysis............................................................................................................2
Business Background.............................................................................................................2
Type of industry.....................................................................................................................3
Environment Analysis of Wesfarmers in General..................................................................3
Industry environment..............................................................................................................4
Competitive environment.......................................................................................................5
Opportunities and Threats......................................................................................................5
Part 2- Internal analysis and proposal........................................................................................6
Identifying the capabilities.....................................................................................................6
Core Competency Analysis for Wesfarmers..........................................................................6
Information system solution proposal for Wesfarmers..........................................................7
Evaluation...............................................................................................................................7
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
Strategic information system for business and enterprise are developed so that quick
response is taken. It is a feature that helps in managing all the process and then recognizing
the opportunities so that improvement could be done. It can be seen as an analytical tool for
an organisation that allows them to improve all the operational efficiency. Strategic
information system helps in implementing all the business strategies so that maximum
profitability can be made. It is an integrated part of an organisation that helps in making
corporate decision. In this report, the internal analysis as well as external analysis is carried
out that helps in understanding all the business operations in detail. It is true, that every
business performs set of rules to perform certain activities so that objective could be
achieved. To execute all the business operations, every organisation requires some strategic
information system (Willis, et. al, 2018). It supports organisation to gain competitive
advantage by using strategic information system as it moulds all the operations and
functionalities so that good brand image is achieved in the target market. In this report, the
entire focus is on the functionalities of Wesfarmers in relation with usage of strategic
information system. The internal and external analysis that is followed helps in achieving the
objective. Wesfarmers is one of the leading organisations in Australia. It has expanded its
services in all the sectors Along with this, strategic information system helps in capturing the
target market so that production cost could be lowered down, this will help in enhancing the
productivity as well as demand and sales in the marketplace.
Part1- External Analysis
Business Background
The organisation that is selected in this report is Wesfarmers; it is one of the largest
Australian companies. Wesfarmers have diversified their services in every field from retail
stores to selling their products in a wholesale market. They sell chemical products, coal
mining products, daily products to safety and industrial products. It has around 220,000 staffs
with more than 550,000 shareholders. The company was initially offered services to
Australian farmers in 1941 (Willis, et. al, 2018). Later, the services got expanded in every
sector and now it is listed as one of the Australian stock exchange. Wesfarmesr was started o
the demand of rural workers to support the community of farmers. In 1914 it got registered in

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Westralian farmers limited and started trading with the intention to grow and take co-
operative actions for farmers. Later, in year 2017 it was found as one of the target company
in Australia than proved to generate majority of income from the grocery and supermarket
store. In 2017 the company generated total revenue of $68,732,000,000 including sales and
other revenue (Pulker, Trapp, Scott and Pollard, 2018). In 2017 Wesfarmers Limited had
approximately 223000 employees that cover employees from all subsidiaries under the
company's control. It owns a diversified portfolio in the supermarket including the hardware,
processing and energy distribution, coal mining, chemicals and fertilisers. The retail division
is divided into the Coles, Kmart and other target companies. It holds its resources in various
country which produces steaming coal for domestic and export market.
Type of industry
Wesfarmers operates in many sectors and the industry can be said as a retail sector.
Wesfarmers is one of the largest retail industries in Australia as it covers both trading and
non-trading service. This industry has high profit as it contributes in economic growth of an
organisation. It is a retail industry that has higher demand as compared to other industries.
Thus the reason behind the expansion of Wesfarmers is the industry. It helps in linking
strategic system with business strategies so that business can gain new capabilities so that it
can gain competitive advantage (Pulker, Trapp, Scott and Pollard, 2018).
Environment Analysis of Wesfarmers in General
The environmental analysis is carried out by considering economic, physical, sociocultural,
global, technological, political/legal and demographic factors of the company. Discussing all
the factors and its effects:
 Economic- The service and offers offered by Wesfarmers affects the sale of other
companies like Kmart, Coles and target. The economic condition of the country was
improved due to the sale and demand of Wesfarmers (Lim, Blyth, Fathima, de Klerk
and Moore, 2017). The profit margins gained by the company affects the overall
success.
 Physical- The physical factors covers the variation in business practices and
consumer behaviour (Ogiela, 2015). Wesfarmers have worked on such barriers so that
better service can be offered to the customers.
 Socio-cultural- With changing time the standard of living and demands of Australian
people have changed (Lim, Blyth, Fathima, de Klerk and Moore, 2017). Thus, with

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the change in demand the services have also been changed so that customer
satisfaction is maintained (Janssens and Kaptein, 2016). Wesfarmers have started
servicing healthy and low fat products due to the increasing health concerns.
 Global- The organisation have diversified their service in the global market as it is
expanded over multiple places like china, India, Singapore, Hong Kong, New Zealand
and many others (Janssens and Kaptein, 2016). Expanding the services in global
market helped to gain brand image.
 Technological- Wesfarmers have beaten all its incubators as they have adopted new
technology in its processes (Ogiela, 2015). The adaption of new technology helped
the company to compete with its competitors. The business got expanded as it offered
online shopping experience to customers that added flexibility.
 Political/Legal- The legal and political factors affected Australian market was
opening up of new supermarkets and retail stores in the country. The sale of
Wesfarmers affected the profit margins of other countries (Moore, Guiver,
Woollacott, de Klerk and Gidding, 2016). This issue was overcome by initiating
various services like restricting trading hours or measuring the captured market.
 Demographic- It covers the group of people that are living in Australia that affects
the demand of products and services (Jie and Gengatharen, 2018). The immigration
rate is quiet high in Australia that increases the overall profit margins.
Industry environment
Wesfarmers is a retail industry and it faces issue due to bargaining power. The bargaining
power affects the profit margins of an organisation. The barging power of supplier and
buyer is discussed.
 Bargaining Power of Buyers- The Company suffers from bargaining crises as
buyers have the habit of bargaining to a particular extent. The bargaining margin
is quiet high as customers tries to bargain to a maximum extension. Additionally,
it is important as other competitors in the market are selling same product but with
lower price may attract more customers (Fathima, Blyth, Lehmann, Lim, Abdalla,
de Klerk and Moore, 2017). Thus, barging power of buyers depends upon the
price of product offered by other company.
 Bargaining Power of the Suppliers-To enhance the profit margin barging power
of the supplier should be high (Fathima, Blyth, Lehmann, Lim, Abdalla, de Klerk

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and Moore, 2017). The bargaining power of supplier helps in maintaining better
relations with the customers and promises to offer better products to customers at
a nominal price (Connell, 2016).
 New competitors in the market- Competitors are always a threat to an
organisation as they come up with new ideas and products to attract customers. In
case of Wesfarmers, it is tough task for any other competitors to overtake the
services as they offer services in diversified sector (Connell, 2016). Due to this
reason it becomes difficult for an organisation to enter in the system.
 Rivalry among existing firm- The existing firms also offer tough competition
like wools worth is one of the biggest competitors for Wes farmers. It is offering
similar services but at a lower price. Competitors are one of the reasons that
decline the sale of other company.
 Difficulties faced due to substitutes- The substitute of retail industry is online
store that offer all the services at a single click (Regan, Moore, de Klerk, Omer,
Shellam, Mak and Effler, 2016). The demand of such substitutes is increasing as
it adds up flexibility in shopping and causes ease in availability of products.
Competitive environment
There are many competitors of Wesfarmers in Australia; some of the competitors are aldo
and Woolworths. The market is captured by Wesfarmers and one of the reasons is its Cole
markets. The earning of Cole supermarkets is because Wesfarmers is adopting new services.
Aldo uses agile logics in order to complete the operations in an effective way. Woolworths
offer high discount which is one of the reason of capturing customers. The rivalry firs also
follow strategies to attract more customers by offering them discounts and special offer. The
threats that are faced by Wesfarmers is capturing the entire market.
Opportunities and Threats
The company faces various challenges along with opportunities. Some of the opportunities
and threats of Wesfarmers is listed below:
 Opportunity- Wesfarmers have expanded their business in global market by offering
the services in international sector. The services got expanded in different countries
due to the adaption of high technology so that innovation can be made. Apart from
that, various customer loyalty programs were enabled so that customers can be
retained in an organisation (Kilroy and Schneider, 2017) . Apart from that, to improve

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the quality benchmarks are defined so that all the inefficient activities could be
redefined so that quality could be improved. The timeframe constraint is considered
so that better customer satisfaction could be offered.
 Threats- The biggest threat faced by Wesfarmers is the competitors in the market.
The market share of an organisation is affected by the entry of some other
organisation (Kilroy and Schneider, 2017). Other competitors offer similar service to
the customers but with lower price. It affects the sale of an organisation, like the sale
of Wesfarmers is affected by Woolworth, aldo and many other competitors. The threat
of Wesfarmers is affected by the equitable price of other companies.
Part 2- Internal analysis and proposal
The internal analysis of an organisation is identified by checking upon the resources
either tangible or intangible. In the case of Wesfarmers, the tangible resources are the human
staffs that are involved in an organisation. Wesfarmers have more than 220,000 staff that
works with the same mission to fulfil the demand of customers and serve them with best
options (Waterlander, Luiten, Eyles and Steenhuis, 2016). Apart from that, the intangible
resources are used to enhance the brand image. From all eh research it was found that success
of Wesfarmers were due to the presence of tangible and intangible resources.
Identifying the capabilities
The main capabilities behind the success of Wesfarmers are effective workforce, supply
chain management and brand image. They basically design policies to ensure that cultural
conflicts are eliminated and every employee is given equal importance so that overall
objectives are met (Seppanen, Tan, Corscadden, Currie, Richmond, Thornton and Kirkham,
2018). The capability is to maintain internal as well as external operations of an organisation.
The major capability of Wesfarmers is to identify the improvement that could be made in the
industry. The workforce culture of Wesfarmers is diversified as in groceries, fresh food, fuel,
coal, liquor and financial services. They have started to serve their services in global market
also through online channels this helped to capture more customers (Rowe, Nowak, Quaddus
and Naude, 2014). Additionally, Wesfarmers have identified various challenges that have
impacted overall profit of an organisation. The reason for this success is adoption of new
technological capabilities.

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Core Competency Analysis for Wesfarmers
The audience can be captured from the market and competitive advantage could be gained by
making use of supply chain strategy (Seppanen, Tan, Corscadden, Currie, Richmond,
Thornton and Kirkham, 2018). The overall profit of Wesfarmers was made possible by
designing new strategies so that customers can be captured from the market.
Branding and market- It is very important to capture customers so that brand image could be
captured. Thus, new marketing strategies are developed so that overall sale can be increased.
Branding of an organisation helps in creating a positive image so that customers get attracted
towards it (Rowe, Nowak, Quaddus and Naude, 2014).
Integration- Integration is one of the important factors that assure that all the process of an
organisation are completed effectively. Wesfarmers assure that products and services are
assured in an effective manner.
Innovation- It can be other reason that helps an organisation to gain profit and brand image.
Innovation make the organisation stand out from the competitors, for this market is analysed
on regular basis (Rowe, Nowak, Quaddus and Naude, 2014).
Information system solution proposal for Wesfarmers
For Wesfarmers, it has operations in every sector thus software’s should be used so that
operations are completed automatically (Zentes, Morschett and Schramm-Klein, 2017). All
the information of the customers needs to be stored at a secured place as confidentiality is one
of the major concerns that can be considered is security (Sedera, Gronau and Sumner, 2015).
In the proposal it was mentioned that Wesfarmers uses strategies to capture customers by
offering them offers. The quality of products is one of the priorities as it helps in building
customers trust. Additionally, it was proposed that integrity, confidentiality and availability
of information should be considered so that security is maintained. Thus, proper access
control list and firewalls need to be used so that no security breach occurs (Biddle, 2016). To
overcome all these issues, solution were propose like intrusion detection system should be
used so that vulnerabilities could be resolved. An information system is used to manage all
the internal operation so that they are completed effectively (Trevena, Neal, Dunford,
Haskelberg and Wu, 2017).

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Evaluation
The proposed solution can be evaluated on the basis of security as in the proposal it is
mentioned that access control list could be defined. It is a difficult task to maintain security of
large amount of information. Thus, it is found that security was a benchmark for an
organisation success thus all the client information was kept confidential. All the operations
need to access so that quality of product is maintained and also promotes that brand image is
maintained (Trevena, Neal, Dunford, Haskelberg and Wu, 2017). The combination of
framework helps in providing a successful way to business.

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Conclusion
It can be concluded from this report; information system plays an important role in
enhancing competitive advantage of an organisation. In this report, Wesfarmers that is an
Australian organisation the analysis is done considering this case. The internal as well as
external operations of an organisation are considered and processes are designed so that
processes could be improved. The environmental analysis is also carried out so that internal
and external operations could be improved. The competitor analysis is carried out of
Wesfarmers and it is compared with Woolworth as it is one of the competitors. A proposal is
prepared at the end of the report that covers a solution to improve all the business processes
and operations. The reputation of Wesfarmers has been maintained due to its Cole industry.
Coles supermarket have diversified the products in general merchandise, groceries, fresh
food, fuel, liquor and financial services through its online channels and national store
network to more than 20 million customers every week. The external and internal analysis of
Wesfarmers is done so that competitive environment could be checked. The industrial
background along with its opportunity and threats are considered. The internal analysis and
the proposal are made after analysing all the capabilities.

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References
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2017. The Impact of Pneumococcal Vaccination on Bacterial and Viral Pneumonia in
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