Strategic Management Inputs: A Comprehensive Report on AWB Limited

This report provides a strategic analysis of AWB Limited, a major Australian agribusiness, focusing on its strategic management inputs. It begins with an overview of the company, including its products, services, and revenue-generating units, particularly its dominance in wheat exports. The external environment is examined using PESTLE analysis, covering political, economic, social, technological, legal, and environmental factors impacting the business. The internal analysis identifies AWB's resources, core capabilities, and competitive advantages, such as its extensive distribution network and brand image. The report concludes with recommendations for future strategic direction, including product development, cost leadership, and diversification strategies to enhance its market position and profitability. Desklib is a great resource for students seeking similar reports and study tools.

Agriculture Business

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Contents
Introduction...........................................................................................................................................3
Overview of the company......................................................................................................................3
Products and service..............................................................................................................................4
Revenue Generating Unit......................................................................................................................4
External Analysis..................................................................................................................................4
PESTLE Analysis..............................................................................................................................4
Internal Analysis....................................................................................................................................6
Resources and core capabilities.........................................................................................................6
Competitive advantage......................................................................................................................7
Recommendations.................................................................................................................................8
Conclusion.............................................................................................................................................9
References...........................................................................................................................................11

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Introduction
Strategic management is the continuous planning, monitoring, and analysing the objective of
the organisation. The external and internal analysis has been done in the process of strategic
management for the effective result. It is required for the company to adopt the strategies to
gain a competitive advantage. It is essential for an organisation to analyse the environment
before adopting the strategies. There are many tools that can be used by the company to
analyse the environment such as PESTLE and SWOT Analysis (Morden, 2016). The main
aim of this report is to understand strategic management inputs. In this report, AWB Limited
has been taken into consideration to analyse the environment of the organisation.
At the beginning of the report, the external analysis will be done by using the PESTLE
analysis tool. Later on, the discussion is made on the internal analysis of the organisation to
identify its resources and capabilities. At the end of the report, the appropriate strategies and
methods are recommended to overcome the issues.
Overview of the company
AWB Limited was a major grain marketing organisation based in Australia. It was a
government body which is known as the Australian Wheat Board. It was founded in the
1930s to regulate the wheat market after the excesses of the Great Depression. In July 1999, it
was transformed into a private company which is owned by wheat growers. AWB has grown
into the multi-number of subsidiaries to diversify its income from wheat exports. Subsidiaries
companies also operate in grain flow that helps to manage the collection of grain from
farmers (Reference for Business, 2018).

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Products and service
The company offers limited products to consumers in the market. It mainly delivers the
services of wheat to consumers. It exports wheat in 50 locations to earn the high revenue
(Trove, 2018). The company have a number of subsidiaries in different locations which
operate the business of grain. The company becomes the monopoly exporter of Australia in
Wheat and it also exports the grains in different locations (Reference for Business, 2018).
Revenue Generating Unit
The company earns high revenue from the exporting business of grain and wheat. The
company earns the maximum profit as it was considered as a Monopoly Company in the
market. The company operates in a different location such as Japan, Egypt, South Korea,
Indonesia and many others. The company is the main wheat suppliers of Iraq which helps to
generate the revenue. Apart from these services, the company also invests in the business of
feed and four milling to generate the revenue (Reference for Business, 2018).
External Analysis
PESTLE Analysis
Political
It has been seen that agriculture is a narrative for Australia identity and prosperity.
Agriculture is a responsibility of the government of Australia to maintain productivity growth
and to care for the rural environment. The parliament of Australia passes the rules which
affect the whole country. The government of Australia supports the agriculture industry with
the objective of growth. Australian government developed the rules and regulation regarding
the agriculture industry so that the companies can easily operate in the domestic and
international market. The Australian government developed the rule of inquiry in which the

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productivity commission has to analyse the material before supplying to consumers
(Australia Government, 2018).
Economical
Australia has a largely mixed economy with a high GDP rate of $1.69 trillion in the year
2017. Australia beat Switzerland and became the largest median wealth per adult with the
amount of $8.9 trillion in the year 2016. It states that the capacity of the consumer of buying
the agriculture product is high. The high purchasing power of the consumer is high that is a
positive factor for the company as well for the economic growth of the country.
Social
Australia is coming under the best countries to the terms of education, wealth, health and
quality of life. Australia has a small population of 22.9 million and their life expectancy is
above the age of 80 years. The high life expectancy rate states the good wealth of Australian
people; it indicates that the people have the capacity to take necessary products. As Australia
is a multicultural country that is why; the taste and preference of consumer different as per
the different background. The different taste of people affects the demand of consumers
towards the wheat and the other agriculture products (Fozer, et. al, 2017).
Technological
The country has advanced technology and it is also a well-known country for adopting new
technology at a faster rate. It has been seen that the country has an enormous growth in
technology over the years. The technology is increasing with the rate of 4 % in 2018 to $63
billion and it is expected to expand by $65 billion in 2019. Advance technology helps the
agriculture companies to use the different techniques so that they can easily meet their

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demand of customers. More innovation and design meet the demand of consumers and also
reducing the cost of production (Wheelen, Hunger, Hoffman, and Bamford, 2017).
Legal
Australian government developed different laws to protect the consumers and companies. It
is observed that the companies have to follow the rules and regulation to survive in the
market for a long time. Trading laws, competition laws and consumer’s laws are the basic
laws which have to follow by the company. The government of Australia also develop the
policies of biotechnology and biodiversity to protect the environment. The government
should restrict the license policy on the agriculture company so that every company follow
the legal policies and provide the quality of material (Australian Government, 2015).
Environmental
Australia is also popular for tourism just because of its natural beauty such as stunning
beaches, forests and mountains. But Australia faces many challenges regarding the
environment. Australia is the driest place on the earth due to which it is difficult for the
production of crops. Climate change is the risk for agriculture companies because it directly
affects the perishable products. Water insecurity, infection diseases and land are the factors
that directly affect the growth of the company (Hay, 2018).
Internal Analysis
Resources and core capabilities
AWB Limited operates in the business of wheat and other agriculture products. The company
have many subsidiaries which operate in grain flow. The company provide different grains
and it is also famous for its grain in the market. Human resources are the main asset of the
company because it helps the company to expand the business as well to compete with the

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competitors. The company has 3000 employees due to which it can easily export their
resources.
The main capability of the company is its wide and strong distribution network that covers
the 50 countries in the world. The veto power of the company helps to control the exclusive
Australian export market (Cockfield, and Botterfill, 2007). As discussed above, the company
have the multi-number of subsidiaries in different locations which help to reduce the risk
associated with the wheat exports. After the transformation of the company into a private
company, it is changed acquired by different companies. After the acquisition of Agrium
Australia, the scope of growth increases due to which the capacity of meeting the demand of
consumer is also increasing (Feng, Morgan, and Rego, 2016).
The company have a high brand image in the grain market that influences the different
companies to invest in the organisation. The company have the capabilities to meet the
demand of a large number of consumers at a low cost. Investment from outside Australia
helps the company to open the further subsidiaries to move into the other grains like oats,
canola and many others. The company have the capability to expand the business at the
international level by providing the services in the different locations of the world. As
discussed above, human resource is the main resource of the company. The management
team of the company brings a positive direction for the company so that it can achieve
success in the market (De Brentani, and Kleinschmidt, 2015).
Competitive advantage
Earlier, the company was considered as the government company due to high shares of
government. The company was also considered as the monopoly company in the business of
wheat exports. It is the only company in Australia in the business of wheat export which has
the license to export the wheat in the international market. The company gain a competitive

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advantage with this benefit because it can easily switch the prices according to its facility.
There are few competitors in the Australian market which compete the company such as
Australian Agriculture Company, Australian Farming Company, and Mulgowie Farming
Company (Rankers, 2018). These companies have high competition with each other in
different products. Australian Agriculture Company beat the company in the business of
grain but as the monopoly company of wheat; the organisation gain a competitive advantage.
The company gained a high competitive advantage of fixing the prices of wheat as per the
legislation. The government of Australia fixed the prices in the domestic market that is why;
the bargaining power of buyers decreases. Wheat is a necessary item for the human being for
survival. In every condition of life, people like to buy the wheat that is why; the demand of
the company is decreasing in rare cases. The company gained the advantage of a necessary
product in the market. The company is also facing high competition in the market due to a
large number of competitors. The company has the opportunity to gain a competitive
advantage by adopting competitive strategies (David, and David, 2016).
Recommendations
As per the limelight discussion, it has been recommended that the company have to adopt
competitive strategies or expansion strategies to achieve success.
Product Development strategy
As discussed, Australia has a high value of GDP that is why; the purchasing power of
consumers is high. The high purchasing power of consumers indicates that the company has
an opportunity to expand its business with the appropriate strategy. Product development
strategy of Ansoff Matrix is an appropriate strategy for the organisation. The company has a

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high brand image in the exporting business of wheat. It is required for the company to expand
the business by offering new products or grains (Mind Tools, 2018a).
Cost leadership strategy
The company is considering as the monopoly company in the wheat business. It has an
opportunity to fluctuate the prices as per their requirements. Low cost increases the demand
of the company that is why; it is recommended that the company has to offers the low prices
to the consumers as compared to the other competitors in the grain business (Mind Tools,
2018b).
Diversification strategy
This strategy states that the company has to offer new products in the new market in order to
attract a large number of consumers. It can grab the high market share by offering a new
product at the new market place. The company is operating with the existing products due to
which loyalty of the customer is increases and the demand towards the products is also
increases. It has an opportunity to expand the business by entering a new market with new
products so that a large number of customers take the advantage of services that are providing
by the company (Lasserre, 2017).
Conclusion
From the above analysis, it has been concluded that the company has high scope to enter the
new market to expand the business at the international level. As discussed above, it has been
seen that the government of Australia supports the agriculture industry with the motive of the
high rate of wealth. Economic factors help the company to expand the business at the
international level as the purchasing power of consumers is high. The company mainly
operates in two businesses such as grain and wheat. These are the two ways of generating

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revenue for the company. The management team and the 3000 employees are the main assets
of the company from which it achieved success. However, the company gained a competitive
advantage due to it is considered as the monopoly company. But it is also observed that the
company faces the issue of competition from the different companies that is why, it is
recommended that the company has to adopt the product development strategy, cost
leadership strategy and market development strategy. The company can achieve success in
the international market by adopting these strategies.

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References
Australia Government. (2018) How Government Works. [online] Available from:
https://www.australia.gov.au/about-government/how-government-works [Accessed 22/3/19].
Australian Government. (2015) Regulation of Agriculture. [online] Available from:
https://www.pc.gov.au/inquiries/completed/agriculture#report [Accessed 22/3/19].
Cockfield, G. and Botterfill, L. (2007) From the Australian Wheat Board to AWB Limited:
Collective Marketing and Privatisation in Australia's Export Wheat Trade. Public Policy,
2(1).
David, F.R. and David, F.R. (2016) Strategic management: A competitive advantage
approach, concepts and cases. Pearson.
De Brentani, U. and Kleinschmidt, E.J. (2015) The impact of company resources and
capabilities on global new product program performance. Project Management Journal,
46(1), pp.12-29.
Feng, H., Morgan, N.A. and Rego, L.L. (2016) Firm Capabilities and Growth: The
Moderating Effect of Market Conditions. In Let’s Get Engaged! Crossing the Threshold of
Marketing’s Engagement Era (pp. 581-582). Springer, Cham.
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T. and
Mizsey, P. (2017) Life cycle, PESTLE and multi-criteria decision analysis of CCS process
alternatives. Journal of cleaner production, 147, pp.75-85.
Hay, A. (2018) Agricultural law in Australia: overview. [online] Available from:
https://uk.practicallaw.thomsonreuters.com/Document/I0f03659be20d11e498db8b09b4f043e

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0/View/FullText.html?
contextData=(sc.Default)&transitionType=Default&firstPage=true&comp=pluk&bhcp=1
[Accessed 22/3/19].
Lasserre, P. (2017) Global strategic management. Macmillan International Higher Education.
Mind Tools. (2018b) Porter's Generic Strategies. [online] Available from:
https://www.mindtools.com/pages/article/newSTR_82.htm [Accessed 22/3/19].
Mind Tools. (2018a) The Ansoff Matrix. [online] Available from:
https://www.mindtools.com/pages/article/newTMC_90.htm [Accessed 22/3/19].
Morden, T. (2016) Principles of strategic management. Routledge.
Public engagement. (2018) Social and ethical issues. [online] Available from:
https://www.publicengagement.ac.uk/do-engagement/planning/social-and-ethical-issues
[Accessed 22/3/19].
Rankers. (2018) List of Agriculture Companies. [online] Available from:
https://www.ranker.com/list/agriculture-companies/reference [Accessed 22/3/19].
Reference for Business (2018) AWB Ltd. - Company Profile, Information, Business
Description, History, Background Information on AWB Ltd. [online] Available from:
https://www.referenceforbusiness.com/history2/12/AWB-Ltd.html 1 [Accessed 22/3/19].
Trove. (2018) AWB Limited. [online] Available from: https://trove.nla.gov.au/people/642162?
c=people [Accessed 22/3/19].
Wheelen, T.L., Hunger, J.D., Hoffman, A.N. and Bamford, C.E. (2017) Strategic
management and business policy (p. 55). Boston: pearson.

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