Analysis of Key Strategy Development Tools in Australian Businesses

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Essay – Key Strategy Development Tools
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TABLE OF CONTENTS
Essay................................................................................................................................................3
Tool 1: Westpac/ SWOT analysis.............................................................................................3
Tool 2- BHP Billiton/PESTLE analysis...................................................................................5
Tool 3- Wesfarmers/ Five forces analysis................................................................................7
Tool 4 – Woolworths/Ansoff matrix.........................................................................................8
References........................................................................................................................................9
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Essay
In the modern era, there are different types of strategy development tools available and
businesses can make use of any of these tools with an objective to gain competitive advantage
over other players in the market. The present report outlines the application of four different
strategy development tools on four different companies of Australia.
Tool 1: Westpac/ SWOT analysis
Westpac is one of the most popular banking and financial companies in the country and it has
targeted individuals who seek for banking and financial assistance. The SWOT analysis of
Westpac is carried out below as:
Strengths- Westpac is market leader in context of total number of branches and ATM’s in the
country and this can be termed as its most important strength (Leischnig et al. 2017). The market
leadership is considered as a critical strength because it is helping the business in attracting more
and more customers and acquiring better sales and profitability. In terms of business banking in
Australia, Westpac is second largest and this can be termed as another major strength of the
business. Apart from this, the company is also providing different types of flexible banking
related services to its customers and this is another major strength because it has helped in
creating sense of satisfaction among the customers.
Weaknesses- It can be stated that along with certain strengths, the company is also having
different weaknesses which are creating issues and obstacles in the success and growth of
Westpac. High inventory days in comparison with its competitors can be termed as one of the
major and most important weaknesses of Westpac (França et al. 2017). Maintaining high
inventory level is a weakness because it has encouraged the business to invest more and more
capital. In addition to this, high rate of attrition among the employees is also a weakness which is
creating issues for Westpac in terms of growth and development. The attrition rate is very high in
Westpac and the result of this is that the company is required to invest considerable resources in
areas such as training and development of its employees.
Opportunities – Westpac has the opportunity to attract more and more customers by using online
channels of marketing and communication. The use of digital channels is useful and effective for
the business because it will help in increasing the existing market share and customer base.
Expansion in new market is also an opportunity which is available in front of Westpac to attain
desired growth and success.
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Threats – Increasing and intense competition in the banking and financial industry of Australia
can be termed as the biggest threat to the business (Uhl et al. 2016). The intense competition is a
threat because it is forcing Westpac to carry out continuous improvements in their products and
services to attract customers. The demand of products and services which are highly profitable is
also very seasonal and this can be termed as another major threat for Westpac.
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Tool 2- BHP Billiton/PESTLE analysis
BHP is an Australian based multinational company which offers products related with mining,
metal and petroleum. The Pestle analysis of BHP is carried out below as:
Political – It can be stated that the stable political environment of Australia has played a vital
role in the long-term growth and success of BHP (Tukker and Tischner, 2017). The company is
into the process of mining and the Australian government has provided adequate support to the
business in terms of its processes and business activities. The low level of corruption is also a
critical part of Australian political environment which has supported in the success of BHP. The
low tax rates in Australia are also supporting the organisation in carrying out smooth flow of all
its operations.
Economic- The elements of economic environment such as rate of interest, foreign exchange,
economic growth, GDP and income level of consumers in the society also plays a vital role in the
success and growth (Wurthmann 2019). The high economic growth of Australia can be termed as
one of the main and most critical factors which has contributed and still contributing in the
success of BHP in the country. Furthermore, the availability of adequate infrastructure has also
supported the business in extracting petrol, metals and stones from the country. The growing
income level and living standard of people in Australia has resulted in maintaining adequate
demand of products and services offered by BHP.
Social - Adequate availability of skilled and talented workers can be termed as the most
important social factor because of which the company is able to attain higher growth. The
demand of products and services offered by BHP is increasing within the Australia market and
therefore, the brand will not face issues and challenges in context of future growth.
Technological - The advancements in the field of technology is helping BHP in carrying out
more effective flow of all operations and processes (Jarzabkowski and Kaplan, 2015). The up-
gradations in Australia in context of technology have helped BHP in reducing its cost of
operations and at the same time, they have contributed a lot in context of improving the
efficiencies of its manufacturing processes.
Legal - The laws and regulations within Australia have become very strict and therefore, BHP is
required to follow these regulations and laws strictly. Negligence of these laws and regulations
can result in imposing several fines and penalties on the company.
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Environment - The chosen organisation is also required to take care of the fact that its operations
and business activities are not making negative impact on the environment and people living
within the local communities. BHP Billiton is now required to focus on employing operations
and business processes which are more sustainable.
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Tool 3- Wesfarmers/ Five forces analysis
Wesfarmers is one of the leading and most popular retail businesses in Australia and the
application for Porter five forces model is carried out below as:
Buyer power – The power of buyers in the industry is very high because of the low switching
cost (Omotayo, 2015). Currently, the buyers in food retail industry of Australia wants that
businesses should deliver quality products and services to them at affordable prices. The ability
to seek for attracting discounts and special offers is also very high among the buyers.
Supplier power – At present there are limited number of suppliers operating in the food and
staple retail industry of Australia and therefore, the power of suppliers is high (Burns, 2016). The
suppliers in the industry can dominate businesses such as Wesfarmers over areas such as prices
and quality. The powerful suppliers in the industry are using their power of negotiation to
dominate the industry players.
Threat of competition – The competition in the retail industry of Australia is very intense and
this has created issues and challenges for businesses such as Wesfarmers. The company is facing
intense competition from brand such as Woolworths and other retailers and because of this
competition, Wesfarmers is required to operate at low prices and margins.
Threat of new entry – The threat of new entry in the industry is low because the new businesses
are required to invest considerable amount of resources and efforts in entering the market and
competing with businesses such as Wesfarmers (Thompson et al. 2015). The new firms are also
required to focus on areas innovations and creativity to enter the market and give intense
competition to existing players in the retail food and staple industry of Australia.
Threat of substitute – The threat of substitute products and services is low in case of Wesfarmers
because of its high brand image and high-quality products and services. At present, the
customers in the industry are less interested in buying substitute products because Wesfarmers is
already offering high quality services and products at low or affordable prices.
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Tool 4 – Woolworths/Ansoff matrix
Woolworths is considered as one of the largest private sector employers in Australia and one of
the most popular brands in the retail industry of the country. According to the concept of Ansoff
matrix, there are four different strategies of growth and expansion available for businesses and
the application of strategies on Woolworths is carried out below as:
Market Penetration – According to this strategy, Woolworths will be required to emphasize on
increasing the sales of its existing products and services within the existing markets. Here,
aggressive marketing is the plan which can be used to attain desired growth targets.
Market development – It is a kind of generic strategy in which the brand will need to focus on
expanding its existing services and products to new markets of the world. Here, feasibility study
of different growing markets can be done and Woolworths can enter any of these markets.
Product development – According to this strategy, Woolworths will be required to focus on
developing new and innovative services and products for existing markets such as Australia
(Ansoff et al. 2018). Here, strong research and development is required to identify gap in the
market and develop new products.
Diversification – It can be termed as one of the riskiest growth strategies in which Woolworths
will need to introduce a completely new range of products and services in an entirely new
market.
The models of strategies management are useful and effective because they provide companies
with an opportunity to analyse their existing conditions and at the same time, support in
development of new strategies for future growth and development.
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References
 Ansoff, H.I., Kipley, D., Lewis, A.O., Helm-Stevens, R. and Ansoff, R.,
2018. Implanting strategic management. Springer.
 Burns, P., 2016. Entrepreneurship and small business. Palgrave Macmillan Limited.
 França, C.L., Broman, G., Robèrt, K.H., Basile, G. and Trygg, L., 2017. An approach to
business model innovation and design for strategic sustainable development. Journal of
Cleaner Production, 140, pp.155-166.
 Jarzabkowski, P. and Kaplan, S., 2015. Strategy tools‐in‐use: A framework for
understanding “technologies of rationality” in practice. Strategic Management
Journal, 36(4), pp.537-558.
 Leischnig, A., Wölfl, S., Ivens, B. and Hein, D., 2017. From digital business strategy to
market performance: insights into key concepts and processes.
 Omotayo, F.O., 2015. Knowledge Management as an important tool in Organisational
Management: A Review of Literature. Library Philosophy and Practice, 1(2015), pp.1-
23.
 Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy:
Concepts and readings. McGraw-Hill Education.
 Tukker, A. and Tischner, U. eds., 2017. New business for old Europe: product-service
development, competitiveness and sustainability. Routledge.
 Uhl, A., Houlder, D. and von der Horst, M., 2016. Strategy management. In A Handbook
of Business Transformation Management Methodology (pp. 59-84). Routledge.
 Wurthmann, K., 2019. The essential mix: six tools for strategy-making in the next
decade. Journal of Business Strategy.
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