This report provides a comprehensive analysis of the business environment of Wesfarmers, a leading Australian retail company. It begins with an introduction emphasizing the importance of micro and macro environmental analysis for a firm's growth and survival. The report then applies Porter's Five Forces framework to assess the competitive landscape, evaluating the threat of new entrants, bargaining power of suppliers and buyers, competitive rivalry, and threats of substitutes. Following this, the report delves into micro-environmental factors, including customers, suppliers, and shareholders, and their impact on Wesfarmers' operations. Finally, it proposes strategies to mitigate potential risks associated with these factors, such as enhancing customer service, building strong supplier relationships, and maintaining good shareholder relations. The conclusion reinforces the significance of environmental analysis for sustained success in a dynamic market.