Comprehensive Analysis of Wesfarmers' Management and Operations Report

This report provides a detailed analysis of Wesfarmers, an Australian conglomerate with international operations. It examines the company's overview, operating position, and international competitive strategies, including product differentiation and customer satisfaction. The report delves into Wesfarmers' organizational design, entry strategies in various countries like the UK and India, and operational control, including supply chain management. It also explores human resource practices, such as equal opportunity and employee retention strategies. Furthermore, the report identifies critical issues and opportunities for Wesfarmers, offering recommendations for management to improve its performance. The analysis incorporates frameworks like the Ansoff Matrix and Porter's Value Chain Model to provide a comprehensive understanding of Wesfarmers' business operations and management approaches.

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Management
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Executive Summary
The report has thrown light on analysing the overview of Wesfarmers Company which has
expanded their operations in different countries such as the UK and India. The current
operating position of the company has been analysed which provided brief overview of the
cost and revenue structure of the company. Additionally, the competitive strategy of
Wesfarmers has been identified wherein the organizational design and structure have been
considered, and this helped in analysing the overall effectiveness of Wesfarmers in the
different markets across borders. The various entry strategies have been discussed which
assisted in explaining the most appropriate entry mode for expansion. The value chain
analysis has been described with the application of human resource practices across borders.
Lastly, the opportunities have been considered which were examined along with provided
recommendations to the management.

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Table of Contents
Overview of the company and operating position.....................................................................3
Review of international competitive strategy of company........................................................4
Existing organizational design structure and control issues......................................................6
Entry Strategies used to enter other regions and countries........................................................7
Operational control, production and distribution or supply chain management........................8
Management of human resource across borders........................................................................9
Equal Opportunity to Employees at Wesfarmers...................................................................9
Employee Retention Strategies............................................................................................10
Identification of critical issues or opportunities.......................................................................10
Recommendations....................................................................................................................11
References................................................................................................................................12

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Overview of the company and an operating position
Wesfarmers is one of the Australian conglomerates which is headquartered in Perth,
Western Australia wherein the central departments include retail, chemicals, coal mining,
fertilizers and industrial along with safety products. The company was founded in the year
1914, and the company is listed in the Australian Stock Exchange which grew into one of the
biggest retail conglomerates in the competitive business environment. The areas served by
Wesfarmers are Australia, India, Ireland, United Kingdom and New Zealand wherein revenue
earned by the company is A$68.44 billion, and the number of employees working in the
organization is 223000 (Wesfarmers.com.au 2019).
As per the operating model, Wesfarmers has applied the Lean Retail Model to Fund
investment as customers play a significant role in generating the success of the company in
the market effectively. Wesfarmers have adopted the operating model which helps in
reflecting the expectations of the customers in the market. In the viewpoint of the operating
position, Wesfarmers has mainly focused on the three primary outcomes:
 Cost- Improving overall efficiency along with cost position in the low inflation
environment (Brewster et al. 2016)
 Customers- Offering the customers with different kinds of products and services
which will improve the overall efficiency of the firm appropriately
 Growth- The growing of market share and the customers play a vital role in managing
the operations (Wesfarmers.com.au 2019)
In attaining the operating position in the market which is competitive, the Wesfarmers
Conglomerate needs to apply strong leadership and accountability which helps in managing
operations successfully. Wesfarmers is trying to build a set of world class cross business

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supply chains along with an integrated system of merchandising which has been a platform
for the overall growth of the firm.
Review of international competitive strategy of the company
The entire competitive strategy of Wesfarmers Conglomerate Company depends on
various techniques as there was decline in the profit. To improve the business situation in the
market and to reestablish their position in the market, the company has adopted the
differentiating strategy in comparison to the other players present in the market. The various
competitive strategies adopted by the company are analyzed as follows:
 Selling products at first price rather than a discounted price as the policy was not
sufficient and this led to the decline in the profitability of the organization negatively.
After the same, Target Company which is the part of Wesfarmers tried to sell
products at the original price as this helped them in avoiding high stock clearances
along with strengthening revenues of the organization (Albrecht et al. 2015)
 Enhancing the flexibility of the customer shopping experience is the other aspect
which is being followed by Wesfarmers in which Wesfarmers is trying to work and
integrate the physical stores of the company with digital business. For instance-
Customers who are shopping with Wesfarmers are being able to collect online orders
from the stores, and there can be text reminders provided to them as well (Deery and
Jago 2015)
 Increasing the overall focus on the customer’s satisfaction is the other aspect in
which the company has analyzed through surveys regarding the health preferences of
the customers in the market (Brewster, Chung and Sparrow 2016).

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Figure 1: Ansoff Matrix
(Source: Savino, Manzini and Mazza 2015)
From the above strategies, this can be analyzed that Wesfarmers has attained
competitive advantage with the implementation of the differentiation technique through
product differentiation (Jabbour and de Sousa Jabbour 2016). With the assistance of the
same, Wesfarmers tried to satisfy the demands of the customers by understanding their
requirements and the products meet and match international standards which creates a
competitive advantage for the company as to attract more customers (Nankervis et al. 2016).
Furthermore, the cost advantage is the other aspect wherein Target tried to reduce the
reliance on discounts, and they mainly focused on providing better quality products at a
reasonable rate. Therefore, from the above situation, this can be identified that the company
has tried to improve their position in managing the overall sustainability appropriately.

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Therefore, from the above, this can be explained that to stay competitive in the
market, the Wesfarmers Conglomerate company (Target Retail company) has tried to focus
mainly on providing better quality to the customers in the market and improve the business
situation appropriately. Target has created value for the customers wherein they try to deliver
high-merchandises which are in line with the global trend in an appropriate manner.
Existing organizational design structure and control issues
Figure 2: Organizational Design Structure of Wesfarmers
(Source: Hishe, Asfaw and Giday 2016)
From the diagram, this can be analyzed that the organizational structure which is
being followed at Wesfarmers is hierarchical structure wherein director of the organization
is at the top of the company followed by the regional manager who handles the different
operations at geographical locations. All the employees in various departments are required

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to report to the director and manager which is quite difficult in managing operations of the
organization. Without a proper organizational structure, this can hamper the growth of the
company as there can be different issues related to hierarchy as there can be issue surfacing
confusion among the various members working in the organization (Hamilton-Hart and
Stringer 2016). The real problem which can be faced by the employees in the organization is
that supervisors take the authoritative role which dominates employees and affects the morale
of employees. There is a lack of communication among members which has created massive
confusion among the members, and this affected the confidence of the employees negatively.
Entry Strategies used to enter other regions and countries
Wesfarmers have their presence in different countries which have increased the
overall sales and profitability of the organization appropriately. While entering in the New
Zealand market, Wesfarmers tried to incorporate the wholly-owned subsidiary which had
offered them with different kinds of vision and guidance on the country in which they are
opening their store along with developing their business practices which were successful for
their operations in New Zealand (Irvine 2015). There were diversification and reduction of
risk by developing various businesses, and they took over the other weak companies which
increased their presence and market share in the overall competitive business environment.
Furthermore, in the United Kingdom, Wesfarmers tried to implement licensing
strategy of entry mode which was successful, and this successfully increases their operations
as well (Howieson, Lawley and Hastings 2016). Wesfarmers analyzed that the licensing is
one of the most sophisticated strategies wherein they can transfer the rights to use the
different products and services to the other firm. In this manner, Wesfarmers tried to gain
their presence fast in the UK market with low cost and low risk, and this helped them in
becoming competitive in their aspects.

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In India, Wesfarmers tried to acquire the market through Acquisition technique
through the stable operation, and this helped them in improving their overall effectiveness
appropriately. However, in acquisition technique, there have been incurring of high costs and
integration issues with the home country which led to the different aspects at first while
establishing their business operations in Indian market. Wesfarmers tried to examine the
various laws and legislation of the target Indian economy which helped them in
understanding the issues and restrictions and analyzing the overall acquisitions effectively
(Hollender, Zapkau and Schwens, 2017).
Operational control, production and distribution or supply chain management
With the help of Porter’s Value Chain Model, the Wesfarmers value chain activities
can be analyzed as to gain more competitiveness in the competitive business environment.
The infrastructure of the Firm- This is the first aspect in which there are more than
2000 stores of Wesfarmers in the worldwide. The company serves more than 100 million
customers in the world, and they have their different branches and presence through the
various entry modes (Lincoln and Andrew 2018).
Operations and Operational Control- The recycling of the different objects are the
major priority of Wesfarmers, and they try to reduce wastage by encouraging their vendors to
reduce the packaging costs. There is the use of advanced energy management systems as this
will reduce and regulate the usage of the energy in the market. The company tries to provide
safe and secure shopping experience to the customers. These are the different operational
control related activities which helped the company in functioning (Gereffi and Fernandez-
Stark 2016).
Distribution- The technique of inventory at Wesfarmers helps in analyzing that the
company have distribution centers and they forward the same to the stores. This helps the

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company in keeping inventory and costs of transportation low, and this has cut down the time
which is required for transportation which helped in reducing the inefficiencies.
Production- The primary focus of the Wesfarmers is the strategic relationship which
is being maintained by them with the local suppliers for receiving the different products and
services as this helps them in keeping the cost of the materials low, and the suppliers try to
provide standard products along with services as mentioned in code of the suppliers
(Brewster 2017).
Management of human resource across borders
In the past scenario, Wesfarmers faced severe criticism for the poor performance of
the human resource management practices which were conducted by them. However, in the
present situation, the things have changed as the different policies of wage system provided
to employees have changed, and this has helped the company in recruiting more new talents
in the organization.
Equal Opportunity to Employees at Wesfarmers
In Wesfarmers, the employees are provided with proper and equal opportunity for the
advancement of the career. The employees are encouraged to communicate openly, and
Wesfarmers has been ranked among the top 10 companies in the world. In recruiting the
different new employees, the organization begins with the recruitment program which is
convenient as this provides an opportunity for employees regarding their viewpoints
(Brewster 2017).
Wesfarmers is one of the primary examples of effective large-scale human resource
management considering that the company has millions of employees working worldwide.
Additionally, the human resource planning at Wesfarmers is stratified regarding the different

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solutions which are being developed and applied. There are various divisions in Wesfarmers
which provide proper training and development which helps in covering technical skills along
with teamwork and leadership. Additionally, the Wesfarmers uses the particular software
which helps in automating the process of analysing the changes in workforce.
Employee Retention Strategies
Moreover, Wesfarmers tries to maximize the employee retention to minimize
financial loss which is linked to turnover. The different employee retention strategies applied
by them are as follows:
 Recognition which is being based on the performance of employees (Brewster 2017)
 Benefits which are based on status or position of employees
 Incentives which are based on employee’s status or position in the company
Identification of critical issues or opportunities
The significant opportunities which can help in influencing Wesfarmers are related to
growth and expansion strategies which can be adopted by the organization appropriately.
These are the various opportunities which are linked with the global economic situation.
Additionally, the human resources situation in the organization represents the different issues
which are the different opportunities for the company to improve the overall situation
appropriately. The various opportunities of Wesfarmers include the following:
 Expansion in other developing nations
 Improvement in the different human resource activities and practices related to the
same
 Increase in the quality standards which will help in managing the different operations
successfully in various countries (Brewster 2017)

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Wesfarmers can expand their business operations in different developing nations
which is dependable on economic growth condition and the proper analysis of the company's
employment practices which will be appropriate for the growth of the company.
Recommendations
Therefore, from the above analysis, this can be recommended that the company can
increase their overall effectiveness by analyzing the following aspects:
Firstly, Wesfarmers can improve the HR management standards along with product
quality standards which will be promoting the overall performance of the organization.
Proper usage of the human resources in the company is the principal aspect as they play a key
role in managing the overall effectiveness.
Furthermore, work on delivering quality services to the customers in the market is the
other aspect as the clients plays a vital role in growth of the organization. The business needs
to find appropriate ways to improve the quality of the products and services which are being
delivered by them to the customers in the market appropriately.
Lastly, proper usage of technological advancement is the other significant aspect
which is required to be considered which will improve the efficiency and growth of the
companies in developing nations. Using of the software programs can be useful in protecting
the business across borders to enhance their effectiveness in different countries.