Wesfarmers: Competitive Strategy, HR, and Global Expansion Analysis

This report provides a management overview of Wesfarmers, an Australian conglomerate, focusing on its operating position, international competitive strategy, and implementation of the Ansoff Matrix. It reviews the company's organizational design structure, control issues, and entry strategies used in different regions, including New Zealand, the United Kingdom, and India. The analysis extends to operational control, production, distribution, and supply chain management, highlighting Wesfarmers' emphasis on recycling, inventory management, and strategic relationships with local suppliers. Furthermore, the report examines human resource management across borders, emphasizing equal opportunity and employee retention strategies. Key issues and opportunities for growth and expansion are identified, along with recommendations for improving HR management standards, delivering quality products and services, and leveraging technological advancements. The report concludes by referencing various academic sources to support its findings and recommendations.

MANAGEMENT

OVERVIEW OF WESFARMERS
• Wesfarmers is the Australian Conglomerate that is
headquartered at Perth, Western Australia
• The major sectors in the company is inclusive of retail,
chemicals, coal mining, industrial and fertilizers products
• The company was founded in 1914 and this is one of the
biggest retail conglomerates in the comparison to the other
competitors (Wesfarmers.com.au 2019).
• The areas served by Wesfarmers are inclusive of India, United
Kingdom, Ireland and New Zealand
• The revenue earned by the company is A$68.44 billion and the
number of employees working in the organization is 223000

OPERATING POSITION OF
WESFARMERS
• Customers play a major role in generating success of the
organization with the adaption of the Operating Model in reflecting
expectations of customers in market
• The main focus of Wesfarmers is inclusive of the following:
Customers- Offerings the different customers with various products
and services that helps in improving overall efficiency of business
Cost- Improving the overall effectiveness in cost position in low
inflation environment (Albrecht et al. 2015)
Growth- Growing of market share along with customers play a vital
role in managing various operations

REVIEW OF INTERNATIONAL COMPETITIVE
STRATEGY OF COMPANY
• Selling the products at first price and not the discounted price as
the discounted price policy was not effective and this led to decline
in profitability (Brewster 2017)
• Increasing the overall satisfaction of the customers in the market
through analysing the health preferences of customers
• Enhancement of flexibility in market by integrating their business
with digital business prospects to gain competitive advantage

COMPETITIVE ASPECTS OF
WESFARMERS

IMPLEMENTATION OF ANSOFF
MATRIX
• Differentiation Aspect- Wesfarmers tried to implement different
techniques in which they offered various products that matches
international standards that will create competitive advantage
(Brewster, Chung and Sparrow 2016)
• Product Differentiation- The products which are being offered to
the customers in the market is wherein the different tastes and
preferences of customers are being considered which helps in
managing the overall effectiveness
• Cost Advantage- The company tried to reduce different discounts
which helped in providing better quality products at reasonable
rate.

EXISTING ORGANIZATIONAL DESIGN
STRUCTURE AND CONTROL ISSUES

CONTD….
• Wesfarmers Conglomerate Company is following Hierarchical Structure
wherein director is at top of the organization followed by regional manager
who handles various operations at regional locations
• All the employees in different departments are required to report to the
director and manager and which has affected the operations of the company
which surfaces confusion
• The major issue faced by employees is that the supervisors in organization
takes the authoritative role and this affects the morale of employees negatively
(Brewster et al., 2016)
• There is lack of information between the different employees which has
affected morale of employees negatively

ENTRY STRATEGIES USED TO ENTER OTHER
REGIONS AND COUNTRIES
• In New Zealand market, Wesfarmers have incorporated the
Wholly Owned Subsidiary wherein this offered them with
vision and guidance on the respective country wherein they
are opening new stores (Deery and Jago 2015)
• This respective method led to diversification and reduction
of the various risks by developing business and this
increased their presence in the competitive market

CONTD…
• In United Kingdom market, the licensing strategy is the
respective entry mode which has helped in increasing
operations successfully. This is the sophisticated strategies
which helps in transferring rights and this gained their
presence fast in the market appropriately
• In India, Acquisition technique is established through
operations which have been successful, however, there are
cost of integration and incurring of high costs which
affected the overall business operations negatively

OPERATIONAL CONTROL, PRODUCTION AND DISTRIBUTION
OR SUPPLY CHAIN MANAGEMENT
• Operations and Operational Control- Recycling of various objects are the most important priority of
Wesfarmers which helped in reducing wastage in the entire economy. The company tried to perform such
activities with help of requesting vendors in reducing the cost of packaging. Usage of the advanced
energy management systems will be helpful in regulating and reducing usage of energy in the market
• Distribution- The technique of inventory at Wesfarmers have various distribution centres wherein this is
easy for the company in keeping inventory along with transportation costs low
• Production- Main focus of Wesfarmers is maintaining strategic relationship with the local suppliers as to
receive the various products and services and keeping the costs of the materials low

VALUE CHAIN ANALYSIS

MANAGEMENT OF HUMAN RESOURCE
ACROSS BORDERS
Equal Opportunity to Employees at Wesfarmers
• Equal opportunity is provided to all the employees for
advancement of the career
• In recruiting employees, Wesfarmers begins with recruitment
process which are convenient and this provides opportunity to
employees regarding their viewpoints (Gereffi and Fernandez-
Stark 2016)
Employee Retention Strategies
• Recognition of employees based on performance of employees
• Benefits which are being provided on position of employees
• Incentives which are based on the status or position of employees

IDENTIFICATION OF KEY ISSUES OR
OPPORTUNITIES
There are various opportunities which are being provided to the
Wesfarmers and these are related to growth and expansion of the
company appropriately
• Expansion in other developing nations through innovation in the
offerings
• Proper improvement in human resources activities which is related to
the same appropriately
• Improvement in the quality of the different products and services
which are being provided by them which helped in operating the
functions in a successful manner

RECOMMENDATIONS
• Wesfarmers can improve HR management standards with the
standards of quality which will be improving overall efficiency of
the firm in the competitive business environment
• Delivering the quality products and services will be essential which
plays a major role in growth of the organization appropriately
• Usage of the technological advancement is the other aspect which
plays a vital role in managing the different activities appropriately
and gaining more shares in comparison to the other competitors

REFERENCES
• Albrecht, S.L., Bakker, A.B., Gruman, J.A., Macey, W.H. and Saks, A.M., 2015. Employee engagement, human resource
management practices and competitive advantage: An integrated approach. Journal of Organizational Effectiveness: People and
Performance, 2(1), pp.7-35.
• Brewster, C., 2017. The integration of human resource management and corporate strategy. In Policy and practice in European
human resource management (pp. 22-35). Routledge.
• Brewster, C., Chung, C. and Sparrow, P., 2016. Globalizing human resource management. Routledge.
• Brewster, C., Vernon, G., Sparrow, P. and Houldsworth, E., 2016. International human resource management. Kogan Page
Publishers.
• Deery, M. and Jago, L., 2015. Revisiting talent management, work-life balance and retention strategies. International Journal of
Contemporary Hospitality Management, 27(3), pp.453-472.
• Gereffi, G. and Fernandez-Stark, K., 2016. Global value chain analysis: a primer.
• Wesfarmers.com.au (2019). Home. [online] Wesfarmers.com.au. Available at: https://www.wesfarmers.com.au/ [Accessed 14
Jan. 2019].