Wesfarmers Limited: Company Analysis, Strategy & HR Management

This report provides an in-depth analysis of Wesfarmers Limited, an Australian conglomerate operating across diverse sectors, including coal mining, fertilizer production, and retail. The company, with a substantial revenue of approximately $65.98 billion, employs various strategies to maintain a competitive edge, such as embracing online business models, offering affordable prices, stocking global trends, and enhancing store services. Wesfarmers employs a hierarchical organizational structure, which, while providing clarity in higher positions, can lead to confusion and communication gaps among lower-level employees. The company utilizes Sedex for ethical monitoring within its supply chain and invests in training and job programs for its workforce. Key opportunities include international expansion and service quality enhancement, while challenges include competition and rising raw material costs. Recommendations are provided to guide overall growth and international reach.

Running head: Company Analysis: Wesfarmers 1
Company Analysis
Wesfarmers
STUDENTS NAME:
1/24/2019

Company Analysis: Wesfarmers
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Executive Summery
The report is a detailed analysis of the company Wesfarmers Limited that is an Australian
company that functions in a lot of fields such as coal mining, manufacturing of fertilizers,
safety products, chemicals and grocery. This report states that the company has recently
earned almost $65.98 billion revenue and is one of the largest organisations in the country.
The report lays down list of strategies that the organisation has adopted to win competitive
advantages in the market and widen its reach in the international market. The company
follows a hierarchical structural design as far as the work force is concerned. The supply
chain of the organisation is distributed in a well-planned manner and it ensures that the
customers are provided with quality services and products. The report suggests that
Wesfarmers provides a variety and huge amount of employment all over the world and is
known for providing excellent training and job programmes for the development of skills of
the employees who work there or are willing to work. In the end, recommendations are
provided in order to be used as guidance for overall growth of the company and to help it
increase its reach internationally to achieve excellence.

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Contents
Overview of the company..........................................................................................................4
Current operating position..........................................................................................................4
Review of company’s international competitive strategy..........................................................4
Existing organisational design structure and control issues.......................................................5
Entry strategies used to enter other regions/countries................................................................6
Operational control, production and distribution/supply chain management............................7
Management of Human Resources across borders....................................................................8
Identify key issues or opportunities for management................................................................8
Opportunity.............................................................................................................................8
Issues......................................................................................................................................8
Recommendations to management for improvement................................................................9
References..................................................................................................................................9

Company Analysis: Wesfarmers
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Overview of the company
Wesfarmers Limited is a conglomerate in Australian. The company headquartered is
located in Perth. The organisation pays attentions mostly on New Zealand and Australian
Retail Companies. These companies include manufacturers of fertilisers, coal mining, safety
products, chemicals and industrial products. It is a Public Company. The company attracts
highest earnings from Supermarkets as well as Grocery Stores. Wesfarmers was founded in
the year 1914 with a target to provide Western Australian farmer’s services as well as
merchandise (Wesfarmers 2019a).
Current operating position
The organisation is one of the largest in Australia in context to its revenue and has
earned around AU$65.98 billion by the year 2016. The organisation is the biggest employer
in the private sector in Australia and has almost 220,000 workers.
Mr Rob Scott is the Chief Executive of Wesfarmers Limited. Mr Michael Chaney is
the Chairman of Wesfarmers Limited (Bloomberg 2019).
Wesfarmers Limited functions in a varied range of businesses that are supermarket,
hardware, department stores, chemicals and gas processing, fertiliser, coal mining, energy
distribution, and industrial and safety product industries.
Review of company’s international competitive strategy
To achieve more success and profit and be above the competitors some strategies
adopted by the company are:
 Online business mode –In the age of internet where people look for ways that work is
done at finger tips enable online business is a why in achieving more customers and
providing more services and products to increase profits. The increased use of
technology will enable the organisation to extend its reach far and beyond and will
enable it to be a tough competition to the other competitors who are also getting their
grip in the field of technology. Online business model of Target that is a daughter
company of Wesfarmers has allowed the company to get more customers and also
give an opportunity to increase discovery of the brand. Some other advantages are

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24/7 business operation and enhanced delivery of services and products (Verbeke,
2013).
 Selling more products at first price rather than at discounted price – Keeping the
original prices more affordable is a way to attract more customers and earn huge
profits in a long run in order to succeed in the competitive market. Target has changed
its strategy by selling products at first price and not in discounted prices. This will
allow the company to st6ay away from high stock clearances and build up its revenue
generation.
 Stocking global trends –Target is preparing to hire in-house designers who will design
apparels that are exclusively for their customers according to their choices and
preferences (Target, 2019). This will help the company to make trendy items that are
highly popular and in demand in the market. This will also increase brand loyalty
among customers and hence increase profits (Hubbard et al., 2014).
 Additional store services – The structure as well as functioning of the store has been
slightly changed in order to incorporate the provision of more services and items to
the customers in comparison into its competitors. The changed structure, ambience
and added in store facilities like in-house coffee shops has attracted more customers
and also enhanced the brands image (Booth & Coveney, 2015).
Existing organisational design structure and control issues
All organisations have a particular structure that determines how a task has to be done
by the employees of the organisation and also explains the functioning of the authority
members as well as stakeholders. The presence of such a structural system determines that no
confusion is faced while the functioning of the organisation as the responsibilities of the
members are accurately stated in the structure, that are supposed to be followed (Friesen et
al. 2014).
The structure of Wesfarmers is the hierarchical structure in which the manager, who
comes under the supervision of the director, is responsible to give instructions to the other
employees under whose supervision and instructions they are supposed to work. The team
leaders come next in the line followed by the employees working under the ground level
supervisors. The mentioned order is distributed separately into different departments like
finance, production, marketing and R&D (Sorensen and Stanton 2013).

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The order of this system is clear for the individuals working in higher positions but
the system becomes very confusing to determine the position of the employees who have
comparatively lower designations causing direct problem and added confusion in functioning
of the organisation as a whole. Another problem that is faced in the hierarchical system is that
the manager or the supervisors at times become very arrogant and authoritative towards the
employees that highly demotivate them affecting the overall performance of the organisation
causing harm to its profits (Hill, Jones and Schilling, 2014). This system also attracts
communication gaps between co-workers due to different in designations and lower
connectivity between individuals and employees of different levels. Cost is also a problem in
this scenario that comes along the accumulated operation by multiple designators. Delegation
of job roles might be faced keeping in mind this particular system.
Entry strategies used to enter other regions/countries
 Wesfarmers invests in its new businesses in Hong Kong in order to help the
organisation to direct as well as lay the foundational ground work and provide a
significant move overseas along with the organisation enhancing its internal
capacities so that whenever the correct opportunities arrive the organisation has the
skills to face the challenges of an offshore deal.
 The investors must not be made aware about the organisations expansion overseas for
security and confidentiality purposes.
 Wesfarmers existing operations that are presently heavily dominated domestically and
around retail through companies under it such as Bunning’s, Coles, Target,
Officeworks, and Kmart.
 Elevation in the organisations retail businesses will be supported this year by
incorporation of continues improvements in customer value, offer, and range and
category innovation.
 The organisation also drives store network, operational productivity and continue to
expand its online offers all across its retail brands.
 Kmart which is the organisations apparel and merchandise division concentrates on
provision of products in lower prices more categories and also grow the stores in
terms of size, products and services. The organisation is also determined to strengthen
its leadership and management abilities.

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 A day is spent that is entirely dedicated to making and implementing the strategy7 of
the organisation that is called “The Wesfarmers strategy day” This is held every year
where bosses of each department delivers a presentation to investors and analysts, and
further formulate their strategy with their help and make plans for its implementation .
Operational control, production and distribution/supply chain management
 The organisation uses Sedex (Supplier Ethical Data Exchange) to make more efficient
ethical observance and monitoring and provide suppliers with efficiency. Sedex
enables information-sharing as well as risk assessments across its entire platform for
social compliance audits (Sedex, 2019). This enables the maintenance of visibility and
consistency all across the supply chain (Wesfarmers, 2019c).
 Target and Kmart both have an ethical sourcing program roadmap of 3 years. This
consists of identification of six strategic areas and relevant works to be done over
these years. This is enabling the transitioning of Target and Kmart’ program from an
audit and compliance vision into a model that focuses on factory capacity construction
and strengthening, Industry partnership and supplier compliance ownership.
 The direct supplier base of Bunnings has increased almost by 4.3 per cent. Over 100
per cent was screened through the companies ES Program. The company enhanced its
Code of Conduct by wide spreading its reach from product suppliers to service
providers as well. The company has conducted a review in green life supplier contract
hire, cleaning services, labour and commenced work on raw materials like stones.
 Target and Kmart has recently joined in order to become partners in buying within the
International Labour Organisation/International Finance Corporation Better Work
Program.
 Kmart targets to have transitioned all the eligible factories that manufacture apparels
in Bangladesh, Indonesia and Cambodia.
 The company Officeworks under this organisation has developed a three-fold
approach in order to make sure that suppliers are complying along with its ES Policy
(Officeworks, 2019). The company strives to understand the policies and mechanisms
that the suppliers have in order to make sure that they are properly monitoring and
following human rights within their supply chain, and it also obliges to the company’s
ES Policy. If these policies do not oblige to the set requirements as well as

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requirements, suppliers are supposed to register with Sedex, and fill up the self-
assessment questionnaire.
Management of Human Resources across borders
 The organisation provides a huge range of job opportunities in a wide range of fields.
It also provides training associated with specific jobs and career development training
that composes of development of skills in customer service, technical skills,
leadership, team work etc. These Training and job programs are available for both full
time as well as part time employees (Wesfarmers, 2019b)
 In the organisation there is a team called the talent team that focuses on the potential
and capability of the organisation’s leadership teams as well as general managers in
order to make sure that they comprise of the desired capabilities for the present as
well as future.
Identify key issues or opportunities for management
Opportunity
 Expansion at a universal level will lead to increased growth of the organizations
revenue and that will directly lead to the increase in its profitability as well as
international expansion.
 The organization can enhance its quality as well as services.
 The income level of the consumers is also gradually increasing with advancement in
time that will encourage more customer attraction and loyalty (Fern Fort University,
2019).
Issues
 Competition from other organizations such as Woolworths, Meta Cash Limited, Myer
etc. (Biddle 2016).
 The prices of the raw materials that the organization requires are increasing rapidly in
Australia.
 The organisations conglomerate model is under severe pressure along with which a
bigger risk to its earnings is caused by the wars going on between the supermarket
wars. Deflation always remains to be a significant issue and if in any way its

Company Analysis: Wesfarmers
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competitor Woolworths gets its act together and grow its market share fate will
change for Wesfarmers.
Recommendations to management for improvement
• To increase the overall profits of the organization and they must allow increase in the
demand of products and services that the business provides. Burnings must provide
home hardware for lower costs. The organization must work towards the
improvement of profit for Burnings by doing so.
• The organization must improve its overall business related performance in order to
increase the value of the products and services that it provides in order to increase
company reputation, demand and overall profitability.
• The organization must work towards making its management and marketing activities
outstanding that will enable the business to grow larger in terms physical facilities,
size, development in amenities which are offered and also market scope
internationally.
• International strategy must be made in order to attain wider achieve spread as well as
reach. Australian dollar hold a very high power because of the decrease in American
dollars value. This difference in power can be used for the advantage of the
organization to expand internationally.
• Kmart must be merged with Target as they sell similar products and thus they can
together provide bigger profits to the organization.
• For environmental protection purposes the organization must make alternative
environmental recourses instead of mines, such as Solar or wind power.
References
Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters
battle. Busidate , 24 (3), 3.
Bloomberg 2019, Company Overview of Wesfarmers Limited, viewed 24 January 2019,
<https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=875660>.

Company Analysis: Wesfarmers
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Booth, S., & Coveney, J. (2015). ‘Big Food’—The Industrial Food System. In Food
Democracy , 3-11.
Fern Fort University. (2019). Wesfarmers Limited [SWOT Analysis] Weighted SWOT
Matrix. Retrieved from http://fernfortuniversity.com/term-papers/swot/nyse/4814-
wesfarmers-limited.php
Friesen, J. P., Kay, A. C., Eibach, R. P., and Galinsky, A. D. 2014. Seeking structure in social
organization: Compensatory control and the psychological advantages of hierarchy. Journal
of Personality and Social Psychology, 106(4), p.590.
Greenblat, Eli. (2014). Wesfarmers eyes international expansion, Viewed 24 January 2019,
https://www.smh.com.au/business/companies/wesfarmers-eyes-international-expansion-
20140528-3930c.html
Hill, C. W., Jones, G. R., and Schilling, M. A. 2014. Strategic management: theory: an
integrated approach. Cengage Learning.
Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.
Officeworks. (2019). Office Supplies, Office Furniture, Stationery, Ink & Toner at low prices
| Officeworks. Retrieved from https://www.officeworks.com.au/
Sedex. (2019). Sedex - Empowering Ethical Supply Chains. Retrieved from
https://www.sedexglobal.com/
Sorensen, L.J. and Stanton, N.A., 2013. Y is best: How Distributed Situational Awareness is
mediated by organisational structure and correlated with task success. Safety science, 56,
pp.72-79.
Target. (2019). Target. Retrieved January 24, 2019, from https://www.target.com/
Verbeke, A. (2013). International business strategy (2nd ed.). London: Cambridge University
Press.
Wesfarmers 2019, Increasing supply chain transparency, viewed 24 January 2019,
<https://sustainability.wesfarmers.com.au/our-principles/sourcing/ethical-sourcing-and-
human-rights/increasing-supply-chain-transparency/>

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Wesfarmers 2019, Training and development, viewed 24 January 2019,
<https://sustainability.wesfarmers.com.au/our-principles/people/people-development/
training-and-development/>
Wesfarmers 2019, Wesfarmers, viewed 24 January 2019,
<https://www.wesfarmers.com.au/>.