University Marketing Report: Wesfarmers' Global Expansion in Germany

This report provides a comprehensive analysis of Wesfarmers' potential for expansion into the German market, focusing on global marketing strategies. It begins with an executive summary and table of contents, followed by a detailed market analysis assessing market size, growth rates, and population demographics in Germany. The report then delves into an organizational analysis of Wesfarmers, including customer audit, buyer behavior, marketing mix, and a thorough competitor analysis, identifying key players like Lidl and Aldi. A positioning map is used to visualize the competitive landscape. Furthermore, the report examines the macro environment using Porter's Five Forces, value chain, and BCG matrix models. A SWOT analysis is conducted to evaluate the company's internal strengths and weaknesses, as well as external opportunities and threats. The conclusion summarizes the key findings and recommendations for Wesfarmers' successful entry into the German market. References and appendices are included to support the analysis.

Running head: GLOBAL MARKETING
Global Marketing
Name of Student
Name of University
Author Note

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Executive Summary
The report is based on the effects of global marketing in business. The objective of the report is
to formulate ideas that are required for expanding in an international market. The report focuses
on Wesfarmers and the marketing analysis it needs to conduct in order to set up business in
Germany. The report provides a marketing analysis of the factors that may affect the expansion
of the company. The advantage of the products sold by Wesfarmers is analysed in order to
understand the rate at which it can the company can succeed. Furthermore, a SWOT analysis is
conducted in order to understand the internal factors of the organisation. In conclusion, it is seen
that based on the factors that affect business in the international market, Wesfarmers have a
potentially good opportunity for expansion in Germany.

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Table of Contents
Introduction......................................................................................................................................4
1. Market Analysis.......................................................................................................................4
1.1. Size of the market and growth rates..................................................................................4
1.2. Population.........................................................................................................................5
1.3. Market barriers and market drivers...................................................................................5
2. Organisational analysis.............................................................................................................6
2.1. Customer audit and buyer behaviour................................................................................6
2.2. Marketing Mix..................................................................................................................7
2.3. Competitor analysis...........................................................................................................7
2.4. Description of major competitors.....................................................................................8
2.5. Competitor advantage.......................................................................................................8
2.6. Positioning map of competitors........................................................................................9
3. Macro environment................................................................................................................10
3.1. Porter five forces model..................................................................................................11
3.2. Value chain.....................................................................................................................12
3.3. BCG Matrix.....................................................................................................................12
4. SWOT Analysis......................................................................................................................13
5. Conclusion..............................................................................................................................14

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References......................................................................................................................................15
Appendices....................................................................................................................................18
Appendix....................................................................................................................................18

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Introduction
The purpose of the report is to analyse the opportunities that a business organisation may
have while expanding itself in the international market. Global marketing is one of the main aims
for most managers in order to increase dominance in the business world. For the purpose of the
report, Wesfarmers has been considered in order to understand its marketing strategies. The aim
of the company is to expand itself and dominate the markets of Germany. Hence, the report
focuses on analysing the external as well as the internal factors that may affect the expansion of
the company. A proper market analysis, customer analysis and SWOT analysis are done in order
to understand the opportunity of expansion. Apart from this, the report also analyses the
competitors that Wesfarmers have to face after expanding its market in Germany.
1. Market Analysis
1.1. Size of the market and growth rates
According to Horton & Tambe, (2015), market size is one of the most important factors that
need to be considered before expansion or growth of an industry. Without a proper size of the
market for a particular product, industries may find it difficult to establish and attract customers.
The growth rate also determines the level of success that can be achieved if the investment is
made in that market. In this case, it can be said that the size of a market, particularly for retail
industries is high. This provides an opportunity for Wesfarmers to establish itself in the markets
of Germany. The growth rate is significantly high as the popularity of the companies among the
customers makes it a huge success in the business (Song & Chen, 2014).

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1.2. Population
Germany is a country that has a medium level of population. The rate of population in the
country is about 82.67 million, which can be considered as a moderately populated country. This
can provide an advantage for many companies seeking to establish itself in the German market.
As stated by Coale & Hoover, (2015) the size of a population of a country consists of the
demographic factor of the country. This provides an additional advantage for companies that
consider demography as an important factor for business. Wesfarmers can seek this opportunity
in order to increase and expand the business in the country. With the increase in the number of
migrants in the country, Germany is opened to a diverse culture of people (Castles, De Haas &
Miller, 2013). Thus, this can be a huge advantage for Wesfarmers as it has branches in other
countries of the world. This can be a strength of the company while expanding into the market.
1.3. Market barriers and market drivers
Mathews et al., (2016) stated that certain factors restrict the entrance of new industries in a
market. These prove as market barriers that are needed to be analysed by a company. In most
cases, the barriers exist due to the interference from the Government and due to the poor
economic condition of a country. In some case, the technological factors can also play a key role
in the restricting the entry of a company. In the case of Wesfarmers, the political situation of
Germany can play a huge role in the expansion of the market in the company. The existence of a
large number of local retail stores can also hinder the progress of the company. However, certain
factors like the social and technological factors can act as the role of market drivers for the
company. This is because Germany is a technically advanced country with a population
sufficient to help in making the ventures of Wesfarmers a success (Buckley & Hashai, 2014).

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2. Organisational analysis
Wesfarmers is a reputed retail company in Australia second only to Woolworths. Due to this
reason, the company holds a high market share in the retail sector of the country. Currently, the
revenue of the company is estimated to be at AUD$65.98 billion. The expense of the company is
estimated to be at AUD$13.19 million. This indicates that the company spends a lot of amount in
the innovation and application of strategies that can increase the profit. The current manager of
the company adopts the strategy of manufacturing fresh products and sells them to the public.
This accounts for the maintenance of a sustainable environment, which is an important social
responsibility of the company. Other strategies include the collaboration with a company of
similar items and dominating the market with the help of the company. The collaboration with
Coles has helped Wesfarmers to maintain its status as the second best retail company in Australia
(Wesfarmers.com.au, 2017).
2.1. Customer audit and buyer behaviour
In order to be successful in the market, every business needs to maintain the satisfaction of
the customers. The feedback provided by the customers is important for understanding the
improvements required in the business. This is an important factor for any business as customers
expect the feedbacks to be taken seriously and changes are implemented based on the feedback
(Jin, Ji & Gu, 2016). The buying behaviour is another factor that needs to be considered while
manufacturing and distributing goods. The buying behaviour changes along with the needs and
demands of the customers. In the case of Wesfarmers, establishing a market in Germany, these
can be an important factor for the company as the customers are accustomed to purchasing

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products from local markets. Hence, implementation of technique based on customer auditing
can help Wesfarmers (Refer to appendix).
2.2. Marketing Mix
Hanssens et al., (2014) stated that the analysis of the elements of the marketing mix is an
important success factor for most industries. The elements are collectively referred to as the 4Ps,
which was later elevated to 7Ps. In the case of Wesfarmers, the company need to ensure that the
elements of the marketing mix are used strategically. A proper medium, preferably the internet,
needs to be used for promoting the types of products that are sold in the company. This is
because brand awareness can elevate the sale of products by a considerable margin (Huang &
Sarigöllü, 2014). The prices of the products must not deviate a lot from the market price, as
customers can prefer local competitors to Wesfarmers. The place of the setting up of the
company need to be made in such a way at it becomes convenient for the customers to access it.
2.3. Competitor analysis
In order to set up a company, it is necessary that the managers of an organisation make a
thorough analysis of the competitors. The analysis of the strength and weakness of the
competitors is required in order to develop strategies that can provide a competitive advantage
for the company. Based on these strategies, customer satisfaction can be done that can help to
increase the reputation of the company (Grant, 2016). Wesfarmers need to make a similar
competitive analysis before entering into the German market. This is because many reputes
supermarkets exist in the country that can provide tough competition to Wesfarmers. These

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supermarkets are renowned internationally and can restrict the growth of Wesfarmers in the
country. Some of these competitors include Lidl, Aldi, Extra and Penny.
2.4. Description of major competitors
The major threat that can come to Wesfarmers is from Lidl and Aldi. Lidl is a supermarket
chain that has its branches all over Europe and the United States. It operates in over 10,000
locations with annual revenue of €85.7 billion. The company is one of the oldest supermarkets
operating in the country with varied products that can satisfy every demand of the customers
(Lidl.com, 2017). On the other hand, Aldi is another supermarket chain company that specialises
in not only food and beverages but also provides household goods. The annual revenue of the
company is €53 billion and it has its branches in all over Europe. The company have existed in
the German market for over 100 years and have gained a large follower of loyal customers
(Aldi.com, 2017). However, the weakness of both these companies is the lack of innovative
facilities for the manufacturing of products. Apart from these, other local companies also exist
that pose medium or low threat to Wesfarmers.
2.5. Competitor advantage
Based on the analysis of the competitors, the products of Wesfarmers can be analysed. One
of the biggest advantages that Wesfarmers hold is the fact that the company manufacturers fresh
produce. The fruits and vegetables manufactured by the company are freshly grown and sold in
the market. Hence, the freshness of the level of food can add to an advantage for the company.
Apart from this, Wesfarmers also indulge in selling safety equipment, chemicals and fertilisers

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(Morschett, Schramm-Klein & Zentes, 2015). Hence, the variety of items sold by the company
provides an advantage to it over its competitors.
2.6. Positioning map of competitors
In the light of the analysis of the competitors, a position map can be drawn in order to
identify the possibilities of success for Wesfarmers. Positioning map determines the level of
threat that exists in a market and the level in which a company is prepared to mitigate the threat
(Punia, Garg & Garg, 2014).
Figure: Positioning map of competitors
(Source: Created by author)

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From the analysis of the map, it can be said that Wesfarmers have to compete with Aldi and
Lidl in terms of quality of product and the services provided by the company. The use of
innovative techniques and application of a technological approach can help the company to
mitigate the threats from these companies. Other local supermarkets pose a low threat for
Wesfarmers. This is largely due to the lack of revenue generating ability and improper strategy.
Hence, the marketing opportunity for Wesfarmers can be attributed to a minimum threat.
3. Macro environment
Political The political aspect of Germany provides free entry and exit from the business
market. Government interventions do not prove much hindrance.
Economical Germany is a country with vast economic wealth (Ozturk, Joiner & Cavusgil,
2015). Hence, Wesfarmers can capitalise the economic conditions of the
country.
Social The diverse population can allow Wesfarmers to manufacture and sell a variety
of goods to its customers.
Technological The advancement of technology in the country can help in the production of
innovative items. This can greatly increase the popularity of the company.
Demographic The demographic versatility of Germany can provide Wesfarmers with an
opportunity to exploit the country. Thereby, the satisfaction and trusts of the
customers can be gained.
Natural
environment
With the manufacturing of sustainable items, Wesfarmers can ensure that the
natural environment of Germany will not be affected.
Table 1: PESTEL Analysis

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(Created by author)
3.1. Porter five forces model
ELEMENT LEVEL OF THREAT
Threat of new entrants High
Threat of buyers High
Threat of Substitutes Medium
Threat of suppliers Medium
Threat from existing rivals Medium
Table 2: Porter’s Five-force analysis
(Created by author)
From the analysis, it can be seen that Wesfarmers received a high threat from new entrants. This
is mainly because the German Government does not pose many restrictions to the entry of new
markets (Alfalla-Luque, Marin-Garcia & Medina-Lopez, 2015). Apart from this, the threat from
buyers is high because a large number of similar industries exist from where the buyers can
purchase its goods. Despite this, the threat of suppliers, substitutes and rival threat is less. This is
mainly because of the fact that apart from Aldi and Lidl, the other super markets lack the proper
managerial strategy to gain a competitive advantage. This can provide Wesfarmers with an
opportunity to establish a firm foothold in the market.
3.2. Value chain
The value chain analysis helps in formulating strategies in order to monitor the internal
activities of an organisation (Mudambi & Puck, 2016). This is done in order to identify the