Report on Strategic Management Tools and Wesfarmers Case Study

This report provides an in-depth analysis of strategic management tools, including PESTLE analysis, SWOT analysis, and Porter's Five Forces framework. The study utilizes Wesfarmers, an Australian conglomerate, as a case study to illustrate the practical application of these tools. The report examines how Wesfarmers uses these strategic frameworks to analyze its external and internal environments, particularly when expanding into new markets. The PESTLE analysis covers political, economic, social, technological, legal, and environmental factors influencing Wesfarmers. The report also assesses the competitive landscape using Porter's Five Forces, identifying threats from new entrants, suppliers, buyers, competitors, and substitutes. Furthermore, a SWOT analysis is conducted to evaluate Wesfarmers' strengths, weaknesses, opportunities, and threats. The conclusion emphasizes the importance of these strategic models in organizational decision-making and environmental evaluation, highlighting their significance for businesses like Wesfarmers.

Competitive strategy

Competitive Strategy 1
Strategic management is the procedure of planning, analyzing, monitoring and assessment of all
which is required to meet its goals and objectives. It is important for the company to analyze the
market environment before implementing the strategies or expanding the business at the global
level. Organization uses the strategic tools to analyze the micro or macro environment in to
develop the strategies (Ansoff, Kipley, Lewis, Helm-Stevens, and Ansoff, 2018). In this report,
the discussion is based on “strategic management tools”. The tools are also implemented at the
Wesfarmers to analyze the environment. Wesfarmers is an Australian Conglomerate which
operates in Australian and New Zealand. The company offers the coal mining, retail, chemicals,
fertilizers and safety products. It is considered as the largest Australian company in terms of
revenue (Wesfarmers, 2018a).
PESTLE Analysis is a tool of strategic management that is used by the company to analyze the
external environment. This tool is used while expanding the business into the new market as it
helps to evaluate the environment of the country. PESTLE defines the factors such as political,
economic, social, technological, legal and environment (Lasserre, 2017).
Political: Australian Government restricts the trading hours due to which the business faces the
challenges in exporting or importing the business. The company has to implement the rules and
policies at the workplace which is developed by Australian and New Zealand government for
long time survival.
Economic: The GDP rate of the Australia is good $1.69 trillion due to which the willing power
of buyers is increases and that is beneficial for the company.
Social: In Australia, the wage rate is high and that’s becomes an issue for the organization in
terms of operation.

Competitive Strategy 2
Technological: Australia is the country which adopts the advance technology in order to
manufacture the product.
Legal: Government of Australia develops laws and acts in order to protect the consumers. It has
to follows the laws of government of Australia and New Zealand.
Environmental: Changing weather is an issue for Wesfarmers as they operate the business in
Coal mining industry.
Porter’s Five Forces Framework is the tool of evaluation of industry. This tool helps the
organization to analyze its industry so that it can develop their strategy. These five forces directly
affect the environment of the industry. These forces examine the structure and the level of
competition in the industry. The five forces are based on buyers, suppliers, new entrants,
competitors and substitutes (Rothaermel, 2015).
Threat of new entrants: It has been seen that Wesfarmers has high level of threat of new
entrants as the existing companies have high brand image in the market. It is tough for the new
companies to beat the existing companies and it also required high capital.
Bargaining power of Suppliers: The service provided by Wesfarmers is easily accessible in the
market as there is huge numbers of suppliers in the market that provides the resources to the
company. Due to great numbers of suppliers available in the market the negotiation power is low
as the company can switch to the other suppliers.
Bargaining power of Buyer: The negotiation power of customers is high as there are several
companies that provide the similar services to consumers. There are lots of companies due to
which the consumers have numerous options to buy the product.

Competitive Strategy 3
Threat of competitors: The threat level of competitor is high as there are various corporations
that provide the similar services to consumers. The main competitors of the company are
Woolworths, Aldi and the others as they offers they implement strategies to beat the competition
(Owler, 2018).
Threat of substitute: The threat level of substitute products is low as the services provided by
Wesfarmers are necessity for the consumers. Although, the others companies also provides the
similar services to consumers that can replace the priorities of the consumers in terms of choice
Madsen, T. L., and (Walker, 2015).
It is a tool which is used to analyze the internal factors of the company. SWOT Analysis stands
for Strength, Weaknesses, Opportunities and Threat. This tool helps the organization to
understand the strength and weakness so that they can identify the opportunities to reduce the
threat (Mind Tools, 2018).
Strength: High brand image of the company in the supermarket industry. It is observed that the
company has strong physical presence in the market of Australia.
Weaknesses: The weakness of the company is its lack of presence in online market. The
weakness of the company is its similar services as there are other organizations too provides the
product/ services to consumers due to which it face the higher competition (Wesfarmers, 2018b).
Opportunity: The Corporation has the opportunity to enlarge the business at the global level by
using its high brand image in the market. As the demand of consumers is high towards the
corporation, it has the chance to expand the business in online market by uploading or posting
the pictures on social media to increase the demand of consumers.

Competitive Strategy 4
Threat: The main threat that the company has its competitors that offers the similar services to
consumers in the market in low prices or by implementing the strategies to attracts them. As the
company has less presence in online market, then it can face the threat of losing the consumers or
market share.
From the above analysis, it has been concluded that the strategic models helps the organization to
take the decision by evaluating the environment. It is observed that the strategic management
frameworks or models are useful for the organization. There are numerous strategic tools but
PESTLE, SWOT and Porter’s Five Forces Framework are discussed in this report. As per the
above analysis, these strategic tools are especially used by the company while expanding the
business in new market. Wesfarmers are also used these tools just to evaluate the marker
environment so that it can take decision as per the environment or condition.

Competitive Strategy 5
References
Ansoff, H. I., Kipley, D., Lewis, A. O., Helm-Stevens, R., and Ansoff, R. (2018) Implanting
strategic management. Springer.
Lasserre, P. (2017) Global strategic management. Macmillan International Higher
Education.
Madsen, T. L., and Walker, G. (2015) Modern competitive strategy. McGraw Hill.
Mind Tools. (2018) SWOT Analysis. [online] Available from:
https://www.mindtools.com/pages/article/newTMC_05.htm [Accessed 13/08/19].
Owler. (2018) Wesfarmers's Competitors, Revenue, Number of Employees, Funding and
Acquisitions. [online] Available from: https://www.owler.com/company/wesfarmers
[Accessed 13/08/19].
Rothaermel, F.T. (2015) Strategic management. McGraw-Hill Education,.
Wesfarmers. (2018a) Who we are. [online] Available from:
https://www.wesfarmers.com.au/who-we-are/who-we-are [Accessed 13/08/19].
Wesfarmers. (2018b) Workplace relations. [online] Available from:
https://sustainability.wesfarmers.com.au/our-principles/people/people-development/
workplace-relations/ [Accessed 13/08/19].