Strategic Analysis and Recommendations for Wesfarmers
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The assignment requires an in-depth analysis of Wesfarmers' corporate strategy, focusing on evaluating their current performance and market position. Students will conduct a SWOT analysis to uncover internal strengths and weaknesses as well as external opportunities and threats. This task involves examining the company's organizational structure, strategic objectives, competitive landscape, and financial health. Based on these insights, students are expected to develop strategic recommendations aimed at enhancing Wesfarmers' overall performance and achieving long-term business goals. The assignment will culminate in a comprehensive report that synthesizes research findings and presents well-founded strategies for future growth and success.

Running head: PART A
Contemporary Business Issues: Part A
Name of the Student:
Name of the University:
Author’s Note:
Contemporary Business Issues: Part A
Name of the Student:
Name of the University:
Author’s Note:
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1PART A
Part A
Executive Summary
Strategic management cycle examines the strategic issues of an organization and suggests
improved strategies for gaining high level of competitive advantage. It is an ongoing process of
creating, implementing and evaluating business decisions, which enables an organization
towards achieving organizational goals. The study has analyzed the strategic marketing
management of Wesfarmers. Wesfarmers is an Australian conglomerate providing services like
retail, coal mining, industrial and safety products, chemicals and fertilizers. As per the survey of
2016, Wesfarmers has become the largest Australian company based on its revenue with
AU$65.98 billion revenue.
The stakeholder analysis matrix has demonstrated that shareholders, customers, suppliers and
employees are the most important stakeholders of the organization. The study has analyzed its
external market though PESTLE and Porter’s Five Forces model. From this analysis, it has been
found that economic development and stable political condition of Australia has boosted the
business development of Wesfarmers. However, the organization faces tough competitive
pressure from Woolworths and Washington H. Soul Pattinson. From the competitor analysis, it
has been found that Wesfarmers has wide products and service ranges as compared to
Woolworths and Washington H. Soul Pattinson. The study has also assessed its internal market
though VRIO and SWOT analysis. From the internal analysis, it has been found that strong
brand image and worldwide distribution network has built sustained competitive advantage for
Wesfarmers. The study had analyzed the strategic options for Wesfarmers through Porter’s
Generic Model and Ansoff Matrix. From such analysis, it has been found that Wesfarmers
follows cost leadership strategy. The organization has high potential for wide geographical
expansion in international markets.
Part A
Executive Summary
Strategic management cycle examines the strategic issues of an organization and suggests
improved strategies for gaining high level of competitive advantage. It is an ongoing process of
creating, implementing and evaluating business decisions, which enables an organization
towards achieving organizational goals. The study has analyzed the strategic marketing
management of Wesfarmers. Wesfarmers is an Australian conglomerate providing services like
retail, coal mining, industrial and safety products, chemicals and fertilizers. As per the survey of
2016, Wesfarmers has become the largest Australian company based on its revenue with
AU$65.98 billion revenue.
The stakeholder analysis matrix has demonstrated that shareholders, customers, suppliers and
employees are the most important stakeholders of the organization. The study has analyzed its
external market though PESTLE and Porter’s Five Forces model. From this analysis, it has been
found that economic development and stable political condition of Australia has boosted the
business development of Wesfarmers. However, the organization faces tough competitive
pressure from Woolworths and Washington H. Soul Pattinson. From the competitor analysis, it
has been found that Wesfarmers has wide products and service ranges as compared to
Woolworths and Washington H. Soul Pattinson. The study has also assessed its internal market
though VRIO and SWOT analysis. From the internal analysis, it has been found that strong
brand image and worldwide distribution network has built sustained competitive advantage for
Wesfarmers. The study had analyzed the strategic options for Wesfarmers through Porter’s
Generic Model and Ansoff Matrix. From such analysis, it has been found that Wesfarmers
follows cost leadership strategy. The organization has high potential for wide geographical
expansion in international markets.

2PART A
Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Sustainability.............................................................................................................................4
2.1 Stakeholder Analysis.............................................................................................................4
2.2 PESTEL Analysis..................................................................................................................6
3.0 Governance................................................................................................................................7
4.0 Strategy......................................................................................................................................7
4.1 External analysis....................................................................................................................7
4.1.1 Porters 5 Forces Analysis...............................................................................................7
4.1.2 Competitor and Customer/Market Analysis...................................................................9
4.2 Internal analysis...................................................................................................................10
4.2.1 Capabilities (VRIO)......................................................................................................10
4.3 SWOT Analysis...................................................................................................................11
4.4 Porters’ generic strategic choices for competitive advantage..............................................11
4.4.1 Cost Leadership............................................................................................................11
4.4.2 Differentiation...............................................................................................................12
4.4.3 Focus.............................................................................................................................12
4.5 Ansoff Matrix......................................................................................................................14
4.5.1 Market Penetration........................................................................................................14
4.5.2 Market Development....................................................................................................14
4.5.3 Product Development...................................................................................................14
4.5.4 Diversification..............................................................................................................14
5.0 Operations................................................................................................................................15
5.1 Recommendations................................................................................................................15
Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Sustainability.............................................................................................................................4
2.1 Stakeholder Analysis.............................................................................................................4
2.2 PESTEL Analysis..................................................................................................................6
3.0 Governance................................................................................................................................7
4.0 Strategy......................................................................................................................................7
4.1 External analysis....................................................................................................................7
4.1.1 Porters 5 Forces Analysis...............................................................................................7
4.1.2 Competitor and Customer/Market Analysis...................................................................9
4.2 Internal analysis...................................................................................................................10
4.2.1 Capabilities (VRIO)......................................................................................................10
4.3 SWOT Analysis...................................................................................................................11
4.4 Porters’ generic strategic choices for competitive advantage..............................................11
4.4.1 Cost Leadership............................................................................................................11
4.4.2 Differentiation...............................................................................................................12
4.4.3 Focus.............................................................................................................................12
4.5 Ansoff Matrix......................................................................................................................14
4.5.1 Market Penetration........................................................................................................14
4.5.2 Market Development....................................................................................................14
4.5.3 Product Development...................................................................................................14
4.5.4 Diversification..............................................................................................................14
5.0 Operations................................................................................................................................15
5.1 Recommendations................................................................................................................15
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3PART A
5.2 Proposal of Recommendations through McKinsey 7S Framework....................................15
6.0 Conclusion...............................................................................................................................16
Reference List................................................................................................................................17
5.2 Proposal of Recommendations through McKinsey 7S Framework....................................15
6.0 Conclusion...............................................................................................................................16
Reference List................................................................................................................................17
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4PART A
1.0 Introduction
Strategic marketing defines the way in which an organization differentiates itself from its
competitors though capitalizing its strengths towards providing unique value to the customers
consistently. This study will assess the strategic marketing management of Wesfarmers.
Wesfarmers is an Australian conglomerate with interest of retail, fertilizers, chemicals, industrial
and safety products and coal mining (Wesfarmers.com.au 2017). The study will the stakeholders
of the organization though stakeholder-mapping analysis. The study will also analyze its external
market through PESTLE, Porter’s Five Force analysis and competitor analysis. The internal
market of the organization will be assessed through VRIO and SWOT analysis. Apart from that,
the study will also evaluate some strategic options to the organization through Porter’s Generic
Strategy and Ansoff matrix. Based on the strategic analysis, the study will also provide some
recommendation to Wesfarmers for fulfilling the expectation of the stakeholders. Furthermore,
the study will also apply McKinsey 7S Framework for implementing the suggested strategies.
2.0 Sustainability
2.1 Stakeholder Analysis
Stakeholder Mapping Analysis
Stakeholders Environmental Analysis
Impacting Stakeholders
Stakeholder Value Expectation Power
1-10
Interest
1-10
SHAREHOLDERS  Low interest rate and
low growth rate can
reduce return in
investment
 Decreasing growth
rate in conglomerate
industry
 Extreme industry
concentration in
Customer market
 Satisfactory and high
return on investment
 Acceptable and adequate
level of dividends
 Evidence of high growth
potential
6 9
1.0 Introduction
Strategic marketing defines the way in which an organization differentiates itself from its
competitors though capitalizing its strengths towards providing unique value to the customers
consistently. This study will assess the strategic marketing management of Wesfarmers.
Wesfarmers is an Australian conglomerate with interest of retail, fertilizers, chemicals, industrial
and safety products and coal mining (Wesfarmers.com.au 2017). The study will the stakeholders
of the organization though stakeholder-mapping analysis. The study will also analyze its external
market through PESTLE, Porter’s Five Force analysis and competitor analysis. The internal
market of the organization will be assessed through VRIO and SWOT analysis. Apart from that,
the study will also evaluate some strategic options to the organization through Porter’s Generic
Strategy and Ansoff matrix. Based on the strategic analysis, the study will also provide some
recommendation to Wesfarmers for fulfilling the expectation of the stakeholders. Furthermore,
the study will also apply McKinsey 7S Framework for implementing the suggested strategies.
2.0 Sustainability
2.1 Stakeholder Analysis
Stakeholder Mapping Analysis
Stakeholders Environmental Analysis
Impacting Stakeholders
Stakeholder Value Expectation Power
1-10
Interest
1-10
SHAREHOLDERS  Low interest rate and
low growth rate can
reduce return in
investment
 Decreasing growth
rate in conglomerate
industry
 Extreme industry
concentration in
Customer market
 Satisfactory and high
return on investment
 Acceptable and adequate
level of dividends
 Evidence of high growth
potential
6 9

5PART A
CUSTOMERS  Changing consumer
trends
 New low cost
providers in market
 Price sensitivity
 High brand image
 New product
development
 High quality products
9 8
EMPLOYEES  Demand for
extremely favorable
employment
condition
 Increasing demand
for ethical and
purposeful reputation
of the employers
 Adequate remuneration
and favorable
employment condition
 Flexible work structure
and career growth options
 Creation and
maintenance of flexible
work culture
5 9
SUPPLIERS  Unpredictable
international pricing
of raw materials
 Maintenance of
relationship with the
suppliers
 Reliable and regular
commercial supplier
agreement
 Development and
maintenance of long term
relationship and
partnership
4 7
COMMUNITY  High level of
community
expectation
 Miscommunication
with community
Inclusive and cohesive
community environment
Long-term commitment to the
community for its development
5 6
GOVERNMENT  Strict regulatory
reforms
 Changes in tax
reforms
Government expects
Wesfarmers to be good
corporate citizen
Expects adequate contribution
to country’s economy
8 8
CUSTOMERS  Changing consumer
trends
 New low cost
providers in market
 Price sensitivity
 High brand image
 New product
development
 High quality products
9 8
EMPLOYEES  Demand for
extremely favorable
employment
condition
 Increasing demand
for ethical and
purposeful reputation
of the employers
 Adequate remuneration
and favorable
employment condition
 Flexible work structure
and career growth options
 Creation and
maintenance of flexible
work culture
5 9
SUPPLIERS  Unpredictable
international pricing
of raw materials
 Maintenance of
relationship with the
suppliers
 Reliable and regular
commercial supplier
agreement
 Development and
maintenance of long term
relationship and
partnership
4 7
COMMUNITY  High level of
community
expectation
 Miscommunication
with community
Inclusive and cohesive
community environment
Long-term commitment to the
community for its development
5 6
GOVERNMENT  Strict regulatory
reforms
 Changes in tax
reforms
Government expects
Wesfarmers to be good
corporate citizen
Expects adequate contribution
to country’s economy
8 8
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6PART A
Table 1: Stakeholder Analysis of Wesfarmers
(Source: Missonier and Loufrani-Fedida 2014)
Table 1: Stakeholder Analysis of Wesfarmers
(Source: Missonier and Loufrani-Fedida 2014)
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7PART A
LowInterestHigh
HighPowerLow Shareholders
Government
Customers
Community
Suppliers Employees
Keep Satisfied Manage Closely
Monitor Keep Informed
Figure: Stakeholder Analysis of Wesfarmers
(Source: Bettis et al. 2016)
2.2 PESTEL Analysis
PESTEL ANALYSIS OF WESFARMERS
POLITICAL
FACTOR
 Stable political condition of Australia develops business growth of
Wesfarmers
 Frequent change in government policy often hampers business
conditions
 Restrictive trading hours can limit the profit potentiality of
Wesfarmers
 Reduced tax rate is favorable for Wesfarmers
ECONOMICAL
FACTOR
 Growing economic condition of Australia ensures high level of
business return on investment
 Increased strength of Australian and New Zealand dollars ensure
business profits
 Higher wage cost of Australia increases business cost
 Frequent changes in inflation rate often hamper the pricing policy of
the organization
LowInterestHigh
HighPowerLow Shareholders
Government
Customers
Community
Suppliers Employees
Keep Satisfied Manage Closely
Monitor Keep Informed
Figure: Stakeholder Analysis of Wesfarmers
(Source: Bettis et al. 2016)
2.2 PESTEL Analysis
PESTEL ANALYSIS OF WESFARMERS
POLITICAL
FACTOR
 Stable political condition of Australia develops business growth of
Wesfarmers
 Frequent change in government policy often hampers business
conditions
 Restrictive trading hours can limit the profit potentiality of
Wesfarmers
 Reduced tax rate is favorable for Wesfarmers
ECONOMICAL
FACTOR
 Growing economic condition of Australia ensures high level of
business return on investment
 Increased strength of Australian and New Zealand dollars ensure
business profits
 Higher wage cost of Australia increases business cost
 Frequent changes in inflation rate often hamper the pricing policy of
the organization

8PART A
SOCIAL FACTOR  Modern and sophisticated life of people leads them towards make
shopping from supermarkets and hypermarkets
 Inclination of people towards online shopping can be threats for
Wesfarmers
 Increased disposal income of customers can positive impact the
organization
 Increased demand for industrial safety in organizations has also
increased the demand of Wesfarmers
TECHNOLOGICAL
FACTOR
 Advanced technology in understanding customer preferences
 Usage of social and digital media for effective promotion
LEGAL FACTOR  Free trade regulation assists in international business
 Restriction in employment policy can hamper the business
ENVIRONMENTA
L FACTOR
 Wesfarmers needs to report its emission report under NGER act
 Restriction to reduce landfill waste by 6%
Table 1: PESTLE Analysis of Wesfarmers
(Source: Bettis et al. 2014)
3.0 Governance
According to Bergh et al. (2014), the board of Wesfarmers is elected by the shareholders
for observing their interest in long-term financial stability. The board of directors set the
governance framework for effectively governing the organization through effective rule and
regulations. The organization provides adequate return on investment to the shareholders.
Furthermore, the organization uses strict code of conducts for managing the behavior of the
organizational members (Vogel and Güttel 2013). The public policy and corporate reputation
council maintain the community relationship of the organization. Furthermore, the code of
business conduct ensures ethics compliance of the organization.
SOCIAL FACTOR  Modern and sophisticated life of people leads them towards make
shopping from supermarkets and hypermarkets
 Inclination of people towards online shopping can be threats for
Wesfarmers
 Increased disposal income of customers can positive impact the
organization
 Increased demand for industrial safety in organizations has also
increased the demand of Wesfarmers
TECHNOLOGICAL
FACTOR
 Advanced technology in understanding customer preferences
 Usage of social and digital media for effective promotion
LEGAL FACTOR  Free trade regulation assists in international business
 Restriction in employment policy can hamper the business
ENVIRONMENTA
L FACTOR
 Wesfarmers needs to report its emission report under NGER act
 Restriction to reduce landfill waste by 6%
Table 1: PESTLE Analysis of Wesfarmers
(Source: Bettis et al. 2014)
3.0 Governance
According to Bergh et al. (2014), the board of Wesfarmers is elected by the shareholders
for observing their interest in long-term financial stability. The board of directors set the
governance framework for effectively governing the organization through effective rule and
regulations. The organization provides adequate return on investment to the shareholders.
Furthermore, the organization uses strict code of conducts for managing the behavior of the
organizational members (Vogel and Güttel 2013). The public policy and corporate reputation
council maintain the community relationship of the organization. Furthermore, the code of
business conduct ensures ethics compliance of the organization.
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9PART A
4.0 Strategy
4.1 External analysis
4.1.1 Porters 5 Forces Analysis
PORTERS 5 FORCES ANALYSIS OF WESFARMERS
THREATS OF NEW
ENTRANTS
 Investment cost is quite high for new entrants in conglomerate
industry
 New low cost providers are threats to Wesfarmers
 It is quite tough for new entrants to beat the high established
conglomerate like Wesfarmers
 Low threats of new entrants
THREATS OF
SUBSTITUTE
 Face extreme pressure from the substitutes like grocery shops,
individual retailers, shops and others
 High quality of products facilitates the Wesfarmers to beat with the
substitutes
 Moderate threats from substitutes
COMPETITIVE
RIVALRY
 Tough competitive pressure from the competitors like Woolworths,
Washington H. Soul Pattinson and Best & Less
 Large market size facilitates in minimizing the competitive pressure
 High competitive from competitors
BARGAINING
POWER OF
SUPPLIERS
 Extreme dependency on Suppliers
 Powerful suppliers use their negotiating power on Wesfarmers
 High needs for quality products have increased the demand of unique
suppliers
 High bargaining power of Suppliers
BARGAINING
POWER OF
BUYERS
 Wide availability of retailers and other shops have increased the
bargaining power of buyers
 Strong price competition has increased the bargaining power of
buyers
 Moderate bargaining power buyers
Table 3: Porters 5 Forces Analysis of Wesfarmers
4.0 Strategy
4.1 External analysis
4.1.1 Porters 5 Forces Analysis
PORTERS 5 FORCES ANALYSIS OF WESFARMERS
THREATS OF NEW
ENTRANTS
 Investment cost is quite high for new entrants in conglomerate
industry
 New low cost providers are threats to Wesfarmers
 It is quite tough for new entrants to beat the high established
conglomerate like Wesfarmers
 Low threats of new entrants
THREATS OF
SUBSTITUTE
 Face extreme pressure from the substitutes like grocery shops,
individual retailers, shops and others
 High quality of products facilitates the Wesfarmers to beat with the
substitutes
 Moderate threats from substitutes
COMPETITIVE
RIVALRY
 Tough competitive pressure from the competitors like Woolworths,
Washington H. Soul Pattinson and Best & Less
 Large market size facilitates in minimizing the competitive pressure
 High competitive from competitors
BARGAINING
POWER OF
SUPPLIERS
 Extreme dependency on Suppliers
 Powerful suppliers use their negotiating power on Wesfarmers
 High needs for quality products have increased the demand of unique
suppliers
 High bargaining power of Suppliers
BARGAINING
POWER OF
BUYERS
 Wide availability of retailers and other shops have increased the
bargaining power of buyers
 Strong price competition has increased the bargaining power of
buyers
 Moderate bargaining power buyers
Table 3: Porters 5 Forces Analysis of Wesfarmers
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10PART A
(Source: Simon, Fischbach and Schoder 2014)
Figure 2: Porters 5 Forces Analysis of Wesfarmers
(Source: Gans and Ryall 2017)
(Source: Simon, Fischbach and Schoder 2014)
Figure 2: Porters 5 Forces Analysis of Wesfarmers
(Source: Gans and Ryall 2017)

11PART A
4.1.2 Competitor and Customer/Market Analysis
Factors Wesfarmers Woolworths Washington H. Soul Pattinson
Products and Services  Retail
 Chemical
 Coal mining
 Industrial and safety
products
 Fertilisers
 Supermarket
 Petrol
 Liquor
 General Merchandise
 Home Improvement
 Hotels and Gamling
 Coal Mining
 Bulk Handling
 Telecommunication Carrier
 Retailing pharmaceutical
products
 Fruit juice
Pricing and Cost Price is higher than Woolworths
but lower than Washington H.
Soul Pattinson
Price is lower than both
Wesfarmers and Washington H.
Soul Pattinson
Price is higher than Wesfarmers
and Woolworths
Distribution Channels  Hypermarket
 Supermarket
 Wholesale
 Retail Channels
 Supermarket
 Wholesale
 Retain channels
 Retail Channels
Market Share 45% (FY2015-FY2016) 39% (FY2015-FY2016) 34% (FY2015-FY2016)
Sales Revenue 68,099$M (FY2017) 53578 (FY2017) 55896 (FY2017)
Strength  Sales through online
channels
 High brand reputation
 Wide product portfolio
 High brand reputation
 Low cost of products
 Efficient Operation
 Reputed brand recognition
 Wide ranges of products
Weakness  Limited international
expansion
 Low skilled employees
 Limited in online sales
 Inadequate employee
 High price
 Lack of operational
efficiency
Target Customers  Target customers from
households to business
persons
 Mostly seeking customers,
who needs high quality
products
 Major customers are
benefit seeking
 Repeated customers to
purchase products
 Customers seeks high
product quality
 Customers seeking online
advantage to purchase
products
Table 4: Competitor and Customer Analysis of Wesfarmers
(Source: Greco, Cricelli and Grimaldi 2013)
4.1.2 Competitor and Customer/Market Analysis
Factors Wesfarmers Woolworths Washington H. Soul Pattinson
Products and Services  Retail
 Chemical
 Coal mining
 Industrial and safety
products
 Fertilisers
 Supermarket
 Petrol
 Liquor
 General Merchandise
 Home Improvement
 Hotels and Gamling
 Coal Mining
 Bulk Handling
 Telecommunication Carrier
 Retailing pharmaceutical
products
 Fruit juice
Pricing and Cost Price is higher than Woolworths
but lower than Washington H.
Soul Pattinson
Price is lower than both
Wesfarmers and Washington H.
Soul Pattinson
Price is higher than Wesfarmers
and Woolworths
Distribution Channels  Hypermarket
 Supermarket
 Wholesale
 Retail Channels
 Supermarket
 Wholesale
 Retain channels
 Retail Channels
Market Share 45% (FY2015-FY2016) 39% (FY2015-FY2016) 34% (FY2015-FY2016)
Sales Revenue 68,099$M (FY2017) 53578 (FY2017) 55896 (FY2017)
Strength  Sales through online
channels
 High brand reputation
 Wide product portfolio
 High brand reputation
 Low cost of products
 Efficient Operation
 Reputed brand recognition
 Wide ranges of products
Weakness  Limited international
expansion
 Low skilled employees
 Limited in online sales
 Inadequate employee
 High price
 Lack of operational
efficiency
Target Customers  Target customers from
households to business
persons
 Mostly seeking customers,
who needs high quality
products
 Major customers are
benefit seeking
 Repeated customers to
purchase products
 Customers seeks high
product quality
 Customers seeking online
advantage to purchase
products
Table 4: Competitor and Customer Analysis of Wesfarmers
(Source: Greco, Cricelli and Grimaldi 2013)
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