Describe about the Business Strategy for Market of Retail.
The Wesfarmers Company that started as a small Co-operative has spread itself into the Australian and New Zealand market of retail. This leap has been the result of a sequence of reasons. Organisation needs to follow a road map to develop its business. It also can be called blueprint of the business. From the beginning should focus on the ultimate outcome for this the organization have to segment,target and position its product. For proper market survey they use marketing mix. In this report, the researcher will try to analyse the external and the internal situations facing Wesfarmers. Also, the reasons which led to the company’s immense success. The researcher analyse the internal factors as well as the external factors along with the PESTEL and SWOT analysis.
About the company
Wesfarmers, started as a small co-operative company providing access for Australian farmers to reach markets. Slowly they expanded their business moving into full fledged retail. Their position has been confirmed through comparing their net profits. The company has today commitments in Australia, Bangladesh, United Kingdom, New Zealand and Ireland. The company has undertaken multiple companies among which the most renowned ones are Bunning’s Warehouse, Coles Supermarkets, Coles Express, Harris Technology, Bi-Lo and many more (Henson, 2012).
It is to be noted that the internal analysis of a company is to focus on the various factors that are the company’s strengths as well as weaknesses. In this environmental analysis and this internal analysis the researcher will explore the various factors of Wesfarmers Company like their management talent, various resources and capabilities (Ommani, 2011).
The Wesfarmer’s corporation has been in the retail business for the last 100 years and more and today they are the single largest private employer, but they have previously declared that they are finding it hard for retaining the talent. The Wesfarmers is a diverse team of workers employing around 205000 employees under its various subsidiaries. The company, which reached its peak in the last decade has employed some of the best people for their various job roles. These are one of the leading reasons for the growth of the company (Hassan, 2014).
Management skills are evident in the growth of the company. The management and planning of the corporation play an important part in the business and the way the company operates. Attracting talented leaders have been one of the leading ways to see a steady growth in the sector. The Company has increased ways for it to retain talent by providing their existing leaders with challenging work, giving them the opportunity to grow as a company.
Human resources are an important factor of any company and the Wesfarmers is a company that believes in providing ample scope for the development of a person’s personal professional capabilities. The proper management of talent becomes an important factor for the company depends on the proper management of the employees and their talents to show good results. With a fleet of 205000 employees and reaching millions of customers it is important that the retail business is controlled in the right way. The Wesfarmers has a strong relationship in the supplier sector, which ensures that all third products are sourced directly from the market ad are of the top quality (Oliver, 2007).
The company has a huge capability to grow into a much larger company. It has started venturing into the resources and the mining sector. The company has already made contacts with other countries like the United Kingdom, Ireland and Bangladesh. The company can join the retailing of apparel, which can be easily supplied by the high quality clothing mills that are famous in Bangladesh. The company also has the opportunity to venture into tether retailing industries like Telecom or Aviation. The main focus of the company has been the sectors the include retail so the company can target the non-saturated markets in the retail industry and start investing there (Blackman, 2001).
Micro Environment
PESTEL analysis
Political: Wesfarmers has already included themselves in various departments like the Home and office supplies, the retail market, chemicals, energy sector, resources and much more. The Australian government is supportive towards the increase in the holdings of the Wesfarmers group. The company holds a significant amount of resources (Gupta, 2013).
Economy: The Australian conglomerate Wesfarmers have taken part of the retail and departmental store business and has under its holdings the leading retailers, namely the Coles and Bunning’s companies who have been taken over by the company ensuring that the company holds a significant section of the retail audience under one roof. The increase in disposable income from the Australian buyers has improved the business of the retail sector (Clark, 2003).
Social: The local Aussies are involved in farming and have been involved in the shopping from the most popular retail giants Coles, Bunning’s etc. The company of Wesfarmers was based on the dealings with the 65 local co-operative companies. Even though the company has become a household name in Australia, but regular advertisement ad marketing ensures that the company sees better customer relationships and commitments from the customer (Härtel, 2014).
Technology:
The Wesfarmers has included various steps to increase their productivity, including better ways for them to source materials. They are also trying to get the best way to increase their output through employing better safety and technology. Venturing into the safety sector they are committed towards creating a better and safer company (Khan, 2015).
Legal: Wesfarmers has been aided by the casual legitimate arrangement of the Australia where it has a sound law business that help the company to stay away from any kind of illegal activities.. The large conglomerate hardly faced challenges in expanding its businesses (Alam, 2016).
Environmental: The Wesfarmers group believes in creating a better footprint on the World, ensuring that the company invests in the betterment of the society. There have been significant issues with the companies under the Wesfarmers group and they each have taken part in creating a better world. Wesfarmers is trying to create a sustainable working environment by creating better opportunities for work for the people at grassroots level. They are promoting diversity, and also engaging in ways to the development of the people. The products sourced by Wesfarmers are done through better negotiation. Ethical sourcing has been largely advertised by the company. The company has also taken steps to reduce emissions and generate less waste and made a pledge to use less water (Henson, 2012).
Society: Growing from a small company into the large conglomerate it is today, it is important that the company shows significant dealing with the society. The company has been associated with the society, creating better employment, better resources and better services for the society which have been a significant reason why Wesfarmers has been regarded as a leader (Clark, 2003).
Competitor’s analysis
The Wesfarmers is the leading retailer among the Australian economy and has spread its business abroad also. The main competitor of Wesfarmers is the Woolworth Company. After the buyout of Coles, Woolworth has significantly lost the support of stakeholders. The investors are finding Wesfarmers a better investment sector than the main competitor Woolworth. Even thought the main competitor Woolworth has attractive pricings for the retail sector, but the Wesfarmers has also created better pricing through lower costing, and low cost pricing. The main reason for the development of the company was their low cost yet high quality products which have been at the heart of the company even today (Agriculture).
Customer’s analysis
Wesfarmers have a diverse base of consumers who are tech savvy and are born in the modern economy, which has seen steady growths in the last few years. The best ways to say this is that the customer base of Wesfarmers is diverging since it has multiple companies under its hat, there is a significant diversity seen in the company customers. Mostly the customers of Wesfarmers group of companies include the young and mid-age people who are habituated in buying their needed groceries, household stuff and other things at one place (IBISWorld, 2016).
Supplier’s analysis
The Wesfarmers group works with the farmers in the Western Australia at first slowly growing into a much larger cooperative company. The supplier system of Wesfarmers is huge which now includes Coles and Buntings which are significant players in their respective retail market. The market of Wesfarmers is not controlled and there is a significant portion of the consumer.
The company has various strengths which include a huge base of conglomerate companies it includes the leaders among retail businesses in Australia. The company is part of a huge economy which has seen a steady increase in resources and sales. The development of the service sector, the enhancement of the retail business has all increased the potential of Wesfarmers as a company.
The Wesfarmers group is quite resourceful and has businesses under various industries which help it absorb the shocks of the economy easily. The increasing number of the companies taken under the Wesfarmers group ensures that the company has enough mettle to fall back on, in case it faces any hardships like a recession. The retail business has been solely controlled by Wesfarmers in the last few years. With the inclusion of Coles and Bunning’s into the Wesfarmers group, the company has found significant source of control over the food and household goods market (Härtel, 2014).
The Wesfarmers also has weaknesses which can be a problem, these include the lower prices offered by Woolworths in the retail sector where its subsidiary Coles is a direct competitor. Also expanding its business to the other countries can be a source of weakness for Wesfarmers, since not every economy has the same elements of the business. Since a lot of materials of the retail business are imprinted it makes sense that the outside market may impact the business of Wesfarmers.
Opportunities can be seen in better management of the company, which makes it important for Wesfarmers to explore opportunities in other retail sectors and service sectors in the Australia also the other nearby countries. New Zealand has a good economy to invest in where there is a good opportunity to grow in the field of business.
Threats of Wesfarmers include the small threats in venturing outside their own country which includes the changing economy, increased pricing, shortage of supplies, the lower commission rates and the government pressure. The Coles and Bunning’s under Wesfarmers control a great amount of the market, which has created latest politicians to think about ways to make the market healthy and competitive (Thompson, 2001).
Conclusion
The above analysis of the Wesfarmers allowed us to carefully investigate the various factors associated with the company’s intense growth into the retail market as well as create a business management plan to increase its holdings into other markets and also in other sectors. Throughout the report the researcher has presented the reasons for the Wesfarmers to analysis and make out ways to enter the new booming markets and retain its position as the leading company in Australia. Concentrating on the problems of the company, the various environmental and social situations faced by the company it is to be noted that the company has reached the highs of business in Australia due to its ability to adapt to the changing economy. The ability to increase itself from the starting point, taking over companies and also making the right decisions over the right time.
References
Agriculture, W. A. (n.d.). Journal, Volume 27. 2005: Pennsylvania State University.
Alam, M. N. (2016). Internal and external environment study. International Journal of Economics, Commerce and Management.
Blackman, D. (2001). Talent management: developing or preventing knowledge and capability? National Institute for Governance, University of Canberra .
Clark, A. (2003). Senior Australian Agriculture. Pascal Press.
Gupta, A. (2013). Environment & PEST Analysis: An Approach to External Business Environment. International Journal of Modern Social Sciences,.
Härtel, C. E. ( 2014). Human Resource Management. Pearson Australia.
Härtel, C. E. (2014). Human Resource Management. Pearson Australia.
Hassan, S. M. (2014). Top Online Shopping E-companies and their Strength and Weakness . Research Journal of Recent Sciences .
Henson, B. ( 2012). Luminous World: Contemporary Art from the Wesfarmers Collection. Fremantle Press.
IBISWorld. (2016, September 09). Wesfarmers Limited – Premium Company Report Australia. Retrieved from ibisworld.com.au: www.ibisworld.com.au/car/default.aspx?entid=69
Khan, U. A. (2015). A critical analysis of internal and external environment of apple inc. International Journal of Economics, Commerce and Management.
Oliver, C. (2007). Sustainable competitive advantage:combining institutional and resource based views. Strategic Management Journal, 697–713.
Ommani, A. (2011). Strengths, weaknesses, opportunities and threats (SWOT) analysis. African Journal of Business Management, 5-9.
Thompson, A. A. (2001). Crafting and Executing Strategy: Text and Readings. McGraw-Hill/Irvin.
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