This report will focus on elaborating the development tools. The development tools on which the discussion will be made in this report are SWOT ANALYSIS, PESTLE ANALYSIS and Porter five force analysis.
This development tool is one of the business analysis processes that help to define the overall objective of the project. Through this tool, it can be easy to determine the various factors which are concerned with the project. In this framework, there are four components on which discussion is made like Strength, weakness, threat, and opportunities.
Strength represents the attributes which are within the company and are important to achieve success. These are the resources and the capabilities that help the company to achieve competitive advantage in an effective manner. The best examples which are included in this factor are a good brand name and good image in the market. Next component focuses on the weakness that can help the company to achieve good outcomes (Durand, Grant and Madsen, 2017). This factor focuses on the rivalry between different departments and inadequate resources. The examples in this can be high-cost structure, poor image and weak brand name in the market.
Opportunities are also one of the essential factors in which elements related externally are considered and helpful in gaining overall goals. These factors can consider the interest of the vendors who are ready to conduct the activities with the company so that success can be achieved (Bull et al., 2016). The factors which are involved in this are adopting new technologies and unsatisfied customers. The threat is the last component which is involved in this segment (Ramlan et al., 2016).
In this, the forces which are external can give negative impact on the overall success of the project. The threats which the company can face is related to the negative public image, no ready-made market and also lack of vendors who are supplying the raw material for the project. Some of the threats change the trend, new rules and also new substitution of the products (Ansah and Sorooshian, 2017).
Strength
Wesfarmers is known as one of the biggest players in the private sector in Australia and New Zealand. The company offers good quality and performance to the customers which not only maintain the good image but also enhances the overall profits of the company. The strength of the company is also related to the workforce. The company has more than 20,000 employees and also many stores so it gives a positive impact on the growth.
Weakness
Being a market leader is also involved in the important decisions taken. So, it is seen that company has to involve so that right decision can be taken and if involvement is not shown then it can give negative impact on the activities. Also, it can be evaluated that the experiences are limited to Australia on as the company has a low geographic presence.
Opportunities
Wesfarmers have an opportunity to enhance outside Australia. Opportunity for the company is to enhance the quality, service and experience benchmarks across outlets. It will help to maintain the employee and customer loyalty across a various business.
Threats
The company is facing a threat which is related to the competitors. There are many competitors prevailing in the market like best and less, Myer and Woolworths. Also, the competitors are giving specialized products and services so that prices level can be maintained. The threat is also faced by the company which is related to the economic downturn which gives impact on the demand and also on the customers level of confidence.
It is considered as a tool which is taken into consideration by the marketers so that external marketing environment factor which is giving impact on the activities of the company can be analyzed. It is one the major strategic planning business tool that helps to evaluate the external influences of the business. PESTLE analysis stands for political, economic, technological, legal, social and environmental which is considered by the business to conduct the process of strategic planning. By giving emphasis to this factor the company can enhance the opportunities and reduce the overall threats (Hillson and Murray-Webster, 2017).
Political factor is concerned with the pressures and opportunities that are imposed by the government. Also, it evaluated that to what degree the policies of the government are giving impact to the business (Jones, Comfort and Hillier, 2014). It is related to the trading policies, corruption, and government policies.
Next is an economic factor which is concerned with the economic policies, economic structure and also the impact of the economy on the company. It includes taxation, economic trends, the local economy and also international trade (Hubbard, Rice and Galvin, 2014). Next factor is a social factor which is concerned with the cultural aspects, beliefs, and attitude that will give impact on the demand of the organization products and how the organization conducts the activities. In this trend related to lifestyle and also ethical issues are considered. In technological factor innovation technology legislation is considered.
Legal factors are concerned with the laws and regulation. It includes current legislation and also tax regulations. The environmental factor is related to environmental regulations and also sustainability (Hill, Jones, and Schilling, 2014).
Political factor
The company has to follow ad hoc regulations and also there is a restriction on the trading hours.
Economic factor
There is low growth rate for the industry and also high wage cost in comparison to the global market.
Social factor
The company has a huge base of the employees and also there are many initiatives taken to uplift the society like engagement strategies with aboriginal people.
Technological factor
To strive the competition level the company focuses on investing in the stores and activities are conducted through one shop and a new point of the state of technology.
Legal factor
It is seen that legal implication is in the form of carbon emission and it has restricted the overall production of the company.
The five forces are
First is Supplier power and it is related to the suppliers to drive up the prices. The price is driven up by the suppliers by giving focus to the uniqueness of the product and also switching cost. In Buyer power, the evaluation is made that how buyers will drive the prices down. Competitive rivalry helps to drive the number of competitors in the market (Kilroy and Schneider, 2017).
The threat of substitute is related to the products that are easy for the customers to switch to the other products. The threat of new entry is related to the profits through which the new business entry into the market (Geisler and Wickramasinghe, 2015).
Power of buyers
It is seen that there is high rate related to a power buyer as it is seen that other competitors like Woolworth offer customers a wide option to select.
Power of suppliers
It is moderate and the company maintains a good relationship with the suppliers along with the partnership.
The threat of new entrants
It is low as there are larger firms like Wes farmers who have a diverse portfolio and many operations are made. It is difficult for the new business to survive in the Australian retail industry.
Rivalry against the competitors
It is moderate as there are many companies who are mitigating by giving emphasis on offering good services at a low price to the customers. The strategy of the company is to enhance the customer centricity by considering the customer engagement programs.
Threat of substitutes
In this, the products are considered on a regular basis and fewer alternatives are seen. The threat of substitution is low.
Conclusion
To enhance the market share and profits the company should focus on this development tool. It also helps to manage the activities in a proper manner.
References
Ansah, R.H. and Sorooshian, S., 2017. Effect of lean tools to control external environment risks of construction projects. Sustainable cities and society, 32, pp.348-356.
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths, Weaknesses, Opportunities and Threats: A SWOT analysis of the ecosystem services framework. Ecosystem services, 17, pp.99-111.
Durand, R., Grant, R.M. and Madsen, T.L., 2017. The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.
Geisler, E. and Wickramasinghe, N., 2015. Principles of knowledge management: Theory, practice, and cases. Routledge.
Hill, C.W., Jones, G.R. and Schilling, M.A., 2014. Strategic management: theory: an integrated approach. Cengage Learning.
Hillson, D. and Murray-Webster, R., 2017. Understanding and managing risk attitude. Routledge.
Hubbard, G., Rice, J. and Galvin, P., 2014. Strategic management. Pearson Australia.
Jones, P., Comfort, D. and Hillier, D., 2014. Environmental and Social Programmes and Rapidly Growing Retailers. Economia Seria Management, 17(1), pp.5-17.
Kilroy, D. and Schneider, M., 2017. Valuing the Current Strategy. In Customer Value, Shareholder Wealth, Community Wellbeing (pp. 109-141). Palgrave Macmillan, Cham.
Ramlan, R., Omar, S.S., Wong, J.Y. and Sorooshian, S., 2016. SME Swot Ranking for Strategic Planning Using Analytic Hierarchy Process (AHP). International Information Institute (Tokyo). Information, 19(10B), p.4755.
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