Situation Analysis

Wesfarmers Limited
Contents
Introduction................................................................................................................................3

Wesfarmers Strategies................................................................................................................3

Discussion on Marketing Environmental analysis.....................................................................4

Internal analysis of Wesfarmers.................................................................................................5

Talent of Management...........................................................................................................5

Empowering the Culture........................................................................................................6

SWOT vs TOWS analysis......................................................................................................6

Wesfarmers SWOT analysis..................................................................................................6

External analysis of Wesfarmers................................................................................................7

Conclusion................................................................................................................................10

References................................................................................................................................11
 Introduction

This report will have a discussion on the situation analysis of Wesfarmers Limited. While the

evaluation of the business strategies in a present scenario it is necessary to evaluate the needs

of the organisation for beginning the study of analysing its strategies. For such a kind of

study it is crucial to gather relevant information regarding the competitive approach that the

organisation has adopted. Here in this report there would be a critical discussion on the

Wesfarmers Limited rational for their achievement of increased performance levels of growth

as well as its development in distinct operations. The company holds a positive point of view

and a special attention while dealing with its internal as well as the external factors. The

company’s primary focus lies in maintaining customer satisfaction and achieving employee

positivity. Wesfarmers Limited is Australia one of the leading organisation dealing with the

production of industrial products, fertilizers, chemicals, and various other products. It is

headquartered in Perth, Western Australia. It has been Australia’s large retailing

conglomerate equipped with diversified portfolio and business operation. The organisation

believes in to value customer loyalty at the best and equip its shareholders with satisfactory

returns.

Wesfarmers Strategies

The long term objective as well as the aims of Wesfarmers is comprised of ensuring the

effective returns to its shareholders based on their satisfaction. Wesfarmers has also focused

on the strategy of diversification. The company aim at ensuring that each of its several

divisions must be equipped with the powerful management capability that would account to

execute and develop the business strategies as well as manage the day-to-day operational

performance. Every one of the organizations division is to be regulated by the divisional top

managerial staff which likewise incorporates the Managing Director and Finance Director of

the Wesfarmers, and is additionally guided by a wide working cycle gathering and
administration structure (Biddle, 2017). Every one of the divisions was appropriately taken

care of and administered by a specific leading body of the official individuals, which by and

large including the administrators allude its corporate office, business in the division. Every

single organization division was a self-sufficient body in its obligation and the tasks for the

best possible improvement of the organizations' systems allude its business development and

satisfaction of its techniques. The entire company’s decisions were required necessarily for

meeting the organisational goals which were later measured by the utilisation of ROC i.e.

return on capital and also the ROE i.e. return on equity (Tripathi & Jha, 2018).

Discussion on Marketing Environmental analysis

The fact that the environmental analysis of an organisation is of utmost importance cannot be

neglected. It is helpful for the organisation in analytically evaluating and comprehending the

various necessary strategies that play an important role in the organisation’s growth and

survival. In concern with the Wesfarmers Limited, this analysis would help the organisation

to identify the organisational factors that would be evident in helping the organisation to

enjoy the sustainable competitive advantage. The micro-environment analysis involves a

scrutiny of internal environment that facilitates specifying the strengths and weaknesses,

while, the macro-environment analysis requires the scrutiny of PESTLE dimensions which

will assist in specifying the opportunities and threats. Changes within the macro

environmental forces are outside of an organisation's direct control requiring an organisation's

marketing strategies to be adjusted to capture emerging opportunities and minimise any

potential threats. The method of SWOT analysis would also be beneficial and would present

a clear image of the organisation’s strength, weakness, opportunity and the threat (Gürel &

Tat, 2017).
 Internal analysis of Wesfarmers

Talent of Management

Wesfarmers among numerous in its industry utilizes the absolute most intelligent and

shrewdest business cerebrums in Australia. The organization as a piece of its development

empowering agents looks to be a business of decision. It has its own particular manner and

intends to pulling in exceptional individuals having responsibility and ability. It accepts to

use the individual ability in the most basic manner and direct them as a key component in

taking a stab at economical achievement. Wesfarmers perceives that individuals are the best

resource for the association while the systems on which they capacity are regularly basic. At

last it is the general population the individuals who chiefly determines the result in an

association (Wesfarmers, 2018).

The organization unequivocally has confidence in sex correspondence, endeavour to make

comprehensive workplace. It accepts to make estimation of consideration inside the

framework by having individuals Aboriginal and Torres Strait Islander characteristics.

Overseeing ability in Australia involves incredible accuracy and commitment activities,

assorted variety is accepted to be a key component in Wesfarmers ltd. They are resolved to

inserted decent variety activity at a more extensive level in a piece of its ability the

executive’s forms so as to create ability and increment portrayal of female workforce in the

administration jobs (Wesfarmers, 2018).

The practices of recruitment within Wesfarmers focuses on the creation of a sustainable

workforce by focusing on authority just as improvement program. These projects are all

around intended to fabricate as well as to influence wide range of talent. The belief system

behind the assurance of Board is to pick up bit of leeway from a few abilities just as points of

view and furthermore to make a size that aides in compelling basic leadership. In regard with

the perspective of composition the Board of the association accepts that the present
executives delegated inside the organization have the privilege and wanted blend of assorted

variety, abilities, skill just as that enables the Board to satisfy and convey the Company's

corporate destinations alongside releasing their obligations (Jie & Gengatharen, 2019).

Empowering the Culture

Culture outlines a necessary piece of Wesfarmers organizations encouraging a soul of

collaboration and coordination. Wesfarmers perceives that an enabling society support duty

just as in charge of giving higher outcomes that has been settled upon in a corporate

arranging system planned by the gathering. The organization generally supports its colleagues

and workers at all level so they end up being proactive in their view that aides in advancing

formation of significant worth in every one of the organizations (Wesfarmers, 2018).

SWOT vs TOWS analysis

SWOT analysis is carried out for determining and understanding the capabilities and

availability of resources of the Wesfarmers. While on the other hand the TOWS

methodology is one of the most effective tool in combining the internal solid focuses with

outer dangers and openings and the internal feeble focuses with threats at an external level

and opportunities for strategy development (Kapoor & Kaur, 2017).

Wesfarmers SWOT analysis

Strengths: The strengths of the Wesfarmers could be understood by outlining the fact that it

has stores in a huge number, in-store staff as well as has equipped a large workforce which

comprises of around 220,000 employees (Global Finance, 2016). The organisation has

emerged out to become the world’s one of the most reputed organisations. It has also been

able to gain a huge recognition of brand over the span of time.

Weakness: Being a recognized leader in the retail market the experts have always been

scrutinising the organisation in regard of the event of making critical decisions. The

organisations limited scope outside Australia could result in the lack of expansion which
might further result in a stiff competition. Due its large presence in the Australian market it

encounters an increased business risk.

Opportunity: The quality and services of the Wesfarmers have the scope of enhancement. In

addition to this a great potential of growth has been evident in the retail industry across the

Australian region. The retail sector of Australia has shown excellent growth potential along

with the factors supporting the industrial operations such as enhanced and improved chains of

supply, digitalization, extension of better opportunities of growth. This change can be

adapted by the Wesfarmers Limited within their multi option retailing strategy for the benefit

of their customers’ changing needs (Research and Markets, 2019).

Threats: The threats for Wesfarmers would include the increasing cost of raw materials

available in Australia. Further, the organisation must be worried about the increased levels of

competition in the retail market. One such example of industry competing with Wesfarmers is

Woolworths Limited, which operates a huge chain of supermarket in the Australian industry

(Market Publishers, 2019).

External analysis of Wesfarmers

For the purpose of conducting an External Environmental Analysis, it is an essential

requirement for the Wesfarmers to carry out the PESTLE analysis. The PESTEL

investigation of an association clarifies the system of large scale natural variables, for

example, the political components of the financial elements that straightforwardly impact the

development or gainfulness of an association. The PESTEL investigation of Wesfarmers is as

per the following:

Political: the analysis of the political factors suggests the degree to which the country’

governmental authorities assume a significant job in impacting the organisation’s business, as

charges, or other legitimate guidelines. A significant Wesfarmers branch is coal mining.

Keeping that in mind it is also necessary to keep in mind that the Australian federal
government have carried out mandatory protocols which states that the approval of the

mining industry exploitation must be handled by the government of the state for that

respective state (Research and Markets, 2013). Increased emphasis is being made upon

eliminating the protectionisms of trade and the policies of restriction. This act would result in

an effective policy of free trade that would be carried out by the foreign organisations in a

much more convenient trade environment. However, Wesfarmers might not be facilitated by

this free trade policy, since an easy entry into the market could be available for the large

number of non-Australian sectors of retail. Huge competition is definitely implied by this

(Antonini, 2016).

Economical: The sector of service is assumed to depict a significant role in the Australian

market, and in actuality it is important that only the sector of service contributes to 71.1 % of

the Australian GDP. The two most important Australian organisations of service are finance

and service. Considering this as an advantageous factor, it can be concluded that Wesfarmers

insurance market has the highest probability of enjoying a reputable position of profit in the

Australian market. However, Wesfarmers’ chemicals and fertilisers companies are impacted

by natural and climate change disasters (Global Finance, 2019).

Social: The Australian social environment is immensely important while considering the

Wesfarmers future growth. The factors considered socially include trends in culture,

demographics, analytics of population. An organisation’s success is largely dependent on

these social factors. It is to be necessarily noted that the method of one-stop shopping prevails

among the majority of the Australian citizens. The preferable method of shopping of the

Australian is to buy a large quantity of items that are necessary once in each week. This

makes it possible for them to sufficiently it for the rest of the week. Thus, the installation of

chains of departmental stores and the supermarkets in Australia is most favourable for the

benefit of Wesfarmers (Chan, et al., 2013). Further, the firm is taking a series of projects for
the upliftment of culture. It also has policies for jobs and commitment with Aboriginals and

individuals living in Torres Strait Islander (Murray, 2019).

Technological: A major role is played by the involvement of technology while carrying out

business across the Australian region. So as to endeavour with the extraordinary challenge by

putting resources into stores that are considered as keen for example through 'One-Shop' and

new purpose of condition of innovation. In Australia, technology has an important role to

play in the success of companies. In order to compete intensely, invest in stores that are

considered intelligent, i.e. ' One-Shop ' and new state of the art (NewsComAu, 2019).

Remembering this, it is essential to note here that Wesfarmers has embraced the utilization of

low discharge coal innovation which is an inventive change that is required to continue the

business in future. Coal mining, vitality, synthetic compounds and manure creation are the

absolute most significant regions Wesfarmers works in, and subsequently great mechanical

establishment just as persistent advancement is very required for the future improvement of

the venture (Luftman, et al., 2013).

Legal: There is an assortment of new laws controlling and administering the exchange

arrangement of Australia, for example, the work law business laws, asset law and some more.

The association is required to comply with each, while directing exchange.

Environmental: Value creation for the customers as well as for the shareholders has been

initiated by Wesfarmers with the help of engaging sincerely for a large range of issues in

concern with environmental factors (NewsComAu, 2019). These include, reduction in the

activities of environment pollution, preserving energy, and so forth. It must be crucially noted

that the business activities of Wesfarmers Limited are being carried out according to the ten

principles of community and environmental impact which in return allows the firm to operate

within the energy efficient means and accordingly increase its production (Islam, et al.,

2016).
 Conclusion

This report has carried out an effective market environmental analysis of Wesfarmers

Limited. The analysis concludes that a strong position is being held by the Wesfarmers

limited which is evident as the organisation enjoys a leading position in the retail market of

Australia. An organisation’s environmental analysis could be considered as a strategic tool

which proves to be helpful in the analysis and assessment of the various internal and external

organisational factors which further threaten or facilitate its condition of market. The SWOT

analysis was carried out for the determination of Wesfarmers’ internal analysis whereas the

PESTLE analysis was conducted for assessing the external analysis.

 References

Antonini, C. (2016). An empirical analysis of environmental externalities incidence on

financial performance.

Biddle, I. (2017). Target Marketing: Gaining customer details to maximise marketing

strategies. Busidate, 25(4), 10.

Global Finance Magazine - Countries with Highest GDP Growth 2019. (2019). Retrieved

from https://www.gfmag.com/global-data/economic-data/countries-highest-gdp-

growth

Gürel, E., & Tat, M. (2017). SWOT analysis: A theoretical review. Journal of International

Social Research, 10(51).

Islam, M. A., Jain, A., & Haque, S. (2016). A preliminary analysis of Australian

Government’s Indigenous reform agenda ‘Closing the Gap’and corporate

accountability. In Key Initiatives in Corporate Social Responsibility (pp. 341-354).

Springer, Cham.

Jie, F., & Gengatharen, D. (2019). Australian food retail supply chain analysis. Business

Process Management Journal, 25(2), 271-287.

Kapoor, S., & Kaur, M. (2017). Basel III norms: a SWOT and TOWS

approach. Vision, 21(3), 250-258.

Luftman, J., Zadeh, H. S., Derksen, B., Santana, M., Rigoni, E. H., & Huang, Z. (2013). Key

information technology and management issues 2012-2013: an international

study. Journal of Information Technology, 28(4), 354-366.

Market Publishers, 2019. Wesfarmers Ltd. Fundamental Company Report Including

Financial, SWOT, Competitors and Industry Analysis. Retrieved from

https://pdf.marketpublishers.com/bac_swot/wesfarmers_ltd_swot_analysis_bac.pdf
Murray, B. (2019). The Purpose of Business: Why Values, Meaning and Purpose Really,

Really Matter. Effective Executive, 22(1), 10-17.

NewsComAu. (2019). Woolies loses its crown to Coles. Retrieved from

https://www.news.com.au/finance/business/retail/woolies-loses-its-crown-to-coles/

news-story/7bb6c835a3ade9386221c7c6789809f4

Tripathi, K. K., & Jha, K. N. (2018). An empirical study on performance measurement

factors for construction organizations. KSCE journal of civil engineering, 22(4),

1052-1066.

Wesfarmers Limited - Strategy, SWOT and Corporate Finance Report - Marke... (2019).

Retrieved from https://store.marketline.com/report/ml2731420sa--wesfarmers-

limited-strategy-swot-and-corporate-finance-report/

Wesfarmers, 2018. Wesfarmers Annual Report 2018. Retrieved from

https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2018-

annual-report.pdf?sfvrsn=0