WESFARMERS LIMITED: CASE STUDY ANALYSIS


 


Introduction


Each and every industries may it be small or large companies are subject to different factors that affect the firm’s function as a whole.  In the light of this, there are certain ways or techniques that can be considered in order to emerge and continue to be competitive within the market place. The marketing concept has been defined as ‘the key to achieving organizational goals’ and the marketing concept rests on ‘market focus, customer orientation, coordinated marketing and profitability’. In a profit making business the firm obviously has to try and achieve this level of customer satisfaction as a way of staying ahead of the competition and making a profit. Conventionally, marketing has been utilized by the private sector in decisively increasing the capabilities of an organization. Marketing can be considered as one of the most important element underpinning successful business creation (Hills, 1994). Perhaps because of its complex applications, marketing have been defined in a variety of ways (Sheath et al, 1988). The marketing concept was first promulgated in the late 1950’s (Elliot, 1990). The importance of marketing concept incorporates oft-repeated elements such as: customer orientation; integrated marketing efforts; and resultant profitability (Elliot, 1990).The main goal of this report is to provide an in-depth analysis about the corporate strategy utilised by Wesfarmers Limited in Australia.


 


Company Overview


            Wesfarmers Limited is a business organisation which is composed of six business divisions. The company was established on June 28, 1914 as a cooperative institution for the farmers in Western Australia. The cooperative is focusing on the provision of quality services and products to the rural community in the region. The six divisions of the organisation performs different function such as retailing of home and garden improvement products and other building materials, manufacturing and marketing of industrial equipments and gases, coal mining and production, distribution of industrial and safety products, manufacturing and marketing of wide acre of horticultural fertilises and other chemicals for industry, services and insurance, rail transport investing and others. These different organisational operations have been able to make the company be known in the market place.


 


INDUSTRY AND COMPETITION ANALYSIS


            Industry and Competition analysis are just some of the most important marketing analysis that must be considered by a certain industry.  In this report, industry and competition analysis will be conducted in order to determine the competitive level of Wesfarmers Limited in the marketplace.  In addition, industry and competition analysis is also important to help the company identify significant information that will help them enhance their competitive advantage among its rivals.  This analysis is important not only to determine the current performance of the Wesfarmers in the business world but also to know who among their rival companies can be a bigger threat for them to achieve success.


Porter’s Competitive Five Forces


An industry is a group of firms that market its products closely substituted from each other.  According to Porter (1980), some industries tend to become more profitable and competitive than the others, hence, an existing industry such as the Wesfarmers Limited should always remember that their industry will only survive by utilizing a strategy that would enhance the competitiveness of the business.  Using Porter’s Five Forces Model, the analysis of the industry sector of the Wesfarmers Limited will be analysed (See Appendix 1).


 


New Market Entrants


            Porter’s Five Forces Model includes threat of entrance of new industries.  Primarily the goal of the Wesfarmers Limited is to establish a position in the cooperative industry and to become a company that would always be competitive in the marketing arena.  Wesfarmers Limited is considered as the largest business organisation in Western Australia which competes in different segments such as energy, hardware, insurance, industrial and safety, chemicals and fertilises and other businesses. It can be said that establishing new organisation that will compete with Wesfarmers is not necessary unless the one who will handle such company will have the strategy to outgrow Wesfarmers.  Hence, it can be said that this type of business belongs to a higher entry obstruction due to the existence of competitive companies like Wesfarmers Limited.


 


 Supplier Power


            It is said that the conditions and the present arrangement in the supply market largely determines the extent in which effective competition can be achieved.  The bargaining power of a supplier could be a threat for the profit of the company, and Wesfarmers Limited is very much aware of it.  In this manner, Wesfarmers is trying to have a good contract with its supplier.  Herein, the management of Wesfarmers makes it sure that they are also benefited in the said contract while the suppliers enjoy the agreement with them.        In this kind of business, there is only a limited competition in the supply market.  Wesfarmers avails their resources from different companies that provides them their needs in energy, hardware, insurance, industrial and safety, chemicals and fertilises and other businesses. This limited competition in the supply market illustrates a major obstruction to competition in terms of the business functions of Wesfarmers in the market. 


 


 Competitive Rivalry


            Wesfarmers Limited is considered to be the largest and most competitive industry in the region.  In this analysis, it shows that the company still dominates the Western Australia market.  This means that Wesfarmers is still on top of the competition among other electricity company. The company enjoys its competitive position in the region and still trying to sustain its competitive advantage among its rivals.


 


 Buyer Power


Porter’s also include in his model the concept of the bargaining power of Buyers. Hence, Wesfarmers Limited makes sure of it that their clients and customers in all aspects will be satisfied for the quality service they provide. Specifically, the company has focused their marketing approach on the demands and needs of the buyer for different business segments that satisfy the and heavily positioned their products in this segment.  The company also uses their environmental responsibility as a good public image to make the company more appealing to their customers.  The competitive aim of the company is to do significantly a better job of providing what buyers are looking for and, thereby enabling the firm to gain competitive advantage and out compete rivals within the marketplace (Thompson & Strickland, 2003).


 


 Threats of substitutes


            In terms of threats and substitutes, although the company is aware that there were threats for substitute products, specifically now that technologically advanced materials are used to find new sources of energy, coals and other products and services that they are offering, which is more environmental friendly, the company still have the assurance that their quality service and the satisfaction they give to their clients and customers will hinder any substitutes to have their way.


 


Competitive Strategy


In line with this case study, the CSV analysis will be conducted in order to determine the competitive strategy of Wesfarmers that leads to the success of the company with its designed and implemented alternative solutions.  CSV that can be attached to the company includes its strategic management and the ability of the company provides quality services through the use of knowledge management and other enhancing approach. 


One of the important things that the management of Wesfarmers Limited has used is its strategic approach to management. The principal benefit of strategic management has been to help the company formulate better strategies through the uses of a more systematic, logical and rational approach to strategic choice (Thompson & Strickland, 2003). One of the potential benefits of strategic management to Wesfarmers is it make sure that the organisation only follows one direction or path and that is towards the achievement of its business mission, objectives and success. In addition, strategic management is also beneficial in ensuring not only the success of Wesfarmers but also its survival by adapting the whole organisation to changes in its environment and making sure that the organisation remains competitive (Dreier, 2002).


 


Corporate Strategy


Winning business strategies are grounded in sustainable competitive advantage or position in the marketplace (Oliver, 1997). One of the sustainable competitive advantages of Wesfarmers is the leaders of the company do their business.  Guided by the so-called Wesfarmers Limited Way, the leaders of the industry clearly illustrate integrity in all their actions.  The management has also strong commitment in promoting the company values and the value of diversity among the employees and staffs. In addition, the management of the company has been able to understand the priorities of the business and make every decision in line with the strategic direction by giving consideration to the effect on all aspects of the business and on other stakeholders. 


Another sustainable corporate strategy of the company is its continuous focus on the importance of both internal and external customers to ensure that these customers remain loyal to them.  The company also makes it sure that they motivate, inspire, coach, guide and support their staffs to realise the mission of the Wesfarmers Limited. Furthermore, the company’s ability to identify and recognise contributors is another factor that sustains the company’s competitive advantages.


 


Conclusion


It shows that Wesfarmers Limited is an industry which has been able to position itself in the Western Australia’s market scene. In order to sustain its competitive advantage it is important that the management of the company should be able to give emphasis ion factors that may affect the overall performance of the company. In addition, it is also important that the management should be willing to give all time and effort to understand everything that makes the business operational or functional. 


            In addition, changes in strategies must also be considered to adjust to the needs of the market.  All in all, it can be concluded that if the company would be able to sustain its competitive advantage, no other competitors shall outgrow Wesfarmers Limited.



Credit:ivythesis.typepad.com


0 comments:

Post a Comment

 
Top