Profile of AWB limited company
The primary and main object of this report is to explain and discuss about the profitability, revenue, outputs and business units of AWB limited. In today’s competitive world, the firm offers merchandize, wheat and fertilizers products and services to the customers. The paper outlines that how the organization conducts internal and external analysis to fulfill the demands of the customers. The paper also discuss that how AWB organization handle the challenges and risks and further how it makes unique strategies and policies to stay in the competitive market. SWOT analysis and Pestle analysis are done by the organization to analyze and identify the threats and risks of the market. More detail of the paper has been elaborated below.
AWB limited was a primary grain marketing company based in Australia. The company was incorporated in 1st July 1999 (AWB, 2018). The main motive of the company is to be Australia’s growing agribusiness with strong and unique positions in grain trading, financial and rural services. It is a leading and growing agribusiness corporation that renders fertilizer, merchandize, finance, insurance, farm services, wool, livestock and real estate services to the Australian primary and dynamic producers. The company operates and manages its operations in Geneva, India, Brasil and Australia. The main vision of the firm is to manage and control the grains of choice in the international market. The mission of AWB limited is to be a global leader of Australian grain.
Furthermore, the organization wants to maximize the value for shareholders, customers and growers. The company retains its monopoly position and image as the country’s sole wheat and sells grains in the international market (AWB Ltd, 2018). Along with this, the primary markets of the company include Iran, Egypt, South Korea, Japan, and Indonesia. The firm is a strong and unique supplier of wheat to Iraq. The firm has taken a significant shareholding stake in Futuris that controls and manages Australian agricultural services group elders. The competitors of the firm include Cargill international S.A, Canadian wheat board, Royal Cebeco group cooperative UA, Cenex harvest states cooperatives. The operating revenue of the company was A$2.33 billion ($1.31billion) (2002). The firm has changed its name to Agrium Asia pacific limited in 2011 (AWB Ltd, 2018). In 2016, the retail growth of Agrium Asia pacific limited company was expected $500 million (Annualreports, 2016). The firm exports wheat in various countries thus, wheat is considered one of the biggest revenue units for AWB limited company. Although wheat accounts for 90 % of AWB export business, they firm also markets pulses, oilseeds, sorghum and barley (AWB Ltd, 2018). The company is especially active in the Asian market where wheat can be easily replaced in the market. The wheat business unit is significant for the company because it provides large amount of profit and further, it also enhances the reputation of the firm in the competitive market.
External environment of AWB limited
An external environment is entailed of all the outside elements that may affect the operations and activities of the business (Ozgen, 2011). It is stated that the company focuses on the external environment to compete with rivalries in the international market (Joshi, Singh Ubha and Sidhu, 2012). An organization cannot control and handle the external factors because these factors are uncontrollable ( O’donnell, 2010). Various models and techniques are used by the firm to reduce and mitigate the risks and challenges of the market. Porter five forces analysis is done by the company to gain rivalries benefits in the market. The porter five forces analysis for AWB limited has been discussed below.
Threats of new entrants: Threat of new entrants is high in Agribusiness industry. AWB Limited has to handle all the challenges and risks to safeguard rivalries benefits in the global market. Thus, the company needs to focus on the new competitors to beat the competitors.
Bargaining power of supplier: It has been analyzed that the company buys their raw material from various suppliers. Therefore, the firm needs to focus and identify the potential suppliers to purchase the raw material and other products. The bargaining power of suppliers for AWB limited is high that may affect the profitability and revenue of the firm.
Bargaining power of buyers: It is noted that bargaining power is high in the hands of buyers. The buyers want best quality of products and services at minimum prices. Hence, the organization needs to focus on the bargaining power of buyers in the competitive market (Luo, Sun and Wang, 2011).
Threats of substitute products: The threat of substitutes is high and strong if it renders a value proposition that is effective and dynamic from the competitors. AWB limited company must measure and evaluate the competitor’s products and services.
Rivalry among the existing competitors: There is high and intense competition among the existing competitors. It may directly affect the returns and revenue of AWB limited Company (Fernfornuniversity, 2018).
It has been analyzed that pestle analysis plays a fundamental role to eliminate and reduce the issues and challenges of the marketplace (Joshi, Singh Ubha and Sidhu, 2012). Before initiating the business activities and operations, pestle analysis is done by the organization. The pestle analysis for AWB limited has been discussed below.
Political factor: The international operations and activities of AWB limited are affected by the government policies and rules of the country. Australia is a sovereign country which belongs to the commonwealth. There are three parties such as liberal party, the Australian labor party and the national party of Australia. It is noted that political environment may create both opportunities and challenges for the agribusiness food sector. The environment may consist of various government agencies, laws and pressure groups all of which can affect the success and growth of the firm. The firm needs to obey various rules and legislations to operate and manage business operations and activities in a smooth way.
Pestle analysis
Economic factor: The economic factors also affect the progress and targets of the company. The economic situation of the country works in favor of the firm. The GDP is high and rate of poverty is low in Australian country. The GDP of the country was $241,581 million in the first quarter of 2018. The inflation rate in the country is highly managed at 1 percent and good income level of the people renders the company with excellent opportunities to explore its business actions and operations in the country.
Socio-cultural factor: It is stated that Australia is a multicultural country with a higher proportion of western people. AWB limited needs to focus on the socio-cultural factors to capture entire target market in the global market (Heldon, 2009).
Technological factor: It is analyzed that innovative and advanced technology used by the company to attract and retain maximum number of customers. Innovative technology also helps to increase and enhance the outputs and profitability in a large extent.
Legal factor: It must be noted that different countries follow different rules and regulations. The legal force is an important factor in the international macro environment. AWB limited needs to focus on the rules, legislations and policies to run the business effectively (Ho, 2014).
Environmental factor: The environmental factors include weather, globalization and climate changes could affect the business operations of AWB limited in Australia. The company needs to implement the business activities after considering the environmental factors. In this way, the company can compete with competitors and further, it also helps in attaining ample of benefits in the marketplace (Morris and Metternicht, 2016).
After the various studies, it is analyzed that internal analysis plays a key role to achieve desired objectives and targets (Helms and Nixon, 2010). No company can grow and survive its business without analyzing the internal environment of the company. If an organization wants to uplift profitability and returns then it needs to focus on the internal environment (King et al, 2010). Various tools and techniques are implemented by the firm to measure and identify strengths and weakness in the global market. SWOT analysis for AWB limited is elaborated below.
|
Strengths |
Weaknesses |
|
· AWB limited exports products in more than 50 countries and has around 3000 workers (Mbaskool, 2018). · It has strong and unique distribution network in the market. · The firm has large number of subsidiaries that help to reduce and eliminate the risks and challenges of the market. |
· Various allegations and scandals have damaged the image and goodwill of the firm. · Poor and ineffective performance of the firm over the last few years. |
|
Opportunities |
Threats |
|
· The new and innovative management team can bring a favorable direction to the firm. · Incoming investment and revenue from outside country. · Setting up for addition subsidiaries to move into other grains such as oats, canola etc. |
· There is a high and intense competitor in the marketplace. · Entry of foreign multinational players in the international market is a biggest threat for the firm. · Maximizing wheat consumption within Australia decreasing the size and scope of the export market. |
Resources, capabilities, and core competencies play a significant role to make a dynamic image in the minds of the customers. Aside this, it also helps in attaining competitive advantages in the international market. AWB limited uses ample of resources, core competencies and capabilities to overcome on the rivalries in the marketplace. The tangible and intangible resources are used by the company to meet the long term requirements and needs of the business. The tangible resources include labor, equipments, suppliers and capital. The intangible resources include culture, knowledge, goodwill, brand equity, and intellectual property. Aside this, AWB limited also uses financial resources and technology to differentiate its products from the competitors (Barreto, 2010).
On the other hand, organizational capabilities are considered as a firm’s ability to manage various resources such as workers, efficiently and effectively to attain a benefit over competitors. The organizational capabilities monitor on the business’s ability to meet the customer needs and demands. The capabilities include strategic innovation planning, process and project management, resource planning, and concept development (Kraaijenbrink, Spender and Groen, 2010).
Core competency is a significant concept in management and it is a combination of various resources and skills that distinguish a company in the marketplace and thus are the underpinning of organizations competitiveness. The core competencies of AWB limited include analytical thinking, creative thinking, decision making, conflict resolution and forward thinking (Helfat et al, 2009). `
It is noted that AWB limited can get competitive benefits by using innovative and unique strategies and policies globally. The company needs to review and measure the core strengths and weaknesses to build an attractive and unique reputation or image in the market. Cost reduction is one of the significant strategies that AWB limited Company can pursue to gain competitive benefits. Moreover, management keeps an eye on the performance and productivity of the workers to attain various rivalries benefits. Market penetration strategy is followed by the company to stand out against the competitors internationally. Product or service is also a key factor that distinguishes rivalries thus; the company needs to focus on the products and services that are being provided by the firm. It will help to accomplish the long term objectives and mission as it is also beneficial for the management (O’donnell, 2010).
Although the company is expanding and exploring the business globally but still some recommendations have been given for company’s future growth and success that are detailed below.
- It has been analyzed from the various studies that the company should focus on the pricing and diversification strategy to increase and enhance the customers in the marketplace.
- AWB limited Company should focuses on the strategies, plans and procedures of the rivalries to sustain position in international market.
- A sustainable HRM must be maintained by AWB limited Company to make effective and dynamic policies and procedures within the organization. Furthermore, the organization needs to focus on the various leadership styles to assist and motivate the employees. It will also uplift and maximize the profitability and returns of AWB limited.
- Apart from this, management also plays a major role to flourish the business in a large extent. Therefore, the company should focus on the management and administration to grow and survive the business globally.
Conclusion
It is concluded from the above mentioned analysis that AWB limited is a leading and growing agribusiness Australian company. The above mentioned analysis indicates that how AWB limited enhances and uplifts its profitability largely. Here is the discussion about the internal and external environment of the company that plays an empirical role to compete with rivalries. In addition, the report also explains the resources, capabilities, and core competencies of the company. The firm uses ample of strategies to attain various rivalries benefits internationally.
References
Annualreports.2016. Agrium Annual reports 2016 [Online]. Available from https://www.annualreports.com/HostedData/AnnualReports/PDF/TSX_AGU_2016.pdf [Accessed as on 24th August 2018].
AWB Ltd.2018. AWB Ltd-Company profile, information, business description, history, background information on AWB Ltd [Online]. Available from https://www.referenceforbusiness.com/history2/12/AWB-Ltd.html [Accessed as on 21st August 2018].
AWB.2018. About us [Online]. Available from https://in.linkedin.com/company/awb [Accessed as on 21st August 2018].
Barreto, I., 2010. Dynamic capabilities: A review of past research and an agenda for the future. Journal of management, 36(1), pp.256-280.
Fernfornuniversity.2018. Australian agricultural company limited. Porter five forces analysis [Online]. Available from https://fernfortuniversity.com/term-papers/porter5/asx/630-australian-agricultural-company-limi.php [Accessed as on 21st August 2018].
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Helfat, C.E., Finkelstein, S., Mitchell, W., Peteraf, M., Singh, H., Teece, D. and Winter, S.G., 2009. Dynamic capabilities: Understanding strategic change in organizations. John Wiley & Sons.
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Ho, J.K.K., 2014. Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), pp.6478-6492.
Joshi, M., Singh Ubha, D. and Sidhu, J., 2012. Intellectual capital disclosures by Indian and Australian information technology companies: A comparative analysis. Journal of Intellectual Capital, 13(4), pp.582-598.
King, R.P., Boehlje, M., Cook, M.L. and Sonka, S.T., 2010. Agribusiness economics and management. American Journal of Agricultural Economics, 92(2), pp.554-570.
Kraaijenbrink, J., Spender, J.C. and Groen, A.J., 2010. The resource-based view: A review and assessment of its critiques. Journal of management, 36(1), pp.349-372.
Luo, Y., Sun, J. and Wang, S.L., 2011. Comparative strategic management: An emergent field in international management. Journal of international management, 17(3), pp.190-200.
Mbaskool.2018. AWB Limited SWOT analysis, USP & Competitors [Online]. Available from https://www.mbaskool.com/brandguide/food-and-beverages/9166-awb-limited.html [Accessed as on 24th August 2018].
Morris, A. and Metternicht, G., 2016. Assessing effectiveness of WEEE management policy in Australia. Journal of environmental management, 181, pp.218-230.
O’donnell, C.J., 2010. Measuring and decomposing agricultural productivity and profitability change. Australian Journal of Agricultural and Resource Economics, 54(4), pp.527-560.
Ozgen, E., 2011. Porter’s diamond model and opportunity recognition: a cognitive perspective. Academy of Entrepreneurship Journal, 17(2), p.61.
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