External Analysis
Strategic information system is an important part of an organisation that is used to take various decisions. It offers competitive benefits to the organisation. It helps the organisation to portray their requirements to the target audience at minimum cost. In this report the study is undertaken on Wesfarmers supermarket (Mitchell, 2015). The internal and external analyses of the organisation are performed which could help Wesfarmers to improve and simplify its operations. In this report, a proposal is also prepared for Wesfarmers that will help them to design strategies to overcome from al the barriers and challenges.
Background
Wesfarmers is an Australian company that is located in Perth. The company deals in chemical industry and has retail stores, sells safety and industrial product, fertilizers and many coal mining products (Mitchell, 2015). It is one of the largest private sector in Australia with around 2, 20,000 staffs and more than 5,30,000 shareholders. The company was established in 1941 and offers services to Australian farmers. (Kilroy and Schneider, 2017) The company has expanded its services and have listed now in Australian stock exchange.
Industry
Wesfarmers is an organisation that operates in many sectors. In this report the analyses is carried out by considering the retail sector of an organisation. Retail industry is considered as one of the largest sector in Australia (Kilroy and Schneider, 2017). This industry is based on trading of all non-specialized products like groceries and cleaning products. From the research, it was found that retail markets are more profitable as compared to small businesses (Sun, Strang and Firmin, 2017). These retail markets contribute in higher economic growth of the organisation.
General Environment Analysis of Wesfarmers
- Economic-Due to wesfarmers, the overall sale of other companies like Kmart, Coles and Target were impacted (Sun, Strang and Firmin, 2017). The economic condition of the country directly affects the market consumption and future affects the overall income.
- Physical- The physical background of an organisation is affected by the alteration in business practices and consumer behaviour (Trevena, Neal, Dunford, Haskelberg and Wu, 2015). To overcome all the physical barriers Wesfarmers have come up with various initiatives for the betterment of society as well as organisation.
- Socio- Cultural– With the change in time the lifestyle and standard of living of Australian people have changed over time. The change in lifestyle has reflected the supermarket trends (Trevena, Neal, Dunford, Haskelberg and Wu, 2015). The consumption of health and low fat food has increased due to concerns related to health and obesity.
- Global- The Company has expanded in over multiple countries like UK, India, New Zealand, China, HK and Singapore (Waterlander, Luiten, Eyles and Steenhuis, 2016). Thus, the company has expanded in global market that has strengthened the market.
- Technological- The success of business is directly related to the adaption of new technology so that they can compete in the competitive environment (Waterlander, Luiten, Eyles and Steenhuis, 2016). The Wes farmers have expanded their business by offering online shopping experience so that more customers could be captured. Apart from that, advanced technology has enhanced the security (Wu, Straub and Liang, 2015).
- Legal/ Political- The political factors have affected the Australian market. The small businesses are facing challenges due to the new supermarkets and retail stores. Wesfarmers is one such store that has affected the sale of other small enterprises (Wu, Straub and Liang, 2015). To overcome the issues faced by small businesses government of Australia came up with various policies (Pulker, Trapp, Scott and Pollard, 2018). One such policy is restricting trading hours and also monitoring the captured market by the means of competition and consumer commissions.
- Demographic- The demographic factor covers the group of people living in Australian population. The immigration in Australia is very large thus the people over there are a mixture of ethnic and religious group. From the research it was concludes that, till year 2051 the people of age 65 will grow by 25% (Pulker, Trapp, Scott and Pollard, 2018). Australian population has increased due to presence of Australian immigration policy that governs the immigration and emigration of people.
The Environment of Industry
In any retail industry the bargaining power is one such factor that affects the profit margin of the company. The barging power of buyers and suppliers are listed below.
- Bargaining Power of the Suppliers- It is important for an organisation to have high bargaining power (Sedera, Gronau and Sumner, 2015). It helps in maintaining a good and a loyal relation with the customers by serving them good quality product at a very nominal price.
- Bargaining Power of Buyers- Company suffers from bargaining crises of buyers. The customer tries to bargain to a maximum limit of every product (Sedera, Gronau and Sumner, 2015). Apart from that, there are various other competitors in the market like Woolworths that offer same products and services. This leads to high bargaining power of the buyers.
- New competitors in the market- The success rate of an organisation always have a threat of new entrant in the industry (Jie and Gengatharen, 2018). In case of wesfarmers, it is difficult for any other company to overtake it as it has diversified its portfolio in many sectors. Due to this reason it is difficult for any organisation to enter in the system.
- Rivalry among existing firm- There are various other companies in Australia who are trying to gain the market of wesfarmers by offering the products and services at lowest price. The biggest competitors of wesfarmers are woolworths because of this reason wesfarmers face significant decline in its sale (Jie and Gengatharen, 2018).
- Challenges due to substitutes- The substitutes can be in the form of online stores, grocery stores and fresh food market (Connell, 2016). Clients give more importance to such stores as they offer various benefits lie flexibility in shopping, faster delivery and easy availability.
The competitive threats
The biggest competitors of Wesfarmers are aldo and woolworths. Still wesfarmers bet these companies through its Cole super markets. The earning of Cole supermarket is affected by the new innovative strategy by other supermarkets. Aldo make use of agile logics so that operatiosn are completed in an effective way (Connell, 2016). The competitors are working to capture the customers by offering better services and lower price. Woolsworth offer better discounts such as buy 1 get 1. Coles supermarket have still maintained the position in the Austrillain supermarket. The motivation behind giving stock and administrations toward the Western Australian was the progression of time (Pearlson, Saunders and Galletta, 2016) . The organization developed into a noteworthy retail combination and furthermore got recorded in the Australian Stock Exchange.
Opportunities and Threats
Opportunities- Wesfamers have been engaged in diversified business platform and have also expanded the business in international market. They have enhanced their services in different country due to the possibility of technological innovation. They have also initiated various customer loyalty programs that have enabled customers to sustain in an organisation for longer time (Pearlson, Saunders and Galletta, 2016) . There have been various innovative advancements with the assistance of which it can without much of a stretch improve its administrations, quality and experience benchmarks crosswise over stores (Ogiela, 2015). It can likewise take client and worker unwaveringness activities through which it will have the capacity to guarantee its prosperity for a more drawn out timeframe
Internal Analysis and Proposal
Threats- The biggest threat for the company is its competitors. The competitors of wesfarmers have also tried to capture market by coming up with new strategies so that they can increase their market share. The competitors have affected the sale of wesfarmers and have lowered the loyalty by the customers (Ogiela, 2015). More specialized products and services are being presented by the competitors at the equitable prices which lead to a great threat for Wesfarmers.
After undertaking the internal analysis it was found that success of an organization is dependent upon the tangible and Intangible Resources. Considering the case of wesfarmers, the tangible resources cover a good human staff of the organization (Willis, et. al, 2018). Wesfarmers have approx. 220,000 employees that work towards he same objective. The intangible resources are the ways through which brand image could be sustained. According to the research, it was found that wesfarmers have very strong tangible and intangible resources.
Discovering the capabilities
The main capability of the organization is to maintaining brand image, effective workforce and its supply chain. They focus mainly on building a strong workforce so that cultural conflicts are not faced by the organization. Wesfarmers staff supports the organization to meet their overall objective (DeLone and McLean, 2016). The workforce tries to maintain the internal operations of the organization along with the external operations.
The reputation of Wesfarmers has been maintained due to its Cole industry. Coles supermarket have diversified the products in general merchandise, groceries, fresh food, fuel, liquor and financial services through its online channels and national store network to more than 20 million customers every week (DeLone and McLean, 2016). Apart from that, Wesfarmers identified various challenges faced by an organisation that may impact the activities of environment (da Silva, 2012). The supply chain strategy is the greatest capability of Wesfarmers as it helped them to increase overall profit. The reason behind this effectiveness is adoption of advanced technological capabilities.
The supply chain strategy has played an important role in gaining the competitive advantage and capturing the customers (Peltier, 2016) . It helped Wesfarmers to manage their savings and design strategies so that overall profit could be improved.
- Branding and Market- The brand reputation has been enhanced by offering various products. The marketing strategy used by the company helps in increasing the overall sale (Peltier, 2016) .
- Innovation- Bringing up new strategies helps in gaining profit in the company. Some of the innovative steps need to be taken regularly so that impact on the organization could be reduced (Grimmer, 2017).
- Integration- It is the management among the employees that help in operating all the operations in an effective way. The staffs make sure that all the operations of Wes farmers are managed effectively (Grimmer, 2017).
After analysing the operations of Wesfarmers it was recommended that updated software’s should be used that can make all the operations automated. Thus, Wesfarmers use software’s that stores all the information about the customers like their name, addresses, contact number etc. in a single go. Thus, Wesfarmers can use this information to send special offers so that they can build trust among customers. Apart from that, all the information is secure and it makes sure that confidentiality and integrity of information is maintained (Biddle, 2016). Wesfarmers use various strategies so that threats of security breach could be resolved. Various prevention and detection methods are available so that security can be maintained and data could be secured by intrusions and vulnerabilities.
Apart from that, Wesfarmers can also use an information system that can manage internal working (Biddle, 2016). Wesfarmers have integrated various solutions in the working process so that operations are completed effectively. Making all the operations integrated will enhance the productivity.
Core Competency Analysis
The assessment of the proposed data framework arrangement gives that the prerequisites the business necessities of Wesfarmers can be enough and fittingly met after the selection of such framework arrangement. It is additionally prescribed to keep up the security benchmarks by giving prime significance to the security of client information. This is conceivable with the assistance of receiving productive data framework arrangement. This will additionally prompt improvement of the brand notoriety in the market. Additionally, the combination of the framework with that of various divisions will help in providing food the necessities of the business in a successful way.
Conclusion
From this report, it can be concluded that to offer competitive advantage to the business strategic information system plays an important role. In this report, the study is carried on the Australian organisation that is Wesfarmers. The internal as well as external analysis of the organisation is carried out so that working process could be improved. The general environmental analysis is carried out to so that better strategies could be designed to improve the overall internal operations. The major competitors of Wesfarmers are Aldi and Woolworth. These competitors are major threat for the organisation as they come up with new innovative strategies. The internal analysis of Wesfarmers delivers tangible and intangible resources that have helped in contributing towards its strong position in the market. The detail study about the company helped in understanding certain factors that could help in betterment. Some of the factors are supply chain; brand reputation and effective workforce comprise the capabilities of Wesfarmers. At the end of this report, an information system solution is projected for Wesfarmers that will support the organization to maintain its security and improve all the internal operations.
References
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Grimmer, L., 2017. Is it so hard to say sorry? Revisiting image restoration theory in the context of Australian supermarkets. Asia Pacific Public Relations Journal, 18, pp.17-32.
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Wu, S.P.J., Straub, D.W. and Liang, T.P., 2015. How information technology governance mechanisms and strategic alignment influence organizational performance: Insights from a matched survey of business and IT managers. Mis Quarterly, 39(2), pp.497-518.
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