History of Westralian Farmers Co-operative Limited
Westerner is considered as one of the largest tax paying organization of Australia, and it has contributed a lot to the present economic activities of Australia. This organization was named as Westralian Farmers Co-operative Limited in 1914 (wesfarmers.com.au, 2018). The organization was formed as a co-operative society and it was dealing in cash crops produced by the farmers (Walker et al. 2014). Very soon after the inception, the organization started expanding its business, and it established a public radio station in 1924. Later, this organization purchased a transport company, named as Ashburton transport ltd. this organization included cash crop supply, and mail van business in its business procedure. Later it started expanding its business, and started dealing in coal, oil, and various other natural resources. After 2000, this organization expanded its business more, and it included business supplies, convenient store, departmental store, industrial chemical in its business arsenal. Now, this has become one of the largest private organization in Australia and a major contributor in the Australian economy.
Initially westerner was only a co-operative society, and it was dealing in various types of cash crops. Since its inception, the organization was collecting the crops from the farmers, and they were selling it to a specific market. Soon, the management team decided to establish a public radio house in 1924, which helped the organization to reach out to the common people. Later, this organization bought the Ashburton transport company in order to reduce the cost of the transport and expand its present business operation.
After 1995, this organization decided to deal in natural resources and started coal mining projects. In order to expand the business, this organization started its convenience store chain and office supply chain also this organization expanded its business by producing industrial chemicals, and fertilizers (Walker et al. 2014.).
This organization eels in various industries and the business operations of this organization are versatile in nature. Production of fertilizers, industrial chemicals, an office supplies makes this organization a part of the manufacturing industry. The mining projects, coal supplies, and oil refinery makes it a part of the mining industry. Also, this organization deals in cash crops which makes it a part of the agriculture industry. The organization also runs a chain of convenience store, and departmental store which is under the FMCG market. So, it is quite clear that this organization operates in different types of industry which also makes it unique in nature.
Business Operations of Westralian Farmers Co-operative Limited
The environment of the market has a great impact on the business operations of every organization. Here the PESTEL analysis format has been chosen in order to analyse the impact of the external factors. PESTEL stands for political, social, environmental or the geographical, economic, and legal factors. These factors play a huge role in the entire business procedure of an organization, and it can affect the objectives of the organization significantly (Galliers, and Leidner, 2014).
Since the inception of the organization, the political scenario of Australia was not stable in nature. Though, the legislation of Australia was always business friendly. That is why; the growth of this organization at its initial stage was stagnant. Though, with the changing time the political scenario of Australia changed a lot. The political scenario became more business friendly, and the legislation created an open and competitive marketplace for the organizations (Zahra and Chaples, 2013). It attracted multiple foreign investors, and the market place became equally available for all. Though, the strict labour law, and the increasing wages of the labours have affected the human resource based organization (Galliers, and Leidner, 2014).
The regional environment or the geography plays a crucial role in every organization, and these factors have a huge impact on the objectives of the organization. Depending upon the geographical factors, this organization took various important business decisions. Like, what kind of crops they will be dealing in, and the mining projects. Australia is full of natural resources, and that is why, this organization opted for mining projects and industrial chemical manufacturing.
In the 19th century, the economy of Australia was not flexible enough and that is quite prominent on the growth and development of this organization. But, with the changing time the economy of Australia has changed a lot, and according t that the tax structure for the organization has also changed. This has opened up new opportunities for the organization, and the private organizations has received multiple benefits room the government subsidies (Galliers, and Leidner, 2014).
The Australia legislation is known as the most business friendly legislation. Here setting up a new business is easer compared to other developed countries, and the import and export duties are also business friendly. The exclusive ties with the other countries have helped organizations like Wesfarmers to import and export their products to the different parts of the world (Galliers, and Leidner, 2014).
In order to analyse the industry environment the P5 analysis technique has been adopted. Porter’s five forces deal with various influencing factors. Porters five forces deal with the factors like power of the supplier, power of the buyer, potential threat from the substitute, and the threat from the competitors.
Analysis of External Factors using PESTEL Analysis
The power of the buyer and the economy of the country go hand in hand. If the purchasing power of the consumer is too low, then it is very default for any organization to grow. The organization realised the power of the buyer from the initial days, and that is why it game priority to the pricing of the products.
The power of supplier of any organization is inevitable, and this is also prominent in the business procedures of this organization as well. This organization is heavily dependent of the suppliers to get the raw materials and that is why the risk of the scarcity of the resources remains high for this organization.
This organization is constantly facing the threat of being replaced by the substitutes. All the products of this organization is easy available, and there are multiple competitors who are dealing with the similar kind of products. This organization is dealing with this problem by keeping the cost of the products low, and heavy advertising campaigns.
The Australian market place is an open market place, and the competitors get equal opportunity. This has made the risk of being replaced by the competitors high. That is why; this organization has to rely on the advertising campaign to survive on the market.
The market place of Australia is very competitive because of the government rules and regulation. Especially the strict labour laws have made it very difficult for the organization to make profit. This organization need to consider the demands of the labour union in order to survive in the market. Also the pricing of the product plays a huge role in the success of this organization, and that has created multiple complications for this organization (Godet, 2010).
Like any other organization, this organization is also facing multiple threats. The increasing price of the raw materials and the scarcity of the resources are the biggest threats for this organization. The labour rules and regulations also play the role of potential threat for this organization.
Though, the easy availability of the automated technology and the advancement in this sector has reduced the requirement of the labours. And these organizations are constantly upgrading their technologies to make their production process more efficient in order to save the resources (Biddle, 2016).
This organization is heavily reliable on the availability of the resources. The mining projects are reliable on the availability of the human resources, and machinery. Cohen and Lee (2014) suggested that the retail management chains age dependent on the human resources and the supplies from the suppliers. The industrial chemical production part is also dependent on the availability of the raw materials and human resources.
Competitive Landscape Analysis using Porter’s Five Forces
This organization deals in various types of products and services in order to achieve its objectives. The main objective of this organization is to fill in the gap between necessity and luxury. That is why this organization has made the luxury products easy available for the masses (Meade and Sarkis, 2011). The entire business procedure of this organization can also be redefined as processing. It collects the raw materials from the suppliers, and after processing the material it makes fines quality consumable goods for the consumers.
This organization doesn’t entertain any middle man. It collects the raw materials just after their collection and it directly send those raw materials to its processing hubs. There, it rectifies the raw materials and supplies the processed goods directly to the consumers through ties retails chain. By eliminating any middle man, this organization has kept its profit margins high.
By looking at the increasing cost of the labour, this organization need high quality POS system, and automated machinery linked to the POS. According to Chiang et al. (2013) the information system should be capable of tracking the efficiency of the machinery, and to track the use of the raw materials. As this organization directly deals in various types of raw materials, that is why the information system should be able to track the usage of the raw materials and the finally produced goods in order to track the efficiency of the machinery. This will also reduce the dependency of the organization on its unskilled human resources.
This organization also deals in mining projects, and in order to keep a track on the projects this organization also needs good accounting software. This will help the organization to manage the resources efficiently and effectively.
In order to get the accounting job done, this organization should use the advanced accounting software from MYOB. This will reduce the cost of accounting by adding efficiency and eliminating any scope for mistake. Introducing POS in the retail chain will also help the organization to manage its retail chains. The advanced POS will enable the organization to order the right quantity of the product, and this will reduce the wastage of the FMCG goods, which has a limited shelf life.
Conclusion:
It can be concluded that initially this organization was heavily dependent on the human resources, but a change in the business procedure can be witnessed where this organization has adopted a less human resource based structure and majority of these tasks are done by using automated technology
References:
Biddle, I., 2016. The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle. Busidate, 41(2), pp.04-11.
Campbell, J., 2017. Insights from the company monitor: Wesfarmers. Equity, 31(8), p.16.
Chiang, W.Y.K., Chhajed, D. and Hess, J.D., 2013. Direct marketing, indirect profits: A strategic analysis of dual-channel supply-chain design. Management science, 49(1), pp.1-20.
Cohen, M.A. and Lee, H.L.,2014. Strategic analysis of integrated production-distribution systems: Models and methods. Operations research, 36(2), pp.216-228.
Galliers, R.D. and Leidner, D.E., 2014. Strategic information management: challenges and strategies in managing information systems. Abingdon: Routledge.
Godet, M., 2010. The art of scenarios and strategic planning: tools and pitfalls. Technological forecasting and social change, 65(1), pp.3-22.
Hunt, S. and Eburn, M., 2018. How Can Business Share Responsibility for Disaster Resilience?. Australian Journal of Public Administration, 77(3), pp.482-491.
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Meade, L. and Sarkis, J.,2011. Strategic analysis of logistics and supply chain management systems using the analytical network process1. Transportation Research Part E: Logistics and Transportation Review, 34(3), pp.201-215.
Valacich, J. and Schneider, C., 2015. Information Systems Today: Managing in a Digital World Plus MyMISLab with Pearson eText–Access Card Package. New Jersey: Prentice Hall Press.
Walker, R.V., Beck, M.B., Hall, J.W., Dawson, R.J. and Heidrich, O., 2014. The energy-water-food nexus: Strategic analysis of technologies for transforming the urban metabolism. Journal of environmental management, 141(2), pp.104-115.
wesfarmers.com.au, (2018). DELIVERING VALUE TODAY & TOMORROW, Available at: https://www.wesfarmers.com.au/
Zahra, S.A. and Chaples, S.S., 2013. Blind spots in competitive analysis. Academy of Management Perspectives, 7(2), pp.7-28.
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