External Analysis
Strategic information system for business and enterprise are developed so that quick response is taken. It is a feature that helps in managing all the process and then recognizing the opportunities so that improvement could be done. It can be seen as an analytical tool for an organisation that allows them to improve all the operational efficiency. Strategic information system helps in implementing all the business strategies so that maximum profitability can be made. It is an integrated part of an organisation that helps in making corporate decision. In this report, the internal analysis as well as external analysis is carried out that helps in understanding all the business operations in detail. It is true, that every business performs set of rules to perform certain activities so that objective could be achieved. To execute all the business operations, every organisation requires some strategic information system (Willis, et. al, 2018). It supports organisation to gain competitive advantage by using strategic information system as it moulds all the operations and functionalities so that good brand image is achieved in the target market. In this report, the entire focus is on the functionalities of Wesfarmers in relation with usage of strategic information system. The internal and external analysis that is followed helps in achieving the objective. Wesfarmers is one of the leading organisations in Australia. It has expanded its services in all the sectors Along with this, strategic information system helps in capturing the target market so that production cost could be lowered down, this will help in enhancing the productivity as well as demand and sales in the marketplace.
The organisation that is selected in this report is Wesfarmers; it is one of the largest Australian companies. Wesfarmers have diversified their services in every field from retail stores to selling their products in a wholesale market. They sell chemical products, coal mining products, daily products to safety and industrial products. It has around 220,000 staffs with more than 550,000 shareholders. The company was initially offered services to Australian farmers in 1941 (Willis, et. al, 2018). Later, the services got expanded in every sector and now it is listed as one of the Australian stock exchange. Wesfarmesr was started o the demand of rural workers to support the community of farmers. In 1914 it got registered in Westralian farmers limited and started trading with the intention to grow and take co-operative actions for farmers. Later, in year 2017 it was found as one of the target company in Australia than proved to generate majority of income from the grocery and supermarket store. In 2017 the company generated total revenue of $68,732,000,000 including sales and other revenue (Pulker, Trapp, Scott and Pollard, 2018). In 2017 Wesfarmers Limited had approximately 223000 employees that cover employees from all subsidiaries under the company’s control. It owns a diversified portfolio in the supermarket including the hardware, processing and energy distribution, coal mining, chemicals and fertilisers. The retail division is divided into the Coles, Kmart and other target companies. It holds its resources in various country which produces steaming coal for domestic and export market.
General Environment Analysis
Wesfarmers operates in many sectors and the industry can be said as a retail sector. Wesfarmers is one of the largest retail industries in Australia as it covers both trading and non-trading service. This industry has high profit as it contributes in economic growth of an organisation. It is a retail industry that has higher demand as compared to other industries. Thus the reason behind the expansion of Wesfarmers is the industry. It helps in linking strategic system with business strategies so that business can gain new capabilities so that it can gain competitive advantage (Pulker, Trapp, Scott and Pollard, 2018).
The environmental analysis is carried out by considering economic, physical, sociocultural, global, technological, political/legal and demographic factors of the company. Discussing all the factors and its effects:
- Economic- The service and offers offered by Wesfarmers affects the sale of other companies like Kmart, Coles and target. The economic condition of the country was improved due to the sale and demand of Wesfarmers (Lim, Blyth, Fathima, de Klerk and Moore, 2017). The profit margins gained by the company affects the overall success.
- Physical- The physical factors covers the variation in business practices and consumer behaviour (Ogiela, 2015). Wesfarmers have worked on such barriers so that better service can be offered to the customers.
- Socio-cultural- With changing time the standard of living and demands of Australian people have changed (Lim, Blyth, Fathima, de Klerk and Moore, 2017). Thus, with the change in demand the services have also been changed so that customer satisfaction is maintained (Janssens and Kaptein, 2016). Wesfarmers have started servicing healthy and low fat products due to the increasing health concerns.
- Global- The organisation have diversified their service in the global market as it is expanded over multiple places like china, India, Singapore, Hong Kong, New Zealand and many others (Janssens and Kaptein, 2016). Expanding the services in global market helped to gain brand image.
- Technological- Wesfarmers have beaten all its incubators as they have adopted new technology in its processes (Ogiela, 2015). The adaption of new technology helped the company to compete with its competitors. The business got expanded as it offered online shopping experience to customers that added flexibility.
- Political/Legal-The legal and political factors affected Australian market was opening up of new supermarkets and retail stores in the country. The sale of Wesfarmers affected the profit margins of other countries (Moore, Guiver, Woollacott, de Klerk and Gidding, 2016). This issue was overcome by initiating various services like restricting trading hours or measuring the captured market.
- Demographic- It covers the group of people that are living in Australia that affects the demand of products and services (Jie and Gengatharen, 2018). The immigration rate is quiet high in Australia that increases the overall profit margins.
Wesfarmers is a retail industry and it faces issue due to bargaining power. The bargaining power affects the profit margins of an organisation. The barging power of supplier and buyer is discussed.
- Bargaining Power of Buyers- The Company suffers from bargaining crises as buyers have the habit of bargaining to a particular extent. The bargaining margin is quiet high as customers tries to bargain to a maximum extension. Additionally, it is important as other competitors in the market are selling same product but with lower price may attract more customers (Fathima, Blyth, Lehmann, Lim, Abdalla, de Klerk and Moore, 2017). Thus, barging power of buyers depends upon the price of product offered by other company.
- Bargaining Power of the Suppliers-To enhance the profit margin barging power of the supplier should be high (Fathima, Blyth, Lehmann, Lim, Abdalla, de Klerk and Moore, 2017). The bargaining power of supplier helps in maintaining better relations with the customers and promises to offer better products to customers at a nominal price (Connell, 2016).
- New competitors in the market- Competitors are always a threat to an organisation as they come up with new ideas and products to attract customers. In case of Wesfarmers, it is tough task for any other competitors to overtake the services as they offer services in diversified sector (Connell, 2016). Due to this reason it becomes difficult for an organisation to enter in the system.
- Rivalry among existing firm-The existing firms also offer tough competition like wools worth is one of the biggest competitors for Wes farmers. It is offering similar services but at a lower price. Competitors are one of the reasons that decline the sale of other company.
- Difficulties faced due to substitutes- The substitute of retail industry is online store that offer all the services at a single click (Regan, Moore, de Klerk, Omer, Shellam, Mak and Effler, 2016). The demand of such substitutes is increasing as it adds up flexibility in shopping and causes ease in availability of products.
There are many competitors of Wesfarmers in Australia; some of the competitors are aldo and Woolworths. The market is captured by Wesfarmers and one of the reasons is its Cole markets. The earning of Cole supermarkets is because Wesfarmers is adopting new services. Aldo uses agile logics in order to complete the operations in an effective way. Woolworths offer high discount which is one of the reason of capturing customers. The rivalry firs also follow strategies to attract more customers by offering them discounts and special offer. The threats that are faced by Wesfarmers is capturing the entire market.
The company faces various challenges along with opportunities. Some of the opportunities and threats of Wesfarmers is listed below:
- Opportunity- Wesfarmers have expanded their business in global market by offering the services in international sector. The services got expanded in different countries due to the adaption of high technology so that innovation can be made. Apart from that, various customer loyalty programs were enabled so that customers can be retained in an organisation(Kilroy and Schneider, 2017) . Apart from that, to improve the quality benchmarks are defined so that all the inefficient activities could be redefined so that quality could be improved. The timeframe constraint is considered so that better customer satisfaction could be offered.
- Threats- The biggest threat faced by Wesfarmers is the competitors in the market. The market share of an organisation is affected by the entry of some other organisation (Kilroy and Schneider, 2017). Other competitors offer similar service to the customers but with lower price. It affects the sale of an organisation, like the sale of Wesfarmers is affected by Woolworth, aldo and many other competitors. The threat of Wesfarmers is affected by the equitable price of other companies.
The internal analysis of an organisation is identified by checking upon the resources either tangible or intangible. In the case of Wesfarmers, the tangible resources are the human staffs that are involved in an organisation. Wesfarmers have more than 220,000 staff that works with the same mission to fulfil the demand of customers and serve them with best options (Waterlander, Luiten, Eyles and Steenhuis, 2016). Apart from that, the intangible resources are used to enhance the brand image. From all eh research it was found that success of Wesfarmers were due to the presence of tangible and intangible resources.
The main capabilities behind the success of Wesfarmers are effective workforce, supply chain management and brand image. They basically design policies to ensure that cultural conflicts are eliminated and every employee is given equal importance so that overall objectives are met (Seppanen, Tan, Corscadden, Currie, Richmond, Thornton and Kirkham, 2018). The capability is to maintain internal as well as external operations of an organisation. The major capability of Wesfarmers is to identify the improvement that could be made in the industry. The workforce culture of Wesfarmers is diversified as in groceries, fresh food, fuel, coal, liquor and financial services. They have started to serve their services in global market also through online channels this helped to capture more customers (Rowe, Nowak, Quaddus and Naude, 2014). Additionally, Wesfarmers have identified various challenges that have impacted overall profit of an organisation. The reason for this success is adoption of new technological capabilities.
Industry Environment
The audience can be captured from the market and competitive advantage could be gained by making use of supply chain strategy (Seppanen, Tan, Corscadden, Currie, Richmond, Thornton and Kirkham, 2018). The overall profit of Wesfarmers was made possible by designing new strategies so that customers can be captured from the market.
Branding and market- It is very important to capture customers so that brand image could be captured. Thus, new marketing strategies are developed so that overall sale can be increased. Branding of an organisation helps in creating a positive image so that customers get attracted towards it (Rowe, Nowak, Quaddus and Naude, 2014).
Integration- Integration is one of the important factors that assure that all the process of an organisation are completed effectively. Wesfarmers assure that products and services are assured in an effective manner.
Innovation- It can be other reason that helps an organisation to gain profit and brand image. Innovation make the organisation stand out from the competitors, for this market is analysed on regular basis (Rowe, Nowak, Quaddus and Naude, 2014).
For Wesfarmers, it has operations in every sector thus software’s should be used so that operations are completed automatically (Zentes, Morschett and Schramm-Klein, 2017). All the information of the customers needs to be stored at a secured place as confidentiality is one of the major concerns that can be considered is security (Sedera, Gronau and Sumner, 2015). In the proposal it was mentioned that Wesfarmers uses strategies to capture customers by offering them offers. The quality of products is one of the priorities as it helps in building customers trust. Additionally, it was proposed that integrity, confidentiality and availability of information should be considered so that security is maintained. Thus, proper access control list and firewalls need to be used so that no security breach occurs (Biddle, 2016). To overcome all these issues, solution were propose like intrusion detection system should be used so that vulnerabilities could be resolved. An information system is used to manage all the internal operation so that they are completed effectively (Trevena, Neal, Dunford, Haskelberg and Wu, 2017).
The proposed solution can be evaluated on the basis of security as in the proposal it is mentioned that access control list could be defined. It is a difficult task to maintain security of large amount of information. Thus, it is found that security was a benchmark for an organisation success thus all the client information was kept confidential. All the operations need to access so that quality of product is maintained and also promotes that brand image is maintained (Trevena, Neal, Dunford, Haskelberg and Wu, 2017). The combination of framework helps in providing a successful way to business.
Conclusion
It can be concluded from this report; information system plays an important role in enhancing competitive advantage of an organisation. In this report, Wesfarmers that is an Australian organisation the analysis is done considering this case. The internal as well as external operations of an organisation are considered and processes are designed so that processes could be improved. The environmental analysis is also carried out so that internal and external operations could be improved. The competitor analysis is carried out of Wesfarmers and it is compared with Woolworth as it is one of the competitors. A proposal is prepared at the end of the report that covers a solution to improve all the business processes and 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. The external and internal analysis of Wesfarmers is done so that competitive environment could be checked. The industrial background along with its opportunity and threats are considered. The internal analysis and the proposal are made after analysing all the capabilities.
Competitive Environment
References
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