Strategic Planning For Wesfarmers: Issues, Mission And Vision

Mission and Vision Statement of Wesfarmers

Discuss about the Irresponsible Engagement and Citizen Investor.

Strategic planning is one of the essential and integral parts of conducting business operation that refers to the development and execution of the strategies in order to hold the company’s growth and let it have sustainability in future (Grant 2016). This report is made based on the Wesfarmers, which is one of the largest multi service provider firms in Australia. However, it can be seen that the firm has extended its operation beyond the geographical boundary. Selected firm has been introduced back in 1914 with the service in agricultural merchandise; however, over the time it has transformed itself to become where it is now (Campbell 2017). During 2007, the firm has introduced its retail business and other operations allowing it to grow bigger in future days (Thompson 2014). Over the time it has further subdivided its business and let it grow further to become one of the largest retailers in the world. Owing to the rise in magnitudes of operation and exposure to the international market, there are various operational issues with the business process of the firm (Kilroy and Schneider 2017). This report is aimed to discuss those issues and provide strategic planning for future while analysing the external and internal factor as well as the environmental factors at the present situation. When it comes to choosing proper strategies and plan for the growth of business operation while keeping up with the Corporate Social Responsibility, then it is essential to acknowledge the mission and vision statement at the beginning level and moving forward it is essential to provide key strategic issues (Wang 2017). In this same fashion, the report will highlight the mission and vision statement of the Wesfarmers along with highlighting the key issues of the firm. To conclude the report will provide action plan for next one year and it will portray the summarised overview regarding strategic planning of the chosen firm.

Wesfarmers is one of the largest conglomerate, which has it’s headquarter in Perth and it predominantly present in the countries like New Zealand and Australia (Hubard et al. 2014). The brand has well reputation in the operating countries due to their aim to always perform their business with the satisfactory level of return to the shareholders and providing higher amount of consumer preference. In addition to this, the firm always try to enhance their ethical practice in order to provide their best service to their esteemed customers. When it comes to the mission statement of the firm, then it aims to maintain highest ethical standards in the industry that makes it one of the best multinational brands. According to the McKenzie (2014), the firm’s objective is to develop such a unique, highly focused and disciplined working culture in its organisational framework. Moreover, the firm not only aimed to achieve high ethical standard among its shareholder, additionally it always tries to maintain value of the employees, customers, suppliers and communities where it operates. In addition to this, the firm takes responsibilities of environmental and social development where it operates in order to create strong bonding with the different communities and government of its (Stanton 2016) operating zone. The brand always aims to achieve total economic development of its operating zone through participating in various socio economic programs. When it comes to its origin, then the Wesfarmers showcase deep concern about the Australia and New Zealand (Islam et al. 2016). The company’s mission for its origin is to bring in platform of equal opportunity to the people who works with the firm and attached with the organisation through business management or by the workplace of the organization through management process.

Key Issues Faced by Wesfarmers

Wesfarmers is one of the largest conglomerates that operate in various countries around the world. The vast expanse of business along with the magnitude of business, the firm has specific set of complexities. In addition to this, growing financialization of the business operation in present days has made it hard for the organisations to fulfil its entire objective (Bayne et al. 2017). According to the firm’s annual report below are the objective of the firm is as follows:

• Vast experience in the business has enabled the firm to understand the importance of the one customer satisfaction as the key element of business success. Thus the primary objective of the firm is to provide best in class customer service to their esteemed customers.
• Next to this, the firm tries to maintain the CSR strategies at highest level, thus its secondary objective is to perform is to standardise its ethical practice that will allow the firm to keep ahead of its rivals (Date 2015).
• Next to keeping the highest CSR practice, it has been showcased that employee wellbeing along with the wellbeing of the environmental, customer and society are another objective of the firm.

In order to full fill the desired objectives of the firm it has showcased wide range of strategies in its financial reports. It has been argued by the firm that the firm has developed stable and sustainable HRM strategy for its objective implementation (Collings et al.2017). In addition to this he firm has provided focus on stakeholder wellbeing that will allow strong relationship between the firm and the stakeholder. In addition to this, it has been argued that firm implements various strategic implementations to keep it aligned with the CSR practice (Akbar and Ahsan 2014). Besides this, it perform various environmental perform in order to minimize the carbon emission along with the waste management program. Besides this, the firm’s objective is to ensure minimum energy waste to reduce its effective carbon footprint.

Identifying the external factors that can affect the performance of the firm is highly essential. One of the largest benefits of external environmental analysis is that it will guide the firm to understand and evaluate the growth opportunities, competition intensity as well as strength and weakness of the rival firms (Rothaermel 2016). In this section, the report will highlight external factors impacting on the firm, including customers, suppliers, governments, competitors and the other stake holders.

From its different outlets Wesfarmers handles 19 million client exchanges in a week (Beech and Maclntosh 2017). Coles argue that its client centric methodology keeps on enhancing in effectiveness and profitability, while putting resources into bring down costs, conveying better quality through its ‘Australian First’ sourcing approach and building up a more grounded store base through new store openings and re-establishing existing stores added to it steady income development as the money related pointers have appeared.

There are more than 2, 00,000 suppliers for the Wesfarmers and one of the key issues that the firm faces is performance gap in the supplier (Rae et al. 2015). It is hard for the mangers to keep account of all the suppliers, owing to the large number of service provider is attached with the firm. Thus, supplier performance measurement is absent and it leads to gap in supplier performance.

Government: it is important for a firm to maintain strong relationship with the government in order to have good amount of growth. Considering the case of Wesfarmers, it can be seen that the firm always tries to keep close contact with the government through various channels in order to keep it growing (Tamm et al. 2014). Besides this, maintaining government regulations in the place of operation is another factor that makes the Wesfarmers unique among all the brands in the organisation.

External Environmental Analysis

Though it has been seen that Wesfarmers is a large organisation, yet there is threat from the competitors. compared to the Wesfarmers, their competitor is no lose, owing to their magnitude of business, large number of customers and lower input cost. Rival organisations like MetaCash, Woolworths, and Myer are able enough to pose threats to the sustainability of the firm.

Moving forward, the report will perform Porter’s Five Force analysis in order to assess the external factor that can affect the firm’s performance.

In order to adopt an effective strategy that can enhance the competitiveness of the Wesfarmers, Five Forces of Wesfarmers is required. Below is the detailed analysis of the Porter’s Five Forces.

It can be seen that the market segment, where the Wesfarmers is present is highly congested due to presence of large number of firm and all of them have well established market popularity that is hard for the new brands to penetrate. Thus threat from the new entrants is low (Barua and Parveen 2014).

Wesfarmers has large number of market share and it enables the firm to have some amount of power to bargain. However, presence of the close substitute power from the rival firms makes it hard for the firm to charge monopoly price; thus the firm has medium amount of supplier power.

Large number of buyer is resent in the market and the market is oligopolistic in nature. Thus the buyers’ power is low.

The market structure is oligopolistic in nature where many firms operate making it hard for the Wesfarmers to capture most of the market share. In addition to this, presence of the close substitute products, make it hard for the firm to avail monopoly pricing. Thus, it can be stated that the firm has medium amount of rivalry.

Presence of the close substitute products, make it hard for the firm to avail monopoly pricing. In addition to this being the close substitute, it is easy for the buyers to shift from Wesfarmers to other brand leading to high threat from the substitute (Beech and Maclntosh 2016).

Analysis of the internal factor cannot be overemphasized because it helps the organisation to analytically evaluate and comprehend the strategies necessary for the growth and survival of the organization. This environmental force aids the firm to assess the factors that affect the business performance (Sullivan and Gouldson 2017). In this section the report will identify and portray the internal factors of the Wesfarmers with special focus on the impact of the identified factors on customers, competitors, suppliers, governments and stakeholders. For the internal analysis it will portray the SWOT analysis and next to this it will utilise the Porter’s value chain model to assess the threats and opportunities of the firm.

Table 1: SWOT analysis of the Wesfarmers

Source: (Created by the Author)

Stakeholder analysis is essential for the large firms like Wesfarmers in order to analyse the strength, weakness and opportunity of the stakeholders. Selected organisation has large number of stakeholders who are consumers, government, shareholders, employees and media. The stake holders can be considered as the main asset of the organisation, thus understanding their mechanics is highly essential for the sustainable growth of the organisation (Rowe et al. 2014). From the stakeholder analysis it can be found that the organisation is not only focused to provide bet in class service to their customer, in addition they care about the stakeholders too. For instance, there is employee benefit in the form of incentives and the firm tries to maintain their responsibility towards the stakeholder. Recently it has been seen that the organisation has invested large amount of money in its online channels to lure the investors to invest into their ventures. Besides this, the brand recruits both the skilled and unskilled workers to enhance their total labour force (O’Byrne and Daymon 2014). Better employee bonding is one of the reasons for the success of the economies and thus it would be ideal for the firms to let their employee have close relation with each other. Thus Wesfarmers provides on job training to the fresher to provide them exposure to the real world of the hardcore business (Diviv group 2018). Additionally there is employee engagement policy that provide cultural and gender diversity in its workforce in order to let the workers have better bonding with each other.

Customer Analysis

            Considering the Wesfarmers business operation it can be stated that the firm believes in the value differentiation advantage that comes from the producing superior quality product and by satisfying the customer demands, that results in higher structure of cost (Gattorna 2015). The firm has plethora of goods and services to provide to their customers and it adds to the company value. In addition to this it can be said that the firm not only become famous for its production moreover for its successful marketing activity (Nurhayati et al. 2016). Now when it comes to the differentiation strategy, then it can be stated that the firm can perform the following thing:

• Adding more products to its inventory
• Enhancing customer service
• Increasing customization option to the customers
• offer complementary products to the customers for balanced goods basket

Now, according to the value chain model, it can be seen that the firm can become highly successful in its venture through the sustainable product differentiation (Heino 2017). Compared to its competitor’s comparative advantage is the key to the success of the brand. Besides this, it has also been found that the firm is trying to pushing bet combination of the product basket in order to have sustainable differentiation advantage.

From the above internal analysis it can be found that the firm has strong capabilities to grow in future and the resources frontier is good enough that will aid the firm to have sustainable future growth. The firm tries to keep itself aligned with the CSR practice that has aided it to become where it is now (Qian et al. 2018). However, it can also been seen that the firm has failed to provide any product differentiation to the consumer compared to its rivals. Most of the products that are being sold by the Wesfarmers is close substitute of the competitor’s product, thus the customers can easily shift from Wesfarmers to its rival brand in case of any contradictory situation.

The firm aims to provide bet in class service to their customer with high quality product. In addition to this the firm wants to achieve sustainability through the good customer service. In order to fulfil these aims, it would be better to use the BCG matrix that will guide to construct suitable strategies for the firm:

The firm has high potential with the foreign market with their service, yet they are performing business only in the Australia and New Zealand (Perrone and Wodonga 2015). Thus the firm need to expand for its growth

• High number of stakeholder is the stars for the Wesfarmers
• Good customer service and outstanding product quality acts as the star for the firm.

Key strategic issues that are being faced by the Wesfarmers are as follows:

• Lack of supplier performance measurement that leads to performance gap among the suppliers
• the firm provides much amount of focus on the branding and the advertising that leads to high operational cost (Hubbard et al. 2014)
• Wesfarmers seriously lacks product differentiation

In order to gauge these issues it can be said that the firm can take supplier performance appraisal and KPI program to trace and the defaulters and push them hard for the good performance (Kilroy and Schneider 2017). Net to this, it would be good for the firm to move from the differentiating advantage to the cost advantage so that it can provide boom to its revenue, while maintain the CSR program. Product differentiation is required at urgent basis in order to let the firm face low threat from the substitute products

Supplier Analysis

Conclusion:

In conclusion it can be stated that the firm has no real threat or key issues from external factors; however there is threat from the internal factors. With continuous market dominance in the present markets, the firm fails to lure any new customer base in the Australia and New Zealand; thus it has been found that the firm need to expand its business to the foreign nations too. One of the key instruments for better growth of the firm is moving toward cost advantage rather than opting the product differentiation advantage. In addition to this the report suggests that it would be ultimate requirement for the firm to introduce cost advantage mechanism in new operating zones while keeping up with the social and corporate sustainability. Besides this for the next ten years the firm need the vanguard of innovation by taking advantage of further store renewal opportunities, supply chain transformation and a strategic approach to improved operational efficiencies and continued fund reinvestment in price. In addition to this it would be ideal for the firm to introduce good HRM strategy as well as CSR strategy for the firm that will aid the firm to have better future prospect. The company also needs to focus in the area of motivational factors and leadership style for the employees.

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