Organizational Structure and Business Practices
Discuss about the Knowledge Management Capacity and Organizational Process.
Bunnings Warehouse is one of the largest household hardware chains in Australia, catering to the household needs to millions of customers. They are the leading retailer of home improvements and outdoor household products. The home services provided by the company include innovative kitchen designs, customised bench tops and customised splashbacks. They also assist the customers with colour consultancy, installation of customised air conditions, along with hot water installations. The company also assists in door installation and BBQ assembling (Bunnings, 2017). This assignment highlights the emergence of the organization along with highlighting the impact of the environmental forces on the organization. The risks that might be faced by the organization have been mentioned along with the business practices of the organization. The various functions of the business organization have been included, along with identification of the business model of Bunnings.
The organizational structures that are commonly used in business include the sole trader, the company, partnership business as well as trust. The chosen company Bunnings Warehouse is a private trading group operating is Australia and New Zealand. The company was initially founded in partnership of two brothers (Bunnings, 2017). Gradually the company grew as a private trading group. The key partners of the company include the business partners and the shareholders of the company. The key activities include customised bench tops, innovative kitchen designs, and customised splashbacks for the customers (Akbar & Ahsan, 2014).). They also assist in customised AC installation, hot water installations, door installations, fancy garden door installations. The key activities also include colour consultation and BBQ assembly (Bunnings, 2017). The value propositions include the customer satisfaction and the goodwill that is achieved from the customers. Moreover, the innovation as well as customization of the designs as per the requirements of the customers is also a part of the value proposition. Customer relationship is positive and the type of services provided by the company Bunnings satisfies customers. The dedication and personal assistance adds to the customer relationships. The suppliers of Bunnings include the top and most specialized suppliers of Australia and New Zealand. Since Bunning work in a wide variety of sectors, hence the suppliers also range in a wide variety (Tabrizi et al., 2014).
Any business organization is strongly affected by the environmental forces. Environmetal forces might be external as well as internal. The PESTLE analysis and Porter’s five forces determine the external environment. The internal environmental analysis is carried out using SWOT and McKinsey 7S framework. In case of Bunnings, the various environmental forces that have a significant impact on the company is given as follows:
|
Factors |
Impact |
|
Political factors |
The business of Bunnings is affected by the political instability in Australia along with changes in the regulations of the government. |
|
Economic factors |
The recession and inflation in the market and economic instability affects the business of Bunnings negatively (Bunnings, 2017). Since during economic instability the customers tend to avoid purchasing, hence this factor plays an essential role in determining the condition of the business. |
|
Social Factors |
The social factors such as the change in lifestyle of the customers, introduction of new competitors, Cost based competition plays an essential role in enhancing the business of Bunnings. The changes in lifestyle of the people might need installation of new air conditions and customised kitchen set up would incorporate a boost to the business of Bunnings. |
|
Technological factors |
With technical advancements, it is important that Bunnings upgrade their technology and incorporate innovations in their design and way of installation of their products (Lin, 2014). Lack of innovation would result in Bunnings losing the competitive market. |
|
Legal factors |
The legal factors include licensing framework and abidance to the trading laws of the country. |
|
Environmental factors |
With increase in the environmental awareness and green planet projects, Bunning need to ensure that it reduces the pollution that is caused by its wastes and chemicals used. |
Environmental Factors and Impact on Bunnings
The external environmental impact is also determined by the Porter’s Five force model. The five forces are as follows:
Supplier’s power: The service provided by Bunnings has a wide range. Hence, the range of suppliers is also wide. The supplier’s power in case of Bunnings is quite strong, since the best suppliers of all the raw materials of Australia, New Zealand and International clients. Hence, Bunnings is dependent on the power of the suppliers.
Threat of new Entrants: The business of Bunnings is not affected by the threat of new entrants. This is because Bunnings is a leader in the Australian market. Hence, it does not feel the threat of the new entrants (Biddle, 2016).
Threats of the substitutes: The threat of the substitutes affects the business of Bunnings since the customers might prefer the other company working as a substitute (Bunnings, 2017).
Buyer’s power: Bunnings have a strong buyer’s power and the buyers ranges from households to large companies and shops.
Competitor rivalry: The rivalry with other companies and healthy competition would motivate the staffs of Bunnings to incorporate innovation in their products and services.
The internal environmental impacts are determined as follows:
|
Strengths · Wide spread with more than 250 stores in Australia · Low price · Customised services · Innovation in the products · Largest household hardware retailer |
Weaknesses · Lack of online presence · Service level is low · Lack of global presence since it operates mainly in Australia and New Zealand (Bunnings, 2017). |
|
Opportunities · Online presence could be made by the introducing e-commerce. · Expansion in countries other than Australia and Asia is a good business opportunity. |
Threats · Competition from similar companies might result in threat to Bunning’s. · The instability in the economy might result in customers investing lesser than the usual amount, this reducing sales. |
Structure: The structure of Bunnings is an efficient one providing scope for the growth of the company.
Strategy: Bunnings incorporate the strategy of innovation and customisation for the customers, such that their personal choices might receive importance.
Skills: The employees are highly skilled and installation and innovation is done skilfully.
Staff: The staffs are friendly and hard workers, with innovation. Thus, enhancement of the business is done easily (Bunnings, 2017).
Style: The products and services have a specific style, that the company follows, such that a signature of the company is attached in the products and services.
System: The system includes a smooth operation of the company, with efficient suppliers and logistic system along with efficient staffs (Stein & Ramaseshan, 2016).
Shared values: The shared values include achieving customers’ satisfaction and goodwill.
Risk is common in any business. The risks for Bunnings are as follows:
Poor selection of the suppliers: One of the major risks faced by Bunnings is selection of the poor suppliers. Since Bunnings have a large area of services and products, hence a variety of suppliers needs to be contracted (Dragni?, 2014). Selection of poor suppliers would result in degradation of the business of Bunnings.
Poor monitoring of the competitors: The competitors need to be monitored regularly, such that the competitors do not overpower the company. However, lack of regular monitoring would result in loss of business of Bunnings (Kuratko et al., 2014).
PESTLE Analysis and Porter’s Five Forces Model
Low responses to economic changes: It is important to respond to the economic changes in the country. Negligence of responses to the economic changes results in loss of productivity of business.
The organization and business practices that play an essential role in the enhancement of the productivity of Bunnings are as follows:
High performance work practices: High performance system need to be practiced by the employees of Bunnings such that the employees are motivated to work diligently and alighend to achieve the organizational goals.
Power: Adequate power is given to the employees of Bunnings such that they are able to take prompt decisions, as and when needed. This distribution of power is necessary for the successful and diligent working of the employees (Fan, Wong & Zhang, 2013).
Information: An efficient information system is available at Bunnings and the necessary access is provided to each of the employees. The information system contains information regarding the quality and quantity of the workplace output. The cost and profitability is also recorded in the information system.
Rewards: The reward system is an important system that acts as a motivation for the employees and helps them to work diligently towards the fulfilment of the organizational goals.
Conclusion
Bunnings is the largest retailer of household hardware chains in Australia. This assignment highlights the organizational structures of Bunnings along with analysing the internal and external environment that has a strong impact on the business of the organization. the external environment is analysed using PESTLE analysis and Porter’s five forces, whereas the internal environment is analysed using SWOT and McKinsey 7S framework. The risks that the firm might face are also highlighted in this assignment. The risks include the risk of poor selection of the suppliers, along with the inability to monitor the competitors effectively. Lack of responding to the economic instability is also highlighted as a potential risk. Thus, a complete management and business context of Bunnings is described here.
References
Akbar, S., & Ahsan, K. (2014). Analysis of corporate social disclosure practices of Australian retail firms. International Journal of Managerial and Financial Accounting, 6(4), 375-396.
Biddle, I. (2016). The Wesfarmers/Woolworths duopoly war: The Bunnings vs. Masters battle. Busidate, 24(3), 3.
Bunnings. (2017). About Us. [online] Available at: https://www.bunnings.com.au/about-us [Accessed 12 Apr. 2017].
Bunnings. (2017). Services. [online] Available at: https://www.bunnings.com.au/our-services [Accessed 12 Apr. 2017].
Dragni?, D. (2014). Impact of internal and external factors on the performance of fast-growing small and medium businesses. Management: Journal of Contemporary Management Issues, 19(1), 119-159.
Fan, J. P., Wong, T. J., & Zhang, T. (2013). Institutions and organizational structure: The case of state-owned corporate pyramids. Journal of Law, Economics, and Organization, 29(6), 1217-1252.
Kuratko, D. F., Hornsby, J. S., & Covin, J. G. (2014). Diagnosing a firm’s internal environment for corporate entrepreneurship. Business Horizons, 57(1), 37-47.
Lin, L. H. (2014). Organizational structure and acculturation in acquisitions: Perspectives of congruence theory and task interdependence. Journal of Management, 40(7), 1831-1856.
Stein, A., & Ramaseshan, B. (2016). Towards the identification of customer experience touch point elements. Journal of Retailing and Consumer Services, 30, 8-19.
Tabrizi, A.B., Whale, J., Lyons, T. and Urmee, T., 2014. Performance and safety of rooftop wind turbines: Use of CFD to gain insight into inflow conditions. Renewable Energy, 67, pp.242-251.
Yang, I. C. (2017). Knowledge Management Capacity and Organizational Process Alignment in High-Tech Industry. Transylvanian Review, (13).
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
