Competitive Forces Framework Other Factors -Myassignmenthelp.Com

Question: Discuss About The Competitive Forces Framework Other Factors? Answer: Introduction Founded in 1914, Wesfarmers was a co-operative that supplied farming equipments and labour to the West Australian farmers. Currently it regarded as one of the leading private sector companies in Australia generating highest revenue in 2017. According to their website, Wesfarmers currently have 220,000 employees working for them. Having a solid background in rural business, Wesfarmers have expanded their company to every possible major fields of business (Akbar Ahsan, 2014). Department store outlets, industries for home improvements, chemical companies and even the Coles group of industries; all are a part of this mega organisation. This report aims at evaluating this particular organisations business and corporate strategies along with other prospects of interest. Detailed analyses of the organisations current performance and implemented strategies have been produced in this report (Abdalla et al., 2017). Various business level strategies such as cost advantage, differentiation alon g with corporate level strategies such as diversification and retrenchment are included in this report to provide a thorough understanding of the firms business activities and intentions. Business Level Strategies The main aim of any business company is to keeps its customers satisfied and attracted to the company. In order to achieve and maintain such a goal, proper planned business strategies need to be implemented. These business strategies have the pivotal aim of analysing, comprehending and meeting the criterions and demands of the customers. Furthermore, these strategies establish and explore the opportunities and marketing position of the relevant organisations. Cost Leadership Companies tend to compete against one another based on the value of its commodities. The prices need to meet the customers ability while providing maximum profit to the company. Thus cost leadership is focused on internal efficiency that ensures profit while keeping a baseline margin for the customers (Hwang Sitorus, 2014). Organisations go to great lengths to make sure that its costs are lower than that of its customers. Obtaining a cost advantage includes determining and constraining costs along with reconfiguring the policies and strategies of the company as needed. Wesfarmers have stuck to the policy of low-pricing. Wesfarmers recently lowered the prices of the commodities such as bread, sugar and cheese while suffering a deflation of 0.8%. This boosted their sales. Wesfarmers have introduced the "everyday low prices", which offers everyday commodities at a lower price than its competitors. Differentiation Organisations such as Ralph Lauren and Rolex have implemented this methodology in their business strategies. Through unique business strategies along with cheap prices and distributed customer base, Wesfarmers have managed to hold their position at the market for long now. By decreasing the customers costs while increasing their own sales has helped Wesfarmers sustain their hold in the market. Corporate Level Strategies Corporate strategies are finalised by the board of directors of highest level authorities of a firm (Purce, 2014). These strategies are usually focused on redistributing its resources and subsequent utilization of the limited available resources. Diversification Strategy These strategies are implemented by organisations who have reached their peak in terms of marketing income and need diversifications into market prospects. Retail chain markets to fertilisers and even safety products, Wesfarmers have indulged in several fields of business. Concentric diversification includes the companys involvement in the relevant fields of industry. This ensures that Wesfarmers expand their business in fields which they already have established themselves as the common name. Conglomerate diversification, also known as the unrelated diversification refers to the diversification of an organisation in fields outside its expertise. Wesfarmers diversified its business by getting involved in the coal business that boosted their sales. Retrenchment Strategy Retrenchment strategies of a company are needed to be implemented with emergence of other heavy competitors. With emergence of Amazon, Wesfarmers had the need of coming up with innovative ideas to be at the top of the marketing chain (Bayne, Schepis, Purchase, 2017). Companies with online marketing schemes, such as Lidl and Kaufland, have emerged as the foremost competitors. Amazon has opened their fresh food chain which does pose a certain level of threat to the Wesfarmers. Stability Strategy Stability strategies are usually implemented by those firms who have a thorough understanding of the marketing environment and have been in business for quite some time. Generally, the stability strategies can be categorised into three methods (Gerow, Thatcher Grover, 2015). No change strategy is for organisations that have the monopoly in market. Thus, there is no need of any change in their business strategy. Wesfarmers have considered a mixture of the Profit strategy, by virtue of which a company focuses on gaining maximum profit, and Pause Strategy. Partnerships and Alliances Wesfarmers have always ventured in various prospects of marketing to expand their customer base. Wesfarmers have gone into partnership with various and numerous number of smaller and emerging firms. Wesfarmers have recently partnered with Teach for Australia and WA Parks Foundation. A lot has been invested in the medical field of research and development. Wesfarmers has provided supported to various arts institutes and galleries. Global Strategies and the Multinational Corporation Wesfarmers have invested in developing a business office in Hong Kong. This is the first step towards globalisation of the company. Wesfarmers have always maintained a domestic point of view till date. However with the emergence of multinational companies, Wesfarmers have found the need to expand beyond Australia. Kmart has launched a plan to open as much as 40 new stores in the coming few years. Suitability of the Current Business Strategy Wesfarmers have long sustained in this competitive market through various long term managing policies and norms. The achievements that have ensured sustainability include, continuous focus on development and research and employing a diverse attitude in their executions (Klettner, Clarke Boersma, 2014). Their ambitions include providing accurate and precise governing structures to secure their future investments. Reduction in cost by increasing the efficiency in controlling the emission of greenhouse gas in production procedures has been a major focus of Wesfarmers. Recycling processes are also given high priority within the organisation. Introducing restrictions and burning through cash for innovative work, new firms and organizations are more averse to enter a dynamic industry where the built-up players, for example, Wesfarmers Limited continue characterizing the benchmarks frequently. It radically diminishes the window of exceptional benefits for the new firms hence disheartens ne w players in the business. Porters 5 Forces model has been referred to evaluate the suitability of the companys current business strategies. Porters 5 Forces Model Rivalry Woolworths is the primary contender of Wesfarmers. Although, since the great depression, both these companies have suffered their own losses, through their huge customer base and cheaper prices, Wesfarmers have emerged as the highest revenue generators in recent years (Anton, 2015). As discussed above, differentiation techniques to retain sustainability need to be implemented to compete with others. Partnerships and alliances need to be established to broaden the horizon of marketing aspects. Customers Wesfarmers have maintained their strategy of producing good quality daily products at an affordable price. They have risked the profits by implementing a below average profit margin. Eventually, it has worked in their favour and with a huge customer base and established Wesfarmers as a monopoly in the market. Suppliers - Coles, the retail chain under Wesfarmers, have the policy of acquiring supplies from Australia. Their Australia First policy requires them to source almost 96% of their supplies from within Australian farmers and growers. Entrants Wesfarmerss policies have kept them in the market and as they keep selling products at reasonably cheaper prices, enabling the organisation to keep its rivals at bay. However, as mentioned above, Amazon has shifted its focused to the food chain retailers, bringing competition to the market (Mathooko Ogutu, 2015). Introducing innovative products have made Wesfarmers maintain their status. To compete against multinational companies, Wesfarmers may further need to minimise the margin of profits. Substitutes With their low price policies and constant up gradation of such policies according to the customers needs, Wesfarmers have made sure they dont provide an opportunity to its substitutes (Kilroy Schneider, 2017). Wesfarmers have tackled such issues by focusing on service oriented marketing instead of just products. Comprehending the core demands of the customer base and executing marketing strategies in accordance to that is what distinguishes Wesfarmers from other similar firms. Conclusion In conclusion, no significant threats could be found against Wesfarmers apart from the usual price issues that every firm faces. The constant concern regarding sustainability has been and will be the hardest part of it all. However, Wesfarmers have been dominant in the market for quite some time now. Wesfarmers have indicated that they wish to develop new ideas and policies to reduce its debts further and in the process try to increase revenues as well. Quality and services provided need to carefully assessed and modified as per need. With their most updated technological departments providing the necessary brains behind all these innovations, Wesfarmers have been able to further enlarge their exposure (Bayne, Schepis, Purchase, 2017). The annual reports of the organisation have showed positive strides both in terms of financial and reputation. Producing daily requirements at affordable prices is the main motto of the company. Albeit being an established company, it needs to focus o n having a more digital outlook and access for the customers. With innovations in technological fields providing ample scope to gain access to larger customer base, Wesfarmers need to utilise that and amplify their business prospects. Effectiveness Having generated the most revenue in past years in Australia, Wesfarmers have undoubtedly established their effectiveness. The companys diversified approach of marketing has seen them invest in potential marketing aspects. Wesfarmers has always been dedicated to their shareholders. One of the primary aims of the management team and Board of directors has been to provide a best returns possible to their shareholders. Wesfarmers, believe on being focused on long term returns rather than just focusing on short term returns. From the annual report published by Wesfarmers, it can be known that $48 Billion is the increase in the shareholder value for the year 2017 and all of that has been the consequence of business growth. Wesfarmers have been investing in numerous business sectors. This showcases their intentions of having a long term establishment in the market (Greenblat, 2018). Apart from these, another prospect that distinguishes Wesfarmers any other competing firms is that of its wo rk culture. All of their business ventures are intended not only at enhancing their work environment but to the upliftment of the society as well. As mentioned earlier, Wesfarmers are to known to have partnered with several cultural associations, including arts and music. They have spent huge amount of resources to provide a safe and technologically advanced working environment for its employees. Efficacy Wesfarmers entire business can be classified into two sections. The retail trade section that includes Coles, Target, Kmart and others home and office products, and the Industrial section that varies from chemical to coal mining (Mortimer, 2016). Thus is quite evident that Wesfarmers has been able to employ the strategies and policies in reality. Considering their growth, especially in the last 3 years, a stable yet steep growth in future can be forecasted. Among the two discussed major sections of business, Wesfarmers have identified retail business as their primary are of marketing. It provides the most revenue as compared to their other business ventures. Implementing policies to provide a safe, ethical work environment and working for the betterment of the society at large shows that Wesfarmers has identified humans as its prime factor of development. Efficiency There are two main objectives of business plans as far as Wesfarmers are concerned. The first is provide a significant return to its shareholders and the other is to expand through diversification. They have recently expanded to Hong Kong with plans to expand further. Since their intentions are to focus on a long term business venture, profit has been at times not their primary concern. Providing daily products in retailing chains at affordable price does the requirement of marginalising the profit. Wesfarmers have always been eager to invest on the betterment of society through various partnerships, sponsorships or programmes. Bunnings Warehouse has been a part of Wesfarmers since 1994, and it focuses on maintaining sustainability through actions that are directly associated with society, environment and economics. Bunnings is dedicated to make sure that the required levels of product outcomes are met both domestically and at a global level as well. Ethicality Wesfarmers aims to accomplish their objects by focusing on a few major principles defined as policies. They try to maintain and enrich the working environment which the operating section of the company. Such ideas include constructing strategies to minimize on the emission of polluting gases and providing a clean and healthy surrounding (Low, 2018). Wesfarmers tend to focus on their stakeholders as well. Providing its shareholders with adequate returns have been a major objective for the company. Employees of Wesfarmers are known to be not only satisfied at their respective positions, they tend to treat customers with utmost respect and dedication. Wesfarmers has been associated with organisations working to help society grow. Their main motto of providing the basic needs for everyone at cheapest possible price dictates their ethicality towards its customers. The core values of the company include that of showcasing integrity by indulging in any activity while maintain the basic ethi cs. Their openness towards the company activities in terms of finance and labour, establishes an accountable yet commercial image. Elegant Stake holders are given paramount importance as far business is concerned for Wesfarmers. Through financial regulations and appropriate management, Wesfarmers primary goal is to deliver returns that satisfy the shareholders. Wesfarmers spends a major part of its resources to ensure that each of the departments under the company are well equipped to maintain a certain level of focused management and its executions. Wesfarmers are known to be transparent in their actions and are committed to establish an assuring relation with its customers and its stakeholders. Considered as the largest formal corporate acquirements in Australia, Wesfarmers acquired the services of The Coles group in 2017. Since then this has helped establish Wesfarmers as the highest revenue earner in recent times. 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