Business of Wesfarmers and its Operations in Australia-Free-Samples

Question: You are required to prepare a business report that deconstructs an organisation's business model and identifies the critical success factors that make the business sustainable. Answer: Introduction: About the business The Wesfarmers limited can be described as an Australian conglomerate which has its business in Perth in the region of Western Australia. The company operates in the retail supermarket sector. The company deals in chemicals, fertilizers, coal mining and industrial safety products. The company has being performing well and recently made a profit of 65.98$ billion. The company has recently become the largest company in Australia by revenue taking over its competitors (Armstrong et al, 2015). The company began its operations in 1914 as a cooperative business which provided assistance to the Western Australian farmers. It was in the year 1940 that the company began to deal in wheat, wool, livestock, fruit and vegetable exports and came to be known as Westralian Framers Limited. Alongside retail food products the company also deals in Chemical, Fertilizers, Safety and other related products (Wesfarmers, 2018). At present the firm has its operations in Australia and New Zealand. Figure 1: The business segments of Wesfarmers (Source: Wesfarmers, 2018). The Business Canvas Model Key Partners Wesfarmers operates in the retail supermarket sector and along with that it operates in various other sectors also. The given subsidiaries and divisions of the business are given as follows : Kemart Target Coles BBC Hardware Ansett Travel Superannuation Fund Coles Property Management Comnet Fosseys Morley Shopping Centre now.com.au Theo's Liquor Tooronga Shopping Centre Tyremaster Viking Direct and World 4 Kids. Grocery Holdings Pty Ltd Harris Technology Howard Smith, Katies Fashions Loyalty Pacific Masters Home Improvement New Zealand Key Activities Pricing Marketing Procurement Customer fidelization Diversification Analyzing consumer demand Effective Distribution system Warehousing and Logistics Purchasing and selling consumer goods (Barquet et al., 2016). Value Proposition Wide selection of products Safety 24/7 shopping experience Online buying Convenient online shopping Good prices of the products Online shopping facility Diversification of business operations like Gas, energy, clothings and others. Customer Relationships Customer Loyalty- wesfarmer offers good quality products to the customer and therefore they build loyal relationships with the customers. Online shopping Self-service Discount offers Affiliation (Sutton-Brady, Kamvounias Taylor, 2015). Long term relationships Recipes and Inspiration Brand awareness Customer Segments Mass audience Housewifes Restaurant owners Student Older people Key Resources The company is one of the largest companies in the continent of Australia It has an employee base of 2, 20,000 till 2016. The supermarket serves thousands of customers IT Infrastructure Negotiation power of the company (Joyce Paquin, 2016) Channels Super market Gas stations Online business Through its various outlets Club card Social Media One stop solution for all customers through small stores Cost Structure The important cost structures of the given in the given business model are : Staff Taxes Real estate Advertising Cost of goods (Thompson, 2014). Acquisitions Logistics Revenue Streams Online sales Retail store sales Advertising Financial income from insurance and bank business. Key relationship between blocks The building blocks of the business canvas model are used to [portray the different aspects o a business`s operations. The business canvas model primarily provides information on the given five aspects of the business enterprise: Customer segments Value Propositions Channels Customer Relationships Revenue Streams Key Activities Key Partnerships Key Resources Cost Structure The business canvas model is formed in order analyze the different aspects of a business enterprise and to get the detailed information about any business. This is done in order to understand, how a business is generally performing and the areas need to be improved. It is very important for any analysis that see t it that they have a well defined business model which helps the company to perform well in all the given aspects of the firm. It can be stated that the different blocks of the business canvas model are closely related. The blocks are mutually dependent on one another; hence any change which is made on one particular block often has a drastic effect on the other block (Muhtaroglu et al., 2013). For example, the key value proposition of the organization states all the aspects which an organization offers and I any changes take place there it should be understood that the cost structure of the given company is also bound to change. If the cost structure changes then, that shall have an impact on the selling prices set of the company and the revenue structure of the firm. Another case can be taken of the key resources which are gained by the firm. The key resources tend to have a huge impact on the key activities of the firm and even an impact on the cost structure of the firm. If Wesfarmer`s decides to attain a new resource for example a new supermarket in a part of New Zealand, then the a key activities indulged in by the firm will undergo a certain change. This will then impact the costs of the firm, which is the third block being affected. Lastly, it may also have an impact on the revenue earned by the firm which may then cause huge changes in them. Figure 2: The brands under Wesfarmers (Source: The Conversation, 2018) Critical Success Factors to get sustainable success The Critical success factors are a management term which is very often used to describe that element of the business and how the business needs to determine whether the organization has been successful in its operations or not. These factors tend to have a huge impact on the business of the organization (Massa Tucci, 2013). If a business aims to become successful in future or rather attain sustainable success then it needs to see to it that the company has been performing well in the these areas. The CSFs that Wesfarmers has to get right to achieve sustainable success are as follows: Understanding the behaviour of the Customer The retailers need to realize that the behaviour of the customers in order to take critical decisions on various aspects of the business enterprise which range from decisions like what they need to offer the company and also decisions like how can they strengthen their relationships with the consumers. To understand the various aspects of a consumer`s behavior, the company creates various feedback forms, conducts certain surveys and so that they are able to get on to the right track. If the firm is able to do so, they can be successful in the future because it will be doing the right things that the customer desire. Making use of Multichannel Strategies The consumer needs are extremely varied. It is very often for any business enterprise to offer the business with all kinds of facilities and options in order to see to it that the business is extremely successful in its avenue (Hong Fauvel, 2013). Hence, the business needs to make use of Multichannel Strategies and target the customer using various mediums like online, convenient stores and mobile application to capture the larger share of a customer demand. Wesfarmer`s needs to see to it that it is catering to what the customers are looking out for and this can be done using techniques like the follows : Opening neighborhood convenience stores Opening corners in gas stations Online avenues Home delivery Other CSFs are as follows: Enhancing customer experience By providing good quality products at convenient prices, Wesfarmers can enhance its customer experience Improving operational efficiency Operational efficiency plays a key role in determining the success of business in the future and through this move (Cochrane, 2014). Downside risk and causes Downside risk is a kind of risk whereby the company can suffer a huge loss if the market condition changes. The risk can be posed by external factors of the firm whereby the company suffers a huge blow. The cause for downside risk for Wesfarmers could be as follows: Its demerger from the Cole group According to Kiel (2014), Wesfarmers has decided to demerge from Cole and for this reason, it could be exposed to a downside risk whereby the market share could be captured by Cole and Wesfarmers could suffer a huge loss. Entrance of a giant like Tesco If a retail giant like Tesco decides to enter into the business then it could lead to a huge loss for the Wesfarmers. This is because Tesco has a huge operational experience and for this purpose, if it decides to enter into the Australian market then, it could lead to a downfall for Wesfarmers. Recommendations to change the business model The given changes could have been recommended: Wesfarmers can narrow don its offerings Very often when a company intends to become successful, it tends to offer various products to the different customers but it should not be the ideal case. Instead the company should narrow down its offerings and make premium quality products. It can then seize the opportunities available and expand its operations to emerging markets of the South East Asian countries like Bangladesh, Nepal, India and other emerging countries. Although these countries have a presence of the famous local retail organizations serving the market, however internal expansion can be made a priority in the business`s model to cater to a larger market and to become an international name. If the company is successful in doing so then it would be able to increase its revenues and also be able to expand the base. It can introduce its own brand products to save costs and increase profits The company has a wide product line which has enabled it to serve all the needs of the customers in order to expand operations and achieve operations excellence. It is suggested that it increases its Key resources and employs brands which are the company`s own in order to cut the costs of the firm in order to see to it that the company is able to improve its revenue structure. If the company gets into the brand owned personal care line and hygiene line then it will be able to reduce the components of its cost structures and increase revenue. References Armstrong, G., Kotler, P., Harker, M., Brennan, R. (2015).Marketing: an introduction. Pearson Education. Barquet, A. P. B., de Oliveira, M. G., Amigo, C. R., Cunha, V. P., Rozenfeld, H. (2013). Employing the business model concept to support the adoption of productservice systems (PSS).Industrial Marketing Management,42(5), 693-704. Cochrane, T. D. (2014). 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(2014).Wesfarmers 100: The People's Story 1914-2014. Wesfarmers Limited. The Conversation. (2018), Wesfarmers News, Research and Analysis - The Conversation. Retrieved 19 March 2018, from https://theconversation.com/au/topics/wesfarmers-1723 Wesfarmers. (2018) , Wesfarmers. Retrieved 19 March 2018, from https://www.wesfarmers.com.au