Essay: Wesfarmers And Coles Group - Private Label And Branded Foods In Australia.

Discuss About The Private Label And Branded Foods In Australia.

A corporate is an organisation that have several other organisations under its operations, these single units operate on their own or may have complete control of the parent organisation depending upon the contract in between the management of the unit. The strategic management is the process by which any business organisation formulates their decisions and policies based on analysis and strategic management theories. Business units are run by the management department and these are the people who decides upon the process of the business function and draws polices which will benefit the company and help in achieving the objective of the business.  The first step of strategic management for a company is to develop the mission and vision statement. Every organisation has two environments which forms the basis of the operations, internal and external. The management of the company takes decisions based on the dynamics of the factors in these environments as they positively or negatively impact the business decisions. The company understands the strengths and weaknesses of the

Definition: A corporation is a particular unit that comprises of a group of people or a group of organisation operating under one umbrella organisation (Phan et al. 2009). The corporation that will be studied in the assignment is Wesfarmers. Product or service portfolio is the range of product or services that a particular company offers the customers (Killen et al. 2008). The company has a wide range of services to offer to the customers.

 Wesfarmers is a conglomerate that has been established in 1914.  Over the years of operation the Company has gained goodwill and reputation form among the stakeholders as well as in the industry. It is one of the biggest companies in Australia and has a significant contribution towards the economy as well as towards the employment as well. The company was initially formed as west Australian farmers corporative. Wesfarmers at the present times have a range of business units operating under the umbrella brand (Wesfarmers.com.au 2018).

• Retail (supermarkets)
• Food and beverage
• Tourism and lifestyle   
• Chemicals industry
• Energy and fertilizers
• Industrial and safety products
• Coal (Wesfarmers.com.au 2018)

All the industries that the company is operating in have intense competition in the market and are of high demand. One of the examples of the retail industry investment of the corporation is Coles. It is a chain of supermarkets that operate under the corporation, in Australia there is heavy competition from Woolworths, Aldi etc. The company has invested in sustainability as it is one of the major objectives of the company to strive towards a sustainable future, every year the company publishes sustainability report. Wesfarmers are also a big employer there are almost 220,000 people who get remuneration of $8-9 billion annually which in turn is contributing by giving purchasing power in the hands of the people (Wesfarmers.com.au 2018).

Overview of the Corporation

Strategic business unit are autonomous segments of a corporation or a large scale organization that functions independently and has its own line of products and services (Gupta and Govindarajan, 1984).

One of the main reason for the growth and development of the company is the development of the Australian economy depending upon the purchasing power of the people the growth of the company is based. The business unit that has been chosen to focus upon is Cole’s group, which is as discussed one of the major players in the Australian retail industry.

Product or service Line can be defined as the group of associated products or services offered to the customers by company under the same brand name (Quelch and Kenny 1994).

The company mostly run on the service industry, there are products manufactured under the company’s name but the majority of the business function depend upon the services that the company offer (Trevena et al. 2015). Retail is again a part of the Coles group apart from this the company has a financial industry as well as in the tourism industry with the spirit hotels. In this part the focus will be on the retail unit. The retail unit has the following divisions:  supermarkets, online store, liquor stores and Coles express stores (Wesfarmers.com.au 2018). Coles focuses on the need and requirement of the customers in order to develop their policies and decide upon their business function. The organization has been serving the people of Australia for more than 100 years now. In 2016 the value of the organisation was 33 billion AUD. This business enterprise focuses on the quality of the product and services as well as on the values and principles as objective and mission that drives the business. Some of the features that customers and stakeholders associate with the organisation are in sync with the focus of the company’s values: the quality products, outstanding customer service and great value to the consumers (Coles.com.au 2018).  

• To strive towards a sustainable future
• To create a valuable relationships with Australian farmers and to support their growth
• To develop valuable relation with the customers
• To create facilities for jobs in the economy (Coles.com.au 2018)

Revenue can be defined as the amount that is received from the sales after the expenditure (Bitran and Caldentey 2003). The Coles group brings in the largest revenue for the corporation Wesfarmers. It has been clear in the Annual report which was published in 2017, that the Coles group has the largest contribution among the rest of the industries that the company operates in. As discussed above there are a number of services that are offered by the Coles group but the retail services that are offered by the company make up for most of the revenue that the organisation draws (Lewis  and Huber  2015).

Business Unit Identification

Operating environment are the factors that impact the functions of the business (Markley and McNamara 1994). Every business organisation operates in two environments internal and external (Child 1972). In the external business environment are not under the control of the management of the company therefore the company has to keep up with the changes in these aspects in order to determine the threat as well as the scope in the industry that lies ahead. The changes in the external business environment impact the business and decisions should be made in order to deal with the situations.

Political: The government policies and regulations impact the operations of a business largely.   The organization operates in the Australian business environment, the political condition of the country is stable and the government encourages trade and has several ways in which they support the growth in the process (Yüksel 2012). Where the political conditions of a country are unstable the company will not be able to operate peacefully.  There are several laws, rules and regulations that are authorized by the government to support trade in the country. The government makes the process of operation easy with easy regulatory actions and fewer barriers in trade. On the other hand the companies also have to keep up with the law and the jurisdiction of the constitution. Some of the factors that the company has to focus upon are: labour law, anti-pollution regulation etc (Yüksel 2012).

Economic: The financial condition of a country represents the economy of the state. The economy is an important aspect as it provides opportunity or poses threat to the business. The Australian economy is developed and is on the rising trend, the country has resources and capabilities of involvement in the process of improving the development of the standard of living among the people (Dockalikova and Klozikova 2014). Some of the factors of the economy that impacts the operation of the business are: like inflation rates, market and trade cycles, the demand of the service in the industry etc. The management takes decisions based on the changes in the economy to suite the internal bsuiness environment. One of the recent example of how economy impacts business is the global economic depression during 2008. Therefore, the international economy also impacts the operations of the business (Dockalikova and Klozikova 2014). 

Societal:  The culture and the tradition that is prevelant in the society in which the orgnsiation operates impacts business as the people are accustomed and behave according to the culture and tte traditions. The buying behavour among the customers are imporatnt to analyse the profitability fo the busienss and the requirement of the cusotmers arise form this fator. Coles is an organisation that works for the customers and deem them to be the most important stakeholders the dynamics and the changes in the society are important for the development of the company. As a supermarket the ocmpany has to keep up with lifestyle trends and develop way and means to reach out more to the people (Rothaermel 2015).

Identification of Product and Service Lines

Technology:  Australia is a technologically advacned country, the goevrnement of the country encourages the use of technology and provideds the people platfrom to utilise the same (Hill et al 2014). Coles have also adapted to the advances in technology in the industry, the orgasniation has invested in e-commerce owing to the dvelopment in the technology that is prevelant among the people as well as the change in the buying behavior among the customers. The company has developed mobile phone applications to help the customers as well (Hill et al 2014).

Environement: Organsiation have droped the tarditional view of operation where the prime focus of the business fuction was on financial growth of th eocmpany. Now every organisation has adopted to the triple bottom line concept and has their CSR activities lined up in order to serve the people and the planet. Coles has objectives such as: reducing waste, reducing energy consumption,  sustainable and responsible sourcing etc as a part of their CSR activities (Gupta 2013).

Legal:  For a company to operate in a country, the managemen has to follow the law and has to operate with in the jurisdiction of the particular country. Some of the legal aspects whihc are general to all busienss organiasitions are the labour laws the environement laws, the leaglities associated with incroporation of the bsuienss. Coles have a line of liquor stores wihc have to have special licience athorised by the Australian governement in order to operate (Ho 2014). 

Competitive advantage is the strategy or the feature of the company that helps it gain an edge over the competition in the market (Schilke 2014). There are various ways that a company can gain advantage over the competition the decisions are made based on the following factors (Porter 1991).

According to the concept derived by Michel Porter there are four factors of competitive advantage:

Structure, strategy and rivalry: The structure of the organization, the strategy and the management decisions of the company as well as the intensity of rivalry that is prevalent in the industry impacts the decision of competitive advantage.

Home demand conditions: The demand for the product or service in the market is responsible for the decisions that the company take to combat the competition in the market, the demand will also make a market attractive to new competitions (Porter 1991). 

Related and supporting industries: the suppliers and the service providers of the company are important aspect as the services they provide add to the efficiency of the competitive strategy (Riasi 2015).  

Identification of the Business Revenue of the Unit

Factor conditions: can be categorized into material resources, knowledge resources and infrastructure. These are the aspect that provides a support to the organization to develop strategies (Porter 1991).

The source of competitive advantage of Coles is the customer centric approach of the company. The organization is constantly improvising regarding the service as well as the process in order to keep up with the dynamics of the changes required by the customers (Huang et al. 2015). The company uses the strategies of market penetration as well as product development in order to initiate the completive advantage (Liu 2013). 

Strategic direction is the process by which organizations formulate decisions in order to achieve the objectives.

The company has the potential to expand the market and open small format of stores in order to improve the services and develop a personal personalized approach towards the customers

Coles have the opportunity to use sales promotion as a marketing strategy in order to generate sales

The company can choose to diversify the business line in to providing more services

The company should also use engage in social media promotions in order to connect with the customers as well as improve the marketing process. This strategy must be connected to the Coles online service as they both share the same platform.

Conclusion 

It can be concluded form the above discussion that the Coles operate under the Wesfarmers conglomerate, the company has its own operation team and top management but the revenue of the business is shared by the parent organisation. The business unit also has several areas of function and collectively makes up for the largest area of revenue for the corporation.

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