Wesfarmers was founded in 1914 as a farmers' collaborative organization in Western Australia. Furthermore, after nearly 100 years of existence, it is considered as one of Australia's most well-known and reputable associations. Wesfarmers apply a sustainable and ethical approach towards the dealing and engagement of their potential customers, with a continuous expansion of the retail industry in Australia. The corporate has addressed a number of sustainability issues for the global economy including the modern slavery statement, the climate change issue and developing ethical sourcing and preserving the human rights of an individual.
The purpose of the report is to analyze the sustainability issues perceiving in Wesfarmers and to study the models of its external environment. In the retail industry Wesfarmers have concerned for both of the social as well as the environmental issues by considering the Aboriginal community in their employment plans and the environmental challenges such as reduction in carbon footprints and the climate changes as their sustainability issues.
The strategies of dealing with the key issues faced by people and stakeholders associated with Wesfarmers are highlighted and an analysis on the business macro environment using the PESTEL and five force analyses. The summary of the two-macro analysis is detailed along with the overview of the sustainability changes and their impact on the industry’s future outcomes.
Political Factors
The main political factors affect the trade between the farmers and the corporate. Wesfarmers policy is to safeguard the local people by assuring the sale from local production houses. This affects the global export with the limiting trading hours and the wastage of products at the large inventories and logistics. The overall cost of the business has increased in terms of compliance by the political authorities. The tax policy and the duties for trading in the international market affect the revenue of the corporation. The expansion of the supply chain has restricted the new budding retail firms which is concern for the political authorities. Different regulations for trading in the Australian market are to be taken care of before joining hands with the investors or suppliers.
Economical Factors
The economic factors affect the consumer market and the operation of the Wesfarmers. The currency of Australia and its exchange policies must be revised in order to trade with other countries. The skills of the workforce at the different level of operation of the retail chain matters and the company’s investment for the training and development of the workforce affects the economic factors of profit or loss within the corporation. The retail business in Australia is at threat, and its sustainability and expansion will require a significant investment in money, client satisfaction, and strategic planning and continuous improvement. Wesfarmers' activities are influenced by a variety of financial circumstances. For example, integrations of major corporations, expansions, trade cycles, competitiveness, and market irregularity. Other factors affecting the economic development of Wesfarmers are the interest rate, the growth rate and the inflation rate.
Social Factors
The majority of Australian households buy their daily necessities on a weekly basis, which is enough for their needs. In this way, people are much more interested in buying products by purchasing them under one roof, and saving time or money, Wesfarmers provides them with such a solution, as the many divisions of the grocery store, such as personal improvement, retail store, and supply store, are available in one place. The social factors affecting the retail industry in the business of Wesfarmers are the demographics, the culture and the environmental concerns of Australia. The interest of the population in the leisure activities along with the health and environmental development affects the organization’s growth.
Legal Factors
There are different factors affecting the operation of the retail chain in the country, they are the laws set up for the effective working of the organization. In case of Wesfarmers, the protective anti-trust laws must be considered as priority to supply food and staples within the retail industry and in Australia or other countries. The right of assuring the product using copyrights and patents is done in demand of the consumer rights and protection laws. Other laws like data security law must be compiled in order to protect the customer’s personal data shared by Wesfarmers during transactions. The employees of the Wesfarmers retail chain are protected by the employment law and the laws of discrimination among employees.
Sustainability issues
The two sustainability issues identified are the food wastage in the large storage and inventories due to the expanded supply chain. This issue is addressed by utilizing the social development goals and the inventories are technologically upgraded to prevent wastage by listing products according to their date of expiry. This technology informs the inventory manager to check products prior and saves wastage of the products.
Another issue identified is the landfill waste generated by the large packaging. This issue is addressed by using biodegradable packaging and limiting wastage. Also, the waste disposal plants are installed to safely dispose the biodegradable waste to generate manure and natural fertilizers which in turn help in agricultural practices of the region. Wesfarmers are now working on developing their packaging and reducing the landfill waste to protect the environment as their CSR (corporate social responsibility) issue.
