Environment Wesfarmers

Environment

Remote Environment

1. Demographics

The growth and increase of Wesfarmers business operations, they have reached an employee mark mark of 200,000 employees in 2009 and therefore became one of the biggest employers in Australia. Since Australia itself has a population of 22 million and is highly urbanized with about 90% of the people living in metropolises or bigger cities on the coast, Wesfarmers' market concentration in retail is quite high after the acquisition of Coles Group. With this, they became a duopoly in the Australian market with competitor: Woolworths.

2. Political

Since Australia is a parliamentary democracy in free markets and Wesfarmers is an asset orientated company with a high return to shareholders. The company faces political decisions such as rights for buyers or laws which restrict monopolies in markets. In the past, there were several changes in the energy sector like the removal of barriers to the interstate trade of electricity which gave Wesfarmers great opportunities to expand in other states it also introduced fierce competitions. The introduction of lucrative prospects in the coal minng industry also introduced new competitors.

3. Economic

The Australian economy trend has a direct effect on consumption of the market because it depends on their buying power, which directly affects the country’s GDP (gross domestic product). When the global financial crisis (GFC) hit in 2009, the market’s consumption behaviour was deeply influenced affecting the disposable income of the households. Since the acquisition of Coles Group in 2007, the GFC hindered its short-term growth. The sales in their chemical and fertilizers division were also affected by natural disasters and climate change propositions.