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<p align="justify">Wesfarmers is an Australian globally diversified conglomerate with its headquarters in Perth, Australia. The company was founded in 1914. The majority of its business is located in Australia, New Zealand, Ireland and India. The company operates the largest retail stores and departments in Australia. Its operation includes supermarkets, liquor, hotels, department stores, office supplies, home improvement, and convenience stores (Forbes, 2021). Its primary retail brands are Kmart and Target. The company also operates in industrials division such as energy, chemical, and fertilizers, coal, and safety product, including its subsidiaries QNP, CSBP Fertilizer, Australian Vinyl and Australian Gold Reagent (Wesfarmers, 2021). Wesfarmers is one of the most valuable companies in the world. Porter&#8217;s five forces model is a valuable tool to identify threats and opportunities faced by Wesfarmers in the world.</p>
<h2 align="justify">Competitive Rivalry in The Market</h2>
<p align="justify">The retail industry all over the world is very competitive. The retail industry is predominated by a food conglomerate with its presence all over the world. Wesfarmers is the leading retail company listed on the Australian exchange (Statista, 2021)). The most significant competitors of Wesfarmers are Woolworths and JB Hi-Fi Limited. All these multinational companies have a strong foothold in Australia and New Zealand. Wesfarmers competes with Woolworths group in the region. The revenue of Woolworths, JB Hi-Fi is $45.524 Billion (Fortune, 2020) and $5.3 Billion (Fortune, 2019), respectively, as compared to the revenue of Wesfarmers $81.177 Billion (Fortune, 2011). Wesfarmers holds a slight edge in marker over its competitors due to its diversified products and presence in the other parts of the world. It had made it difficult for their rivals to compete with them. However, the retail industry remains highly competitive.</p>
<h2 align="justify">Threat of Substitutes</h2>
<p align="justify">The threat of substitute in the retail industry is always moderate to high. The clientele always has multiple options to choose from. Different brands are offering similar products. So to keep with them, they must not compromise on their products while maintaining the prices in control. The cost of substitute products is very high, and to produce its expertise is required to meet the standards set up by the front runner. The online retail industry is taking charge in this day. Wesfarmers spend $230 M to acquire Catch Group (Wesfarmers, 2019), the leading online retailer. It incorporated it with its Kmart brand. The diversified portfolio which caters to different demographics provides them with an upper hand. Wesfarmers caters to various sector of customers. Those products cater to huge masses in society. The threat of substitute is moderate to high in the retail industry. However, Wesfarmers is taking progressive measures to stay relevant.</p>
<h2 align="justify">The Threat of New Entrants</h2>
<p align="justify">The retail industry&#8217;s entry barriers are not strict. The startup can challenge industry runners even in retail giants such as Wesfarmers, Target group or Ahold Delhaize. Startups can get a market share and compete with the existing brands based on convenience, location, specialty, and other factors. Online Retail stores are expanding at exponential speed, and due to pandemic, the growth of is skyrocketed. Wesfarmers is evolving through time. Its online retail division has unprecedented business. It is enhancing the dependency on technology in stores as well (Insideretail, 2020). It is not easy to compete with Wesfarmers even in these circumstances. It is because of its brand credibility and history. Wesfarmers is evolving its business with the need of time. Despite the stronghold of incumbents in the retail industry, there is a potential for new aspirants by leveraging technology. Therefore, the threat of new entrants remains medium.</p>
<h2 align="justify">Bargaining Power of Buyers</h2>
<p align="justify">The buyer&#8217;s bargaining power depends on the number of characteristics of its market situation. Buyer can exert their power if the product available are standards; they are buying it in bulk quantities if the product produced is not up to the mark (HBR, 1979). The buyer looks for a better quality product and cost-benefit for it. A company with a diversified product range can attract buyers and keep them interested in their brand, increasing its clientele. It caters higher number of individual consumers with diversified product lines. The particular customer is the small-scale purchaser. So it decreases their bargaining power. The bulk purchaser can expect higher power bargaining power. Wesfarmers holds a diversified portfolio in the world. It provides a wide range of products for the customer. Retail giants have higher bargaining power here.</p>
<h2 align="justify">Bargaining Power of Supplier</h2>
<p align="justify">In the retail business, suppliers are the organization or companies, which provide resources to the industry, such as materials, services, and labour (i.e. individuals, organizations such as labour unions, or companies that supply contract labour). The bargaining power means the ability of the supplier to increase the price of raw material or the industry&#8217;s cost (Hill &; Jones, 2012). Suppliers hold higher power if a few suppliers dominate the industry, it provides more products in the market and it is future integrated. The supplier&#8217;s enormous population of supplier &; intense competition between them decrease their bargaining power. The supply chain of the material is excessive. So in this supplier can have no or little impact on the company. So they hold a weak level of bargain power against the company.</p>
<h2 align="justify">References</h2>
<p align="justify">Forbes. (2021). JB Hi-Fi. Available at:https://www.forbes.com/companies/jb-hi-fi/?sh=2592f89042c7<br />
Forbes. (2021). Wesfarmers. Available at: https://www.forbes.com/companies/wesfarmers/?sh=2caeb125d0ae<br />
Fortune. (2021). Woolworths Group. Available at: https://fortune.com/company/woolworths/global500/<br />
Hill, J., 2012, Essentials of Strategic Management, 3rd Edition. South-Western,<br />
Insideretail. (2020). Digital checklists help Kmart navigate new pandemic challenges. Available at:https://insideretail.com.au/sponsored-content/digital-checklists-help-kmart-navigate-new-pandemic-challenges-202011<br />
Wesfarmers. (2019). 2019 Strategy Briefing Day Presentation. Available at: https://www.wesfarmers.com.au/docs/default-source/asx-announcements/2019-strategy-briefing-day-presentation.pdf?sfvrsn=0<br />
Wesfarmers. (2021). Wesfarmers Chemicals, Energy and Fertilizers. Available at: https://www.wesfarmers.com.au/our-businesses/wesfarmers-chemicals-energy-and-fertilisers</p>
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