The Introduction outlines the purpose of the report
Mar 13,23Question:
Background:
| Introduction and Conclusion (5 marks)
· The Introduction outlines the purpose of the report and provides a summary of the company. · The Conclusion reflects on the analyses and states any limitations. All conclusions are logically supported by the analyses. |
| Perform a Porter’s Five Forces Analysis (10 marks)
Competitive Rivalry Focus on the industry
The threat of New Entry Focus on the industry Supplier Power Focus on the industry and not Westgold. Who are the suppliers to the gold mining industry? Are there a lot of them or just a few? Who has the stronger negotiation power? Are there any switching costs? What is the bargaining power of suppliers? High? Medium? Low? Buyer Power Threat of Substitution Focus on the industry |
| Perform a SWOT Analysis (10 marks)
Strengths Weaknesses Opportunities Threats |
| Identify the Corporate and Business Strategy for your selected company (7 marks)
· Clearly articulates the Corporate and Business Strategy of the company. · Refer to the PPT slides |
| Writing qualities and referencing (8 marks)
· Writing is clear and concise. Grammar, spelling, and punctuation are correct. · Chicago format is followed for writing, citations and bibliography. |
Strategic analysis of Westgold Resources Ltd annual report 2019 and 2020 to compare their financial state.
This assessment focuses on the competitive strategic position of Westgold Resources Ltd.
Perform a Porter’s Five Forces and SWOT analysis on Westgold Resources Ltd. Based on the outcome of the above analyses, identify Westgold Resources Ltd’s corporate and business strategy.
(Please on do Westgold Resources Ltd, other is not accept for this assignment)
https://www.westgold.com.au/site/content/
Part 1 Seminar 1: Strategy
ACCT5003 Accounting Research Project
Outline of Seminar
Assessment One: Investigation
Strategy
Assessment One: Investigation
Assessment – Part One: Investigation
Assessment Requirement:
This assessment focuses on the competitive strategic position of your chosen company.
Perform a Porter’s Five Forces and SWOT analysis on your chosen company. Based on the outcome of the above analyses, identify your company’s corporate and business strategy.
Due: 12pm, Wednesday, 9 September 2020.
Word limit: 800 words.
Planning Structure of Investigation Report
- Introduction
- Porter’s Five Forces
- SWOT Analysis
- Identify the Corporate and SBU Strategy of your Selected Company
- Conclusion
- References
- Appendices
INVESTIGATION MARKING RUBRIC Criteria (Total marks: 40)
Introduction and Conclusion (5 marks)
- The Introduction outlines the purpose of the report and provides a summary of the company.
- The Conclusion reflects on the analyses and states any limitations. All conclusions are logically supported by the analyses.
Perform a Porter’s Five Forces Analysis (10 marks)
Perform a SWOT Analysis (10 marks)
Identify the Corporate and Business Strategy for your selected company (7 marks)
- Clearly articulates the Corporate and Business Strategy of the company.
Writing qualities and referencing (8 marks)
- Writing is clear and concise. Grammar, spelling, and punctuation are correct.
- Chicago format is followed for writing, citations and bibliography.
Checklist for your Investigation Report
Referencing:
The report must have a reference list.
Each citation has a reference entry. All your references must be properly cited in your report and included in the reference list at the end of report. Each citation is checked.
Students shall use the Chicago referencing style when preparing the report. More information can be found on this style from the Library web site.
In-text citations are checked for proper formatting.
Strategy
Organisational Goals
Profitability
Maximising shareholder value
Risk
Others
◦organisational effectiveness
◦high productivity
◦good organisational leadership
◦organisational reputation, etc.
What is Strategy?
“… the means by which an organisation plans to achieve its objectives…”
Strategy Formulation
Involves managers analysing the external environment and the internal resources of the organisation to formulatepotential courses of action.
Levels of Strategies
- Corporate – strategies for the whole organisation.
- Business – strategies for business units within the organisation.
Strategic choices are different at different hierarchical levels, there is a need for consistency in strategies across business and corporate levels.
Types of Decisions
In formulating an organisation’s strategy, the following decisions must be made:
◦What business will we operate in?
◦How should we compete in that business?
◦What systems and structures should we have in place to support our business strategy?
Corporate Strategy
“Where will we compete?” instead of “How will we compete?”.
What business will we operate in?
Issues dealt with are:
1.Definition of businesses in which firm will participate.
2.Deployment of resources among those businesses.
Corporate Strategy
Concerned with
◦the types of businesses in which the company as a whole operates;
◦decisions about which businesses to emphasise or de-emphasise;
◦decisions about what businesses to divest or acquire; and
◦how to best structure and finance the company.
Corporate Strategy
Can be classified into three categories:
◦Single industry firm – uses core competencies to pursue growth within that industry.
◦Related diversified firm – firms that operate in a number of industries and their businesses are connected to each other through operating synergies.
◦Unrelated diversified firm – firms that operate in a number of industries and their businesses do not share common core competencies or resources
Business Strategy
How should we compete in that business?
◦Also called competitive strategy.
Deals with how to create and maintain competitive advantage in each of the industries that the company has chosen to participate.
Competition in diversified firms occur at the business unit level.
Business Strategy
Business-unit strategy depends on:
◦its mission (what are its overall objectives?)
◦its competitive advantage (how should the business unit compete in its industry to accomplish its mission?)
Generic competitive advantage
Types of Competitive Advantage:
◦Low cost
◦Differentiation
Low Cost
- Providing goods or services at the lowest cost while providing acceptable features.
- Economies of scale, tight cost control, cost minimisation.
- Minimal expenditure in R&D, marketing and overhead
- Serves as an entry barrier to potential competitors
Differentiator
Providing non-standardised goods or services to customers with unique needs, usually at a premium price.
Examples:
◦Dick Smith Foods Mission: Dick Smith Foods are made in Australia, by Australian owned companies. We believe this is important because it provides employment for Australians and all the profits remain here, helping the future of our country.
Key: customers should be willing to pay for perceived value added
Basis for Competitive Advantage
Which strategy?
How to determine which strategy to develop
◦Industry Analysis
◦SWOT Analysis
We will look at this in next week’s seminar.
Answer:
Introduction
Strategic Analysis Report of Westgold Resources Limited
Student Name
Course Unit
Course Instructor
Institution
Introduction
Westgold Resource Limited is the leading Australian company involved in exploration and mining of gold. It holds gold operation in the Kalgoorlie region of Western Australia, Western Bryah Basin, Norseman region and Murchison region. The company’s projects include; the central Murchison gold project (CMGP), Fortnum Gold Project (FGP), Rover Project and Tuckabianna Project among others. The company’s operating results have improved tremendously over the recent years leading to increase in its profitability. In 2020, the company recorded a net profit after income tax of $34,607, 315 which was a huge increase from $14,130, 064 in 2019. Its consolidated revenue increased from $418, 317,447 in 2019 to $492,268,271 in 2020.[1] This strategic analysis report investigates Westgold Resource Limited’s Porter’s Five Force Analysis, SWOT Analysis and the company’s corporate and business strategy.
Porter’s Five Force Analysis
Michael Porter’s Five Forces refer to a business analysis model which helps to explain different levels of profitability in various businesses.[2] Porter’s Five Forces strategy focuses on how organizations can build sustainable competitive advantage in their respective industries. Westgold Resources Limited’s competitiveness in the market was analyzed using Porter’s Five Forces model to determine its competitive rivalry, suppliers’ power, buyers’ power, threats of new entrants, and threats of substitution in the market.
Competitive Rivalry
Competitive rivalry among the existing players in the industry leads to decrease in prices and overall profitability of an organization. Westgold Resource Limited, operates in highly competitive material industry which is likely to affect its overall profitability. The organization’s competitors include; BHP Group Limited, Rio Tinto Limited, Anglo American among others. In order to tackle the intense rivalry among the gold industry competitors, Westgold Resource Limited does the following:
- Build a sustainable differentiation model for their products
- Scale up its operations to enable it compete effectively in the market
- They have also enhanced collaboration with competitors to increase the market size instead of competing for a small market in the gold industry.
Suppliers’ power
Suppliers bargaining power, has the ability to increase or decrease the margins that organizations can earn in the market.[3] Suppliers who are in dominant positions decrease the margins hence may lower the overall profitability of Westgold Resource Limited and other gold companies in the material industry.
Westgold Resources Limited deals with the suppliers bargaining power by ensuring that they build an efficient supply chain with multiple suppliers. They have also developed dedicated suppliers whose business depend on the organization.
Buyers’ Bargaining Power
Buyers always want to purchase the best products available using as minimum price as possible. Organizations in the gold mining industry stretch their resources to provide different products to their customers at affordable prices hence affecting the business’s profitability. When the customer base is smaller and more powerful, it has higher bargaining power and ability to seek increased discounts and offers. Westgold Resources Limited manages the buyer’s power by building a large base of customers and by rapidly innovating new products to limit the bargaining power of buyers.
Threats of new entrants
New organizations venturing in the gold industry bring innovations and new ways of doing things putting pressure on existing organizations like Westgold Resources Limited to lower prices as well as exploring other ways of providing new value propositions to the customers. Westgold resources Limited manages new entrants by innovating new products and building economies of scale so as to lower the fixed cost per unit.
Threats of substitution in the market.
New products or services that meets similar customer needs affects the profitability of the industry. The threat is usually high if the value proposition offered is different from the one in the industry. Westgold Resources Limited and other companies manages this threats by understanding the core needs of customers and increasing the switching cost for the customers.
SWOT Analysis
| Strengths
1. It has reliable suppliers of raw materials 2. Highly skilled employees through successful training 3. Automation of activities that has enabled the company to scale up 4. Strong dealer community. |
Weakness
1. Lack of strong innovation in product development 2. Gaps in products range hence giving competitors easy market entry 3. Its organization structure limits expansion 4. Financial planning not adequately done |
| Opportunities
1. Availability of stable free cash flow provides opportunities to invest in other product segment 2. Opportunity to enter new emerging markets due to government free trade agreements and technology. 3. Increased customer spending |
Threats
1. Shortage of skilled workforce 2. Increased competition in the gold industry 3. Changing consumer behaviors |
Corporate strategy of Westgold
Westgold Resources Limited applies the strategy of developing new products or markets to help it accomplish its corporate growth objectives. It also uses market penetration strategy which encourages sales growth within the current customer base as well as focusing on developing the existing product to penetrate the existing market effectively.
Business Strategy Westgold
Westgold Resource Limited uses a combination of differentiation and cost leadership strategy to gain a competitive advantage in the gold industry. This strategies enables the company the gain quick brand recognition, expanding their customer base and achieving sales targets by offering affordable products as well as enhancing their accessibility.
Conclusion
Westgold Resource Limited has been an icon in the exploration and mining of gold industry. The organization applies various strategies to remain competitive in the market. This investigative report revealed that the profitability of the organization has tremendously increased over the last three years owing to the business and corporate strategies used by the organization.
Bibliography
Inderst, Roman, and Christian Wey. “Buyer power and supplier incentives.” European Economic Review 51, no. 3 (2007): 647-667.
Porter, Michael E. “Competitive Strategy: Techniques for Analyzing Industries and Competitors.” Revista Inteligência Competitiva 2, no. 2 (2012).
Westgold Resources Limited: Financial Report (2020) retrieved from https://www.westgold.com.au/site/investor-centre/annual-reports 1/9/2020
[1] Westgold Resources Limited: Financial Report (2020)
[2] Porter, Michael E. “Competitive Strategy: Techniques for Analyzing Industries and Competitors.” Revista Inteligência Competitiva 2, no. 2 (2012).
[3] Inderst, Roman, and Christian Wey. “Buyer power and supplier incentives.” European Economic Review 51, no. 3 (2007): 647-667.
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