PESTLE Analysis (DENPTC)
‘Brickworks’ is an Australian organization that was founded in the year 1934 and involved in the development, design, distribution, marketing, of the building materials. It is the major and most varied building material producers in the world. The company has built its persistent reputation with its large customer base. Moreover, it commits to assist, motivate, develop, and build superior environments and places for its clients and societies. It gives importance to two aspects namely responsibility and cares for its people and environment that are the foundation of its values. This company has a wide range of brands that have gained their well-established presence all over the globe (Brickworks, 2020). This report discusses the situation analysis of the company by studying its products & services; customers; competitors; and the value proposition of the brickworks organization. Moreover, it entails the PESTLE and SWOT analysis to study the external and internal environment of the company and comprehend the strengths, weaknesses, threats, and opportunities available.
‘Brickworks’ has a beautiful variety of products that last forever since it is the leading manufacturer of excellence building products. All of its brands namely Austral Bricks; Bowral Bricks; Crafted Bricks & Pavers; Glen-Grey; Nubrik; Pronto Panel; and more are well-established so far. These brands are constantly creating their reputation for offering topmost superiority. The products of brickworks are stylish and innovative enough that they create sustainable material for the beautiful environment. This company is exclusively placed to fulfill the desires and demands of the building sector with its wide portfolio of products and the manufacturing facilities across Australia (Brickworks, 2020). The products of the company are as follows:
It is true that customers are the most essential stakeholders whose desires must be fulfilled by the company as they are the ones who buy a company’s product (Grewal et al., 2017). Keeping this thing in mind, brickworks always fulfills the demands of its customers by offering them innovative and stylish products that are sustainable in nature. The major aim of the company in respect of its customers is to deliver outstanding customer experience at all stages of the journey along with offering sustainable building material. In the year 2019, there was a substantial increase in the value of its portfolio of industrial property which is due to the fact that the company has modernized its supply chain as per the tastes and preferences of the customers like virtual shopping (Brickworks, 2019).
The Brickworks Company has been considered to be the biggest competitor in the building industry. This company has superior domination in the market due to its proud history for 80 years. The major competitors of the company are Boral bricks Inc., and Basalite Concrete Products LLC, both of which are having higher supremacy in the market. However, Brickworks Company has immensely achieved in gaining a competitive advantage with respect to the national level and expanded customer reliability so far. Furthermore, this company has been able to handle its existence in numerous isolated areas for making its products available to clients and hence directed in the improvement of the customer base. Due to its value-added products and services; it has gained enormous attention from the customers and hence has sustained its competitive advantage for numerous years.
A value proposition can be defined as the value that is pledged by the company to deliver its products and services to customers. It summarizes the reasons for customers why they should buy their products and services (Priem, Wenzel & Koch, 2018). Brickworks Company is of the view that its values direct its culture and these are the crux of what the company stands for. The values of the company are care, collaboration, exceed, innovate, integrity, and lead. Care means the company strives to protect its environment and people by carrying out safe production processes and delivering sustainable products. It believes that all its employees, shareholders, communities, and supply chain are responsible for generating value to the society and customers. It means that it believes in collaborations and partnerships with the customers and industry to achieve more. Furthermore, it keeps on changing its products by bringing innovations and changes as per the demands of the customer. With any evolution in the industry, it keeps focuses on delivering better products through its technological advancements.
The PESTLE framework is utilized by the vendors of the organization for evaluating the external business setting that may influence the activities of the business. With this particular framework, the company is able to comprehend its threats and opportunities (Ho, 2014). The factors that are to be analyzed in this framework are as follows:
The population is one of the demographic factors that can have an influence on the building industry in Australia (Martek et al., 2019). Demographic factors entail gender, education level, income, age, experience, and others that impact the performance of any business. Further, it is about the characteristics of the population in a particular area. The population of Australia has been progressively rising which is clear from the fact that approximately 40 lakhs residents were added of which 20 lakhs belonged to net overseas migration. Furthermore, as far as education level is concerned, inhabitants of the nation are highly educated and the country is experiencing growth in terms of international students (Parr, 2018).
There are numerous economic factors like interest rate, inflation, savings, unemployment, and others that may have an influence on business performance. Within the domestic environment, several challenges are encountered by Brickworks Company for maintaining higher performance due to the decrease in GDP growth rate. Further, the inflation rate has been amplified from 1.9 percent to 2.1 percent in the year 2018 (Hossain, 2019).
It is true the Australian government has started promoting environmentally friendly business practices. Australia is facing an issue with the climatic conditions as its climate is very adaptable from year to year. It will have a huge impact on the building material manufacturing business Brickworks Company as this can lower the demand for its products in fluctuated climatic conditions (Amelung & Nicholls, 2014). However, the business has its mission in reducing the environmental impacts like carbon footprint, climate conditions, and waste management.
The political environment of the Australian nation is stable and secure. The Brickworks Company includes of suitable constitution delineating the accurate regulations and principles of doing business. It is a fact that the Australian government has made certain legal framework in respect of tax, benefits to employees, equality, and tariffs. Moreover, there are privacy rules for handling the confidentiality of the customers. All these laws and regulation certifies justifiable trading for the companies and customers (Dowling, 2014).
There is no doubt that the Australian nation is best known for technological innovations due to its prompt adaptation to the novel inventions and technologies. Today, Australian companies are enormously investing in modern technologies like big data, artificial intelligence, and others for meeting the rising demands of customers. However, these technologies are expensive to use in companies, and hence it is a major concern for businesses (Yigitcanlar et al., 2019).
The cultural factors are related to the lifestyles of people, their preferences, and other cultural sides. It is a fact that every company must take into consideration the tastes and preferences of customers to remain competitive in the market. In Australian companies, the lifestyle of individuals is the essential factor that analyses the behavior of the customer towards a product.
SWOT Analysis is the most cooperative approach that needs giant harmonization among diverse divisions in companies like marketing, operations, sales, finance, and more. This tool is essential for the company in recognizing the internal strengths and weaknesses and external threats and opportunities (Gürel & Tat, 2017). The SWOT analysis of Brickworks Company is as follows:
It is true that Brickworks building material is one of the leading organizations hence, it consists of numerous strengths allowing it to prosper within the market. It has robust free cash flows since the past numerous years due to which it has made enormous investments in its brand portfolio and expanded into new varieties of products. Furthermore, it has extremely skilled staff due to its constant training and development programs. Automated services are its biggest strengths that have brought stability to excellence in the products of the company. Therefore, the current strengths of the company are its skilled and talented workforce and the automation in the products.
These are the areas where a company needs to improve itself to remain competitive in the market and to improve on its loopholes. Every company has certain weaknesses despite having numerous strengths (Phadermrod, Crowder & Wills, 2019). The brickworks company is also lagging behind in certain aspects like it has poor financial planning abilities; it has a lack of demand forecasting abilities for a product and more. Due to these loopholes, the company missed chances of reaching target customers as compared with its competitors in the market. Due to poor financial planning, it has sometimes lacked funds to invest in research and development activities and hence it negatively affects the liquidity position of the company.
One of the major threats for Brickworks Company is the changing preferences of customers with the constant evolution of technological advancements. Furthermore, there is an intense level of competition available in the building industry that is also posing a threat to the company. Moreover, every nation has different laws and regulations to do business operations hence Brickworks Company has to adapt to and learn about those laws so that operations could be done smoothly. Additionally, there may be an irregularity in the novel product supply that may lead to low and high fluctuations in the number of sales over time.
The Brickworks Company has an opportunity to enter the evolving markets with the free trade agreement of the Australian government and the adoption of modern technology. Further, it has a chance to increase the profitability of its business with the novel taxation policy and carry out business freely. The green drive by the government can help the company to position itself in the market by offering sustainable and green products and focus more on CSR practices. Stability in cash flows can be helpful for the company to invest more in reach and development activities and technologies.
By analyzing the external and internal environment of the company, it is highly recommended to the company that it must require high-level planning that demonstrates strategic guidance to its business. Moreover, it is suggested that it must put its efforts in retaining its existing customers instead of acquiring novel clients. It will be more beneficial in cost-cutting. Further, there must be an accurate practice of handling the acquired cash flow and to be earned cash in an efficient manner in order to sustain the fiscal stability and strength of the company. It is highly recommendable that it must make use of data analytics software tools to analyze the customer trends and improve its decision making for gaining competitive advantage.
From the above situation analysis of the Brickworks Company, it can be concluded that the company is well versed in having skilled staff to offer robust and outstanding customer services. However, it must have to improve itself with respect to proper planning for financial aspects, technological software implementations for proper demand forecasting, and more.
Amelung, B., & Nicholls, S. (2014). Implications of climate change for tourism in Australia. Tourism Management, 41, 228-244.
Brickworks (2019). Annual report. Retrieved from http://www.annualreports.com/HostedData/AnnualReports/PDF/ASX_BKW_2019.pdf
Brickworks (2020). About brickworks. Retrieved from https://www.brickworks.com.au/company/about
Brickworks (2020). Beautiful products that last forever. Retrieved from https://www.brickworks.com.au/products
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Hossain, A. A. (2019). Does money have a role in the inflation process? Evidence from Australia. Australian Economic Papers, 58(2), 113-129.
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Phadermrod, B., Crowder, R. M., & Wills, G. B. (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, 194-203.
Yigitcanlar, T., Sabatini-Marques, J., da-Costa, E. M., Kamruzzaman, M., & Ioppolo, G. (2019). Stimulating technological innovation through incentives: Perceptions of Australian and Brazilian firms. Technological Forecasting and Social Change, 146, 403-412.
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