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Discuss About The Bargaining Power And Industry Dependence In Mergers.

External Audit

Dymocks bookseller is an Australian bookstore which was incorporated in 1879. The organization has 60 stores in Australia and has had various stores in Hong Kong and New Zealand. The first Dymocks bookstore was opened in Sydney by William Dymock. It is one of the biggest and oldest bookstores in Australia (Dymocks 2018). It has been noted that Dymocks stores are operated and managed by locals who are tremendously well-read and passionate about books (Dymocks, 2018). The bookstore provides various types of books, DVDs, and eBooks to the customers across the world.

External audit plays a significant role to analyze and evaluate the risks and challenges of the market. This external audit protects the business from the external obstacles and factors that could affect the productivity and performance of the firm adversely (David, 2011).

The porter five forces analysis is done by Dymocks bookstore to understand where the firm power lies in a business situation. The porter five forces analysis helps the company to understand and evaluate the strength of the competitors in the marketplace. The porter five forces analysis has been detailed below.

Bargaining power of buyers: The bargaining power in the hands of the buyers is high (Vasarhelyi & Halper, 2018). The buyers have the ability to reduce the prices and increasing the quality of the products. In order to increase sale volume, Dymocks needs to focus on the needs and requirements of the customers.

The bargaining power of suppliers: Supplier provides material to the firm then Dymocks can run the business successfully and effectively. It has been noted that bargaining power of supplier is low in Dymocks because most of the material is brought by the company ownself.

Threats of substitutes: Dymocks focuses on the prices of the competitors to beat them effectively. The threat of substitute is high in a retailing industry (Ahern, 2012). The threats of substitutes exist because books and DVDs demand is affected by switching costs.

The rivalry among the competitors: It has been noted that rivalry is high among the competitors. The rivalry among the competitors is most significant of any industry (Horn & McGee, 2012). As the same way, it plays a significant role in Dymocks bookstore. It is stated that rivalries sell the same product at lower prices thus it affects the selling process of the firm.

Threats of new entry: The threat of new entry is high in bookstore chain Dymocks that have a direct impact on the sustainability and outcomes of the firm. Dymocks needs to reduce and eliminate the threat of new entrant by creating a good image in the minds of the customers.

Porter Five Forces Model

It is analyzed that Dymocks bookseller is dealing with a shift from print to digital media that is leading and growing to changes within the organization (Wiek, Withycombe & Redman, 2011). The key success factors for Dymocks have been detailed below.

  • It is stated that Dymocks has made the transition to e-books sales by using online sites and websites. It has been studied that Dymocks attract readers by providing various opportunities to the customers across the world.
  • Dymocks uses new technology and services to increase and maximize the revenue and profitability in the marketplace. Social media is a good example to maximize the sale of the firm (Foss & Knudsen, 2013).  Social media tools such as podcasting can develop and boost sales and bring customers into a store.
  • Apart from this, Dymocks uses unique and effective strategies and policies to attract the maximum number of the customers in the global market. In addition, a bookstore is adding snack shop and coffee bar to attract more customers in the competitive market. 

Value chain analysis is a strategy and process that is used by Dymocks to analyze and identify the internal firm activities. It recognizes those activities which are most valuable and significant. It has been noted that marketing and sales activities are one of the effective and unique activities in the value chain analysis for Dymocks (Rothaermel, 2015). The bookstore uses multi-channel marketing strategy through its retail stores and online channels. Apart from this, the firm uses advertisement and promotional strategy to the demands of the books. The main aim of Dymocks is to attract customers through its membership programs which give greater discounts, and special discounts. It is stated that human resource management is the other activity of the value chain analysis that provides value to the customers. It is significant to have happy employees for the company that are able to serving the consumers as the firm promised. In value chain analysis, books are published by the publishers and then it sent for the printing. The distribution companies distribute these books to the booksellers effectively and successfully. In this way, effective and unique value chain analysis is used by Dymocks in the workplace.


Key core capabilities and competencies play a vital role to expand and explore the business activities and operations successfully and effectively (Bakker, 2014). These capabilities and competencies determine the success and progress of the firm. Dymocks core competencies include system thinking, external collaboration, social innovation, sustainability literacy and active values. The core capabilities include the brand image, employees, social media, affordability, awareness and local market adaptation. These core capabilities provide competitive advantages to the company. By maintaining core capabilities, the firm has been able to analyze and evaluate the plans, policies, and strategies of the competitors. Furthermore, it also helps in attaining long-term mission and vision of the firm (Wiek, Withycombe and Redman, 2011).

A strategic issue has been considered as a fundamental policy, question or a critical problem and that is also considered as liable in impacting the mandates, offerings, mission and vision and mix clients and all the stakeholders, structure and strategies of the business entity (Barney & Hesterly, 2010). The organization's culture will be impacted which issues will get on agenda and how they are structured and will also stimulate the strategic options. The below mentioned are the two strategies issues that will be impacting the Dymocks:

Key Success Factors

Management planning and faulty planning process are one of the biggest strategic issues that will be faced by the business organization. Chances of this type of issue will rise due to the changes in the political and technological environment (Buckingham, 2011). These changes will be stimulating the business environment of Dymocks. The second strategic issue that will be faced by the entity is of unskilled labor and workforce proficiency. The business entity will be facing the number of issue =s due to the unprofessional and unskilled labor, as the workforce will not be able to provide a qualitative service and that will lead in lowering of productivity and profitability. The planning of strategies and tactics will also be affected by the unskilled workforce will be not able to cope-up with the organizational structure and working environment. These are the issues that can be considered by the business entity for the future time as well. As mentioned in the given scenario these issues will be having the impact on the organizational structure for the upcoming three years if they are not resolved.

Determining the vision for the future and also the identification of goals and objectives for the business organization and this all is done by the managing authorities and this process is known as strategic planning. The below presented is the strategic plan that has been developed on the basis of the above-identified issues by the Dymocks:

Identification of issues

Analysis of the issues

Generating alternatives

Management planning and faulty planning process

Adoption of unfair and biased business practices is the main reason for the faulty process of the management planning and also a low level of transparency by the management side is also one of the reasons of the occurrence of this issue (Carroll, Primo & Richter, 2014).

Making provisions for the advanced training sessions for the management authorities so as to enhance their planning and decision-making skills and also motivating the management to fat involved with the workforce and increase the transparency level.

Un-skilled labor

The lower level of quality of the products and services and due to which there is a decline in the productivity.

Provisions of the training sessions for the workforce should be made and also involved with the managing authorities should be done so as to make them feel motivated.  

Strategic objectives are the one that depicts what the business entity is attempting to attain, whereas, the financial objectives are the future finance related plans and needs of the business firm. The below mentioned are the strategic and financial objectives that are developed for Dymocks:

Strategic objectives

  • Expanding sales to existing customers
  • Marinating and achieving outstanding customer services
  • Advancing and utilizing customer base

Financial objectives

  • Increasing revenues by 25% as compared to the last year
  • More focus should be provided towards increasing the positivity of cash flow

Activities   /Duration

Time Duration

Responsible Person


Identification of Strategic  issues

1-2 Months

Head of the concerned departments

Monitoring the issue and finding the root cause

Analysis of issues

3-4 Months

Management authority

For developing solutions over the issues for bringing improvements

Generating alternatives

6 Months

Team leaders and the other teammates

For the purpose of the eliminating the chances of errors

Approval for alternatives

3 Months

Management authorities

For making the process legal and increase the authenticity



After summing up the above-executed analysis it has been concluded that strategy and change are the two core concept or aspects of a business corporation that is considered as core an integral part of the structure. Dymocks is one of the largest brands in the retailing industry. The above-mentioned analysis shows that how Dymocks conducts the internal and external audit to reduce the risks and challenges of the market. It also describes that how strategic and action plan helps to maximize the profitability of the firm. The report also comprises of the strategic and action plan that is based on identified strategic issues faced by the business corporation.


Ahern, K.R. (2012) Bargaining power and industry dependence in mergers. Journal of Financial Economics, 103(3), pp.530-550.

Bakker, D. (2014) Vertical Brand Portfolio Management: Strategies for Integrated Brand Management Between Manufacturers and Retailers. Springer.

Barney, J.B. & Hesterly, W.S. (2010) Strategic management and competitive advantage: Concepts. Englewood Cliffs, NJ: Prentice hall.

Buckingham, I.P. (2011) What’s Employee Engagement?. In Brand Champions (pp. 37-74). Palgrave Macmillan UK.

Carroll, R.J., Primo, D.M. & Richter, B.K. (2014) January. Using Item Response Theory to Improve Measurement in Strategic Management: An Application to CSR. In Academy of Management Proceedings (Vol. 2014, No. 1, p. 12215). Academy of Management.

Cassidy, A. (2016) A practical guide to information systems strategic planning. Florida: CRC press.

David, F.R. (2011) Strategic management: Concepts and cases. Peaeson/Prentice Hall.

Dymocks.(2018) About Dymocks [Online], Retrieved from:,

Foss, N.J. & Knudsen, C. eds. (2013) Towards a competence theory of the firm (Vol. 2). New York: Routledge.

Rothaermel, F. T. (2015). Strategic management. US: McGraw-Hill Education.

Segal-Horn, S. & McGee, J. (2012) Strategies to cope with retailer buying power. Retail and Marketing Channels (RLE Retailing and Distribution), 6, p.24.

Vasarhelyi, M.A. & Halper, F.B. (2018) The continuous audit of online systems. In Continuous Auditing: Theory and Application (pp. 87-104). Emerald Publishing Limited.

Wiek, A., Withycombe, L. & Redman, C.L. (2011) Key competencies in sustainability: a reference framework for academic program development. Sustainability science, 6(2), pp.203-218.

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