Harvey Norman is a large sized Australian multi-national retailer of furniture, bedding, computers, communications and consumer electrical products. The company mainly operates on franchise system where the main brand is operated through stores owned by ASX-listed Harvey Norman. As on 2016, there are 280 company-owned and franchised stores in Australia, New Zealand, Europe and South-East Asia under the name of Harvey Norman. The brand has occupied a huge market share due to its innovative practice. This has allowed the brand in gaining significant market share not only in Australia but in South East Asia. Customers feel delighted due to availability of different product under one roof where they can easily differentiate. The company is planning to expand strategically across globe with a strategy to gain market competency. As of 30 June 2015, the company has overseas operations in Republic of Ireland, Malaysia, New Zealand, Northern Ireland, Singapore, Slovenia and Croatia (CompanyProfile.2008).
The report is based on the strategic growth and expansion plan of Harvey Norman in Singapore. It defines the strategy incorporated by the brand in the country to gain market competencies. Harvey Norman stores in Singapore is owned and operated by a Singaporean company, Pertama Holdings Limited. Harvey Norman and its associated company hold 80.2% of the company, with a Singaporean sporting distributor, Ossia International, holding 19.8%. As of July 2013 Harvey Norman Singapore and Harvey Norman ossia (Asia) Ltd had held over 83% of Pertama's shares. Harvey Norman is functioning directly owned by the Harvey Norman Holdings Limited.
Motivation for Investment in Asia
The Asian market is booming at a fast pace creating ample of opportunities for the international business organizations. The economies in Asian countries are rising, creating opportunities for the International business organization to grow well.
The data published by World Bank shows the GDP growth in South Asia rose to 6.9 percent in 2014 and 7.5 percent in 2015. The Asian market is an untapped market with massive potential. The reasons for making an advancement to nurture or develop a business in this continent:
The Asian market is fast developing with extraordinarily focus on innovative intervention. There are World-class tech hubs in Singapore, Hong Kong, Tokyo and other Asian cities. Asia is a fast developing market with ample of market opportunities for the international organization. Advancing technology, government support and tax breaks have created a favorable environment to nurture businesses. These facilities have attracted international companies to explore the business opportunity out in Asia. A report from Forrester forecasts that online business in China will reach $1 trillion by 2019. The fast market growth is achieved due to technology based driven business environment. The business advancements have helped in managing the business in an appropriate way by creating market opportunities. An Increase access to mobile devices, ecommerce and apps has improved the overall networks developing multiple opportunities in order to develop a better environment (Dunning, 2012).
Enormous population and market
The Asian market is very big with a huge population. The vast population represents vast market potential customers with lot of business opportunities. This has helped business in delivering effective upcoming and untapped talent. This is how the Asian market is growing considering the market growth and development opportunities. The growing population with the evolving tech industry has helped in a systematic growth. Asia has a large pool of talent and customer base, creating a wide level of business opportunities. These opportunities have enabled the international business organization in gaining market competencies (Fernie and Sparks, 2014.).
The Asian market has an exciting culture for the international organization in order to gain market opportunities. This is important for the business organization to manage the ample of growth and development opportunities in Asia. This has helped in creating better opportunities in order to gain competencies is. Contrasting established markets in the U.S. and Western Europe, Asian market is an emerging economy creating a wide scope for innovation and unique opportunities (Khanna, Palepu and Sinha, 2005). The start-up culture in Asian countries has increased at an incredible rate, and that’s inspiring. Cities like Beijing, Tokyo, Shanghai and Bangalore were among the top six in the world in terms of growth in venture-capital deals in 2014. The Asian economy is developing at a fast pace which means development of new opportunities and possibilities available in creating a better growth opportunities (Kalhan, 2007).
Moreover, Asian countries have better infrastructure facilities connecting major cities. The better infrastructure facility has helped in developing better opportunities. Major cities in Asia have advanced infrastructure helping in raising the business opportunities. Rapid growth in Asian countries has helped in developing better investment opportunities in both economic and social infrastructures (Killing, 2012). This has helped in gaining better opportunities for the international companies in order to gain market growth. The advanced market infrastructure has helped in attaining an effective market growth and infrastructure based opportunities. The better infrastructure opportunities have helped in gaining opportunities. These policies are important for the organization in managing market competencies. The long-term sustainable organizational culture has created wide organizational goals in order to master growth strategy (Kim, Park, Park, and Joo, 2005).
Rationale for the choice of country
Singapore stands at a strategic position at the confluence of the East and the West. The country is known very well as a significant business hub. The geographic location of the country has helped in creating an important market share. Singaporean sea ports are linked very well with the rest of the country creating wider business opportunities. The Singaporean Airport is ranked amongst the top 5 for air cargo. The flights are well connected with most of the countries providing with better business opportunities (Kinra, 2006). In order to be developed as an efficient and advanced business hub, the country has gained an effective market growth structure in order to create better market value. Singapore has a wide market with a better infrastructure making it the most suitable option for the International brands. The ‘Smart Nation’ program is created and delivered by the Government with a purpose to harness improved lives of citizens and for creating more opportunities to develop stronger communities. There are wider opportunities that have helped in utilising technology in order to serve people and their needs in order to manifests innovative creations such as the Beeline App. This app is important from the point of view to develop transport routes based on commuter’s demands (Kolstad and Villanger, 2008). The efficient transport and infrastructure has provided with an evident services to offer young technologists the challenge to meet the targets. The infrastructure and business development initiative by the government has purely helped in managing the business organization in dealing with the issues. The city has a physical infrastructure with a highly-developed integrated transport system that supports Mass Rapid Transit (MRT) trains, buses and taxis. In 2013, Singapore was voted as the world’s best infrastructure under the survey undertaken by consulting firm Mercer for the Wall Street Journal.
Most interestingly the working environment in Singapore is highly sophisticated infrastructure supporting the balance in between if the workforce that support structures efficiently. In spite of the country’s size, Singapore’s is one of the highly educated and motivated workforces in the world. Singapore came top for Labor drive assessment. The city appreciates the most astounding positioning for work in terms of laborers' abundance and general state of mind, due to Singapore's unrivaled business exhibitions with cutting edge technology. The inspiration and efficiency is a consequence of powerful organization arrangements, an exclusive requirement of living and a dedicated culture (Kotler, 2009).
Stringent Intellectual Property (IP) laws and a noteworthy prominence on the regulation have guaranteed that organizations while making an investment into Singapore. The Government has remained a foundation of Singapore's development in the course 50 years; a representative for the Law Society of Singapore remarking that ''It gives a structure that is straightforward and advances sureness in the law, which gives outside speculators certainty.
Lawful security is communicated most clearly everyday by thorough and regarded IP laws. Singapore is positioned fourth in the world and first in Asia due to the best IP insurance by the World Economic forum Report 2015/2016. In addition the U.S. Global Intellectual Property Centre’s 2015 additionally positioned Singapore top in Asia for its IP environment. Such lawful security has prompted a progression of multinational worldwide companies, for example, Procter and Gamble and DHL, choosing Singapore as their decision for innovative work formation. While Expanding on the lead of law and pragmatic reality of business exchanges, Singapore has built up an ideal money related law, including the production of mediation focus and devoted business court. This is making a steady and secure condition to direct business to thrive as a worldwide legitimate focus and Singapore is presently sticking to this same pattern
Business supportive environment
The above mentioned factors are important for gaining effective results while conducting business activity. There are supportive funding bodies that are involved in providing an easy trade and commerce. The availability of private investment has provided with a wider scope in order to gain a competitive advantage. This business environment is playing an important role in managing the business requirements.
Business segment and competitive approach
The Retail volume sales of consumer electronics market in Singapore have reduced in 2016 due to the slowdown of economy, poor employment and wage stagnation. A lack of innovation in the market was one of the major reasons for the declining sales and caused a slowdown in Smartphone’s, tablets and wearable’s.
In the recent time period there is been a fall in the smart wearable’s as the expectations remains confined to a very niche audience. No matter, there has been a revolution in the industry, but there was no significant change in the not obligatory accessory.
There are certain Chinese brands who sustained their space in the consumer electronics, chiefly in smart phones, cannibalizing sales of existing brands. Xiaomi, Huawei and Oppo are the few brands that performed extremely well because of the product offerings. There are other brands like Apple Watch and Samsung affected by the invasion of Chinese brands. The sales of mid-priced brands like LG, HTC and Sony has suffered competition from low priced Chinese Smartphone (Chong, Seng, 2015).
There is a feeble domestic and tourist demand, competition from online retailers and cross-border transactions. The consumers are largely dependent on the flagship stores, experiential spaces and Omni-channel strategies. A majority of Electronics and appliance specialist retailers are refurbishing existing outlets in order to add innovative features (Johnson, et al 2013). These Retailers are focusing on concept stores helping in managing the sales in an effective way. In this way the company is able to interact with sales team while merging online channels to create a better option for the people. Singapore market has a sluggish competition with a very few stores based on the same concept. These stores are helping in creating a seamless customer experience in order to create a seamless shopping experience. Challenger, Courts and Mustafa Center are some of the example of the Electronic retail store. Harvey Norman is already doing well in the market due to availability of less competition. . The stores operate with a high level of integrity. They are known across in Singapore for providing better discounts. In this way they are able to manage and integrate the franchise mechanism In Singapore (Motohashi, 2015)
Source of market intelligence available
Harvey Norman stores in Singapore have a full range of technology gadgets and household appliances. They are providing with the Apple laptops, Samsung tablets, Sony entertainment systems and other appliances. The store provides with an excellent services with an efficient professional. The employees are helpful, friendly in terms of providing with services. This has allowed the brand in expanding business in Singapore. Within a short tenure the brand has established itself as a well-established brand. They are not using hard selling tactics to please the customers. They only believe in giving an effective shopping experience to the customers. The brand is known across Singapore as an efficient consumer electronics shopping places; Harvey Norman offers a largest selection of different brands that includes works with Bosch, a famous German manufacturer (Peng, 2016). The one stop store is evidently helping the brand in making significant changes in the market. This is providing an effective way to deal with the strategic marketing issues. Harvey Norman has significantly gained market growth in the Singaporean market. This is helpful for organizing better growth opportunities in Singaporean market. This is important for managing the challenges occurring at the local market. Asian market has ample of growth opportunities in order to gain better organizational growth. In case of expanding business in Singapore, it is evident to manage the changes in an effective way (Hill, et al 2013). This is better for gaining market competencies and various different growth opportunities into the current market. It is evident for meeting the challenges and gaining market effectiveness thereafter. This is important for the business organization in dealing with the consequent market intelligence strategies. These are one of the important parameter in dealing with the appropriate tasks an organization needs. Harvey Norman stores in Singapore is owned and operated by a Singaporean company, Pertama Holdings Limited. Harvey Norman and its associated company hold 80.2% of the company, with a Singaporean sporting distributor, Ossia International, holding 19.8%.
Harvey Norman has a strategic policy to manage the organizational growth and development in availing long term sustainable growth. These results are important in managing the systematic growth and development plan (House and Street, 2016). This is important for getting an effective role while managing market effectives. The market value is created by subsequent growth and development in order to gain competency (Verbeke, 2013). Successful marketing intelligence provides with a motive to manage competition. This provides with a base to make an effective comparison in between the companies working. It is therefore helping in balancing the gap in the organization in order to develop an effective plan. These plans are important for gaining better organizational goals. The purpose of the effective plan is to gain growth inside the organization while coordinating with the difference (Cavusgil et al 2014; Madsen and Walker, 2015).
Dos and Don’ts of conducting business in Singapore
The Singaporean business culture is very competitive with a very high focus on ethics. It is suggested to focus on the ethical code of conduct in order to manage business competency. Harvey Norman needs to focus on the ethical norms while conducting business in Singapore. The business culture is very sophisticated which requires a special attention in order to manage the organizational values effectively.
Harvey Norman should avoid placing the organization near its competitor. This will help in coming up with better completive services. It is serving as an effective platform in order to gain market competencies (Angeloska-Dichovska and Mirchevska, 2017).
Key competency of Harvey Norman for expansion in Asia
The multi-retail store outlet is known for its effective market strategies in Australia... In Singapore the brand has formed an alliance with the local corporation to diversify the revenue. It is through the effective market strategy that the brand is able to gain market effectiveness. There are plans that are leading to the conclusion that the brand is planning to expand in Asia. The primary reason is due to the effective competitive strategies. These strategies are important for gaining long term market competencies while handling the issues. This is better for the organization in order to deal with the issues (Hitt, Li and Xu, 2016). The stores operate with a high level of integrity. They are known across the world for its largely controlled ethical behavior. They have managed to integrate the franchise mechanism within the Australian economy. The international store is operated on the same manner while managing a superior level of integrity channel (Kim and Mauborgne, 2014). The retail dominance of Harvey Norman occurred due to a high rate of commission paid to the sales person. These strategies are important for meeting the consequent result and for developing better organizational results (Wild, Wild and Han, 2014). This is better opportunities in order to gain market competencies. The organizational goals are important for managing excess competition in the market. This is better for managing growth. Asia has fast growing market opportunities with wider results. It is important for Harvey Norman in order to manage growth. This is important for managing the excessive competition in order to deal with the excessive market pressure. This is evident for handling excessive organizational goals. It is important for better marketing opportunities in order to gain competencies; this is effective in dealing with the issues that need to be managed at different level. It is necessary for handling competition in the Asian market. This is important for managing long-term sustainable goals. Harvey Norman follows efficient market strategies in order to create a distinct market role. There market strategy is to incorporate strategic innovation in the process so that the organization can gain distinct result. With lots of potential and brand value, it is possible for the brand like Harvey Norman to establish itself as a potential player. This is evident for any brand to develop an effective market strategy so as to gain distinct market goal (Boshyk, 2016).
Challenges faced by the company
The Southeast Asian city-state's focused retail scene isn't new. Long-standing macroeconomic elements like increasing expenses and an excessive market pressure because of more tightly remote labourer arrangements heightened rivalry. The ascent of internet business aggravated those troubles, while, all the more as of late, a decrease in visitor entries in 2014. Government figures demonstrate worldwide crowd coming to Singapore for the initial 11 months of 2014 as 3.4 percent i.e. 13.72 million. This is expected predominantly to a 25.7 percent decrease in Chinese guest landings, which are eminently the greatest spenders among travellers in the Southeast Asian city, the Singapore Tourism Board said.
Due to this, the retail division has intensely dependent on the local tourism industry, Singapore's retail deals saw a miserable begin to 2014, with month to month decreases through May, and government information appeared. With a wide-spread competition and taxation has posed certain level of challenges for the company. This has evidently become one of unexpected reason for the company to establish itself in South East Asia.
To conclude, as a franchise store the company, Harvey Norman leases out the stores to the franchisee and provide them with advertising and administrative services. Gerry Norman is the visionary of the company who takes all the major strategic decision. The company is very well-known slogan “go Harvey, go Harvey, go Harvey Norman. The motto of the company completely supports franchise operators culture in the country of operations. The stores operate with a high level of integrity. They are known across the world for its largely controlled ethical behavior. They have managed to integrate the franchise mechanism within the Australian economy. The international store is operated on the same manner while managing a superior level of integrity channel. The retail dominance of Harvey Norman occurred due to a high rate of commission paid to the sales person. Harvey Norman is increasing its strength in Singapore with a motive to become the number 1 store. This strategy has helped the brand in regaining market capacity in a well defined way.
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