Essay: Analysis Of David Jones Pty. Ltd. In Australian Retail - 70 Chars.

Analyse the Australian Retail Industry and an Organization which Operates in the Country.
 

Analysis of the Australian retail industry

David Jones Pty. Ltd. or David Jones is an Australian upmarket based department store that has been acquired Woolworths Holdings Limited in the year 2014. David Jones was established in the year 1838 by the David Jones who was a Welsh merchant when he had migrated to Australia. David Jones is the oldest department store which had been operating in the industry and has been able to develop a major position in retail based industry of Australia. The organization currently operates around 45 stores in different Australian territories and states (Davidjones.com., 2019).

The report will be based on analysis of the industry in which David Jones operates and trends which exist in the industry as well. The corporate and financial performance of the organization will be analysed in detail in the report with the competitive advantage which has been developed in the industry as well.

The Australian retail industry has recently faced major disruption from the international organizations which have entered the country. The retail based landscape has started changing along with the consumers as well. The consumers in the industry have become more technology savvy and busier as well. The future operations of the retail industry of Australia is also based on the multiplicity and agility of different delivery platforms can affect the non-responsive retailers (Barros, Hernangómez & Martin-Cruz, 2016). The revenues which have been earned by David Jones in Australia in the year 2018 was 18 Billion Dollars that 0.9% lower than its revenues that were earned previously. The organization has shown negative levels of growth in the retail industry of Australia. The overall size of the Australian retail industry as of 2016 was 122 Billion US Dollars (Businessinsider.com.au., 2019). The Australian retail industry is mainly ruled by the two major organizations namely, Woolworths and Coles. David Jones has not been successful in gaining a major part of the market mainly due to this reason.

The buying strategy that David Jones uses that is it offers all things to the peoples by taking the risk and making the company a jack of all the trades rather than becoming the master of one kind of products. David Jones buys the products of different sources and sells those to the customers as it is not possible for the sources to reach the customers. The business shares half of the profits to the sources thus it becomes beneficial for both the source and the retailers. For providing the effective services the company are required to train the staffs 

Financial and corporate performance of David Jones Pty. Ltd.

This study recommends that David Jones can built a strong relation with the customers by providing the increased availability of data through which the marketers can move from the identification of the segments for targeting the micro segments which is based on the patterns of the individual customer’s research and the purchasing behaviours.

The online marketing strategies that the business follows is to attract the global customers by the development of the new business windows, great website, and blog and through social media. The business could use the social media marketing strategies as it is one of the cost effective marketing methods. This will help the business to gain reviews of the new products they are launching in the business market. The business are required to develop the effective SEO contents for reaching the customers.

David Jones increases the brand merchandise by consuming the products of the quality brands like Woolworths as their motto is to increase the sales volume. For this they retains their loyal customers by campaigning the quality products. They tends to provide the unique quality products first in the business market for attracting customers.

David Jones can keep track of customer and their satisfaction by introducing the new operation system that is whenever anybody is looking for the specific product there remains the requirement of product specialized persons who can assist the customers by providing valuable informations regarding the product and online also there are person who analyses the search list of the customers and assist accordingly. The business collects the feedbacks and take steps by reconstructing their business operations according to the negative feedbacks. They provides offers and by lowering their profit they tries to satisfy their customers as they mostly tends to increase the sales volume. 

Corporate performance – David Jones has been acquired by the South African organization named Woolworths. An impairment charge of 712 Million Dollars has affected the entire acquisition based process which has been implemented by the organization. Woolworths has spent more than 2 Billion Dollars on the entire acquisition based process. The local retailing based environment which has been developed in Australia is considered to be an important part of the performance which has been shown by David Jones (Businessinsider.com.au., 2019). The expansion of David Jones is based on the opening of stores in different countries by collaborating with the local organizations. For example, David Jones entered the market of New Zealand with the of redevelopment of an organization named Westfield Newmarket.

SWOT analysis of David Jones Pty. Ltd.

Financial performance –The levels of profitability of David Jones have decreased in the year 2018 by 50 percent after the organization has gone through tough conditions in the last few years. The sales of David Jones have reducedin the past years and the revenues of its parent organization have been affected in a negative manner as well. Earnings of David Jones have dropped by the 58 percent and the financial services of the organization are also quite flat. Spending rates of David Jones have increased and has an immense effect on the revenues (Businessinsider.com.au., 2019). The major part of the profitability of David Jones is earned from the retail operations of the organization. The sales growth of David Jones has however not been able to affect the profitability which has reduced in the last few years.

 

Figure 2 – Financial performance

Source - (Businessinsider.com.au., 2019)

SWOT analysis framework is considered to be an effective method which is helpful for analysing the internal environment of an organization. The internal environment of David Jones can be examined with the proper implementation of this framework.

Strengths – The strong domestic levels of presence in the Australian retail industry in different industries like, electricity, fashion and the food products is a major strength of David Jones. The product based variety of David Jones is also a strength of the organization. Stores of David Jones have been developed in areas which are high value and low risk based (Daspit et al., 2017).

Weaknesses – The availability of huge number of options has been considered to be a major weakness which is based on the operations of David Jones in the industry. The organization also has a limited level of global presence (Engert, Rauter & Baumgartner, 2016). A major issue which has been faced by David Jones is related to higher prices and targeting only the premium market segment.

Opportunities – Acquisition is able to provide major levels of opportunities to David Jones to expand in the industry. The private label based strategy of the organization can play a key role in increasing the profitability levels of the organization (Demir, Wennberg & McKelvie, 2017). The management structure of the organization can also be altered in order to increase profitability levels.

Threats – The domestic levels of competition have increased in the last few years due to the entry of new organizations in the industry. Loyalty levels of the customers of David Jones are also quite low. 

Competitive advantage of David Jones Pty. Ltd.

Competitive advantage –The major competitive advantage that has been gained by David Jones in the industry is based on the expansion of the private label based brands of the organization. The products that are offered under private label of David Jones are of higher quality as compared to those of Myer and are targeted towards the premium segment. The organization has been able to increase its profitability levels with the help of proper expansion of different private brands that are offered to the customers (Durand, Grant & Madsen, 2017).

The current strategy that has been implemented by David Jones is based on offering the products to high-end based market rather than the mid-market based segment of retail industry of Australia. The products of the organization are sold to customers at higher prices as compared to those which are offered by its competitors like, Harvey Norman and Myers. A major strategic option which is being considered by David Jones is based on its strategy based on carving up the growing 44 Billion Dollars retail sector. The strategy will be able to play a major role in enhancing the customer base and increasing levels of diversity as well (Dyer et al., 2015). The major target market area of David Jones will be Sydney which consists of premium as well as mid-market customers and has been earlier targeted by other Australian and international retail organizations like, Myers, Aldi and Target. The mid-market based segment needs to be included in the target segments of David Jones.

 

Figure 4 – Competitive environment

Source - (Businessinsider.com.au., 2019)

The major changes that are required for implementations are that the David Jones Pty. Ltd are required to bring the innovative strategies for the production of the innovative products. This changes are essential because there are huge number of competitors in the same field and they need to come up with some innovative strategies for competing in the business market. The company are also required to produce some products at a low price as because most of the products they are produces are highly priced and their targeted market segments are required to be extended.

The organizations are also required to develop the innovative culture for the employees in the working place. The business are required to train the employees based on the specified skills and should evaluate whether they gained the appropriate trainings. The business should train the employees in such a manner that if they have to change their responsibilities they will be able to perform in the same manner.

Recommendations for David Jones Pty. Ltd.

The company are required to develop such a business structure that would allow the business to provide the products based on the high-end market based than the mid-end market of Australia. The business are required to make the production process in low cost as their most of the products can be categorised as the high cost product. The company should include such a business structure that will require less labour and resources for developing a short budget product. The more the company will be able to lower the labour cost the more the company will be able to produce the product at low budget. This will help the organization to increase the customer bases and increase the diversity levels. The business structure should be planned in the recommended ways for bringing changes in the product delivered and targeting the mid-market based company.

For implementing the new strategies the companies are required to include the reward system culture in the business. This is so because the company are required to impose the new operation system that are comprised of low labour cost, low production cost. The reward system would encourage the employees to adopt the new operation process for developing the low budget product. The company are required to introduce new reward system that can be in both form of monetary forms and the appraisal forms. When the employees are appraised for their effective performances they are more encouraged towards their job. The incentives or the monetary reward system encourages the employees to work in the efficient ways as the employees are also encouraged to provide extra work if they get incentives for that. Therefore this is essential for David Jones Pty. Ltd to introduce the new reward system in the business operations.

The leadership styles that David Jones Pty. Ltd follows are the autocratic leadership style and this leadership theory is based on the trait theory. This leadership style is considered as the effective leadership style as in this leadership the leader plays the major role in the decision making process and the employees are required to follow every decision of the leader. The employees are also imposed to follow every instructions made by their leaders and while making any decisions, the leader of the organization does not involve any team members to make any suggestions while making any decisions. This leadership style also motivate the employees to follow every instructions in their work. This leadership style will help the employees to implement the new strategies of producing the low budget project and for this the leader of David Jones Pty. Ltd are required to impose the new production process on the team members.

Conclusion

David Jones Pty. Ltd are required to provide the low budget products by developing the new system structure of the business. The business  are required to implement the new business that is changes that the business require to update. The systems through which the business advertises should be done through the low marketing strategies that is the business are required to focus on the marketing skills like the advertisement through the media, content writing and through spreading messages, posters and flyers the business are required to implement for making the production and the business operations at the low price. For the implementation of the new strategies the company are required to recruit and chose the efficient staffs as the business will not be able to introduce huge number of the labours and staffs for the production process as the motto is to produce the low budget product. 

David Jones Pty. Ltd are required to implement the new strategies of making the production at low cost and producing the low priced products. The business are required to monitor the marketing strategies as the advertisement for the product are required to be done at low cost. The business are also required to control the number of staffs and the amount of resources those are required for the implementation of the new strategy.

David Jones Pty. Ltd may face the major issues for implementing the strategies that is the business have to arrange for the new suppliers, the new resources that are required for the low budget production process. The business also may face problem in choosing the less number of the employees for the production process. These are the issues that are required for the organization to fix beforehand.

The company should follow the evaluation methods for introducing the new production process regarding the staff selection, the supplier’s selection and the selection of the resources for the production of low budget product. The company are required to evaluate the marketing process as the marketing process should be done in low budget.

The business are required to analyse the external factors and the internal factors for determining the business process and the business process are required to be changed for the implementation of the new strategies like the introduction of the new product that are low priced. The external factors will involve the suppliers, and the resources that re required for the production process and the internal factors will involve the staffs for implementing the new production process.

This can be stated that the business are able to implement the new strategies for producing the product at a low budget. Then only the business will be able to provide the low priced products and this implementation will involve the mentioned changes as well as the mentioned recommendations are required to be met for the implementation of new strategies.

Conclusion

The report can be concluded by stating that the performance of David Jones in the retail industry of Australia has not been profitable. The strategies of the organization can be altered in order to increase the profitability levels in an effective manner.

• David Jones needs to target the mid-market based customers with the help of its products in order to increase the customers base in an effective manner.
• The organization can also invest its resources in the affordable fashion based sector in order to develop a loyal customer base with the help of quality products. 

References

Barros, I., Hernangómez, J. & Martin-Cruz, N. (2016). A theoretical model of strategic management of family firms. A dynamic capabilities approach. Journal of Family Business Strategy, 7(3), pp.149-159.

Businessinsider.com.au. (2019). David Jones sales growth is crushing the competition. Retrieved from https://www.businessinsider.com.au/david-jones-sales-revenue-smashes-the-competition-2016-7

Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. & Long, R.G. (2017). A strategic management perspective of the family firm: Past trends, new insights, and future directions. Journal of Managerial Issues, 29(1), p.6.

Davidjones.com. (2019). David Jones Online | Shop Fashion, Beauty, Home & More. Retrieved from https://www.davidjones.com/

Demir, R., Wennberg, K. & McKelvie, A. (2017). The strategic management of high-growth firms: a review and theoretical conceptualization. Long Range Planning, 50(4), pp.431-456.

Durand, R., Grant, R.M. & Madsen, T.L. (2017). The expanding domain of strategic management research and the quest for integration. Strategic Management Journal, 38(1), pp.4-16.

Dyer, J.H., Godfrey, P., Jensen, R. & Bryce, D. (2015). Strategic Management: Concepts and Cases. Wiley Global Education.

Engert, S., Rauter, R. & Baumgartner, R.J. (2016). Exploring the integration of corporate sustainability into strategic management: a literature review. Journal of cleaner production, 112, pp.2833-2850.