Opportunities and Challenges of Business Innovations: A Case Study of Myers and David Jones Group

This study focuses on the challenges faced by Myers and David Jones Group in innovating within the Australian retail industry. It examines the importance of innovation, its impact on performance, and the barriers to innovation in retailing. The project aims to understand the contribution of innovation in the retail industry, analyze the challenges faced by Myers and David Jones Group in innovating, and examine competitors' strategies within the industry. The literature review covers the background of the project, the concept of innovation, the importance of innovation, the impact of innovation on performance, the importance of retailing, the history of retailing in Australia, innovation's role in retail, and the barriers to innovation in retailing.

Opportunities and Challenges of business
innovations: A Case Study of Myers and
David Jones Group
Assignment 1
Student Name: Student ID:
Subject Name: Subject ID: HI6008
Date Due: Professor Name:
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Abstract
Retail sector is booming globally with rising consumerism. In Australia retail segment is
experiencing tremendous boom with increase in sales. In retail innovation has been regarded as
the key attribute that allows sustainability. Myers and David Jones, one of the traditional
companies in the industry experienced significant downfall owing to its lack of capability to
innovate. The scope of this study comprises of challenges faced in innovation in the company. A
brief literature from various sources has been encompassed to reflect on the various areas in
which the company is lagging.
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Table of Contents
Abstract............................................................................................................................................2
1.0 Introduction................................................................................................................................4
2.0 Project Objective.......................................................................................................................4
3.0 Project Scope.............................................................................................................................5
4.0 Literature Review......................................................................................................................6
4.1 Background to the Project......................................................................................................6
4.2 The Concept of Innovation....................................................................................................7
4.3 Importance of Innovation.......................................................................................................7
4.4 Innovation impact Performance.............................................................................................8
4.5 Importance of Retailing.........................................................................................................8
4.6 History of Retailing in Australia............................................................................................9
4.7 Innovation’s role in Retail......................................................................................................9
4.8 Barriers to Innovation in Retailing.......................................................................................10
5.0 Conclusion...............................................................................................................................12
6.0 Reference Lists........................................................................................................................13
7.0 Appendix..................................................................................................................................14
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1.0 Introduction
Myers and David Jones Pty Limited is an Australian supermarket departmental store.
Both the brands merged to cater to more number of customers and increase their area of
operations. The companies had been suffering from a long period of time due to lack of
capability in innovations (Chesbrough, 2010). The companies faced severe challenges from
rising international retailers in the country along with online competition. The scope of this
project aims at developing suitable literatures to analyse challenges faced and lack of opportunity
of the companies within Australian markets that have led to their decline.
2.0 Project Objective
Australia has become on the leading global hubs for retail businesses with growing
immigrant population in the country. With government easing norms for international businesses
to conduct their operations in the country, there has been an influx of major retailers from around
the world (Sosna, Trevinyo-Rodríguez & Velamuri, 2010). Myers and David Jones an Australian
based business has been lagging behind in their innovative techniques to cater to growing needs
of customers. Hence, the study will cater to the following project objectives;
 Project Objective 1: To understand contribution of innovation in retail industry Project Objective 2: To analyse challenges faced by Myers and David Jones group in
innovating Project Objective 3: To examine competitors strategy within the industry
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3.0 Project Scope
Retail industry globally is growing and expanding at a rapid rate. Major driving force in
the retail industry is emerging from its capability to innovate new products as well as processes.
Retail business is expanding their business models to surprise their customers at each and every
step. In this dynamic industry, companies have to constantly innovate and devise strategies for
accomplishment of customer demands (D’Este et.al.,2012). Organization that does not have
innovation as a crucial process is currently losing out on profitability and later might lose
business sustainability. Threat and fear of competition makes it essential to innovate newer
products, services as well as processes to maintain business viability and feasibility. The project
scope deals exclusively with challenges in innovations faced by Myers and David Jones Group
within the retail industry. This has led to significant lose in market share of the company along
with their declining profitability. The project scope will aim at evaluating the multiple barriers in
innovation that are currently being faced by the company. A comprehensive analysis of various
literatures will be evaluated that can indicated areas in which the company is facing is current
challenges.
4.0 Literature Review
Analysis of relevant literatures is crucial for developing any type of study. Reviewing
relevant literature sources enable accommodation of valuable concepts that form the backdrop
for developing the study. The current scope of this study has incorporated various literatures
pertaining innovation and its barriers as indicated.
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4.1 Background to the Project
The project has encompassed analysis of Myers and David Jones Group innovation
challenges that it faces in the current industry. The company is experiencing difficulties of online
rivalry, the flood of universal retailers and feeble customer conclusion. A couple of years back,
the firms lacked innovating capabilities primarily due to poor administration, factors related to
operational, bungled online techniques and advertising issues. The current retail business
emerged as retail trailblazers. The company’s business model does not encompass innovative
frameworks of any sort (Amit & Zott, 2012). They emerged from dynamically changing
purchaser demand for retail products and ways they purchased them. There is a recent period of
turbulence experienced at Myer and David Jones related to its business viability. Myer
encountered a 80 for every penny drop in benefits over the previous year, while for David Jones
it was 25 for every penny. Myer CEO Richard Umbers indicated, "Increased rivalry, curbed
shopper assessment and markdown weakness". David Jones CEO John Dixon faulted the costs
associated with pivoting a business that he said had been "in a type of oversaw decay" preceding
being procured by the South African Woolworths organization in 2014.
4.2 The Concept of Innovation
Innovation can be described as making esteem for which clients will agree pay in
exchange of the way toward deciphering a thought or innovation into a decent or administration
that (Buse, Tiwari & Herstatt, 2010). It allows expanding the monopolistic energy of firms by
accomplishing target of making separation. A thought must be replicable at a prudent cost and
should fulfill a particular need in order to be called an innovation. The usage of new or enhanced
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items, forms, administrations association strategies and promoting techniques includes
innovation as per OECD (2005).
4.3 Importance of Innovation
Innovation has a major role to accomplish within retail sector with growing trends in
business. Innovations allow businesses to perform better in the market that allows generation of
better image for the company by extension of core competency by establishing competitive
advantage. The business conditions changed rapidly worldwide with changing customer needs,
rivalry amongst businesses, globalization and diversification. Retail industry need to constantly
devise strategies and innovative practices for overcoming this dynamic state of art businesses.
(Uyarra et.al, 2014) Innovativeness not only allows businesses to cope with these diversified
challenges and situations rather it allows companies in developing a competitive edge in their
processes. Often it allows overcoming issues related to customer services, product changes, and
employee management and so on.
4.4 Innovation impact Performance
Advancement is significant to secure the feasible upper hand in the commercial center.
Significance of imagination and innovation for organizations to be focused in the market. At the
point when any association plans to seek after advancement, at that point it needs to build up its
meaning of innovation (Demirbas, 2010). Advancement can be characterized as a procedure of
producing new and inventive thoughts for handiness. A fruitful association concentrating on
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advancement is really searching for huge accomplishments through the nature of new thoughts
and adequacy of the thoughts usage. The meaning of imaginative execution includes the mixes of
above autonomous parameters (for instance, nature of new thoughts and compelling usage of
innovative thoughts). Presently days the organizations are centering more towards innovation for
achievement in the long haul as opposed to simply concentrating on cost diminishment systems.
The association must tend to help curiosity, new thoughts, imaginative procedures and
experimentation that may prompt new administrations, items, mechanical procedures and the
quest for innovative and new answers for issues.
4.5 Importance of Retailing
Recent rise in retailing across the globe has various advantageous. Most importantly
retailing allows purchasers experiment by holding an item in hand prior to making purchase
decision. Retailing offers customers with over-burdened number of choices, data analysis and
opportunities. Retailing provides fundamental necessities to consumers in any situation.
Innovation in retailing allows to experiment with wide variety of choices with online as well as
physical situation (Hueske, Endrikat & Guenther, 2015). Consumers are able to select from a
wide array of products they are offered. Moreover, they have the opportunity to meet their own
needs sufficiently by visiting or browsing through retailers. Retailers who are incapable of
meeting needs and demands of their customers phase out in the long run. Incapability to cater to
needs of the market is a major disadvantage for retailers that aim at gaining considerable market
share.
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4.6 History of Retailing in Australia
Retailing in Australia began in mid 1800s, in Parramatta with numerous retailers offering
incredible assortment of merchandise. In the 1850-1910 specialization of shops developed in the
region with establishment of Pye's Drug store. Then retail stores started coming up in 1850 with
establishment of Whitaker. In 1933 opening of Elegance Brothers retail establishment at an
intersection main road in Parramatta came up. Then one by one various retailers including Coles
Myers Pty Limited, Woolworth and various other retailers started coming in the region. In 2017
Westfield Organization was sold to the European organization Unibail-Rodamco for $32 billion.
Post 2010 considerable number of international retailers also started their establishment in the
region.
4.7 Innovation’s role in Retail
History of retailing industry uncovered that retailers were hesitant for being
revolutionized. Retailers that do not value innovation might get typically stuck between specialty
players and extensive retailers. As indicated by the current examinations expedited three
speculations retail innovation, for instance, the wheel of retailing, the retail accordion and the
retail lifecycle. There would be a positive effect of innovation on piece of the pie and deals
however would decay all through the following stages and would lead towards new retail frames.
There are three manners by which innovation by retailers can rise regarding designs, as
from customers evolving requests, changing to take advantages of center skills or through effects
over the production network. In addition, this advancement comes about into new arrangements
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as well as cause increment in deals and market strength and with more fracture, stores alter their
systems of situating and change their picture to remain competitive‟.
4.8 Barriers to Innovation in Retailing
Innovation being a critical aspect of retailing needs to be integrated into basic procedures
and processes of every retail organization. Organizations in the retail segment need to view
innovation as a critical aspect of their everyday lives to enable extension of their day-to-day
activities that accomplish customers. They need to identify ways and means by which potential
barriers can be appropriately overcome such that they are able to extend their core competencies
in a better manner. It is integral to discuss the core challenges or barriers that might hinder
innovation. Hjalmarsson et. al, (2014) analysed that a major reason organizations do not adopt
change of any kind regarding innovation is due to their fear from failure (Hjalmarsson et. al,
2014). Given extensive competition and dramatic innovations that are continuously failing in the
retail industry, there remains constant fear from innovation. Innovating products as well as
processes includes high costs, therefore accommodating innovation and then allowing it to fail
might not be acceptable by various organizations. Organizations that are making losses or losing
out on their current market share might seemingly have lack of resources that helps them to
tolerate failure of any kind. Another major challenge in innovation is lack of resources or
capabilities. An organization that is currently functioning on low resources of finances and other
capabilities as human resources, might not be so eager to innovate. Research and studies
conducted across various entrepreneurial organization and other organizations reveal lack of
resources in the short terms period hinder possibilities of companies to extend their capabilities
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towards innovative endeavors. Innovation does not encompass any guaranteed returns on
investments as it often takes enormous amounts of approaches on delivering final impact.
Hölzl and Janger (2011) identified major lack of resources across organizations hamper their
capabilities to make any investments for the future, where there might be no guaranteed returns
(Hölzl & Janger, 2011).
Another critical attribute that hinders innovation across organization is there lack of
leadership. In absence of a capable leader, who can efficiently handle and manage a innovation
process, the overall activity might get deterred. Leaders are capable visionaries, who incorporate
innovative processes for the organization. In absence of capable leaders, an organization will not
be able to adopt innovative processes that might require a change. Saatçioğlu and Özmen (2010)
identified lack of focus being another crucial factor that might deter the process of
innovativeness (Saatçioğlu & Özmen, 2010). When upper level management have no focus
related to innovativeness factor then it might be difficult to incorporate the process of change.
Lack of focus leads to spending time on activities that will make a difference. Innovativeness has
often been identified as an activity which causes distraction in other product developments or
any other vital activities of the organization. This might lead to total deviation from achieving
mission or vision of the organization. Moreover short term thinking can deviate-away focus from
innovative strides leading to more immediate time visions. Organizations that are relatively new
or striding to survive cannot accomplish innovativeness as a process. Short-sighted organizations
lags capability to incorporate innovativeness there it is a major hurdle in the process of
innovation. Sorescu et. al. (2011) analysed that lack in urgency to initiate innovation is noted to
be another factor that hampers the process of adopting innovations within organizations. While
many organizations consider innovativeness to be a crucial process, they lag behind in
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accomplishing the same. They lack in creating sense of urgency amongst employees to adopt the
process. In retailing organizations need to visualize longer term gains over shorter term has to be
prioritized. Most importantly retail organizations as evaluated in this case lags in resources that
has to be diversified to gain considerable benefits of innovativeness. Leaders in retail
organization have to visualize innovativeness as a crucial change process for betterment of the
organization. They need to establish core competency of businesses through innovative
endeavors. Competitive advantage of retail firms can be extended by means of innovative
processes such as ecommerce platform and private label branded products. Customers in retail
segment are highly diversified and seeking for rapid changes. In order to meet growing
diversified need of customers, organizations has not only innovate products but also processes.
This would allow them to establish their brand names and brand loyalty. Customers moreover in
the retail segment have high switching costs that make it market structure all the more
competitive in nature. In order to remain focused Australian business environment and compete
with potential competitors, companies have to diversify their operations and encompass
strategies that provide them leading advantages in the market.
5.0 Conclusion
Analysing above factors and trends in retailing it can be said that innovation plays a
crucial role in retailing. In absence of innovations Myers and David Jones Group might cease to
exist. They will notice a steady decline in customers and potential supplier tie-ups. There will be
challenges leading to business viability. Hence, the company needs to accommodate processes
for innovating to overcome these barriers.
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6.0 Reference Lists
Amit, R. and Zott, C., 2012. Creating value through business model innovation. MIT Sloan
Management Review, 53(3), p.41.
Buse, S., Tiwari, R. and Herstatt, C., 2010. Global innovation: An answer to mitigate barriers to
innovation in small and medium-sized enterprises?. International Journal of Innovation and
Technology Management, 7(03), pp.215-227.
Chesbrough, H., 2010. Business model innovation: opportunities and barriers. Long range
planning, 43(2-3), pp.354-363.
D’Este, P., Iammarino, S., Savona, M. and von Tunzelmann, N., 2012. What hampers
innovation? Revealed barriers versus deterring barriers. Research policy, 41(2), pp.482-488.
Demirbas, D., 2010. How do entrepreneurs perceive barriers to innovation. Empirical Evidence
from Turkish SMEs. Newcastle Business School, Northumbria University, Newcastle upon Tyne.
Hjalmarsson, A., Johannesson, P., Jüll-Skielse, G. and Rudmark, D., 2014. Beyond innovation
contests: A framework of barriers to open innovation of digital services.
Hölzl, W. and Janger, J., 2011, April. Innovation barriers across firm types and countries.
In Paper presented at the DIME Final Conference (Vol. 6, p. 8).
Hueske, A.K., Endrikat, J. and Guenther, E., 2015. External environment, the innovating
organization, and its individuals: A multilevel model for identifying innovation barriers
accounting for social uncertainties. Journal of Engineering and Technology Management, 35,
pp.45-70.
Saatçioğlu, Ö.Y. and Özmen, Ö.N.T., 2010. Analyzing the barriers encountered in innovation
process through interpretive structural modelling: Evidence from Turkey. Yönetim ve
Ekonomi, 17(2), pp.207-225.
Sorescu, A., Frambach, R.T., Singh, J., Rangaswamy, A. and Bridges, C., 2011. Innovations in
retail business models. Journal of Retailing, 87, pp.S3-S16.
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Sosna, M., Trevinyo-Rodríguez, R.N. and Velamuri, S.R., 2010. Business model innovation
through trial-and-error learning: The Naturhouse case. Long range planning, 43(2-3), pp.383-
407.
Uyarra, E., Edler, J., Garcia-Estevez, J., Georghiou, L. and Yeow, J., 2014. Barriers to
innovation through public procurement: A supplier perspective. Technovation, 34(10), pp.631-
645.
7.0 Appendix
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