David Jones: Market Size, Financial Performance, and Strategic Recommendations

The paper focuses on the analysis of David Jones Company, including market size, financial performance, and strategic recommendations. It discusses the challenges faced by the company in a highly competitive market and provides strategic options to overcome them.

David Jones

David Jones
Executive summary
The paper focused on the David Jones Company and in reference to this company the different
factors such as market size and trends, financial performance and strategic recommendation is
provided. It is important for the company to consider the strategic approaches so that positive
outcome can be attained in the competitive market. So, in this paper the in-depth analysis is done
of the David Jones Company.
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David Jones
Table of Contents
Executive summary.........................................................................................................................1
Market size and trends.....................................................................................................................1
Financial and corporate performance..............................................................................................1
SWOT and Competitive advantage.................................................................................................2
Strategic options and recommendations..........................................................................................3
Discounts and offers.....................................................................................................................4
Training and development...........................................................................................................4
Motivation....................................................................................................................................4
Conclusion.......................................................................................................................................4
References........................................................................................................................................5
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David Jones
Market size and trends
The market size of the company is large and it can be examined that there are approximately 45
stores in Australia. But on the other hand, it is analyzed that company is facing the issue in
relation to grabbing the large market share. In Australia the competition level is high which also
affects the overall growth in the competitive market. It is noted that in the Australian market,
there is a decline in the departmental stores sales. David Jones has also employed the local
celebrities as the “Store Mascots” and the major competition is from the Myer Company. The
other competitors are Wesfarmers and Woolworths that are situated in the metropolitan and
regional areas. David Jones has maintained the control on restructuring its operations by focusing
on the premium market. David Jones also considered the new trends that are prevailing in the
market by considering the innovative products that can assist in satisfying the basic needs of the
customers. So, it can be stated that the major issue that is faced by the company in grabbing the
large market is related to the high competition level present in the market (Financial review,
2019)
Financial and corporate performance
David Jones overall profit ratio has been dropped by 38% to $66 Million in the December and it
is considered as the challenge that is faced by the company. It is stated by the company that there
is a decline because the shoppers moved to the online platform and also new brands were entered
into the Australian market (Xu, Gao & Hammond, 2017). According to the overall figures that
were released it has been seen that the profits of the department stores has been feel from 30% to
$77 Million and also the earning are affected by $2 Million to $7 Million. It has been observed
that the overall costs of the company have dragged David Jones line profits down by 37.7% to
$66 Million. Due to the decline profits, the company was not able to focus in innovative
approach as it requires high investment in the products and services offered by the company.
This has also created an obstacle for the company in relation to the overall growth margin
(Hatch, 2019).
Therefore, it can be stated that David Jones was not able to perform better as compared to other
competitors present in the market. The reason behind this is related with the cashed up parent
willing to spend more money so that business can be rebuild effectively. It is analyzed that the
major competition faced by the company relates to the high increase in the competition level in
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David Jones
the online retailers and also in the international fashion giants. In the Australian market, the
company requires more space in different locations so that it would be easy to compete in the
Australian market. Due to reduce in the overall sales, the company also faced the issue in which
the decline has been observed in the overall performance of the company (Miller & Merrilees,
2016).
SWOT and Competitive advantage
It has been observed that company maintain its competitive advantage by focusing on the
different factors. One of the factors is concerned with strength such as strong domestic touch.
Strength
David Jones has the strong domestic touch that is offered to the customers in the products such
as food and electricity. By having the strong presence in the market it could be easy for the
company to maintain the large market share in the competitive market. The strength of the
company also focuses on the variety of products that are provided in the market to the customers.
By having the wide product range, the company can easily maintain the customer base (Tuite,
2019).
There are also many stores of the company through which the customers can easily purchase the
products. The store locations are present is concerned with the low risk and high value locations
that offers the advantage to the company to attain the large market share. David Jones also has
more than 200 retail stores and this is one of the benefits to accomplish the set goals and
objectives in the market. Therefore, it can be stated that these benefits help the company in
maintaining its competitive advantage in the competitive market (Bailey, 2017).
Weakness
It is examined that weakness of the company is concerned with the many options that are
available for the customers. Due to the wide options of the products and services, the brand
switching is high and also there is low brand loyalty. The customers can easily switch to the
other brand and it also impact the loyalty towards the products and services offered in the
market. The next weakness of the David Jones is limited global penetration. The company has
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David Jones
only limited global penetration that also affects the overall growth in the highly competitive
market (Craik, 2015).
Opportunities
There are also various opportunities that can be grabbed easily by the company in relation to the
operations of the company. One of the opportunities is concerned with entering into the
pharmaceutical business and also the company can easily leverage the brand name David Jones
to enter into the extension of the product line. These opportunities should be grabbed by the
company so that the set goals can be attained. It is important for the company to focus on
expansion so that the customer base can be enhanced easily which will directly affect the growth
ratio of the business (Craik, 2017).
Threats
The threats faced by the company emphasizes on enhancing the domestic competition as the new
brands entered into the market on consistent level. The high competition level is affecting the
business growth in the market and it should be reduced so that profit margin can be boosted. The
high brand switching cost by the customers is also concerned with limited brand loyalty that can
be known as one of the major threats that should be controlled so that positive outcome can be
attained effectively. So, it is important for the company to reduce the threats as it can direct
impact in attaining the competitive advantage (Loy-Wilson, 2016).
Strategic options and recommendations
By analyzing the report, it is recommended that it is important for David Jones to emphasize on
considering the strategic options so that it could be easy to resolve the issues in the highly
competitive business world. The strategic options that should be considered by the company are:
Discounts and offers
It is recommended that David Jones should emphasize on offering the discounts and vouchers to
the employees as it is one of the best methods that can help in maintaining the large customer
base. It is examined that when discounts and offers are provided to the employees then it helps in
attracting the customers towards the products and services. It is important for the company to
focus on the discounts and offers as it can also assist the company in maintaining the competitive
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David Jones
advantage. When prices of the products and services are reduced then it assists the company in
inducing the customers who are attracted towards the competitors’ products. So, it is
recommended that the company should offer the discounts and offers so that price can be
reduced of the products in comparison to the price of the competitors.
Training and development
It is recommended that David Jones should also emphasize on giving training to the employees
so that the skills and knowledge of the workers can be boosted in relation to the tasks that are
assigned by the management. Training and development is the best method that can help in
maintaining the interest of the employees towards the assigned work. It can be stated that
training should be considered by the company so that the skills of the employees can be
enhanced. If effective training is given to the employees then it can help in boosting the
efficiency of the employees.
Motivation
It is also the best approach that can help in competing with the competitors present in the market.
It has been examined that when motivation is offered to the employees then they always tries to
be efficient and dedicated towards work. To resolve the issue related with high competition level,
it is important to retain the employees in the workplace for the company. Therefore, it can be
stated that motivation should be offered to the employees as it can help in competing with the
competitors present in the market.
Conclusion
It can be concluded that David Jones has faced different issues in the Australian market and due
to this the overall sales of the company is reduced. It is important for the company to focus on
managing the issues so that competitive advantage can be attained. It is recommended that
company should focus on considering the different strategic options such as Discounts and
offers, training and development and motivation. These strategies can help in attaining the
competitive advantage in the high level of competition.
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David Jones
References
Bailey, M. (2017). Absorptive capacity, international business knowledge transfer, and local
adaptation: establishing discount department stores in Australia. Australian Economic
History Review, 57(2), 194-216.
Craik, J. (2015). Challenges for Australian fashion. Journal of Fashion Marketing and
Management, 19(1), 56-68.
Craik, J. (2017). Fashioning Australian: Recent Reflections on the Australian Style in
Contemporary Fashion. Journal of Asia-Pacific Pop Culture, 2(1), 30-52.
Financial review.(2019). David Jones profit falls 38 pc, highlighting pain in department store
sector. Retrived from: https://www.afr.com/business/retail/david-jones-profit-falls-38-pc-
highlighting-pain-in-department-store-sector-20180222-h0wi5a
Hatch, P.(2019). David Jones blames 'extremely challenging' conditions for sale hit. Retrived
from: https://www.smh.com.au/business/companies/david-jones-blames-extremely-
challenging-conditions-for-sale-hit-20180719-p4zsi8.html
Hunt, S. D. (2018). The prospects for marketing strategy and the marketing discipline in Era V:
is the prognosis promising or problematic?. Journal of Marketing Management, 34(1-2), 86-
95.
Loy-Wilson, S. (2016). The gospel of enthusiasm: salesmanship, religion and colonialism in
Australian department stores in the 1920s and 1930s. Journal of Contemporary
History, 51(1), 91-123.
Miller, D., & Merrilees, B. (2016). Department store innovation: David Jones Ltd., Australia,
1876-1915. Journal of Historical Research in Marketing, 8(3), 396-415.
Tuite, A. (2019). What is Independent Fashion? An Australian Perspective. Fashion
Practice, 11(1), 5-25.
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Xu, J., Gao, X., & Hammond, J. (2017). E-tailing in Australia: A preliminary analysis of David
Jones. The International Technology Management Review, 6(4), 149-157.
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