Innovation and New Technologies Report 2022

Innovation and New
Technologies

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Porter’s Five Forces Model.........................................................................................................1
Threat of potential entrants......................................................................................................2
Bargaining Power of Suppliers................................................................................................2
Bargaining Power of Buyers....................................................................................................2
Threat of substitutes.................................................................................................................2
Degree of existing rivalry........................................................................................................3
Porter’s Value Chain Analysis.....................................................................................................3
Primary Activities....................................................................................................................3
Secondary Activities................................................................................................................4
SWOT Analysis of Myer Holdings Limited................................................................................5
Technology Cycle........................................................................................................................6
Era of Ferment.........................................................................................................................6
Era of Incremental Change......................................................................................................7
Synopsis.......................................................................................................................................7
Solution for re-emergence in market...........................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Innovation is the new idea which brings new and differentiated products and services to the
market. Technology is the supportive factor that elevates the available resources and brings out
outstanding stuff to market. New and emerging business innovations embraced by businesses
enable creative organisation-wide development. In this report, the various strategic frameworks
will be applied to the currently operating departmental store dealing in differentiated product
line. Myer holdings is the department store having nearly 60 store location with strong brand
image but struggling to survive. They sell a wide variety of fashions, clothing, perfume,
cosmetics, electrical goods and services. To deeply analyse its innovation strategies and strategic
moves the organization will be analyzed through various models. Also, a solution through
innovation and disruptive technologies will be presented.
MAIN BODY
The Australian market is highly innovative and the departmental stores are ready to innovate and
meet up the challenges. However, the business operations of Myer are struggling to find space in
market and make some inspiring results but their profits are dropping. To evaluate the situation
and possible grounds the organization is thoroughly investigated through specific strategic
frameworks below.
Porter’s Five Forces Model
Myer has been continually redefining its ways to trade in retail sector. The major competitive
advantages developed by the organization are focused in elements of the model.
Figure 1: Porter's five forces
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(Source: Training Industry, 2019)
Threat of potential entrants
The innovation by new entrants keeps putting pressers on the brand to lowering its prices and
along with innovating its existing products and services. Moreover, the organization has adopted
innovative methods to improve its product line so that new and existing customer base is
established (Thursby and Berbari, 2016). However, it is definitely less likely for new entrants to
enter the market by spending such huge money on research and development and the company is
updating its standards regularly. As well, it's not easy for new entrants to achieve economies of
scale, however, so it weakens these.
Bargaining Power of Suppliers
Most of the competitors of the organization including them buy raw material from numerous
suppliers. Suppliers may affect the profits of company by decreasing margins of company. But
Within this sector, the suppliers of the Myer do not compete with other goods. The
organization’s supply chain has also been carefully structured so that many vendors collaborate
with them to ensure that they have no monopoly power (Burns and Dewhurst, 2016). Since, they
are struggling to survive building good relations with multiple suppliers is necessary.
Bargaining Power of Buyers
Buyers are not constant and firm they demand a lot form the company. As a department store
they also need to develop and introduce new product line and innovations at the lowest possible
prices. So, to overcome the situation the company is always working to technically innovate and
improve its services to attract higher number to customers. By building large customers base
they could be reduce the bargaining power of buyers. Also, with the fast production of new
goods they can tackle the power of bargaining (Burns and Dewhurst, 2016). Buyers could also
try discounts and incentives on existing goods and if Myer continues to come up with new
products then the bargaining power may be reduced.
Threat of substitutes
It can be said that if another product is satisfying needs of buyers it reduces the profitability of
the brand. For example: Starbucks coffee and cafe coffee day are substitute to each other. To
maintain the customer base and gain their loyalty the company has always been service oriented
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rather than products oriented (Öz, 2019). With improper strategy and positioning the company its
sales and profits are continually falling. They are however better at an interpersonal level than
competitors. But, the substitutes are less for the products and services offered by Myer holdings
and its males the force weaker in the industry.
Degree of existing rivalry
The number of competitors is lesser but they are strong. The main rivals are bigger in scale and
the changes they make are evident in the market. The rivalries, however, pay a toll on the overall
competitiveness of the company. By creating sustainable differentiation they could compete
better in future (Burns and Dewhurst, 2016). The company also looked forward to partnering
with some of its major market rivals to improve its market share and raising the possibility of
national and local sellers' rivalry.
Porter’s Value Chain Analysis
To choose the right competitive strategy and make right strategic decisions making the VCA is
applied to Myer holdings. Deng et,.l., (2016) suggest that this model identifies the importance of
primary and secondary activities of value chain for the organization.
Figure 2: Porter's Value Chain Model
(Source: Business To You, 2018)
Primary Activities
The activities directly associated with the trade and clients targeting are primary activities of
Myer.
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Inbound logistics: Receiving storing and distrusting the goods are liked with inbound logistics.
The company has to face lot of troubles while transforming raw material to finished goods and
while production process.
Operations: The action comes into force when the raw material is received which is then
processed into a good that is displayed at the shelves of store (Howieson, Lawley and Hastings,
2016). The activities of operations include machining, wrapping, accumulating and testing from
manufacturing and services operations.
Outbound logistics: Myer's product delivery operations to its purchasers are called the outbound
logistics. The process is not just limited to delivery of goods but storing and distribution of goods
through internal or external system developed by the organization.
Marketing and Sales: The advertising and targeting strategies viz. advertising, promotion, and
pricing are involved in primary activities too. These help Myer to convinces its buyers through
its innovation and developments and convince them to buy their products.
Secondary Activities
Secondary activities are basically support activities of primary ones. The limited activities of
Myer are deserved below in brief.
Firm Infrastructure: The matters of management regarding quality of goods, legal matters,
financial matters and strategic managements are under this section (Ajamieh et.al., 2016). The
company has developed effective IT infrastructure management to ensure overheard costs are
tracked and competitive position in the industry improved.
Human Resource Management: The organization has in-company successful HR management
which performs continuously to the pressure from competitive industry standards. Therefore,
they are not evaluating their employees on jobs focused in the sector and pursuing cost
minimisation.
Technology Development: In the current aura of industry the technological support is all required
to maintain the operations other value chain activities of business. The technical integration is
present from production to distribution and after sales services (Bedeley et.al., 2018). Customer
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care enabled by technology, product design analysis and data analytics are only a few examples
of technology that is being used in this area.
Procurement: It is the process system involved in the management of Myer's plant & equipment,
raw materials, supplies, and other related products needed for manufacturing operation. Thus
finding correct goods and negotiation with vendors comes under this category.
SWOT Analysis of Myer Holdings Limited
The holding is an Australian organization dealing in departmental stores with 60 store locations
at present. They sell a variety of fashion, hair, perfume, cosmetics, electrical goods, and services
(Myer Pty Ltd., 2020). Moreover, the model would indentify internal strengths and weaknesses
of company along with external opportunities and threats in its external environment. Also, it
will assist the organization to make strategic decisions.
Basis Helpful Harmful
Internal Strengths
 Big network of
distribution.
 Low cost strategy
makes their products
affordable.
 Customer-focused
service.
 Automated activities
create consistency of
quality.
 Well established and
efficient IT system
within business.
Weaknesses
 Profitability ratio is
below industry
average.
 Low product demand
forecasting.
 Mergers with small
firms were not
successful to the extent
required.
 Through they spent on
R&D but it is quite
lesser than other
innovative rivals of
theirs.
External Opportunities
 Internet, e-commerce
and social media are
Threats
 Technological
developments by the
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expansion platforms
for the business.
 Technical
developments come
with numerous benefits
and automated cost
reductions.
 Increased household,
income.
 Green Government
drive
 Globalisation
increased chances of
overseas expansion.
rival companies.
 Increased competition
and threats of new
entrants.
 Fluctuation in
exchange rates and
interest rates.
 Political uncertainties
hinder business
performances.
Source: Oke, Aghimien and Adedoyin, 2018.
Technology Cycle
The cycle is divided into two phases i.e. Era of Ferment and Era of Incremental Change. The Era
of Ferment belong to the initial stage of S-curve of Innovation and the emergence of dominant
design, technological product the businesses undertake an era of incremental change. So, the
TLC describes the product gains and its current position during vital life of the cycle.
Figure 3: Technology Cycle
(Source: ResearchGate GmbH, 2020)
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Era of Ferment
In this phase the innovation is at stationery level where all corporate are focused in technology
development, innovation to fight from competition and product design. Also, new entrants
attempts to establish innovated new designs in market but they are not much aware of industry
trends in this phase (Patel and Husairi, 2018). However, Myer is an incumbent company dealing
in Australian market from a quite long time and trying to improve its technical efficiency with
respect to socio-cultural development and technical developments industry. They are not this
stage of fermentation, but already passed the phase a long time back. Therefore, the era includes
the research and development and ascension process in which client investments in technology
result in product innovation to recover the out-of-pocket expenses.
Era of Incremental Change
This phase is typically taken as the period of minimal innovation and stability and dynamism.
Through the research the overall product line of Myer is not declined in terms of innovation, but,
it is improved through incremental designs. The attentiveness of innovative companies in the
sector increases immediately after the dominant design and this concentration declines over time
in the period of gradual change (Abratt and Mingione, 2017.). Thus, it is the actual phase where
the organization is lying. They are facing the elaboration of dominant design and might face
technical discontinuity if it remains the same. To overcome the situation they are willing to
rebrand itself through innovation and technological advancements.
Synopsis
While the different strategic frameworks are applied to the business it is observed that the
organization is holding an unforgettable image in the eyes of buyers. However, the market
changes are to fast that the company is failing to cope up with them. The technological
advancements require innovation from Myer but they are lacking in these. However, the
company has been working upon to increase its market share by adding small firms but failed to
do so. Also, the innovation is adopted but they lack behind from its major competitors. Research
of the value chain performed above reveals that the logistics and the value chain are clearly
structured but lack technology. As well, they are standing in technical discontinuity phase at
present.
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Solution for re-emergence in market
In the last few years, artificial intelligence software has been making leaps and bounds. The
retail industry has come to a point where the organizations are dealing with tech for delivering its
products and services. Emerging markets and emerging industries create a line of businesses
offering innovated products and services at early stages of development (Evans, 2018). Myer
holding is required to put its skills to tests in market to compete with numerous rivals and trade
their way to top. Technology is not the only thing required reaching the target set but it just
multiplies the resources available with organization.
Figure 4: Mind Map of Solutions
(Source: Self created)
 Disruptive Innovation through technology is one of important strike for the struggling
firm to recreate its brand image in market. Artificial intelligence at store would create an
easy and personalized experience for buyers (Liu et.al., 2020). Also, new customization
option will attract more buyers to try customised outfits of their own preference.
 Investments in social media platform and e-commerce trading. Thus, the company will be
able to grab more buyers and reach them faster would advertising and need of
middlemen.
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 Developing secured vulnerable IT systems in organization would develop internal control
system to protect important data and customers’ information’s and the potential buyers
are listed to the company’s priority list (Priya and Arya, 2016).
CONCLUSION
By summing up the report it has been observed that the Myer is struggling but with its
incumbent image in Australia it has not reached the decline stage. However, due to lack of
innovation in technology the company is facing downfall. It is also, observed that the business is
technically weak but they are strategically strong. Though, the financial decisions are not ideal.
Also, it is evident that the market forces are not weakening the organization. Moreover, the
business is apparently strongly headed and the prospects at hand would become an elevator if
strategically utilised.
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REFERENCES
Abratt, R. and Mingione, M., (2017). Corporate identity, strategy and change. Journal of Brand
Management, 24(2), pp.129-139.
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aggressiveness in explaining and predicting performance. Journal of business research, 69(10),
pp.4667-4674.
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Öz, Ö., (2019). The Competitive Advantage of Nations: the case of Turkey: assessing Porter's
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Priya, S.S. and Arya, S.S., (2016). Threat Modeling for a Secured Software
Development. International Journal of Advanced Research in Computer Science, 7(1).
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ResearchGate GmbH., (2020). Figure 2- uploaded by Jingjiang Liu. [Online] Accessed through:
https://www.researchgate.net/figure/The-innovation-cycle-model_fig2_247832604 [Accessed on
17 April 2020].
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