Strategies for Customer Satisfaction and Retention

David Jones Company is planning to address chronicled cost value differential issues by introducing a new workforce administration apparatus for planning, eliminating manual procedures by integrating stock administration framework with rack talker value tickets, and reducing store network costs. The company aims to create five high-value stores, renovate the furnishing portfolio, and allocate more space to high-profit-margin departments to increase profit volume and secure its market position. Additionally, it plans to launch six new stores, including two under development, four others marked subject to landowner improvements, and initiate automation process of rebate collection. The company also aims to improve trading systems with vendors and review benchmarks to arrange activities accordingly.

Running Head: Managing Innovation
Managing Innovation
David Jones Company

Managing Innovation 1
Table of Contents
Introduction.................................................................................................................................................2
Question 1: David Jones Company's threats and opportunities....................................................................3
Threats.....................................................................................................................................................3
Opportunities...........................................................................................................................................4
Question 2: David Jones Company's strengths and weakness......................................................................6
Strength...................................................................................................................................................6
Weakness................................................................................................................................................7
Question 3: Innovative future Growth of David Jones in next 10 years.......................................................8
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11
Appendices................................................................................................................................................14

Managing Innovation 2
Introduction
In the growing era, SWOT Analysis is an important tool which helps them to develop an
understanding of the internal factors of an organization, so that they can assist them to create
efficiency in future performance of the organization. The strengths and weakness signify the
internal factors of the organization whereas opportunities and threat signifies external factors of
the organization. This analysis is performed by all types of organizations because it assists them
in organizational goal setting planning process (Bull, et. al., 2016). The analysis is a forward as
well as a backward looking process as it helps the company to get to know about the company's
internal and external factors affecting the future innovation trends.
The David Jones Pty Ltd, colloquially known as DJ is an Australian company which is involved
in departmental store business. The company is owned by the South African Retail shop and the
group of Woolworths holding Limited. DJ was originated in the year 1838 by David Jones. The
company is world's oldest continuously operating department store traded with the same name.
The company currently holds 43 stores in Australian states and territories. David Jones is
headquartered in Sydney, Australia. The company serves products like cosmetic, fashion, food,
electrical etc. to its customers. The previous year the company earned revenue of A $ 2.2 billion,
with which it shall be noted that the company is earning well in its industry despite having tough
competitions. Further, there are more than 7200 employees in the organization, so it can be said
that the company is growing with a good speed and is aiming high for future innovation plans as
well. More details and activities of retail company David Jones are discussed below.

Managing Innovation 3
The report will cover the SWOT analysis of David Jones Ltd. with respect to future innovation
trends. It also provides an overview of the company in relation to future innovative activities
which the company is planning to implement. The details are discussed below:
Question 1: David Jones Company's threats and opportunities
Threats: threats refer to the penalties which can attract the company and reduce its growth. The
threats of the David Jones Company are as follows:
 Increasing competition in the external environment: the fact shall be noted that as
there is tough competition in the market, resulting to which the growth of the company is
hampered. Further, it shall be noted as there is a consistent entrance of new brands
coming in the market industry due to which customers o the company shift to new and
different brand prevailing in the market. This reasons act as a barrier to the growth of the
organization (Hollensen 2015). Although the company has surplus amount with the aid of
which DJ can make innovation and identify them in the market. But for the same, the
company needs to implement a proper management, and in this case, the company lacks
(refer appendices 1.1).
 Limited Brand Loyalty provided by customers: DJ being a highly branded product
provides adequate quality services to its customers, but apart from providing adequate
quality along with quantity the company is unable to receive brand loyalty from its
customers. Brand loyalty refers to the process in which the customers are sufficiently
satisfied with the products and services provided by the organization, resulting to which
in return they provide they provide their loyalty to the company by making a repetition of
sales (Yuan 2013). Getting more and more customer does not initiate success for a

Managing Innovation 4
company, instead of getting repeated sales by the same customers of the organization
helps them in achieving success.
 The easy entrance of new competitors: in the retail industry, as there are easy entrances
of the suppliers of products and services in the market, thus the fact shall be considered
that due to this the brand image which the old companies are willing to create is lost (Yu,
et. al., 2015). Also, these new companies render services to the customers at low and
cheap prices resulting to which the customers present in the market get attracted towards
these company which loses the significance of such companies in the eyes of the
customers as well as in the industry (refer appendices 1.2). Another threat to the company
is that along with tough competitors present in the market, constant entry of other firms is
also reflecting the growth of the company (Ngo, and O'cass 2013).
Opportunities: Opportunities refer to the chances which the company receives. If these
chances have opted wisely then it can act as a speedy growth for the company (Carayannis, and
Grigoroudis 2016). The details of the Company David Jones are explained below:
 Entrance in pharmaceutical business: this is one of the fields in which the company
has not and if they will then they can earn optimum return. Thus, company's activities to
step into pharmaceutical field can help them to gain higher profit than expected. After the
market, the management of the company also identified the fact that there is already few
distributor and manufacturer of pharmaceutical products in the Australian market. Also,
anther fact which shall be taken into concern is that the in this industry there is the
restriction on entry and exit of firms (David Jones 2012). The company David Jones will
easily receive entrance in this field because of having an oldest store in Australia and big
one of the biggest departmental stores in Australia. Thus, it can act as an opportunity for

Managing Innovation 5
the company and it can help them to earn well and generate good customer base in the
global market (refer appendices 2.1).
 The weakness of Australian Dollar acting as an opportunity for company: looking
practically a the different economic aspects of the market the fact that came in
consideration is that with decrease in value of Australian dollar in the international
market, the power of local customers decreases to purchase products of international
brand or products which are placed internationally (Huhtala, et. al., 2014). Thus, they
need to return to the retail local stores present in their geographical boundaries. Due to
this reason, the sale of the company increases and the old customers of the company also
come back to the company only (refer appendices 2.2). Also, with this process, the
company receives an opportunity to retain their old customers by providing them better
services at good prices (Mitchell 2017).
 Private Label Strategy: the best benefit a departmental company can receive is that they
can apply private label strategy and earn optimum revenue for the company. It refers to
the strategy in which the departmental store differentially price different brands and
products on their own will. They have the opportunity to increase or decrease the price of
a particular product to increase its sales. Thus, with this process the company can label
increased price of the product which is highly demanded and reduce the prices on the
label of products which are less demanded, this will increase the sale of these products as
well and subsequently the revenue will also increase (Illawarra Mercury 2017).
Looking at the above SWOT matrix the fact that shall be noted is that the company has a great
scope to implement future innovation trends in their business. Also, they have optimum
opportunity to increase the sales of the company and create them product differentiated

Managing Innovation 6
company. This can also help the company in the creation of brand image in the market. With
respect to future innovation David Jones is initiating to implement strategies which shall assist
them in producing optimum returns for the company (refer appendices 2.3). Apart from these
benefits which are enjoyed by the company, the threat of competitors is also present in the
external environment of the organization. In order to reduce the same DJ shall implement
innovative strategies for future which will help them in creating goodwill in the market (David
Jones 2017).
Question 2: David Jones Company's strengths and weakness
Strength: strength refers to the strong points of the company with the aid of which they survive
in the competitive market. The strengths of the company David Jones are discussed below:
 Oldest departmental store operating in Australia: David Jones as referred earlier is the
oldest departmental retail store in Australia which gives an advantage to the company,
that people prefer the product of the company by its name. Being the oldest store in
Australia helps the company to generate greater loyalty among customers and the
customers also believe in the services rendered by the company due to their prevalence in
the market for a long time. The stores of David Jones were opened in the market when
there was no other option for the customers, due to zero competition the company creates
a brand image in the eyes of the customers resulting to which the company is enjoying
maximum market share holding (David Jones 2017).
 High-quality products: As the company is prevailing in the market from a very long
time due to which brand image of the company is created in the eyes of customers. Thus,
in order to maintain that goodwill, DJ needs to update their products according to the

Managing Innovation 7
interest of the customers. High-quality products are being supplied by the company to
fulfill the expectation of the customer. Also, the company has achieved a product
differentiated image in the market by providing high-quality products at optimum prices,
this process also reduced the competition prevailing in the market. High-quality products
also provide greater satisfaction to customers due to which customer loyalty is
maintained in the market. Thus, this is one of the strength which the company attains and
enjoys the surplus coming to the organization's fund (Rice 2013).
 Efficient supply chains of organization: supply chain is one of the most important
factors which are responsible to increase the efficiency of an organization. supply chain
refers to the chain by which the organization supplies goods and services to the customers
of the organization. The company has an efficient supply chain which helps them to
supply products to the customer at a speedy pace (refer appendices 3.1). There is less
involvement of intermediaries resulting to which the product is available to customers
without barriers and at a reasonable cost as well. Also, there is presence of Omni-channel
like retail store, websites etc. due to which the customer can purchase the products of DJ
from varied sources (Johnston, and Marshall 2016).
Weakness: it refers to the drawbacks faced by the organization in the market. It may be due to
internal or external factors affecting the growth of the company. Further, the weaknesses of
Company David Jones are discussed below:
 Presence of international online retailers: with the increase in competitors, there has
been an increase in international brands who are selling their products to customers
through websites and social media. Due to this process, geographical boundation has

Managing Innovation 8
reduced and customers have started focusing on outside brand rather than purchasing
products from local brands. This has implied as a weakness for DJ.
 Huge capital investment in renovation: recently the company has renovated the internal
ambiance of the stores of the organization. This initiation has led to major capital
investment in the activities of the organization. Resulting to which the company was
unable to invest in various crucial business activities (refer appendices 5.1). This acted as
a barrier to the growth of the organization. The company faced difficulty in maintaining
cash balance with them, as they were left with flow cash flow statement (Cummings and
Worley 2014).
 Weak financial position: due to changing in the sentiments of the customers, and the
company facing huge expenditure the company was unable to save reserves for them.
Further competition in the global market and prevalence of other brands online reduced
the sale of the company due to which the financial position of the company decline (refer
appendices 3.2). Adding to it the company faced difficulty due to global financial crisis
as well; there was constant change in the trading conditions which were hindering the
growth of the organization (Eurich, Weiblen, and Breitenmoser 2014).
From the above-mentioned statement, the fact shall be taken into consideration is that the
company David Jones have many strengths present in their organizational culture, they just need
to optimally utilize these resources adequately and drive them in the direction of future
innovation growth. With respect to innovation, the company has a chance to grow in the
international market by originating their sales through online websites (refer appendices 3.3).
This can help the company to reduce the effect of their weakness affect the growth of the
organization (Li, et. al., 2013).

Managing Innovation 9
Question 3: Innovative future Growth of David Jones in next 10 years
From the above SWOT Analysis, the future growth strategy of the company David Jones is that
the company is firstly aiming to overcome their weakness by implementing the following
activities:
 Transformation of the company: under this process, the company initiated to transform
the management into Omni channel retailer. Further, the company focused on
strengthening the customer service and engagement activities, this process will help the
come to look at the issue of the customers of the company as well (refer appendices 4.1).
Another transformation which the company implemented is that they managed to
harmonize the global cost price by transaction with suppliers at an agreeable price of the
product. The company also planned to invest more in the technological changes so as to
flourish their market in online market as well. Lastly, the innovative transformation
which company aimed to change is that they realigned the management skills and
capabilities to the new future strategic direction of the organization DJ (Rothaermel
2015).
 Growing the network of stores: under this aspect, the company initiated to open six new
departments of David Jones so as to provide better assistance to the customer present in
different locations of the company. The full line department stores were placed in high
locations; this initiated an efficient supply chain of the products and services of the
company (refer appendices 5.2). Also with this effect, the customer gained greater
satisfaction from the company due to efficient delivery and cost effective product
differentiation as well.

Managing Innovation 10
 Apart from this, DJ also initiated to introduce various small scale stores in attractive
location so that the products get more identified in the local market. The main of the
company through process is that they wanted to create brand loyalty with local customers
of the company (Goffin, and Mitchell 2016).
 Strengthening the core business activity: the core business activity of David Jones
Company is that they want to offer best products at optimum prices to satisfy the needs of
the customers. Also, they aimed to restore the gross profit of the company at an optimum
long term sustainable level. Further DJ also implemented to open five new high-value
stores for the purpose of refurbishment (refer appendices 4.2). This initiated in creating a
high value of the company as well. Lastly, they implemented the cost of doing business
reduction projects which reduced the cost of production and some other needless
expenses.
Thus in this way the company initiated to implement sustainable growth for the company for the
upcoming ten years (Autio, et. al., 2014).
Conclusion
Thus in the limelight of above-mentioned events, the fact that shall be noted is that the company
David Jones is the oldest company in Australia due to which it has a benefit to flourish the
market and gain market capitalization. But due to competition prevailing in the market, the
growth of the company started depleting. For that purpose the company implemented various
activities like furnishing infrastructure, online websites etc. to sustain the innovative growth of
the business. Thus, these changes will definitely affect the growth of the company in a positive
manner.

Managing Innovation 11

Managing Innovation 12
References
Autio, E., Kenney, M., Mustar, P., Siegel, D. and Wright, M., 2014. Entrepreneurial innovation:
The importance of context. Research Policy, 43(7), pp.1097-1108.
Bull, J.W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C.,
Lambini, C.K., Rawlins, M., Baral, H., Zähringer, J. and Carter-Silk, E., 2016. Strengths,
weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services framework.
Ecosystem services, 17, pp.99-111.
Carayannis, E. and Grigoroudis, E., 2016. Quadruple Innovation Helix and smart specialization:
knowledge production and national competitiveness.
Cummings, T.G. and Worley, C.G., 2014. Organization development and change. Cengage
learning.
David Jones., 2012. David Jones Future Strategic Direction. Viewed on September 12, 2017
from < https://www.davidjones.com.au/~/media/David-Jones/Corporate/Presentations/2012/
Mar_12_Future_Strategic_Presentation.ashx>
David Jones., 2017. About David Jones. Viewed on September 12, 2017 from <
https://www.davidjones.com.au/About-David-Jones>
David Jones., 2017. Our Journey. Viewed on September 12, 2017 from <
https://www.davidjones.com.au/gbj>

Managing Innovation 13
Eurich, M., Weiblen, T. and Breitenmoser, P., 2014. A six-step approach to business model
innovation. International journal of entrepreneurship and innovation management, 18(4),
pp.330-348.
Goffin, K. and Mitchell, R., 2016. Innovation Management: Effective Strategy and
Implementation. Palgrave Macmillan.
Hollensen, S., 2015. Marketing management: A relationship approach. Pearson Education.
Huhtala, J.P., Sihvonen, A., Frösén, J., Jaakkola, M. and Tikkanen, H., 2014. Market orientation,
innovation capability and business performance: Insights from the global financial crisis. Baltic
Journal of Management, 9(2), pp.134-152.
Illawarra Mercury., 2017. What the future (and fashion) of David Jones looks like. Viewed on
September 12, 2017 from < http://www.illawarramercury.com.au/story/2215172/what-the-
future-and-fashion-of-david-jones-looks-like/>
Johnston, M.W. and Marshall, G.W., 2016. Sales force management: Leadership, innovation,
technology. Routledge.
Li, Q., Maggitti, P.G., Smith, K.G., Tesluk, P.E. and Katila, R., 2013. Top management attention
to innovation: The role of search selection and intensity in new product introductions. Academy
of Management Journal, 56(3), pp.893-916.
Mitchell, S., 2017. David Jones future lies food and fashion. Viewed on September 12, 2017
from http://www.afr.com/business/retail/david-jones-future-lies-in-food-and-fashion-20170620-
gwuk77#

Managing Innovation 14
Ngo, L.V. and O'cass, A., 2013. Innovation and business success: The mediating role of
customer participation. Journal of Business Research, 66(8), pp.1134-1142.
Rice, A.K. ed., 2013. Productivity and social organization: The Ahmedabad experiment:
Technical innovation, work organization and management. Routledge.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Yu, T.W., Javed, A.A., Lam, T.I., Shen, Q. and Sun, M., 2015. Integrating sustainability into
value management process-a SWOT analysis approach.
Yuan, H., 2013. A SWOT analysis of successful construction waste management. Journal of
Cleaner Production, 39, pp.1-8.

Managing Innovation 15
Appendices
Appendices 1
1. Omni Channel Retailing speaks to an immense open door for David Jones. Web based
retailing is at its beginning periods in Australia (4.9% of aggregate deals are on the web). Blocks
and snaps retailers are the champs abroad. Worldwide experience proposes Omni Channel
customers are 4-6 times more profitable than single channel customers* Deals through these
channels, at scale, are more gainful than the in-store channel. We are changing into an Omni
Channel Retailer with a specific end goal to catch this open door. After some time we expect
roughly 10% of our aggregate deals to be created through our web-store, portable applications,
and social trade site.
2. David Jones will actualize a multi-application approach, making applications that emphasis
on remarkable client needs. Each application will highlight the capacity to peruse, buy and
organize conveyance. Beginning takes off for iPhone, iPad and Android gadgets will happen by
Christmas 2012.
Appendices 2
1. Our (David Jones) arrangement of all around found the stores are essential for the Omni
Channel understanding, enabling our clients to:
• Request on the web, get in store of decision
• Purchase online return in-store
• Request in-store by means of devoted terminals

Managing Innovation 16
• (full combination into POS to take after)
• Orchestrate shipment for expensive things specifically
• Peruse and survey stock levels over stores
2. David Jones is changing its client administration and engagement recommendation by
additionally putting resources into client benefit and in-store encounters that will separate its
offering from contending retailers
• As various channels of retailing develop and pick up notoriety, clients are progressively
anticipating more, as far as in-store benefit and in-store understanding.
• To address this desire, the Organization is embracing an expansive suite of activities to
improve client engagement and administration.
3. Further, the company invested furniture and fixtures of the organization especially in floor
staff hours according to the relative proportion to sale. According to supervision, the company is
initiating new floor staff to assist the ole of supervisors in the organization. Also, they are
creating over 200 new and innovative frontline services role to entertain the customers and
deliver differentiated and products having specialized qualities in them. Further, in the field of
training the company is the company is continuously investing to improve the skills of the
employees of the organization. The incentives to the employee of DJ are being provided on the
basis of the performance, better the performance, and more the incentives, due to this reason
more and more people are trying to drive maximum sales so that their incentives are created and
they can earn extra income apart from their basic salary.
Appendices 3

Managing Innovation 17
1. The company initiated services touch points so as to increase the service provided t the
customers. Their aim is to maximize the services entertained by the customers so that they can
retain the customers by providing greater satisfaction to them.
2. Chronicled cost value differential in Australian retail is caused by:
• GST and levy exception cost structures, for example, the lease also, compensations
appropriation structures.
• Today bring down worldwide costs are all the more promptly accessible to shoppers due to:
development of web based retailing solid $A expanded outbound tourism.
We have initiated a nitty gritty work program to address the issue, however, discourses with
nearby and global providers and partners are perplexing, and will require some serious energy
• In working towards worldwide cost harmonization we plan to:
keep up net revenues catch additional volume thus of lower costs, to help offset the effect of
emptying on the Organization's NPAT
3. Extension to open more stores in alluring areas in which David Jones ought to be spoken to
the company managed six arranged new stores (two as of now under development, four others
marked however subject to landowner improvements) are in alluring focuses in high esteem
areas with solid socioeconomics.
• The extended physical store organizer is a piece of the Organization's completely coordinated
OCR system and each new store (beginning with Highpoint) will be particularly composed as a
"store without bounds"

Managing Innovation 18
• New stores are required to produce incremental offers of at any rate $280 million p.a.
furthermore, an extra $30 million p.a. of EBIT at the development
Appendices 4
1. David Jones' little store in Perth's Claremont Quarter enables the Organization to exchange a
lucrative statistic range which is generally not appropriate for a full-line store.
• The Claremont catchment range is one of the best 5 rural statistic ranges in Australia
Claremont Quarter is a town like shopping area which does not have adequate space for a full-
line store.
• The accomplishment of our littler Claremont Quarter store, which is exchanging
emphatically, has given us the certainty to search out comparative, less conventional areas, for
other littler organization stores.
2. Littler configuration stores of ~7,000m2 in high-esteem catchments are an appealing new
business development open door for David Jones:
• Our current Claremont store is a prime case of an effective little arrangement store
• Littler arrangement stores are near our center business, utilizing existing marketing, working
and administration capacities, and additionally the David Jones mark.
• Each little arrangement store is relied upon to convey at any rate $2m of incremental EBIT.
• A waitlist of a few potential high-esteem areas have been distinguished after a thorough
national audit process
Appendices 5

Managing Innovation 19
1. Littler organization stores of ~7,000m2 in high-esteem catchments are an alluring new
business development open door for David Jones:
 Our current Claremont store is a prime case of an effective little configuration store.
 Littler arrangement stores are near our center business, utilizing existing marketing,
working and administration abilities, and in addition the David Jones mark.
 Each little arrangement store is required to convey in any event $2m of incremental
EBIT.
 A waitlist of a few potential high-esteem areas have been recognized after a far reaching
national survey process
2. Killing store organization errands through the presentation of another workforce
administration apparatus for planning.
 Wiping out manual procedures by interfacing the generation of all rack talker value
tickets with our stock administration framework.
 Robotizing store compromise undertakings through the interface of money administration
hardware with the Organization's budgetary frameworks.
 Lessening store network costs by concentrating on expensive conveyances, import
preparing and coordination with costs and recuperations.
 Another five initiative which the company made in order to improve the gross profit of
the company is described below:
 Investment in all new and encompassing merchandises planning systems. This will
strengthen the working of the organization.

Managing Innovation 20
 Improvement in the trading system of vendors and change in their application as well.
The company will also review the benchmark and then arrange activities of investment
accordingly.
 Improvement in the rebate collection system provided by the company. It has initiated
automation process of rebate collection.
Appendices 6
1. David Jones Company plans to renovate the furnishing of the store portfolio by creating five
high-value stores. The budget of this renovation is $ 10 million of incremental EBIT. Low profit
department is also being reviewed by the company so that activities can be implemented in order
to increase the profit margin of that particular department. More space was allocated to the
department which earned high profit margin, this initiated increase in the profit volume of the
company and also it secured the position of the company in the market.