Organizations Channel Environment

Organizations Channel Environment 1
ORGANIZATIONS CHANNEL ENVIRONMENT
Student’s Name
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Professor
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Organizations Channel Environment 2
Organizations Channel Environment
Government
Myer has raised its complain to the Federal Government in relation to the GST threshold
on imported goods as it happens to be unfair to their Australian retailers (Evans, Lignier and
Tran-Nam 2013, p.7). Currently, the tax on goods and services applies to imports which exceeds
more than one thousand dollars’ worth. According to retailers, an unfair playing field has been
the result for local business thus making their trading environment to be more difficult than it
already is. On the other hand, consumer groups have faced opposition with regard to change of
the threshold thus raising questions over the costs of collecting GST versus the benefits. The
rising employment costs, import duty and escalating utilities costs have continually impacted
Australian retailers thus an unfair advantage to foreign retailers.
Competition
Myer faces great competition from Amazon with fear being that their department stores
with a wide variety of products will be affected once Amazon enters the Australian market. Their
competitive advantage that they currently in retail marketing is expected to be annihilated once
Amazon enters the market (Barney 2014). The threat posed by Amazon has led to a large number
withdrawing their shares from Myer to a low of 44% in 2017. Premier Investments happen to be
their largest shareholder but has shown agitation with possibility of an exit. Existing competitors
to Myer include Xero, Bellamy’s and Smartgroup. There have been calls from the likes of
Premier Investments urging Myer to adopt a new strategy. The current strategy is similar to the
old one with the difference being a change on emphasis.

Organizations Channel Environment 3
Markets
Myer’s market is majorly within Australia. With news of Amazon entering the Australian
market, Myer opened an online platform in 2017 with sales ranging from entertainment, home
and lifestyle experiences and products. Their decision to compete against Amazon by
introducing an online shopping platform was questioned by Gary Mortimer from Queensland
University of Technology. He argued that Myer was just reacting to the current market situation
rather than coming up with a clear strategy that would maintain its competitiveness (Mortimer
and Grimmer 2017, p.30). There has been a development in 2018 where for the first time, Myer
has been pushed out of the index since 2009. Morgan Stanley investment bank discontinued the
coverage of Meyer on March 2018 and cited reallocation of resources thus suffering another
blow. As reported on March 8 2018 by Financial Review magazine, the market value of Myer
had fallen from $950 million in the previous year to $603 million in the previous six months, to a
further $370 million in the week of the publication.
PESTEL Analysis
Political Factors
Myer operates in more than a dozen countries hence its exposure to different political
systematic risks and political environment. It follows that Myer Holdings analysis a number of
factors before investing or entering a market: risk of military invasion, political stability, legal
framework for the enforcement of contract, level of corruption, trade tariffs and regulations
related to retailing, intellectual protection of property, taxation rates and incentives, etc (Yüksel
2012, p.52).