Strategic Management for David Jones in Australian Retail Industry

This report analyzes the financial and corporate performance of David Jones, an Australian upmarket retail organization. It suggests private labelling of product line as the most appropriate strategic option to create competitive advantage and mitigate market risk. The report recommends steps for strategic implementation and monitoring of future performance.

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
Name of the student
Name of the university
Author note

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Executive Summary
The purpose of this report is to review the financial and corporate performance of David
Jones, which belongs to upmarket retail sector. It has been observed that apart from luxury
retailers, entire retail industry is suffering with economic imbalance and to avoid that out of
two strategic options private labelling of the product line has been chosen as the most
appropriate in order to create competitive advantage. Along with that, it will help to combat
the market risk as far as Australian economy is concerned. After reviewing the financial and
corporate performance, the final strategy of labelling products under private ownership is
feasible. The steps of strategic implementation have been described considering the market
size and trends as well.

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Table of Contents
Introduction................................................................................................................................3
Market Size & Trends................................................................................................................3
Financial and Corporate Performance........................................................................................4
Financial performance............................................................................................................4
Corporate performance...........................................................................................................4
Strategic Options....................................................................................................................5
Final Recommended Strategy................................................................................................5
Implementation of Final Strategy...........................................................................................6
Monitoring and Control of Future Performance....................................................................8
Conclusion..................................................................................................................................8
References................................................................................................................................10

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Introduction
David Jones Pty. Ltd is an Australian organization operating in upmarket retail sector.
The have their wide territories expanded across Australia and different states, competing with
brands like Myer. The following report intends to analyse the retail market sector of Australia
using the example of the above mentioned David Jones. As per the report of financial and
corporate performance strategic options will be suggested and various execution methods will
be described about how it can take advantage of existing opportunities and mitigate threats
based on company capabilities. With the help of strategic options final strategies and its
implementation procedure will be recommended. In this due course, the importance of
monitoring and controlling future performance will be demonstrated in order to gain a
sustainable competitive edge.
Market Size & Trends
Although, Australian retail sector has experienced a recent decline in business,
companies like David Jones operating in luxury retail market have experienced rapid growth
during this time. According to the research conducted by IBIS, unlike retail sector, upmarket
or luxury retail industry is not facing much difficulty while operating the business. Regular
retailers have failed to combat the competition due to the rise of online retail industry and
increasing customers’ demand towards luxury brands. In spite of such promising market, the
business environment is not so strong and surrounded with risks.
As per as the recent trend is concerned, tourists are increasingly being more attracted
to the quality and presentation of luxury retail goods. As stated in Nguyen et al. (2014), based
on the enhanced income from recent customer behaviour, income has been raised. The
national economic disturbance could not able to create a difference as consumers’ preference
for quality remains same. As per the financial records, the upmarket retail has enhanced its

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growth by a moderate percentage of 9.1% in last five years. This is evident from the example
of Australian upmarket which has collected amount of 2 billion dollars in 2018. David Jones
is one of the major companies which belongs to this industry competing with giant names
like Harvey Norman and Myer.
Financial and Corporate Performance
Financial performance
Despite the growth and positive market trend, David Jones is surrounded with
immense risks with Australian retail business. As recorded, more than 55% drop has been
noticed in operating profit in the recent business year. It is perceived that with the progression
the expenses has increased due to new openings, launching and promotions of different
brands.
The company has taken action based initiatives against the reduced levels of
profitability. The importance of online branding and promotions have been realised by
professionals which led them up to 20% increase in sales. As described in Gmelin and
Seuring (2014), after identifying the channels of new promotions and understanding its
significance, the company has decided the follow current methods of developing efficient
supply chains and effective communication targets to achieve further 10% increase in sales
by 2020. They have decided to maintain lean production to cut out the additional operational
costs. Producing products based on market demand will help the company to cut off
additional expenses of enhanced inventory costs and maintenance.
Corporate performance
Within such a risk oriented platform, David Jones has been enjoying a sharp
competitive edge due to their virtual promotional strategies and online sales. The trading

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regulations of their operating sectors such as Australia and South Africa are restricting the
operations. The new innovation in online platform and inventory management have capability
of controlling corporate performance which is evident from recent implications of David
Jones.
Strategic Options
Strategic options are completely different from familiar growth strategies. Rather than
creating opportunities, strategic options must be created from existing lines of business.
According to Gala and Patil (2013), based on the analysis it has been obtained that internal
innovation like labeling brands private ownership is a strategic option to mitigate the
economic risk of the country. It will make their brands exceptional and exclusive among
other offerings.
Moreover, to enhance the consumers’ trust over offered quality products and brand
equity strategic partnership or collaboration will be beneficial. David Jones can consider
establishing strategic alliances with Blueberry Beauty, Disney, Naturica, Scotch and Soda,
and Kenzo. It can be expected that such high end companies will add competitive edge within
upmarket retail industry.
Final Recommended Strategy
Considering both the strategic options it can be stated that labeling brands with their
private ownership will be more beneficial in terms of creating brand equity. With the process
of private labeling, retailers ensure the quality of a certain products. There are several
advantages of labeling including achievement of higher profit margins. In case, as supported
by Lusk (2013), the product idea is original, innovative and perceives high quality it tends to
demand higher price within marketplace. Therefore, luxury retailers have a premium
opportunity to label product under their private names for enhancing profit margin.

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As mentioned before and supported by Schnittka et al. (2015), such initiatives will
enhance brand equity and exclusiveness. Private labelling differentiates brands from its
competitors and creates patent to sell the products. However, these all are dependent on
implementation procedure along with marketing strategies. According to Ramanathan,
Subramanian and Parrott (2017), the benefits will be seen if marketing procedure is efficient
enough to create enough brand recognition even through social media. The pricing strategy,
branding everything depends on the company itself in case of launching and promoting it
throughout the year. The store needs to explore the recent trends in order to attract customers
to stores and make things available for them along with other brands.
Customers are likely to show loyalty with brands who are efficient in operating their
own private brands as well at the same time, managing others. In order to gain long term
success in business private labeling can help to provide high quality which is certified by the
organization itself. Limited accessibility of high quality private brands with large
demographics are likely to boost customer relationship with organization (Malthouse et al.
2013). A responsible company when decides to launch its own brands, customers find it the
right place to invest their loyalty.
Private labeling is helpful for creating exclusive line of products as mentioned.
Another advantage is that, other retailers can have minimum access to their products with
highly priced acquisition costs to sell private brands at their stores. It will not only expand
operational area but also volume of consumer base will increase with progression of time.
Implementation of Final Strategy
There are two ways to launch private labeling. Among the most efficient and current
profitable methodologies, launching products in e-commerce sites of company will be the
initial stage to start (Laudon and Traver 2016). Apart from that, ecommerce is a dependable

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medium to clear inventory baggage at the end of the season. Store launch is something
traditional more trusted than the contemporary polices. According to Abed, Dwivedi and
Williams (2015), engaging customers through social media pages can be a winning strategy
for implementing final strategy. In order to implement the strategy following steps can be
followed for seamless execution.
 Product is the first and foremost thing to care about in this case. Creating a range of
product is tricky as organization has to keep the market demand, customers’
preferences and pricing strategy or operation expenses in mind. In case the market for
the selected product is saturated, the organization has to find innovative ways to make
the product exclusive at the same time they have to measure if that particular launch is
going to be helpful for the targeted customer base. Another factor is market
competition. To gain competitive advantage maintaining the quality is ultimate apart
from providing brand equity. The entire process takes time as launching a product
after evaluating the market is a matter of time and application of strategic thoughts.
 According to He et al. (2014), while manufacturing or processing a retail product, the
suppliers’ issue; hence, creating an efficient supply chain becomes a professional
issue to deal with. Before establishing a supplier relationship, going through the
feedback from market would help to understand the provided quality by them.
Charging processing fee can be allowed but they cannot be allowed to sell products
directly without private labeling.
 As discussed Kalyanam and Tsay (2013), circulating prototype is necessary for
understanding customers’ feedback regarding the quality of product. Based on
customers’ comments necessary changes must be done to ensure acceptability. This
step is helpful to take out the flaws of manufacturing or processing.

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 The final step of execution is marketing and launching according to the strategic
planning. After selecting product, establishing suppliers and brand, a company must
initiate strategic steps to increase brand recognition through effective promotional
strategies. According to Kim, Lloyd and Cervellon (2016), market must be filled with
sufficient product information and attractive promotional advertisements to attract
interest of target market.
This is how execution of private labeling can be completed. However, as it is a case of
new experiment information will raise customers’ expectation. As described in Chkanikova
and Lehner (2015), the organization must ensure customers receive satisfaction for long term
profitability. Although, a practice of continuous supervision and having s good control all of
the marketing sales activity will ensure sustainability of the brand.
Monitoring and Control of Future Performance
As discussed in, Abrell et al. (2016), there are digital tools which are available to
monitor and take control of business plan sake of delivering satisfaction to customers.
Initially, evaluation committee must be formed based on individual leadership attributes. At
first, review dates must be finalized right from the initial stage to avoid issues of cash flow,
complaints regarding new products and developing the product quality as per the feedback.
Besides, software tracking is helpful to do the job of keeping records of the budget, allocated
tasks and execution of those. Business and marketing plan likely to confront each other in
terms of budget, process of execution and scheduled timeline. The review will receive
successful results if the identified mistakes or flaws are being correlated through a prompt
response. Revising plans according to the business need is necessary for sustaining a
particular business.

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Conclusion
It can be rightfully stated that in order to create brand equity and avoid economical
imbalance within Australian retail industry, David Jones can opt for creating products under
their private labelling based on their financial and corporate performance. Efficient execution
procedure must be reviewed and necessary changes must be done through professional
procedure of supervision.

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References
Abed, S. S., Dwivedi, Y. K., & Williams, M. D. (2015). Social media as a bridge to e-
commerce adoption in SMEs: A systematic literature review. The Marketing
Review, 15(1), 39-57.
Abrell, T., Pihlajamaa, M., Kanto, L., Vom Brocke, J., & Uebernickel, F. (2016). The role of
users and customers in digital innovation: Insights from B2B manufacturing
firms. Information & Management, 53(3), 324-335.
Chkanikova, O., & Lehner, M. (2015). Private eco-brands and green market development:
towards new forms of sustainability governance in the food retailing. Journal of
Cleaner Production, 107, 74-84.
Gala, D., & Patil, R. D. (2013). Consumer attitude towards private labels in comparison to
national brands. International Journal of Business and Management Invention, 2(5),
12-18.
Gmelin, H., & Seuring, S. (2014). Determinants of a sustainable new product
development. Journal of Cleaner production, 69, 1-9.
He, Y., Lai, K. K., Sun, H., & Chen, Y. (2014). The impact of supplier integration on
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Kalyanam, K., & Tsay, A. A. (2013). Free riding and conflict in hybrid shopping
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Kim, J. E., Lloyd, S., & Cervellon, M. C. (2016). Narrative-transportation storylines in luxury
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