MGT501 - Analyzing the Business Environment of Harvey Norman

This report provides an analysis of the external business environment of Harvey Norman, an Australian multi-national retailer. It examines the impact of customer behavior, government regulatory policies enforced by the ACCC, and competitor strategies from companies like Kogan and JB Hi-Fi. Public opinion and ethical sourcing challenges are also discussed. The report suggests using a management system framework to incorporate sustainability into Harvey Norman's operations, ensuring compliance with Australian Consumer Law and addressing consumer concerns. This analysis aims to identify key challenges and propose solutions for Harvey Norman to maintain competitiveness and achieve its business goals within the Australian market. Desklib offers a wide range of study tools and solved assignments to assist students in their academic endeavors.

Running head: BUSINESS ENVIRONMENT OF HARVEY NORMAN
Business Environment of Harvey Norman
Name of the student
Name of the University
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1BUSINESS ENVIRONMENT OF HARVEY NORMAN
Executive Summary
The primary purpose of this report is to elucidate on the external business environment of
Harvey Norman. It discusses about the customer behaviour and the regulatory policies
existing in Australia that act like a challenge for Harvey Norman. It states how the competitor
strategy along with public opinion has an impact on success of the firm. The report also
discusses about a framework that can help the company in solving issues rising within the
business environment.

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Table of Contents
Introduction................................................................................................................................3
Customer Behaviour...................................................................................................................3
Government regulatory policies.................................................................................................4
Competitor Strategy...................................................................................................................5
Public Opinion...........................................................................................................................5
Frameworks for resolving challenges for Harvey Norman........................................................6
Conclusion..................................................................................................................................7
References..................................................................................................................................8

3BUSINESS ENVIRONMENT OF HARVEY NORMAN
Introduction
Business Environment refers to sum total of the individuals and institutions which are
outside business control. An organisation depends on the factors related to business
environment since it affects performance of the business. Business environment comprises of
internal along with external factors which has an effect on the functioning of a company.
External environment comprises of the outside factors that has an effect on the business
operations of a company. Harvey Norman is a multi-national retailer based in Australia that is
instrumental in selling furniture, beddings, computers and the electrical products
(Harveynorman.com.au., 2018). This report focusses on customer behaviour and regulatory
policies that have an impact on the working of Harvey Norman. It discusses how competitor
strategy along with public opinion has an effect on the business performance of Harvey
Norman. The report discusses about the factors that cause challenges for the firm and makes
use of frameworks that can help in resolving challenges.
Customer Behaviour
Customer behaviour refers to study of the individuals along with groups that is
associated with the aspect of purchase of a product or service. Customer behaviour is
indicative of emotional and the behavioural responses that are involved in the process of
buying a product. Consumer behaviour examines the emotions, attitudes along with
preferences that has an effect on buying behaviour of an individual. The retail industry in
Australia is very competitive and hence understanding the pattern of consumer behaviour
poses to be a challenge for Harvey Norman. Consumer Behaviour is of crucial importance in
the retail industry as it helps in knowing about the needs and impulses of the consumers in
the present age. Harvey Norman should be able to assess the lifestyle of the people living in
Australia that can help it in catering to the wants of the consumers (Sanders-Jackson et al.,

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2015). The products of Harvey Norman should be able to know about the target market that
will be able to help it catering to the needs of large consumer base. Understanding the
consumer buying behaviour is important for Harvey Norman as consumer insight can help
the brand in restructuring itself that can help the company in getting higher turnover. In the
event of Harvey Norman not observing the consumer behaviour they would not be able to
find the gaps in relation to product portfolio. The finding of gaps in relation to product
portfolio can help them in the aspect of launching new products that can satisfy the
consumers (Kurnia et al., 2015).
Government regulatory policies
Australia has national statutory framework which ensures that trading is carried out in
a fair manner in relation to business along with consumers. The framework is enforced by
Australian Competition and Consumer Commission (ACCC) and this acts as a challenge for
the multi-national retailer, Harvey Norman (Naidoo & Gasparatos, 2018).There are state
along with territory laws that helps in governing the aspect of consumer protection in
Australia. Australian Consumer Law (ACL) helps in providing regulations relating to unfair
contract terms along with consumer rights guarantees. They also help in providing product
safety laws and unsolicited consumer agreement that the retailers in Australia have to abide
by. National statutory framework exists in Australia that helps in regulating product safety
along with information standard in Australia (Huang & Gamble, 2015). These regulations
help in ensuring the fact that the products that are harmful are not circulated in the Australian
market. The laws in Australia lays great emphasis on the aspect of consumer protection and
there are many obligations that the retailers have to abide by within the Australian
environment. The ACL deals with the liability of suppliers and the manufacturer in relation to
injury caused by a product. In the event of consumer issues like deceptive conduct, statutory
consumer guarantee and manufacturer liability the retailers would be penalized (Roy et al.,

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2018).This acts as a challenge for Harvey Norman in the Australian environment. Harvey
Norman has to face liability in case of any defects of the products which acts as a challenge
for the company in operating within Australia.
Competitor Strategy
There are companies in Australia like Kogan and JB Hi-fi that deals with electronics
that poses stiff competition for Harvey Norman. The products are offered at these companies
at a discounted price that increases the level of competition for the company, Harvey Norman
in Australia. The companies like Kogan along with JB Hi-fi have made use of innovative
thinking that helps in improving consumer experience. These companies act as stiff
competition for the retailer Harvey Norman in Australia. There are furniture companies In
Australia like Design by Them, MJP studio, Ingrain Designs and Michael Hayes Furniture
that act as a challenge for the furniture sector of Harvey Norman. The retailers offer
percentage discounts along with multi-buy promotions that makes it difficult for Harvey
Norman to operate in the competitive environment of Australia (Garg & Chauhan, 2015) The
strategies of the competitors like buying and saving off some specific items acts as a
challenge for Harvey Norman that hinders in the process of making profits for the firm. The
competitor strategies like free shipping makes a large number of consumers buy furniture
from MJP Studio, Ingrain Designs and that of Design by Them. The promotions of these
retailers are targeted towards a particular customer group that is a major cause of the
popularity of these retail companies dealing with furniture. Private sale is often run by these
furniture companies that makes the competition very stiff for multi-national retailer called
Harvey Norman (Stubbs, 2017).

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Public Opinion
Public Opinion refers to the desires and thinking of a large number of people.
Collective opinion of people living in the society is a crucial factor that can help a firm in
achieving success. People have a tendency of forming opinions regarding the individual
companies by the application of universal values to the actions. Public opinion can help the
managers in spotting the trends and it can be useful for a company in anticipating future. The
managers can determine the trends in relation to marketing that can help a firm in the aspect
of achieving success. Harvey Norman in Australia would have to make sure that the products
are sourced in the ethical manner. In the event of the products being sourced in the unethical
manner a firm can face hindrance and will lose the favour of the public in the present age
(Goodman & Remaud, 2015). Harvey Norman should be able to make the customers aware
that that information in relation to the products of the company are easily accessible.
Sourcing responsibly is difficult for Harvey Norman owing to the complex supply chain. The
process of supply chain being complex acts as a barrier in the path of operation of Harvey
Norman. The people in the present age lay stress on the method of production of goods owing
to the greater media security that exists in the present age.
Frameworks for resolving challenges for Harvey Norman
The consumers in the present age are awakening to the aspect of sustainability that
has an effect on the shopping habit of the people in the present age. Harvey Norman has to
abide by Australian Consumer Law along with Australian Competition and Consumer
Commission that can help them in staying sustainable within the environment. The retailers
taking care of environmental issues can help in ensuring the fact that customers do not have
to worry about the issue of sustainability. Harvey Norman can increase the awareness along
with interest of the people by laying emphasis on the aspect of sustainability. The retailers in
the present age have a close relationship with the consumers and they can respond to the

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enthusiasm of the customers by making into account the aspect of sustainability.
Management system framework can be taken recourse to by Harvey Norman that can help in
incorporating sustainability in the operational activities of Harvey Norman within Australia
(Grimmer et al., 2017). This framework can help in guiding management in relation to
competing priorities within Harvey Norman. This framework will be able to help the decision
makers in the organisation in making trade-offs in relation to sustainability framework.
Conclusion
Business environment is indicative of individuals along with the institutions that is
outside the ambit of business control. The internal and the external factors has an influence
on the organisational policies and the functioning of an organisation. Australian retail
industry is greatly competitive and hence understanding of consumer behaviour is of crucial
importance for the success of Harvey Norman. The state laws in Australia wants to protect
the consumers that acts as barrier in the path of success of Harvey Norman. ACL has strict
contract terms that strengthen the consumers and hence retail companies in Australia have to
maintain strict standard that can facilitate its operation in competitive environment of
Australia. The presence of companies like JB Hi-fi that sells the electronic products poses
threat for the electronics sector of Harvey Norman. Furniture companies within Australia like
MJP studio along with Ingrain Designs are the competitors for the furniture sector of Harvey
Norman. Public opinion can be useful for the mangers in identification of trends that can be
of use for a company in anticipating future. Management system framework can be utilised
by Harvey Norman that can help them in ensuring the aspect of sustainability in the
operations of a company. This framework can be useful in guiding the management that can
help the company in achieving the goals.

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References
Garg, P., & Chauhan, A. (2015). Factors affecting the ERP implementation in Indian retail
sector: A structural equation modelling approach. Benchmarking: an International
Journal, 22(7), 1315-1340.
Goodman, S., & Remaud, H. (2015). Store choice: How understanding consumer choice of
‘where’to shop may assist the small retailer. Journal of Retailing and Consumer
Services, 23, 118-124.
Grimmer, L., Miles, M. P., Byrom, J., & Grimmer, M. (2017). The impact of resources and
strategic orientation on small retail firm performance. Journal of Small Business
Management, 55, 7-26.
Harveynorman.com.au. (2018). Harvey Norman | Shop Online for Computers, Electrical,
Furniture, Bedding, Bathrooms & Flooring | Harvey Norman Australia. Retrieved
from https://www.harveynorman.com.au/
Huang, Q., & Gamble, J. (2015). Social expectations, gender and job satisfaction: Front‐line
employees in C hina's retail sector. Human Resource Management Journal, 25(3),
331-347.
Kurnia, S., Choudrie, J., Mahbubur, R. M., & Alzougool, B. (2015). E-commerce technology
adoption: A Malaysian grocery SME retail sector study. Journal of Business
Research, 68(9), 1906-1918.
Naidoo, M., & Gasparatos, A. (2018). Corporate Environmental Sustainability in the retail
sector: Drivers, strategies and performance measurement. Journal of Cleaner
Production.

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Roy, S. K., Balaji, M. S., Quazi, A., & Quaddus, M. (2018). Predictors of customer
acceptance of and resistance to smart technologies in the retail sector. Journal of
Retailing and Consumer Services, 42, 147-160.
Sanders-Jackson, A., Parikh, N. M., Schleicher, N. C., Fortmann, S. P., & Henriksen, L.
(2015). Convenience store visits by US adolescents: rationale for healthier retail
environments. Health & place, 34, 63-66.
Stubbs, W. (2017). Characterising B Corps as a sustainable business model: An exploratory
study of B Corps in Australia. Journal of cleaner production, 144, 299-312.