David Jones's Strategic Analysis of the Indian Retail Market Entry

This report provides a comprehensive analysis of David Jones's proposed entry into the Indian retail market. It begins with an introduction highlighting the company's strategic decision and outlines the scope of the analysis. A PESTLE analysis is conducted to evaluate the political, economic, social, technological, legal, and environmental factors influencing the market. Market segmentation, targeting, and positioning strategies are then discussed to assess the potential customer base and product offerings. Competitive analysis, using Porter's Five Forces, examines the competitive landscape, including rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. An organizational analysis, employing SWOT analysis, evaluates the company's internal strengths and weaknesses, as well as external opportunities and threats. The report concludes with a summary of findings and recommendations, emphasizing the importance of adapting to the Indian market's unique characteristics. The reference list provides a detailed list of sources used in the report.

Running Head: ASSESSMENT ITEM 2
ASSESSMENT ITEM 2

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Table of Contents
Introduction......................................................................................................................................3
Macro and Microenvironment analysis of Indian market by David Jones......................................3
Market Analysis of Davis Jones in India.........................................................................................5
Competitive Analysis of Davis Jones in India.................................................................................7
Organizational analysis of David Jones in India.............................................................................9
Conclusion.....................................................................................................................................11
Reference List................................................................................................................................12

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Introduction
David Jones a leading retail company in Australia has decided to enter a new international
market. The company has planned to enter the Indian retail market after analyzing the
extensiveness and diversification of a large number of populations in the country. In this
assignment, a discussion on the market choice of the company, issues that could be faced by the
company as an emerging organisation, competitive analysis in the international market and
subsequent organizational analysis is been provided.
Figure 1: Logo of David Jones
(Source: Shop.davidjones.com.au, 2017)
Macro and Microenvironment analysis of Indian market by David Jones
In order to analyse the market value of business of David Jones in India, PESTLE analysis is
been conducted.

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Figure 2: PESTLE analysis
(Source: Floh et al. 2014)
Political
India prolongs a good relationship with other countries in respect of political grounds. Grant
(2016) has shed light on the strategic dialogue been formed between Australia and India in 2015
that provided an opportunity for enhancement of business among the two countries. However,
the company can face a hindrance in their business activities due to the campaigns recently
promoted by Indian Government. PM has launched a ‘Make in India’ concept in retail sectors,
where, textile and garment manufacturer from rural areas of India are being exposed to the local
as well as international market by the Government initiatives (ETRetail.com, 2017). David and
Jones, being an international company may counter such political scenario and not get sufficient
exposure on entering Indian market as Government is focusing of retailers within the country.
Economical
Australia being a developed country has a much less inflation and unemployment rate. On the
other hand, India is facing huge economic issues in the past few years an inflation and
unemployment are much prevalent in this country (Dess, 2013). A significant impact on the
export and import of goods is made by RBI affecting tax rates. This could have affected the
growth of a new business in the Indian retail market.
Social
PoliticalEconomicalSocialTechnologicalLegalEnvironmental

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Social aspect in India and Australia are completely different. India is a country inhabiting people
of different cultures, religions, lifestyle and family structure. David Jones will have a great scope
in attracting customers in India regarding social aspect (Grant, 2016). However, they might face
competition from domestic market, being more associated with Indian culture. This would prove
to be a negative factor since this organisation would be launching Western dresses which other
international organizations’ like Burberry, Zara have already captured.
Technological
Technology is facing an exponential growth in India in the last few years, enhancing import
export activities, foreign direct investment and also in licensing agreement. In addition to this,
online medium is greatly influencing urban society of India. Thus David Jones will be entering a
country that is being technological rising and the organizing will also be able to conduct their
promotional activities via online medium on entering this new market (Zhang, Guo & Goes,
2013).
Legal
Tax system in India can have a significant impact on entry of David Jones in this market.
Frequent increase in decrease of tax, emergence of new tax system like GST, can affect the
business activities of a newly emerged organisation in Indian market (De Knop & Meunier,
2015). Prevalent legislations are also needed to be followed by the company in a methodical
way, which may be time consuming. This may cause a disruption in convenient operations of
their business.
Environmental
Tropical summer climate is prevalent in India and people mostly prefer cotton clothes. David
Jones, coming from a temperate climate country, needs to modify their clothes to make their
target customers feel comfortable on availing their service.
Market Analysis of David Jones in India
David Jones on entering their new market in India needs to segment their market, target their
customers and position their product offering.

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Figure 3: STP model
(Source: Zhang, Guo & Goes, 2013)
Market segmentation
On the basis of four factors, David Jones has segmented their market in India that is being
discussed below:
● Geographical situation of India covers an extensive boundary, being the 7th largest
country in world in terms of population (Zalengera et al. 2014). Company has scope of
segmenting their customers based on 28 states of the country having various cultures.
● Demographic situation of India portrays that women are adhered to ethnic clothing;
however, David Jones primarily sells western outfits. In this context, there is a huge
chance of facing competition. Thus company is focusing on teenagers and women below
25 in availing their western outfits.
● Psychographic factors of Indian customers lean towards a traditional lifestyle, where their
culture and ethical values play an important part (Zhang, Guo & Goes, 2013). Company
needs to focus on personality and style statement of people and accordingly segment their
market, since; India is a country full of mixed culture.
● Behavioral factors include desires, personal beliefs as well as creativity of customers. The
company, being new to market, will face difficulty in analyzing behavioral aspect of
customers and their choices.

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Target customers
On successful analysis of the market segmentation, David Jones needs to set a particular segment
and target customers of that segment, which will provide them maximum profit. David Jones has
primarily set their customers as per the demographic factors. They would target teenagers and
women their age ranging from 15-25 years, and thereby promote their western outfits. Pawliczek
& Rossler, (2016) have opined that women of this age range would be keen to shift their choice
of clothes from tradition to western outfit.
Product positioning
Company needs to identify a unique selling proposition, considering the factors as to why Indian
customers would be availing their service. They need to portray a positioning map and note the
perception of their target customers about their products. As stated by Fernie, Fernie, & Moore
(2015), a value proposition is to be created to explain the fulfillment of target customers’ needs
and adopt appropriate promotional strategies.
Competitive Analysis of Davis Jones in India
David Jones can analyse the market competence on their entry to the retail market of India with
the assistance of Porter’s Five Forces of Competitive theory. This has been discussed below:
Competitive rivalry ● Tough competition will be faced by
company from the existing local
retail market (Westside, Max,
Provogue) as well as international
organizations (Amazon, Gap,
Burberry) that are operating in India
prior to entry of David Jones
● Existing companies have greater
knowledge of customers as well as
prevalent market situations. Thus
during adverse market conditions,
David Jones will face a tough time
in sustaining in market.

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Supplier bargaining power ● David Jones, being a new entrant in
Indian retail market, will come
across a number of suppliers. A new
organisation is also subjected to
switching to an alternative supplier,
on being rejected from one
(Pawliczek & Rossler, 2016).
● High bargaining power of suppliers
will be faced by David Jones on
entering Indian retail market.
Buyer bargaining power ● Company will be getting a number
of buyers since, customers are
generally curious of availing the
services of a newly entered
company in market.
● David Jones will be attracting a
large number of women customers,
as they are launching western
clothing and apparels for women.
Threat of Substitution ● Products of David Jones have high
chances of substitution on entering
Indian retail market, since they will
be facing huge competition from its
both local and international rivals
(Westside, Burberry). If customers
are dissatisfied with their services,
they would substitute it with
products of the competitors.
Threat of new entry ● Company will counter high threats

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from other international companies
that are planning to launch their
products in Indian market by
adopting technological
advancements and innovative
marketing strategies.
● In addition to this, there is a
constant entry of local retail
companies in the market who are
well acquainted with customer
choices and market factors. They
may also impose a threat to David
Jones.
Organizational analysis of David Jones in India
In order to evaluate the situation of the organisation on operating its business activities in India,
SWOT analysis is performed:
StrengthWeaknesseOpportunitieThreatSWO

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Figure 3: SWOT analysis
(Source: Brito et al. 2015)
Strengths
● Firm supply chain management
system is prolonged by David
Jones. They follow convenient
stages of supply chain management,
which are selection of raw
materials, process of manufacturing
and distribution process.
● Bull et al. (2016) said that, effectual
management of production adds
value to its sustainability in market.
A specific design is maintained by
the company to stock management
system that varies from 4-5 weeks.
After that, a new set of designs are
being formed. As a result, company
fulfils customer needs more,
compared to other companies.
Weaknesses
● Self contained or centralized
distribution system is the main
weakness of David Jones. Owing to
this system, fault in any one factors
of the production can cause the
whole system to get collapsed.
Decentralized distribution system is
followed by rival companies of
David Jones that has allowed them
to gain competitive advantage.
● Advertisement process and
communication with customers are
not being appropriately
implemented by this company. Lack
of promotion can cause a huge
impact on business.
Opportunities
● Scope of global expansion in other
continents has imposed a great
opportunity on enhancing the
business activities.
● Focusing on online market can also
be a great opportunity
Threats
● Extreme competence in market has
caused a great threat in operating
business activities.
● David Jones has not collaborated
with any of the eminent
international designers, thus there is
no such brand label.

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Conclusion
David Jones has extreme potential to become one of the leading international retail companies.
On their entry to Indian retail market, they would face a large number of adverse factors that
would risk their sustainability in the market. In this assignment, probable market analyses have
been performed that would help the company in managing revenue growth, following unique
business strategy and understanding the needs of customers in the new market. Evaluation of the
market analysis and successful implementation of the strategies would help the organisation gain
profit in the international market.

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Reference List
Brito, P. Q., Soares, C., Almeida, S., Monte, A., & Byvoet, M. (2015). Customer segmentation in
a large database of an online customized fashion business. Robotics and Computer-
Integrated Manufacturing, 36(9), 93-100.
Bull, J. W., Jobstvogt, N., Böhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C. &
Carter-Silk, E. (2016). Strengths, weaknesses, opportunities and threats: A SWOT
analysis of the ecosystem services framework. Ecosystem services, 17(8), 99-111.
De Knop, S., & Meunier, F. (2015). The ‘Learner Corpus Research, Cognitive Linguistics and
Second Language Acquisition’nexus: a SWOT analysis. Corpus Linguistics and
Linguistic Theory, 11(1), 1-18.
Dess, G. G. (2013). Consensus on strategy formulation and organizational performance:
Competitors in a fragmented industry. Strategic management journal, 8(3), 259-277.
Fernie, J., Fernie, S., & Moore, C. (2015). Principles of retailing. Abingdon: Routledge.
Floh, A., Zauner, A., Koller, M., & Rusch, T. (2014). Customer segmentation using unobserved
heterogeneity in the perceived-value–loyalty–intentions link. Journal of Business
Research, 67(5), 974-982.
Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. Hoboken: John
Wiley & Sons.
Gustafsson, A., Herrmann, A., & Huber, F. (Eds.). (2013). Conjoint measurement: Methods and
applications. Berlin: Springer
Make in India' rolled out for textile & garment industry - ET Retail. (2017). ETRetail.com.
Retrieved 2 August 2017, from http://retail.economictimes.indiatimes.com/news/apparel-
fashion/apparel/make-in-india-rolled-out-for-textile-garment-industry/43430184
Pawliczek, A., & Rössler, M. (2016). Knowledge of Management Tools and Systems in SMEs:
Knowledge Transfer in Management. Knowledge Management Initiatives and Strategies
in Small and Medium Enterprises, 180(9), 55-120
Shop.davidjones.com.au. (2017). Shop.davidjones Retrieved 3 August 2017, from
http://shop.davidjones.com.au/djs/en/davidjones
Zalengera, C., Blanchard, R. E., Eames, P. C., Juma, A. M., Chitawo, M. L., & Gondwe, K. T.
(2014). Overview of the Malawi energy situation and A PESTLE analysis for sustainable

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development of renewable energy. Renewable and Sustainable Energy Reviews, 38(8),
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