Management Accounting 2: Analysis of David Jones' Financial Issues

This report analyzes the management accounting issues of David Jones, focusing on its financial challenges due to the recession and competition. The report includes a SWOT analysis, examining David Jones' strengths, weaknesses, opportunities, and threats. It highlights the impact of decreasing sales and the need for strategic changes, such as cost-cutting measures and corporate transformations. The analysis emphasizes the importance of understanding consumer behavior, implementing new technologies, and developing strong consumer relationships. The report recommends strategies to improve revenue, maintain market position, and overcome financial difficulties, including implementing a bridal collection and a corporate transformation. It also stresses the importance of effective decision-making, long-term investment planning, and adapting to the changing market to ensure the organization's sustainability and growth. The report suggests building strong consumer relationships, creating new products, and leveraging new technologies during a recession to stay competitive.

Running head: MANAGEMENT ACCOUNTING
MANAGEMENT ACCOUNTING
Name of the Student
Name of the University
Author Note

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MEMORANDUM
DATE: 21st January, 2020
TO:
FROM:
SUBJECT: MANAGEMENT ACCOUNTING ISSUES ON DAVID JONES
From certain official sources, it has been seen that because of the recession, the high end
department store has been cutting their jobs across the head office. This is being done so that
the organization can cut some of the expenses as the sales has been decreasing for the
organization. David Jones is the Australian departmental store that has been owned by South
African retail group Woolworths Holdings Limited from the year 2014. Some of the
departmental stores has been shut, as they are not earning profit and for this it cannot afford
to keep that much of employees and keep the stores open.
The implementation of strategy is not easy as it can affect the functioning in the operations of
the organization. The change can always be accompanied with the lower output and also
slowdown of the overall process. If David Jones wants to overcome the issues that they are
facing related to the management, it is very much important to change the strategy and to
follow some solutions. It is important for the management to encourage certain staffs so that
they can come up with some problem solving ideas and also to listen back to the feedback
upon that. The management firstly should found out the problem upon which they should
work upon and solve it. It was really a shocker for everyone as David Jones announced the
closure of more than 30 stores to close over the period of thirty years.
The SWOT analysis of David Jones has been presented below related to the management.

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Strengths: As David Jones is one of the oldest departmental store in Australia, it does have a
goodwill in that region. The consumers do have loyalty upon the organization and the goods
that they deliver. They do offer a wide range of high quality products of the international
brands related to the fashion, living and beauty. They do offer products through multiple
channels like website, stores etc., but still the prices that they offer are competitive. The
market position has been helped in acquisition with the Woolsworths Holdings.
Weakness: Due to the global financial crisis, the David Jones is suffering from weak
financial crisis as it has a difficulty in the trading conditions and also in changing the
sentiments of consumer. The sale of the David Jones is also decreasing day by day due to the
online retailers internationally. The capital that is being invested because of refurbishment of
store can lower the cash flow.
Opportunities: The merger helped David Jones to become one of the largest departmental
store that offer highly value proposition. The store always deliver the fashion focused items
that does have a really good market presence.
Threats: David Jones does have the threats from the retailers internationally that have some
of the established sector which has been in the region of Australia. One of the biggest threats
that David Jones is facing is the international retailers which is in the sector of online
retailing.
The financial position of David Jones is usually due to the global financial crisis, this
happened because of the difficulty in the trading conditions and change in the sentiments of
consumers. The revenue of David Jones has decreased over the years as there has been
challenge in the trading environment and also there should be change in the strategy so that
they can improve the revenue margin rather than closure of the several stores in the coming
years.

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Implementation of Tools
The management of David Jones has to make certain changes in the strategy so that they can
get desired profit in future across the stores in Australia. There are changes in keeping the
items, the bridal collection should be implemented so that it will attract more consumers.
There should also be a corporate transformation that will bring changes in corporation wide
across the whole organization. A better and stronger corporate reputation will help David
Jones to maintain the position in leading fashion retail store which is across the whole
Australia.
The new management technique will help in ensuring the use of the strength of David Jones.
The decision making should be effective enough with various innovative ideas and also
should have a proper planning about the long term investment. It is important for the
management to understand the strength of David Jones and of the higher values of work. The
new concepts should replace the older ineffective concepts so that it will be better for David
Jones to work more effectively. Upon this changes there has been an overall development in
the emerging markets. With this specific goal, the organization can increase the strength of
the business foundation and there will be better progress in the market that can be seen in the
near future. With this new implications, the investors and stakeholders has to be satisfied by
the progress which David Jones will see upon their performance and there will be increase in
corporate value of the organization. All the process of transformation has been will be based
upon the process and the principles that will give the David Jones a long term solution and
will also enhance the performance. The transformation will be effective enough which will
provide and ability to sustain as well as grow in the financial crisis. The higher authority and
management should be a better visual of the current state of market upon which they will
work upon so that they can get success and stay ahead of the competition. The new strategy

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that has been implemented will definitely boost the sales of David Jones and will also limit
the unnecessary flow of cash which the organization suffered at the time of crisis.
Implementation of strategies at the time of recession period
 It is important for David Jones, to build a strong relationship with the consumers, so that
it will be easier to understand what the consumers want.
 David Jones should get organized and create new products and services so that it will
attract consumers.
 With the implementation of the new technologies and methodologies that can be very
efficient in the next boom stage.
 At the time of recession, David Jones could use it as a big opportunity so that they can be
strong and more competitive in future period.
 It will be helpful if they can create various opportunities, with several investigation and
will invade new market segments that has already been exploited.

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