Strategic Analysis of David Jones in Australian Retail Industry Report

This report provides a comprehensive analysis of David Jones, an Australian upmarket department store, focusing on its performance within the retail industry. It begins with an introduction to David Jones and an overview of the Australian retail market, including market size and trends. The report delves into David Jones' corporate and financial performance, examining key metrics and challenges. A SWOT analysis is conducted to assess the company's strengths, weaknesses, opportunities, and threats, followed by an evaluation of its competitive advantages. Strategic options are explored, considering the company's current positioning and potential growth strategies, including targeting the mid-market segment. The report concludes with recommendations for David Jones to improve its profitability and market position. The analysis incorporates insights from various sources, including financial data and industry reports.

Running head: MANAGEMENT OF RETAIL ORGANIZATION
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Name of the Student
Name of the University
Author Note

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Executive Summary
The report is based on the analysis of Australian retail industry and an organization which
operates in the country. The organization that has been chosen for analysis is David Jones.
The financial and corporate performance which has been depicted by the organization will be
analysed. The analysis will also be related to the competitive advantage and the internal
environment of the company. The report will further provide recommendations based on the
strategic option that can be selected and implemented by the company in order to operate
profitably in the retail industry of Australia.

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Table of Contents
Introduction and about the company..............................................................................3
Market size and trends...................................................................................................3
Corporate and financial performance.............................................................................4
SWOT and competitive advantage.................................................................................4
Strategic options.............................................................................................................5
Recommendations..........................................................................................................6
Conclusion......................................................................................................................6
References......................................................................................................................7

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Introduction and about the company
David Jones Pty. Ltd. or David Jones is an Australian upmarket based department
store that has been acquired Woolworths Holdings Limited in the year 2014. David Jones was
established in the year 1838 by the David Jones who was a Welsh merchant when he had
migrated to Australia. David Jones is the oldest department store which had been operating in
the industry and has been able to develop a major position in retail based industry of
Australia. The organization currently operates around 45 stores in different Australian
territories and states (Davidjones.com., 2019).
The report will be based on analysis of the industry in which David Jones operates
and trends which exist in the industry as well. The corporate and financial performance of the
organization will be analysed in detail in the report with the competitive advantage which has
been developed in the industry as well.
Market size and trends
The Australian retail industry has recently faced major disruption from the
international organizations which have entered the country. The retail based landscape has
started changing along with the consumers as well. The consumers in the industry have
become more technology savvy and busier as well. The future operations of the retail
industry of Australia is also based on the multiplicity and agility of different delivery
platforms can affect the non-responsive retailers (Barros, Hernangómez & Martin-Cruz,
2016). The revenues which have been earned by David Jones in Australia in the year 2018
was 18 Billion Dollars that 0.9% lower than its revenues that were earned previously. The
organization has shown negative levels of growth in the retail industry of Australia. The
overall size of the Australian retail industry as of 2016 was 122 Billion US Dollars
(Businessinsider.com.au., 2019). The Australian retail industry is mainly ruled by the two

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major organizations namely, Woolworths and Coles. David Jones has not been successful in
gaining a major part of the market mainly due to this reason.
Sales
David Jones Myer Harvey Norman
Figure 1 – Market share of David Jones
Source – Created by author
Corporate and financial performance
Corporate performance – David Jones has been acquired by the South African
organization named Woolworths. An impairment charge of 712 Million Dollars has affected
the entire acquisition based process which has been implemented by the organization.
Woolworths has spent more than 2 Billion Dollars on the entire acquisition based process.
The local retailing based environment which has been developed in Australia is considered to
be an important part of the performance which has been shown by David Jones
(Businessinsider.com.au., 2019). The expansion of David Jones is based on the opening of
stores in different countries by collaborating with the local organizations. For example, David

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Jones entered the market of New Zealand with the of redevelopment of an organization
named Westfield Newmarket.
Financial performance – The levels of profitability of David Jones have decreased in
the year 2018 by 50 percent after the organization has gone through tough conditions in the
last few years. The sales of David Jones have reduced in the past years and the revenues of its
parent organization have been affected in a negative manner as well. Earnings of David Jones
have dropped by the 58 percent and the financial services of the organization are also quite
flat. Spending rates of David Jones have increased and has an immense effect on the revenues
(Businessinsider.com.au., 2019). The major part of the profitability of David Jones is earned
from the retail operations of the organization. The sales growth of David Jones has however
not been able to affect the profitability which has reduced in the last few years.
Figure 2 – Financial performance
Source - (Businessinsider.com.au., 2019)

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SWOT and competitive advantage
SWOT analysis framework is considered to be an effective method which is helpful
for analysing the internal environment of an organization. The internal environment of David
Jones can be examined with the proper implementation of this framework.
Strengths – The strong domestic levels of presence in the Australian retail industry in
different industries like, electricity, fashion and the food products is a major strength of
David Jones. The product based variety of David Jones is also a strength of the organization.
Stores of David Jones have been developed in areas which are high value and low risk based
(Daspit et al., 2017).
Weaknesses – The availability of huge number of options has been considered to be a
major weakness which is based on the operations of David Jones in the industry. The
organization also has a limited level of global presence (Engert, Rauter & Baumgartner,
2016). A major issue which has been faced by David Jones is related to higher prices and
targeting only the premium market segment.
Opportunities – Acquisition is able to provide major levels of opportunities to David
Jones to expand in the industry. The private label based strategy of the organization can play
a key role in increasing the profitability levels of the organization (Demir, Wennberg &
McKelvie, 2017). The management structure of the organization can also be altered in order
to increase profitability levels.
Threats – The domestic levels of competition have increased in the last few years due
to the entry of new organizations in the industry. Loyalty levels of the customers of David
Jones are also quite low.

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Figure 3 – SWOT analysis
Source - (Demir, Wennberg & McKelvie, 2017)
Competitive advantage – The major competitive advantage that has been gained by
David Jones in the industry is based on the expansion of the private label based brands of the
organization. The products that are offered under private label of David Jones are of higher
quality as compared to those of Myer and are targeted towards the premium segment. The
organization has been able to increase its profitability levels with the help of proper
expansion of different private brands that are offered to the customers (Durand, Grant &
Madsen, 2017).

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Strategic options
The current strategy that has been implemented by David Jones is based on offering
the products to high-end based market rather than the mid-market based segment of retail
industry of Australia. The products of the organization are sold to customers at higher prices
as compared to those which are offered by its competitors like, Harvey Norman and Myers. A
major strategic option which is being considered by David Jones is based on its strategy
based on carving up the growing 44 Billion Dollars retail sector. The strategy will be able to
play a major role in enhancing the customer base and increasing levels of diversity as well
(Dyer et al., 2015). The major target market area of David Jones will be Sydney which
consists of premium as well as mid-market customers and has been earlier targeted by other
Australian and international retail organizations like, Myers, Aldi and Target. The mid-
market based segment needs to be included in the target segments of David Jones.
Figure 4 – Competitive environment
Source - (Businessinsider.com.au., 2019)

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Recommendations
David Jones needs to target the mid-market based customers with the help of
its products in order to increase the customers base in an effective manner.
The organization can also invest its resources in the affordable fashion based
sector in order to develop a loyal customer base with the help of quality
products.
Conclusion
The report can be concluded by stating that the performance of David Jones in the
retail industry of Australia has not been profitable. The strategies of the organization can be
altered in order to increase the profitability levels in an effective manner.

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References
Barros, I., Hernangómez, J. & Martin-Cruz, N. (2016). A theoretical model of strategic
management of family firms. A dynamic capabilities approach. Journal of Family
Business Strategy, 7(3), pp.149-159.
Businessinsider.com.au. (2019). David Jones sales growth is crushing the competition.
Retrieved from https://www.businessinsider.com.au/david-jones-sales-revenue-
smashes-the-competition-2016-7
Daspit, J.J., Chrisman, J.J., Sharma, P., Pearson, A.W. & Long, R.G. (2017). A strategic
management perspective of the family firm: Past trends, new insights, and future
directions. Journal of Managerial Issues, 29(1), p.6.
Davidjones.com. (2019). David Jones Online | Shop Fashion, Beauty, Home & More.
Retrieved from https://www.davidjones.com/
Demir, R., Wennberg, K. & McKelvie, A. (2017). The strategic management of high-growth
firms: a review and theoretical conceptualization. Long Range Planning, 50(4),
pp.431-456.
Durand, R., Grant, R.M. & Madsen, T.L. (2017). The expanding domain of strategic
management research and the quest for integration. Strategic Management
Journal, 38(1), pp.4-16.
Dyer, J.H., Godfrey, P., Jensen, R. & Bryce, D. (2015). Strategic Management: Concepts
and Cases. Wiley Global Education.

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Engert, S., Rauter, R. & Baumgartner, R.J. (2016). Exploring the integration of corporate
sustainability into strategic management: a literature review. Journal of cleaner
production, 112, pp.2833-2850.