Strategic Analysis of David Jones in Australian Retail Market

This report provides a comprehensive strategic analysis of David Jones, an Australian department store. It begins with an executive summary, followed by an introduction to the company and an overview of the Australian retail market size and trends. The report delves into David Jones' corporate and financial performance, examining its strengths, weaknesses, opportunities, and threats (SWOT) to determine its competitive advantage. It explores strategic options for the company, including potential changes needed for implementation related to structure, culture, reward systems, leadership, systems, skills, and staff. The report also covers monitoring and control, specific implementation issues, methods of evaluation, and the application of external and internal information. It concludes with recommendations for David Jones to improve its profitability and market position within the competitive Australian retail industry.

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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.............................................................................5
SWOT and competitive advantage.................................................................................7
Strategic options.............................................................................................................8
Changes required for implementation............................................................................9
Structure, Culture Reward system; leadership style related to implementing strategies:
..................................................................................................................................................10
Systems, Skills, and Staff related to implementation of strategies..............................11

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Monitoring and control required to implement the strategies......................................12
Specific Issues related to Implementation of the strategies.........................................12
Methods of evaluation..................................................................................................12
Analysis and application of external and internal information....................................12
Discussion....................................................................................................................13
Conclusion....................................................................................................................13
Recommendations........................................................................................................14
References....................................................................................................................15

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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.
The buying strategy that David Jones uses that is it offers all things to the peoples by
taking the risk and making the company a jack of all the trades rather than becoming the
master of one kind of products. David Jones buys the products of different sources and sells
those to the customers as it is not possible for the sources to reach the customers. The
business shares half of the profits to the sources thus it becomes beneficial for both the source
and the retailers. For providing the effective services the company are required to train the
staffs
This study recommends that David Jones can built a strong relation with the
customers by providing the increased availability of data through which the marketers can
move from the identification of the segments for targeting the micro segments which is based
on the patterns of the individual customer’s research and the purchasing behaviours.
The online marketing strategies that the business follows is to attract the global
customers by the development of the new business windows, great website, and blog and
through social media. The business could use the social media marketing strategies as it is
one of the cost effective marketing methods. This will help the business to gain reviews of
the new products they are launching in the business market. The business are required to
develop the effective SEO contents for reaching the customers.
David Jones increases the brand merchandise by consuming the products of the
quality brands like Woolworths as their motto is to increase the sales volume. For this they
retains their loyal customers by campaigning the quality products. They tends to provide the
unique quality products first in the business market for attracting customers.

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David Jones can keep track of customer and their satisfaction by introducing the new
operation system that is whenever anybody is looking for the specific product there remains
the requirement of product specialized persons who can assist the customers by providing
valuable informations regarding the product and online also there are person who analyses
the search list of the customers and assist accordingly. The business collects the feedbacks
and take steps by reconstructing their business operations according to the negative
feedbacks. They provides offers and by lowering their profit they tries to satisfy their
customers as they mostly tends to increase the sales volume.
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
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 reducedin 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

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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)
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.

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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.
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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Changes required for implementation
The major changes that are required for implementations are that the David Jones Pty.
Ltd are required to bring the innovative strategies for the production of the innovative
products. This changes are essential because there are huge number of competitors in the
same field and they need to come up with some innovative strategies for competing in the
business market. The company are also required to produce some products at a low price as
because most of the products they are produces are highly priced and their targeted market
segments are required to be extended.
The organizations are also required to develop the innovative culture for the
employees in the working place. The business are required to train the employees based on
the specified skills and should evaluate whether they gained the appropriate trainings. The
business should train the employees in such a manner that if they have to change their
responsibilities they will be able to perform in the same manner.
Structure, Culture Reward system; leadership style related to implementing strategies:
The company are required to develop such a business structure that would allow the
business to provide the products based on the high-end market based than the mid-end market
of Australia. The business are required to make the production process in low cost as their
most of the products can be categorised as the high cost product. The company should
include such a business structure that will require less labour and resources for developing a
short budget product. The more the company will be able to lower the labour cost the more
the company will be able to produce the product at low budget. This will help the
organization to increase the customer bases and increase the diversity levels. The business

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structure should be planned in the recommended ways for bringing changes in the product
delivered and targeting the mid-market based company.
For implementing the new strategies the companies are required to include the reward
system culture in the business. This is so because the company are required to impose the
new operation system that are comprised of low labour cost, low production cost. The reward
system would encourage the employees to adopt the new operation process for developing
the low budget product. The company are required to introduce new reward system that can
be in both form of monetary forms and the appraisal forms. When the employees are
appraised for their effective performances they are more encouraged towards their job. The
incentives or the monetary reward system encourages the employees to work in the efficient
ways as the employees are also encouraged to provide extra work if they get incentives for
that. Therefore this is essential for David Jones Pty. Ltd to introduce the new reward system
in the business operations.
The leadership styles that David Jones Pty. Ltd follows are the autocratic leadership
style and this leadership theory is based on the trait theory. This leadership style is considered
as the effective leadership style as in this leadership the leader plays the major role in the
decision making process and the employees are required to follow every decision of the
leader. The employees are also imposed to follow every instructions made by their leaders
and while making any decisions, the leader of the organization does not involve any team
members to make any suggestions while making any decisions. This leadership style also
motivate the employees to follow every instructions in their work. This leadership style will
help the employees to implement the new strategies of producing the low budget project and
for this the leader of David Jones Pty. Ltd are required to impose the new production process
on the team members.