Strategic Analysis of Michael Hill International: Report for BMGT7010

This report provides a comprehensive strategic analysis of Michael Hill International Ltd. (MHIL), focusing on its business expansion strategy, particularly in Australia. The report begins with an introduction to MHIL, a major player in the jewellery retail industry, and outlines its mission and vision statements. A key strategic issue identified is the intense competition and pricing pressures in the Australian market, along with the lowering interest of people towards jewellery. The report then explores strategic options available to MHIL, such as penetration pricing, strategic store locations, and differentiated marketing. The best strategic option is determined to be a penetration-pricing strategy combined with strategic store locations, to compete effectively and attract customers. The report concludes with a recommendation for MHIL to implement a penetration-pricing strategy, and consider factors like political considerations, consumer income, and tax policies to successfully expand its business in Australia. The report also includes an analysis of MHIL's mission and vision statements and their alignment with the company's goals.

Running Head: MHIL
Michael Hills International Limited
Report
System04104
5/24/2019

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Table of Contents
1. Introduction.........................................................................................................................2
2. Mission and Vision of the Company..................................................................................2
3. Strategic Issue.....................................................................................................................2
4. Strategic option...................................................................................................................3
5. Best Strategic option...........................................................................................................4
6. Conclusion..........................................................................................................................4
References..................................................................................................................................5

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1. Introduction
Michael Hill International Ltd. is one of the giant retailers of jewellery in North
America and Oceania. The company is facing large number of strategic issues related to its
expansion of business in different countries. This report is about its expansion strategy and
about its strategic issues in Australia. This report helps to understand about the problems and
issues it faced during its business expansion strategy in Australia and causes of failure and
losses in these countries. This report further describes that what are the available solution to
resolve these strategic issues and which option is the best option for the company for its
expansion strategy in Australia and maximising its profit. However, the report also helps to
understand different theoretical and logical concepts related to strategic management along
with analysing the strategic issues of Michael Hill International Ltd.
2. Mission and Vision of the Company
Michael Hill International Ltd. owns the brands of “Michael Hills” and “Emma &
Roe” and it is known for operating its retail business in jewellery industry. The Michael Hill
International Ltd. is operating its jewellery business in more than 280 Michael Hill stores and
8 Emma & Roe stores in Australia, USA, and Canada. The mission and vision statements of
the company are as follow:
Mission statement: The mission statement of the company shows its intention to
become a most focused brand in among the people in the jewellery industry. The mission
statement of the company is “Our mission is to be the most people focused Jeweller in the
world.”
Vision Statement: The vision statement of the company shows its expansion
intentions and creates an image in the mind of people. The company is main vision is to being
open its more than 400 stores in the jeweller industry market. The Michael’s Hill real vision
statement shows its long-term plan that is to resuscitate jewellery as a way of
commemorating and honouring all love.
The mission and vision statement of the company is interrelated to each other. The
mission shows its strategy to become a global brand and creates its leadership image the
jewellery industry. The company also focuses on its business to become as one of the lovable

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brand in the jewel industry and through this it want to expand its business in all over the
world and enhance the love of people towards jewellery.
3. Strategic Issue
The Michael Hill International Ltd. is focusing on its expansion strategy in Australia
and other countries. The major aspects of its strategic management aspect that its expansion
strategy is based in the growth and profits that the company wants to enter in the world
market by controlled profits. Although, the company faces many issues while entering in the
Australian market but the major challenge for the company is to face the large issues related
to competition and the second issue is low pricing strategy of other competitor brands. The
Michael Hill International Ltd. is to face these in the Australian jewellery market where
Holly Ryan, Reliquia, Samantha wills, Babyanything, sarah and Sebastian etc. already cover
a huge share in the jewellery market.
The some other major issues related to expansion of jewellery industry that people’s
interest towards the jewellery is lowering every day. However, threats from the
environmental factors such as political, economic, and social affects also influence the
expansion strategy of Michael Hill International Ltd. in Australia. The increasing inflation
rate in the Australia and New Zealand is the major issues in the expansion strategy of the
company. Due to increasing prices of gold and diamonds, the demand of such precision
jewellery metal is decreasing every day. People like to wear artificial jewelleries instead of
gold or platinum or diamond jewelleries. Therefore, company will have to face problems
related to demand of products and market share. However, the political impacts on the
jewellery industry cannot be avoided as government exercise heavy taxes for the foreign
jewellery retailers in the country. However, the liberal policies of Australian government is
supporting the business of Michael Hill International Ltd. but its profitability will be affected
because of high taxes and profitability and growth are its fundamental keys of expansion.
4. Strategic option
The company has to adopt different strategic options to overcome the above issues
which company might face during its expansion strategy in Australia. The company needs to
align its mission and vision statement with the different needs of different overseas market.
The company should initially think about the tough competition in Australia jewellery market

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and should take appropriate strategy to avoid and overcome this issue. To avoid this issue, the
company can charge the penetration pricing strategy and provide best-designed jewellery on
comparatively low cost in initial days of its business.
Michael Hill International Ltd. failed in its business in the Australia and Canada
because it never considered about the alternative markets. The other issues that it face it
related to selection of places. The Michael Hill International Ltd. should focuses on opening
its stores in right locations in the country. The best option for the company is to select the
metropolitan cities or those areas where people have huge disposable income and people can
buy the costly jewellery products. The best options for the company are Sydney, Melbourne,
NSW, etc. Additionally, the company should focuses on indirect expansion strategies in the
Australia and other countries where it wants to expand its market. The company can also uses
specialized and key aspects of its strategy to differentiate itself from the other jewellery
brands. However, it can be said that if Michael Hill International wants to survive the market
with an effective growth and expansion strategy, it should face the competition in the
Australian jewellery market by reducing its operation costs. The company can also use
several other strategic options such as implementing penetration pricing strategy, open the
stores in the right areas of the country, should advertise its products to the different segments
of its customers etc.
5. Best Strategic option
The best strategic option available for the company is to reduce its prices of the
product in Australia. There are large number of players already exist in the jewellery market
and share a large size of the market. The company will have to understand that in this
industry a good understanding of pricing strategy is so important because only those
companies can survive in the jewellery market that control their cost in order to face the
completion with new papers who charges low prices in their start of the business. In such
scenario, the Michael Hill International should adopt penetration-pricing strategy. It would be
really different for the company in its initial stage to reduce its operation cost and minimise
its profit margin on the product, but once this strategy is implemented by the company, the
company can able to achieve sustainable growth in the future. It also leads to gain a
competitive advantage over other players in Australian Jewellery market. However, the this
best strategic option will be more beneficial and effective for the company, if Michael Hill
International will open its store in large and metropolitan areas of Australia where people

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have huge amount of disposable income and want to spend on jewellery and fashionable
items. The low and competitive cost in compare to other competitors not only attracts people
rather this strategy helps the company to make its customers more loyal. The best way to
reduce the costs of its products is to minimise the operation cost in the business. The
company should also focuses on its advertisement areas where it can communicate its low
pricing strategy and about the best-designed jewellery to its customers.
6. Conclusion
In conclusion, it has been found that high competition and low prices are the major
issues in the company’s business expansion strategy in the Australian jewellery industry. The
management of Michael Hill International Ltd. initially failed in its expansion strategy in the
Australia. To successfully expand its market in Australia, the company needs to review is
pricing strategy. The company should also focus on open its store in proper areas where
people are ready to expand more in jewellery items. In the end, it has been recommended to
Michael Hill International Ltd. to focus on charging penetration-pricing strategy with
fragmented marketing strategy. The company should also consider other factors of feasibility
analysis in expansion of its business in Australia such as political consideration, people
incomes, taxes, and buyer’s attraction towards the jewellery items etc.

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