Myer Holdings Ltd: Sri Lanka Market Entry and Expansion Report

This report provides a comprehensive analysis of Myer Holding Ltd's potential entry into the Sri Lankan market. It begins with a brief background of Myer and an overview of Sri Lanka, highlighting key economic and workforce characteristics. The report then delves into a SWOT analysis to identify Myer's strengths, weaknesses, opportunities, and threats, followed by a PESTLE analysis to assess the political, economic, social, technological, environmental, and legal factors influencing the market. A competitive strategy analysis, including Porter's Five Forces, is conducted to evaluate the competitive landscape. The report explores market entry options, recommends a preferred approach, and considers marketing, research, and development aspects. It also provides recommendations on production and addresses international human resource management issues. The report concludes with a summary of findings and recommendations for Myer's successful expansion into Sri Lanka.

Running head: HRM
International Business
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report provides an account on international business opportunities of an Australian
departmental chain Myer Holding Ltd which have a target of entering the Asian market of Sri
Lanka. The firm trades in almost all Australian states and sells a wider product range that
included clothing, fragrance, home ware, furniture, video games, food, stationary and travel
goods. The report comprises of a brief company background along with a brief about the chosen
country. The report also undertakes a competitive strategy analysis of the product along with
detailed analysis of Porter’s five forces. There is also discussion on the conclusion derived from
the SWOT analysis. There report also puts forward the options of market entry along with
mention of the preferred option. There is also discussion about the marketing, research and the
development considerations with mention of competitive strategy. There report also puts across
recommendations on production along with a detailed analysis of international human resource
considerations and issues.

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Table of Contents
Introduction:....................................................................................................................................3
Brief Background of the Company:.................................................................................................3
Chosen International Country..........................................................................................................4
Conclusions from the SWOT Analysis:..........................................................................................5
Additional Analysis Reflecting further Country Analysis...............................................................6
Competitive Strategy Analysis of the Product:...............................................................................9
Market Entry Option Analysis and Preferred Option Recommendation.......................................10
Marketing and R&D Considerations.............................................................................................11
Recommendations Regarding Production.....................................................................................12
International HRM Issues and Considerations..............................................................................12
Conclusions:..................................................................................................................................13
References:....................................................................................................................................14

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Introduction:
The report aims at providing an insight into the international business opportunities of an
existent Australian firm Myer Holding Ltd that plans an entry into the target market of Sri Lanka
(myer.com.au, 2019). Myer Holding, an upmarket departmental store chain of Australia trades in
most of the Australian states. The company has a broader range of products including clothing
for men, babies, women and children, accessories and footwear, fragrance and cosmetics,
electrical, home ware, furniture, bedding, toys, computer, video games, books, food,
confectionary, stationary and the travel goods. The report commences with the brief back
ground of the company and the selected international country Sri Lanka. The report also derives
a conclusion of the SWOT analysis and an additional analysis of the country. The report also
puts forward competitive strategy analysis of the product or service of the company. There is
also an analysis of the options available to Myer for market entry along with a recommendation
of the preferred option. The report also puts forward marketing, research and development
considerations along with a mention of the competitive strategy. The report also puts forward
recommendations on the production along with the mention of the international human resource
management issues and considerations.
Brief Background of the Company:
Myer is a departmental store chain of Australia that operated in almost all the Australian
states and in one of the two self governing territories of Australia (myer.com.au, 2019).The
company transitioned from humble beginnings into modern traditions. The company has a huge
availability of product assortments including international and domestic brands available at
diverse price. The company also operates a platform related to customer loyalty thereby

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delivering close to 6,00,000 product lines involving 2500 brands in close to over 850
international suppliers(myer.com.au, 2019). The Company collaborates with the leading brands
and the innovative events for delivering memorable experiences. At Myer, however, sponsorship
represents a platform for collaboration and the company has long standing history in delivering
the wanted events to community and they remain committed in supporting the sought after
initiatives.
As one of the well known fashion authority of Australia, Myer plays as one of the crucial
players in the fashion festivals that included the Mercedes-Benz Week in Australia, Virgin
Australia Fashion Festival of Melbourne, Fashion Festival of Adelaide and the Telstra Fashion
Festival at Perth. The brand also remains synonymous with the fashion wear for race. Thus the
sponsorship of Myer Fashion with Victoria Racing Club portrayed their passion for
interpretation, elegance and style.
Myer also adopted a strategy that not only celebrated innovation and created wanted
experiences (myer.com.au, 2019). The Company is also exploring newer opportunities of
partnerships that aligns with over arching objectives of the company and resonates with the core
values of the customers. Myer also takes undertakes effort in the generation of the Middle East
expansion for delivering profitability and growth. In doing so, the company buys the privatized
equity group as the Texas Pacific Group thereby maintaining synergies for generating
competitiveness. The report however, revolves around Myer making an entry into Sri Lanka
since it would be easier in purchasing more at cheaper rate that would assist in the creation of
competitive advantage over the competitors in Sri Lanka.

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Chosen International Country
Myer is making an entry into Sri Lanka with the hope of trading effectively and
generating profitability. Sri Lanka comprises of close to 23 million people with an increase of 8
percent GDP (myer.com.au, 2019). It is considered as the fastest developing economies of the
region. Besides, Sri Lanka offers rapidly growing workforce that remains highly adaptable and
committed towards a delivery of higher quality. It has been found that with 80,000 individuals
employed in IT, the workforce of the country has been growing at a rate of 20 percent
(myer.com.au, 2019). The Workforce remains stable with a lower rate of attrition within the
range of 5 to 15 percent. Besides, Sri Lanka has open market and represents the first country of
the South Asia in liberalizing the economy. The economy of Sri Lanka has proved to be not only
resilient but also projected higher rate of growth. The country also has independent judiciary
thereby following principles of the British Commercial Law and the practices of the legal
system.
Conclusions from the SWOT Analysis:
The SWOT analysis represents a crucial strategic tool for planning for Myer Holdings
Limited. It represented a useful technique for the evaluation of the strength, weakness,
opportunities and the threats faced by the present business ambience. The strength of Myer lies
in the availability of diverse outlets across the continent that implied stronger network for
distribution that resulted in easier accessibility of the products (Abdel-Basset, Mohamed &
Smarandache, 2018). The lower cost structure of Myer is also one of its strengths that allows in
selling of the products at lower price. Besides, the dealing of Myer suppliers and the dealers
helps in developing effective relationship.

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As far as the weakness is concerned, Myer initially faced challenges in entering the target
market of Sri Lanka as the Sri Lankan government focuses more on the legal laws, technological
development, environmental issue and the political consideration (Athukorala & Jayasuriya,
2013). Myer should have made a proper utilization of the showroom area due to higher retail
prices of Sri Lanka and Australia. Weakness also lies in managing the team as the workforce of
Myer belongs to the diverse background.
As opportunities are concerned, the huge online consumers across the world help the
company in diversifying international presence through customer interaction (Goger, 2013). The
new online stores not only generated growth and revenue but also encouraged sale. The
development of opportunity towards green economy encourages creation of a stronger bond with
the players.
The threats lie in the change of desires and the preference of the customers so it is
necessary for Myer to take this aspect into consideration. Increased competition makes it difficult
for Myer to concentrate on each segment of society resulting in revenue loss and loss of the
market share (Kulatung & Lakshman, 2013). The change in the technological advancements
necessitates the effective training of the personnel of Myer.
Additional Analysis Reflecting further Country Analysis
Porter’s Five Forces represented a holistic framework strategy that enabled in taking
strategic decision depending on the analysis of present competition. It focuses on how the Myer
Holdings Limited builds sustainable competitive advantage in the retailing industry (E. Dobbs,
2014). Manager at Myer can not only make use of the Porter’s five forces in developing the

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strategic position within the retail industry of Sri Lanka but also explore the profitable
opportunities in the entire retail sector.
Threats of Newer Entrants: Newer entrants in retailing brings in innovation, introduces
newer ways of implementing things and put pressure on the company to lower the pricing
strategy, reduce the cost and provide newer value propositions to customers. Myer Holdings Ltd
needed to manage all the challenges and build in effective barriers for safeguarding the
competitive edge.
Myer Holdings needed to adopt the following means in tackling the threats of the newer
entrants are as follows:
 Through innovation of newer services and products as new products not only attracts
newer customers but also provides a reason to the old customers in making a purchase
from the company.
 Through building economies of scale that helped in lowering the fixed cost per unit
 Spending money and building capacities on the development and research. Newer
entrants remain less likely in entering the dynamic industry.
Bargaining Power of Suppliers: Most companies buy raw material from the various
suppliers. Suppliers remaining in the dominant position often decrease the margin of the
company (Mathooko & Ogutu, 2015). Powerful suppliers make use of their negotiating power
for extracting higher prices from firm. This results in lowering overall profitability of the
company.
Myer Holdings needed to adopt the mentioned means for tackling the bargaining power
of the suppliers:

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 Building of effective supply chain with the multiple suppliers
 By experimenting with the product designs using various materials such that if prices
increase for a particular product then the company can shift to another.
 Creation of third party manufacturers whose business depends on the company thereby
leading to lesser bargaining power.
Bargaining Power of Buyers: Buyers often act as the demanding lot and have urge of
buying best offerings through paying the minimum price (Fabbri & Klapper, 2016). This holds
immense pressure on the profitability of Myer in long run. The smaller and the more powerful
customer base of Myer Holdings Limited leads to higher bargaining power of customers and
higher ability of seeking increasing offers and discounts.
The company can handle this by tackling bargaining power of the buyers in the following
manner:
 Through building larger customer base
 Through rapid innovation of the newer products
 Introduction of newer products helps in reducing the defection of the existing customers
of Myer Holdings Limited to the competitors.
Threats of Substitute Products or Services: When a newer product or service meets similar
customer needs in different manner, the profitability of the industry suffer (Porter &
Heppelmann, 2014). The threat of the substitute product or service is higher when it offers value
propositions different from the present industry offerings.

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Myer Holdings can tackle threat of the substitute products or services by the following
means:
 By remaining service orientated instead of product oriented
 By understanding core need of customers instead of considering what the consumer buys
 Through increasing switching cost for customers
Rivalry amongst Existing Competitors: Intense rivalry among the existing players in the
industry can drive the prices down and decrease overall profitability of industry (Adedoyin &
Eboreime, 2013). Myer Holding Limited operated within a competitive retailing industry
which takes toll on the long term profitability of organization.
The company can however handle this rivalry by adopting the following means:
 Through building sustainable differentiation
 Through building scale such that it can compete better
 Collaboration with the competitors in increasing market size instead of competing for
smaller market.
Competitive Strategy Analysis of the Product:
According to Michael Porter the competitive strategy is devised according four types
(Porter and Magretta 2014):
Cost Leadership: According to this strategy the objective of firm remains in
becoming the lowest cost producer within industry. This is achieved through large scale
production that enables the firm in attaining economies of scale.

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Differentiation Leadership: According to this strategy, firms aim at achieving
market leadership.
Cost Focus: According to this strategy, the firm concentrates on the segments of the
particular market and keeps the products lower priced in these segments. This strategy helps the
firm in satisfying the customers and gaining popularity.
Differentiation Focus: According to this particular strategy, the firms aim in
differentiating itself from one or two of the competitor’s specific segments. This kind of strategy
is known for meeting the demands of the border customers who refrains from purchasing the
competitor products due to the missing of smaller features.
Myer Holding Limited however adopts the strategy of cost focus for its products.
Market Entry Option Analysis and Preferred Option Recommendation
The market entry options include (Gruber, MacMillan & Thompson, 2013):
Direct Exporting: This ensures direct selling in the chosen market using first instance of
the own resources:
Licensing: It is a sophisticated arrangement where the firm transfer right of using the
service or the product to the other firm. It represented a crucial strategy provided the purchaser
of license have relatively larger market share in the market of Sri Lanka.
Franchising: This works well for the firms having repeatable business model that can be
transferred easily into other markets.

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Partnering: Partnering acts as a necessity while entering the foreign markets and
particularly in certain portions such as Asia. Partnering takes variety of forms that varies from a
simplistic co-marketing arrangement to the sophisticated strategic alliance for the manufacturing.
Joint Ventures: Joint ventures represent particular type partnership that involves
creation of third independently managed company.
Buying the Company: In certain markets, buying existing local company might be the
most suitable strategy for entry.
The recommended market entry option for Myer Holding Limited could be franchising.
Some of the advantages of franchising include (Chintakananda & McIntyre, 2014):
 Reduced risk of the business failure and
 Established market share for products and services
 Products will have a recognized brand name as well as trade mark.
 Complete support of the franchisor including training, aiding in business setting
 Requires no prior experience as training receive from franchisor ensures that franchise
establishes the required skills for the operation of franchise
 Enables a smaller business in competing with the larger business due to the support pool
from franchisor and the network of the other franchisees
 Enables the franchise in holding exclusive right in the territory
 Franchising allows easier financing of the business since the banks easily lends money in
buying a franchise with good reputation.
 Franchising also puts forward the benefits of communicating, sharing ideas, receiving
support from the other franchise within network

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 Helps in establishing relationship with the suppliers.
Marketing and R&D Considerations
Myer Holding Limited is on the mission of revamping the marketing strategy thereby
announcing that it is on the hunt for the newer creative agency in taking it into digital future
(annualreports.com, 2019). The retail giant declared transformational change which is actually a
move in the response of the newer customer technology and preferences. The present creative
agency of the company is Badgar Ogilvy. The company is not only trying to adapt the marketing,
changing the channel mix and the in house digital model.
Research and development in the apparel industry represent an ongoing process. Every
now and then there is an encounter with the new innovations, developments, improvement in the
existing process in terms of the style, fabric, pattern, prints, stitching details, prints and patterns.
Trends moves from the direction of the west to the east. Therefore, Myer Holding Limited
should undertake research and innovations based on the patterns and styling of the trendsetters.
Recommendations Regarding Production
Consumers of the fashions industry demands put forward the demand in seeing freshness
in the products along with a complete experience of shopping. There are various industries where
the shoppers look forward to brands in speaking for themselves. Therefore, the dynamics of
apparel industry are undergoing a dramatic change. In order to succeed amidst shifting tide,
companies like Myer Holding Limited need to revolve their production by concentrating on the
disciplines like moving targets and sustainability.

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International HRM Issues and Considerations
This includes (Dickmann, Brewster & Sparrow, 2016):
1. Cultural Diversity and the Global HR Issues: A key feature of the international HR
remains in maintaining and understanding cultural diversity. Working with the people from the
different locations and the cultural background lies in adapting to the work style of the business
to the new ideas, newer means of communication and an unusual social practice.
2. Compensation and Benefits: They represent the backbone of HR strategy however in
the international HR, compensation and benefits are crucial in focusing on work life balance of
the employees. The key idea behind the work life balance lies in providing the employees
initiatives and programs that improves both the professional and the personal lives.
3. Development and Training: This involves programs encompassing the in house
meetings and seminars designed in providing the employees with knowledge of skills required
for doing global business.
Conclusions:
On a concluding note, it can be said that Myer represented a company with a bright future
and a proud heritage. The company represented proud Australian history and exciting future
backed by the Myer strategy that delivers fresh interpretation of brands; re energized range, in
store experiences and improved service backed by the stronger omni- channel offer. With the
change of the retail world and the change of customers, Myer remains reinvigorated in putting
forward astonishing experiences to customers. The report shows how customers sit at heart of the

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strategy. However, the company would not have been successful without the devoted employees,
stronger supplier relationship and higher quality products and brands.

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