External Environmental Analysis of Myer: Opportunities and Threats

The external environmental analysis of Myer Ltd. identifies several key factors impacting its business operations within the retail industry. The analysis reveals opportunities such as technological advancements enabling efficient inventory management through RFID technology and potential partnerships with international retailers to strengthen its market position. Additionally, there are prospects for innovation in product offerings and online services expansion. However, Myer faces significant threats including intense competition from David Jones, economic slowdowns, price wars, and shifts in consumer preferences. The analysis also highlights challenges related to adapting to regulatory changes and the difficulty of targeting diverse market segments effectively. Overall, understanding these external factors is crucial for Myer to sustain its competitive advantage and navigate future market challenges.

Running head: EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
External Environmental Analysis of Myer
Name of the Student:
Name of the University:
Author note:

1EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
Executive Summary
The activities of marketing in a business are influenced by various internal and external
factors. However, there are some factors that are in control of business but most the factors,
especially external, are not and they are important in such a way that the business has to adapt it
in order to avoid their negative influence. Retail sector is one of the broad sectors of current
market and being in touch with the consumers is a key challenge for all the retailers. This report
will elaborate on the external environment analysis of one of the national retail company of
Ausralia. The company that is chosen for the task is Myer Holdings Limited. The report will
carry on its micro-environmental analysis such as competitive analysis; economic growth and
stability etc., and the opportunities and threats that are present in the market for the company.

2EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Background of the Organization..................................................................................................3
Theoretical Framework................................................................................................................4
External environmental analysis..................................................................................................4
1. Competitors:..................................................................................................................4
2. Economic growth and stability......................................................................................5
3. Political trends:..............................................................................................................5
4. Legal and regulatory issues...........................................................................................5
5. Technology:...................................................................................................................5
6. Socio-cultural trends:....................................................................................................6
Summary of opportunities and threats.........................................................................................6
Opportunities...........................................................................................................................6
Threats.....................................................................................................................................6
Conclusion.......................................................................................................................................7
References:......................................................................................................................................8

3EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
Introduction
The retail sector is growing rapidly in today’s business world and it has become more
complex with the emergence of thousands of stores, micro-suits, micro-apps and commercial
networks that are covering multiple geographies(Kim, Allaway and Ellinger 2015). In order to
create frequently refreshed products, the local markets have developed as a way to further
accurately tailored merchandise offerings to the market demand. This report will shed light on
one of the notable Australian retail company, the Myer Holdings Limited. It will focus on its
external environmental factors including the political, competitive, economic and technological
trends that is influencing the organization and its marketing strategies and the opportunities and
threats that is there in the current market for the organization.
Discussion
Background of the Organization
Myer is one of the famous Australian retail company that is fulfilling its consumer’s
needs through various different retail outlets. It was founded in the year 1900 in Victoria,
Australia and the founder of this company is Sidney Myer (Myer 2018). After it prospered, the
second Myer store opened in the year 1908. It is serving throughout Australia since its
emergence. The company is long been regarded as the largest departmental store of Australia by
the store count and revenue. The main target markets of Myer are the high LSM (Living
Standard Measure) groups or the high-income earners. However, the company is also planning to
extend its target markets and adding to it the black middle class and the lower LSM as in the near
future, they too will buy clothes and foods from the stores. It retails a large range of products,

4EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
starting from men’s, women’s and children’s clothing; footwear; cosmetics; accessories; home
wares; furniture; books; toys; travel goods; bedding; electrical and food and confectionaries.
Theoretical Framework
Marketing environment is the amalgamation of both the external and the internal forces
and factors that could affect an organization’s potential to establish its relationship with the
customers and serve them to their best (Dawson 2014). The external environment plays a very
important role in shaping up the future of an entire organization as well as that of the individual
business. It comprises of the various factors that are external to the business of the organization,
upon which there is a little or no control of the market. It is very essential for planning the future
of the business, understanding the customers, tapping the market trends, tapping the future
opportunities and understanding the competitors. A better understanding of these elements
allows the marketers to develop their business to a greater extent. The relevant external
environments that are to be analyzed are the micro and the macro environments. The micro
environment constitutes the suppliers, market intermediaries, partners, customers, competitors,
and the public (Palmer 2012). On the other hand, the macro environment constitutes the
demographic, economic, physical, technological, political-legal, and the socio-cultural
environment.
External environmental analysis
In order to analyze the external environment of the Myer, the micro environmental analysis is
considered, i.e. its competitors, economic growth and stability, political trends, legal and
regulatory issues, technology and the socio-cultural trends.

5EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
1. Competitors:Competition among the companies is intense in Australia. Different firms
compete for same customers with very little or no switching costs. Here, the competition
is dependent on differentiation. However, the main rivalry company of Myer is the David
Jones (Akbar and Ahsan 2014).
2. Economic growth and stability:Economic factors such as high rate of unemployment
and recession have a strong effect on the business’s financial performance (Fairlie 2013).
The global financial crisis has also declined the condition of almost every organization.
However, the Australian retail industry has maintained more stability than in other parts
of the world.
3. Political trends: The political environment of every country is related with the
organization’s performance and the retail companies are influenced some or the other
way by the political climate. The political changes and disturbance discourages the
investors and the business from entering into the market because of the risk of business
failure and low rates of return.
4. Legal and regulatory issues- Recruitment, employee management, requirements of food
licensing and taxation policies are the major aspects of legal framework for the retail
industry. The qualities of the food items that are available in the stores must be in
accordance to the regulation of the country. In addition, opening of retail outlets must get
approval from the governmental authority (Scollo, Bayly and Wakefield, 2015).
5. Technology: The use of RFID in the company has helped it in efficient inventory
management and in keeping stocks available for the customers. It has also made the use
of SOA (Service Oriented Architecture) in its operations. It is seen that the consumers are

6EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
not agreeable to every type of technology. Therefore, the industry needs to link its
technology in accordance to the customer preference and needs.
6. Socio-cultural trends:The consumers in modern days are increasingly wanting the retail
shopping experience which includes the availability of large range of products with fair
prices (Schiffman et al. 2013). There are times when the encouragements for buying the
products are supplied by the family members and peer of the consumers of
Myer(Christopher 2016).. In addition, the social needs are also some sense of belonging,
which the consumers of Myer develop interest of buying, also, the safety need is for the
reliability and the security of the customers.
Summary of opportunities and threats
The opportunities and threats include:
Opportunities:
 Innovation
 Emerging of market and the expansion to abroad
 The emergence of products and services
 The foreign players are dominating the retail sectors. Hence, there is an opportunity for
Myer to be tied up with these players.
 Online service
 Acquisitions
Threats:
 Competition (David Jones)
 Economic slowdown

7EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
 Price war
 Relatively cheaper technology
 External changes such as taxes, politics and government
 Changes in consumers’ preferences
 Trouble to target every segments of the society
Conclusion
The above external environmental analysis of Myer has helped in identifying the major
barriers in the national, economic and political sectors. The above mentioned external factors are
influencing the retail market in every way and it will continue to have an impact on it in the
future as well. In conclusion, it can be said that in order to maintain its current position, the
company must concern its external surroundings.

8EXTERNAL ENVIRONMENTAL ANALYSIS OF MYER
References:
Akbar, S. and Ahsan, K., 2014. Analysis of corporate social disclosure practices of Australian
retail firms. International Journal of Managerial and Financial Accounting, 6(4), pp.375-396.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK.
Dawson, J.A., 2014. The Marketing Environment (RLE Marketing) (Vol. 1). pp.16-18.
Fairlie, R.W., 2013. Entrepreneurship, economic conditions, and the great recession. Journal of
Economics & Management Strategy, 22(2), pp.207-231.
Kim, K., Allaway, A.W. and Ellinger, A.E., 2015. Retail Assortment Size and Customer Choice
Overload: The Influence of Shopping Enjoyment and Time Pressure. In Marketing Dynamism &
Sustainability: Things Change, Things Stay the Same… (pp. 139-139). Springer, Cham.
Myer. 2018. About Us. [online] Available at: https://www.myer.com.au/p/about-myer/
[Accessed 7 Jan. 2018].
Palmer, A., 2012. Introduction to marketing: theory and practice. Oxford University Press.
Schiffman, L., O'Cass, A., Paladino, A. and Carlson, J., 2013. Consumer behaviour. Pearson
Higher Education AU.
Scollo, M., Bayly, M. and Wakefield, M., 2015. Availability of illicit tobacco in small retail
outlets before and after the implementation of Australian plain packaging legislation. Tobacco
control, 24(e1), pp.e45-e51.