Strategic Management of JB Hi-Fi: Theory and Practice Analysis

This essay provides a comprehensive analysis of JB Hi-Fi's strategic management practices. It begins with an introduction to strategic management, emphasizing its importance in the modern business environment, and then selects JB Hi-Fi as a case study. The discussion section explores the company's strategies, particularly in light of Amazon's market entry, and examines its history, product offerings, and competitors. The essay delves into key strategic management concepts, including the Schendel and Hofer model, strategic fit, and sustainable competitive advantage. It applies these concepts to JB Hi-Fi, evaluating the company's goal formulation, environmental analysis, strategy formulation, implementation, evaluation, and strategic control. The analysis also considers the company's strengths and weaknesses, such as its approach to strategic fit and gender diversity. The essay concludes with recommendations for improvement, focusing on enhancing strategic implementation and promoting gender diversity within the organization. This analysis aims to provide a critical reflective assessment of JB Hi-Fi's strategic management, offering valuable insights into the company's approach and areas for enhancement.

Running head: MANAGEMENT THEORY AND PRACTICE
Management Theory and Practice
Name of Student
Name of the University
Author Note

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Introduction
The act of strategic management is concerned with the formulation as well as
implementation of the important initiatives of the company. The act of strategic management is
an important job role of the top management of a firm (Rothaermel, 2015). The strategic
management is done on the basis of considering the key resources of the company and
understanding the external as well as internal environment. The act of strategic management for
the organization concerns with the direction of the enterprise as well as takes into consideration
the organizational objectives (Rothaermel, 2015). A basic strategy is defined as analytical
process which is formalized process that underlines the long-term goals of the concerned
company (Hill, Jones & Schilling, 2014).The modern-day organizations need to implement
excellent strategies so that they can survive well in the market.
This essay would focus on the strategic management of the selected organization. The
organization selected for the purpose of study is JB Hi-Fi, which is one of the largest Australian
retailers of the consumer goods. The theoretical concepts pertaining to strategic management
would be discussed. The influence of these theoretical criteriawould be applied for the selected
organization. These evaluations would be observed in detail and critical reflective analysis would
be done which would improve the strategic management of the firm.
Discussion
The organization selected for the purpose of study is JB Hi-Fi, which has been in the
news in the last six months. This is because of the fact that the company has taken sufficient
strategic management steps in order to be ahead in the market prior to the arrival of Amazon.
Amazon is making an entry to the markets and hence JB has decided to prepare itself well so that

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it can give tough competition (Peppard & Ward 2016). The company is aiming to replicate the
“in-store” experience of the store which would enhance the loyalty of the customers. The
company is also planning to launch a store on the marketplace of Amazon in order to gain higher
visibility and thus high profits.
JB Hi-Fi is considered as the most successful business operating in Australia and it was
established on 1974(Jbhifi.com.au, 2017). The main headquarters of the brand is located at
Melbourne, Australia and it is located in around 194 locations (Jbhifi.com.au, 2017). It has
engaged in acquiring Clive Anthony’s chain, Hill and Stewart chain, The Good Guys and others
(Jbhifi.com.au, 2017).The main products of the brand includes the consumer goods, which
includes the DVD, CDS, hardware, home appliances and others. The primary competitors of the
brand include David Jones, Harvey Norman, Myer and others (Jbhifi.com.au, 2017). The
operating revenues of the brand are A$ 221 million in the year 2016 and it has an annual profit of
A$152 million (Jbhifi.com.au, 2017). The company engages in a wide number of acquisitions for
the strategic gain of the firm.
There are important concepts pertaining to the strategic management in an organizational
scenario. The strategic management is concerned with the analysis of the external as well as
internal environment. It is also concerned with the evaluation and the implementation of the
important directions for the company (Rothaermel, 2015). The strategic objectives are being
formed by taking into account the strategic vision of the company.
The Schendel and Hofer model is concerned with a unique strategy management model
which takes into account the planning as well as controlling function of the organizations
(Segato, 2016). The model comprises of several steps, which are outlined below-

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 Goal formulation- As opined by Chrisman (2015), the act of strategy formulation is
concerned with the identification of the broad objectives of the firm and how they are
related with the organizational mission (Rothaermel, 2015). The determination of goals
and its relation with the eternal marketing environment would help in the formulation of
suitable marketing plan.
 Environmental analysis- The external environmental analysis is concerned with the
identification of the key elements that has the probability of affecting the performance of
the organization (Epstein & Buhovac, 2014). This analysis is helpful in understanding the
various threats or opportunities present in the external market.
 Formulation of strategy is responsible for achieving the business objectives of the firm.
The formulation of appropriate strategy is concerned with understanding of the objectives
of the firm (Rothaermel, 2015). The first step is concerned with the setting up of
organizational objectives. The strategies should be formulated by taking into account the
divisional plans (Eccles, Ioannou & Serafeim, 2014). The performance analysis is also
important for understanding the various parameters of the strategy and subsequent
implications on the organization.
 Strategy evaluation - It is important to evaluate the implemented strategy so that it
fulfills the strategic objectives of the form (Stanway, Hart & Taylor, 2013). The different
parameters of this step include the through detection of the strategy so that it meets the
organizational mission (Epstein & Buhovac, 2014). It is important to fix a benchmark of
the performance and measure the performance accordingly.
 Strategy implementation- The implementation of the strategy is important as per the
original laid down protocols. It is a process which turns the strategies into actual course

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of action (Wheelen & Hunger, 2017). It can be seen that 86% of the business managers
spend less time in this aspect, which makes them to fail in this step.
 Strategic control- This step is concerned with the actual formation as well as execution
of the various strategic plans (Epstein & Buhovac, 2014). This form of control is
considered to be a specialized form of management control in which there is full focus on
the strategic initiatives undertaken by the firm.
The second most important concept in strategic management is considered with the idea of
“Strategic fit”. The strategic fit is concerned with the degree to which the organization would
match with the external opportunities of the firm (Prajogo, 2016). This kind of matching does
take place through the implementation of strategy and the rightutilization of the strategies. The
strategic fit can be used as the current strategic positioning of the company so that they get
sufficient opportunities (Epstein & Buhovac, 2014). This strategic fit is usually based on the
present strategic position of the firm and the resource based view is also utilized in this process.
There is the development of a unique proposition of capabilities and resources of a firm that can
be combined to create competitive advantage. The aspect of strategic fit is important since it
would help in efficient resource allocation by the firm.
The third most important concept in strategic management deals with the idea of
sustainable competitive advantage (Prajogo, 2016). In the modern business framework, it has
become imperative to give innovative and value-added products to the customers so that they can
continue to purchase products or avail the services of the same company(Prajogo, 2016). This is
because of the fact that there is a large number of competitors in the market (Liu, 2013). The
firms would be able to gain competitive advantage if they are able to create value added
strategies, which has not been implemented by any other competitor(Prajogo, 2016). The

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strategies should be valuable, rare and they should be unique enough to penetrate fast among the
masses. The sustainable competitive advantages should be features which the competitors would
not be able to replicate easily. As opined by Huang, Dyerson and Harindranath(2015), the
competitive strategies are some of the most important strategic options that needs to be adopted
by companies so that they can maintain the market good will. It is most important to formulate
policies that put a particular company ahead of the competitors (Nadarajah & Latifah Syed
Abdul Kadir, 2014). This would increase the brand loyalty as well as customers would be glued
to this particular brand only. There could be variety of attributes that can be used for the purpose
of creating competitive edge (Nadarajah & Latifah Syed Abdul Kadir, 2014). The companies can
invest in a good location, get good distribution channels, create good vendor relations, create
unique merchandising, give good customer service and others (Nadarajah & Latifah Syed Abdul
Kadir, 2014). These would definitely help the company to be a favorable company among the
target audience. The sustainable competitive advantage can be formed with the help of efficient
human resources. The competitive advantage is determined by the level of performance of
human performance (Cummings & Worley, 2014). The firm’s performance is also measured by
competitive advantage. A firm can achieve market leadership only with the help of this tool.
JB Hi-Fi has successfully applied the above three strategic management concepts in their
respective organizations. The company aims to provide integrated products as well as services in
their business (Cummings & Worley, 2014). The company has always strived for business
growth and this would not have been possible without the help of proper strategic management.
Though there is overall good implementation of the strategic management policies of the
organization, but there are certain loopholes in their management process.

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The company applies the strategic management concepts in their day to day functioning.
The senior management leaders are in the constant process of revising their strategy so that they
can meet with the changing market dynamics (Cummings & Worley, 2014). According to the
first step of the Schendel and Hofer model, the company is particular about formulating goals
and they are always particular about what they expect from their employees. The company
always tries to link their corporate strategy with the overall organizational mission (Cummings &
Worley, 2014). They keep in mind that the company goals need to be revised from time to time
so that the various changes can be accommodated. The company engages in extensive support
from all levels of organization. It engages in regular feedback from the employees, which makes
them to improve the strategic directions (Colgate, 2016). The company believes in the fact that
the company decisions would be effective only if it is taken after consulting with the employees.
The company decisions are being undertaken by estimating the external environmental
analysis. The external competitive analysis is being done and the level of competition is assessed
by the company. The various threats of the external market are analyzed and suitable strategies
are being undertaken (Shafiee, Lotfi& Saleh, 2014). The organization is involved in the
formulation of suitable strategies based on the internal as well as external environment. A lot of
strategic control measures are being adopted by the company. A balanced scorecard approach
has been adopted by the company where the performance of the organization is measured
(Shafiee , Lotfi & Saleh, 2014). It also believes in evaluating the internal performances of the
employees so that they can give their maximum output to the organization.
One of the primary drawbacks of the strategic management of the company is that the it
spends less time on strategic implementation(Jbhifi.com.au, 2017). The implementation team of
the firm is not strong enough and hence there are loopholes when it comes to implementing some

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strategies. Another strategic drawback of the firm was the poor gender diversity (Jbhifi.com.au,
2017). A small 39 percent of women are employed with JB Hi-Fi and a meagre 4% of them are
employed in senior management level (Jbhifi.com.au, 2017). This has led to certain level of
demotivation among the women workforce, which is not good for organizational growth. The
organization takes no policies for encouraging more recruitment of the women employees.
It is recommended that the company adopts regular assessment as well as reporting
towards the various gender diversity objectives. It should try to bridge the existing disparity by
bringing in strategic changes. There should be flexible work practices which would enable the
women employees to work for a long time in senior management positions. It is also important
that a proper strategy implementation team is formulated. This would be done by selecting senior
members who have displayed good performance in the organization. This team should make sure
that the formulated strategies are actually implemented in the organization. It is also important to
focus more on the issue of gender diversity and make more women friendly policies. The world
is becoming more progressive and hence it is important to implement gender diversity policies
which would enhance the productivity of the firm (Conrad et al., 2018). The firm should strive to
provide equal package to the employees especially females so that they can be motivated to work
for a long time. There should also be the creation of a team that celebrates the facets of diversity
and prioritizes the weaker gender. There should be equal attention to the success of the female
professionals so that the deserving candidates get greater accomplishment in their workplace.
The women employees should be encouraged so that they can continue with their job even after
having their families. This would improve the gender diversity of the organization.
It is also recommended that the company should engage in understanding the strategic fit
of the firm. The external opportunities should be understood well so that the strategic

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modifications can be done accordingly. The Australian market is full of new business ventures
and several companies are opening their stores there. Many multinational companies are opening
their flagship stores. So, it is important for the company to assess the strategic position of the
firm and promote themselves accordingly. The strengths of the competitors must be assessed so
that the company is able to make suitable competitive policies. The company should stop
assuming the universally applicable policies and instead try to focus on the customized policies
that are suitable for the organization. There should be right combination of integration,
development, production, administration and others for achieving business success. The business
strategy should be molded in a manner that provides the maximum returns. It is also important to
place importance on the supply chains of the firms. There would be uncertainty however, the
company must be aware of the demands at each possible stage as well as select suitable level of
responsiveness which would be suitable for each level. It is also important to understand the
strategic fit between human resources and the organization. The human resources of JB Hi-Fi
should be aligned with the strategic goals of the organization as this would increase the
organizational capability of performing better.
Conclusion
The strategic management is concerned with the fulfillment of the organizational mission.
It is involved with the analysis of the competitive environment and formulation of appropriate
strategy. The organizations should know how to utilize their strengths and convert their
weakness to strengths. The company should also know how to tap the opportunities that are
presented to them. This essay discussed some of the critical concepts of strategic management
and how they are applicable to a real organization. The three most important concepts of
strategic management were discussed such as sustainable competitive advantage,strategic fit and

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the Schendel and Hofer model. The application of the strategic management concepts has been
done in JB Hi-Fi and how it affects the organizational decisions is also being elaborated. The
concluding part of the essay discussed about the probable strategic recommendations that should
be taken by the company in order to be more sustainable organization. This would also give
more revenue generation to the company.

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