Supply Chain Management and E-Business: Harvey Norman vs JB Hi-Fi

This report provides a comparative analysis of the supply chain management strategies employed by Harvey Norman and JB Hi-Fi, two prominent Australian retailers. It begins with an executive summary and table of contents, followed by an introduction that emphasizes the transformative impact of e-business on supply chains. A literature review sets the stage, followed by detailed descriptions of Harvey Norman and JB Hi-Fi, including their business models, customer segments, and supplier relationships. The report then examines the supply chains of each company, highlighting their strengths and weaknesses. A comparison of the two companies' supply chain management practices is presented, followed by recommendations for improvement and a conclusion summarizing the key findings. The report emphasizes the importance of e-business integration and offers insights into how both companies can optimize their supply chain processes for enhanced efficiency and customer satisfaction.

SUPPLY CHAIN MANAGEMENT AND E-BUSINESS
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Executive Summary
Supply chain management is an important part of a business, mainly which deals with trading. In
this study, the different aspects of supply chain management in respect to e-business have been
depicted here. This study focuses on two main companies known as Harvey Norman and JB Hi-Fi
and the concept of supply chain used by them. In order to access this aspect, the business models of both
the organizations have been described briefly in this study. The aspect of customers and suppliers for both
the organizations has also been highlighted in this study and how they are benefitted from the current
supply chain. Through this assessment, some of the disadvantages have also been identified. Therefore,
through the aid of proper recommendations, both the organizations can increase company growth towards
a positive direction. All these aspects have been thoroughly highlighted in this study.
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Table of Contents
Introduction......................................................................................................................................3
Literature Review............................................................................................................................3
Description of Harvey Norman....................................................................................................3
Business Model of Harvey Norman.............................................................................................4
Main customers............................................................................................................................5
Suppliers.......................................................................................................................................5
The supply chain of Harvey Norman...........................................................................................5
Description of JB Hi-Fi................................................................................................................6
Business Model of JB Hi-Fi.........................................................................................................7
Main customers............................................................................................................................7
Suppliers.......................................................................................................................................8
The supply chain of JB Hi-Fi.......................................................................................................8
Comparison of Supply chain management of the two companies...............................................9
Recommendation and Conclusion...................................................................................................9
Recommendation for Harvey Norman.........................................................................................9
Recommendation for JB Hi-Fi...................................................................................................10
Conclusion.................................................................................................................................10
References......................................................................................................................................11
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Introduction
The impact of innovation throughout the centuries has led to an increase in productivity which in
turn has lead to economic growth as well as higher living standards. In business, the main focus
of innovation has been regarding technology, especially on design and manufacturing processes.
The integration of information technology with e-business has completely transformed the
aspects of supply chain. It is a process through which products from suppliers reach the
customers and implementation of technology has evolved the process from mass production to
mass customization. Therefore, this report aims to access the impact of the supply chain on two
organizations known as Harvey Norman and JB Hi-Fi. The importance of e-business on this two
organizations can thoroughly is accessed through the help of this report. From this report, the
aspects in the supply chain which are lacking in the two organizations can be identified for
implementation of the correct solution.
Literature Review
Description of Harvey Norman
The company of Harvey Norman is essentially one of biggest retailer of furniture, computers and
electrical products among others. This company aims to provide the best household items to its
customers (harveynorman.com.au, 2018). Harvey Norman consists of 57 franchise spread all
over in Australia from South Wales to Northern Territory. Apart from that, it has numerous
stores in other countries as well as incorporating to about 280 stores. Its two main brands,
Domayne and Joyce Mayne have been the core leaders in the technological market. Through the
aid of proper supply chain, the company has been successful in delivering its service to
customers.
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Business Model of Harvey Norman
Figure 1: Harvey Norman Business model
(Source: Influenced by Tatoglu et al. 2016, p.188)
The company of Harvey Norman follows a complex business model. This is due to the fact that
the company has various franchisees in each of its stores. Therefore, it is a difficult process to
maintain and operate each and every one of them. Along with that, the company is also
responsible for a superstore where standardise fulfilment is a must. As stated by Boonjing,
Chanvarasuth and Lertwongsatien (2015, p.562), business models help in the organization of
various strategies which are of benefit to a company. Therefore the company of Harvey Norman
focuses on its different aspects such as diversification of items so that the number of people can
buy it. It also focuses on the competitive price of the market to set their range accordingly to
maximise their revenue.
Through the aid of the complex business model, the company also focuses on its multiple
franchises so that the orders received can be organised properly for its customers which
especially helps in the aspect of e-business. This business model also focuses on its other
stakeholders mainly its employees because, without dedicated and effective employees, the
company will not be able to deliver the products in a satisfying manner. Other than this aspect,
Harvey Norman pays adequate interest in its marketing aspects as well as property development.
This business model helps in the development of an overall strategy for the company that will be
beneficial to all.
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Main customers
The company of Harvey Norman provides a wide range of products to its customers starting
from beddings to consumer-based electrical products. This company does not have a specific
target customer rate; instead, it welcomes all customers to purchase their products. In recent
times, the company has essentially focused on digital marketing in order to attract more
consumers. It uses digital marketing software known as Lyris' which helps in the analysis of
online customers to recommend them the products they might be interested in buying. According
to McElheran (2015, p.1123), e-business has been spreading like a wildfire. Therefore, through
its aid, it aims to sell their products to customers of various age ranges.
Suppliers
Every company has its source of preferred suppliers from where it receives raw materials and
other items necessary it’s functioning. Some of the suppliers of Harvey Norman are Domus,
Havit Lighting, Eglo, PHL, Hermosa Lighting, Brightgreen and Gerard Lighting among others.
These suppliers essentially play a key role in terms of providing an adequate supply of materials
for the organisation to prosper.
The supply chain of Harvey Norman
Figure 2: Traditional supply chain model
(Source: Influenced by Vanpoucke, Vereecke and Muylle, 2017, p.516)
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This company follows a traditional model of a supply chain where the products are delivered
to different storage facilities. This aspect is conducted for the offline facility. However, the
aspect of online supply chain plays a similar role. From there, these products are supplied to
various stores of Harvey Norman from where customers get the opportunity to buy the products.
There are five essential steps which are engaged in the process of e-supply chain (Touboulic and
Walker, 2015, p.33). The first step after an order is received from the customers is that they are
processed and the ordered item is packaged. After this, the order is taken to respective storage
facilities from where it is delivered to respective addresses. However, if the order is in a far away
distance, then there are multiple steps where the orders are passed before they can be sending to
their destination. The lack of proper logistics is a huge disadvantage for the company as well as
its customers as they are unable to track their orders along with its delivery time (Soto-Acosta,
Popa and Palacios-Marqués, 2016, p.892).
Description of JB Hi-Fi
JB Hi-Fi is an Australian retail company which mainly focuses on electronic goods and
communications. It deals with various electronic gadgets such as Xbox, DVDs, electrical home
appliances among others (jbhifi.com.au, 2018). This company has about 10 stores in Melbourne as
well as Sydney and it aims at creating a more affordable market so that the consumers can easily
purchase it. This company also has the latest gadgets and technologies along with a full range of
electronic home appliances.
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Business Model of JB Hi-Fi
Figure 3: Business Model of JB Hi-Fi
(Source: Influenced by Brandenburg et al. 2014, p.301)
The company of JB Hi-Fi follows a franchise-based business model as it has a quite a few
branches and is expanding its business at a steady pace. This business model consists of seven
steps which are essentially followed by the company of JB Hi-Fi. According to this model, it is
necessary to understand the different aspect of one’s business for its proper functioning.
Therefore, the company has made its motto to abide by the legal requirements of business in
order to make important decisions. As commented by Wang, Gunasekaran, Ngai and
Papadopoulos (2016, p.99), franchise model helps in proper analysis of company data in order to
increase its revenue. Therefore, this business model essentially helps the company to support its
various franchises and growing their in store as well as e-business. Although there are certain
risks in this model because it requires higher capital cost if strategically planned such risks can
be avoided.
Main customers
The target customers of JB Hi-Fi are mostly the youth. Technology has taken over the world in
the 21st century and the people who are the most impacted from it are the youth. Therefore, this
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company focuses on selling its product to a specific range of customers. As asserted by Pagell
and Shevchenko (2014, p.47), customers are the key stakeholders to any business. Therefore, JB
Hi-Fi provides its products at a reasonable price range so that the people of the young generation
can buy the products of the company without any hesitation.
Suppliers
The company of JB Hi-Fi has engaged with some well-known companies as its suppliers. The
company has partnered up with various multinational electronic companies such as LG, Apple
and Samsung. Through the aid of such suppliers, this company thrives in the technological
market.
The supply chain of JB Hi-Fi
Figure 4: Customer-centric supply chain
(Source: Influenced by Popa, Soto-Acosta and Loukis, 2016, p.121)
The aspect of supply chain followed by JB Hi-Fi is from manufacturer to warehouses of the
company itself. This helps the company to keep its products tagged so that they are easier to
transfer to respective stores as required. This company is also actively involved in e-business
through the aid of its online store. As the company mainly focuses on selling its products to the
youth, it acts as the biggest advantage as this generation is hugely dependent on the internet and
digital media (ideas.repec.org, 2018). The aspect of a supply chain is very much customer-
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centric for the company of JB Hi-Fi. It also provides an effective tracking system for its
customers through which they are able to keep in track of their orders which are placed online.
Comparison of Supply chain management of the two companies
Supply chain management caters to the aspects of the proper flow of goods and services from
one end that is the producers to the other end which is the customers (Fahimnia, Sarkis and
Davarzani, 2015, p.113). The two companies in this study known as Harvey Norman and JB Hi-
Fi adequate follow the aspects of supply chain in management although they are designed a bit
differently. One of the biggest differences in supply chain management is that Harvey Norman
uses a long and traditional process while JB Hi-Fi follows a short but effective one. In the aspect
of this management, JB Hi-Fi has an upper hand due to its effective implementation. According
to Wiengarten, Bhakoo and Gimenez (2015, p.4967), the process of transportation and storage
consists of the two most important aspects of supply chain management followed by the
distribution of the product. In this respect, Harvey Norman implements effective packaging
which assures the items to be in a proper condition until it reaches its destination. Through the
aid of this comparison, it is clear that both the concepts of supply chain used by the two
organizations have their own faults as well as benefits (Christopher, 2016). These aspects of the
supply chain can be turned into their advantage, especially in terms of e-business by using the
correct strategy and recommendations as stated in the latter section of this study.
Recommendation and Conclusion
Through the assessment in this study, it has been observed that in order to eliminate some of the
negative aspects of a supply chain of the two companies, some effective strategies are needed to
be implemented. These have been stated as follows:
Recommendation for Harvey Norman
One of the biggest disadvantages in the supply chain management the company of Harvey
Norman is that it does not have a proper tracking system. Logistics tracking is of utmost
importance, especially in e-Business because it provides assurance to customers about how far
their order is. It also helps in the assessment of the data and time where the order might be
delivered. Therefore, a logistics tracking with an integration of unique tracking ID should be
implemented for the growth of its e-business.
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Recommendation for JB Hi-Fi
The company of JB Hi-Fi mainly focuses on the youth; therefore its customers are youth-centric.
As much as this acts as an advantage, it is also creating a barrier to the growth of the company.
Therefore, electronic products that can by anyone despite their age are needed to be properly
advertised in the e-business site of the company. The website should be user-friendly so that
people other than the young generation can also use it with ease. This will undoubtedly increase
the sales rate and revenue of the company.
Conclusion
The aspect of e-business is booming in the 21st century. However, it is incomplete without
adequate implementation of supply chain management which is one of the important factors in
the process of transportation of the good from suppliers to customers. Therefore, the importance
of supply chain in e-business has been thoroughly depicted in this study through the aid of two
organisations. The aspect of supply chain management is interdependent on the business model
of organisations which have also been depicted in this study. Therefore, it can be stated that
supply chain management depends on the nature of the business. In this case, as it an online
business of the two companies known as Harvey Norman and JB Hi-Fi, proper tracking aspects
are a must. As this generation is tech-savvy, advertisements of various products in e-business
websites can also help in enhancing its growth. Therefore, the aspect of a supply chain with
respect to e-business has been thoroughly described in its study.
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References
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