Case Study of David Jones Essay

3082 Words Sep 24th, 2012 13 Pages
Introduction
David Jones (DJs) is a leading up-market department store chain, which is a public company, founded in 1838. It is one of the most recognised retailer brands in Australia that emphasizes on quality and style. While the retailing business changed in many ways, DJs maintained its commitment to provide high quality merchandise with the introduction of new brands. Through the continuing refurbishment of stores and continuing opening new stores across four major states in Australia, it currently has 37 modern, stylish stores located in most Australian states and territories. It also has its own factory at home which manufactures a large variety of goods from clothing to furniture. Apart from its home branded merchandise, it also
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First, there are good numbers in the higher income categories in Australia. Second, there are an increasing high income earners and middle class which present a great market opportunity. Third, the Australia’s brand conscious society is well suited to the department store concept. Also, advanced computer-based technology and stable political environment contribute to a favourable business climate. The only drawback is economic uncertainty which hinders firms future strategic direction.

Industry analysis
The retail industry is a highly competitive and mature. For this reason, above-average returns can only be obtained by competitive actions and responses against competitors. Porter five forces model will be used to analysis the development and competition situation in retail industry.

There is potentially a huge and growing profit pool due to the growth of the middle class and high income people. This means people have more disposable income to spend on retail shopping. This growing profits pool is increasingly affected by the customer service sector as there are more high income people who prefer good shopping experience.

Threat of new entrants: Retail industry has a higher barrier to entry. First, it is difficult to work out a good value chain as it involves a complex process. Second, it is difficult for new entrants to gain competitive advantage and earn above-average returns in such a highly competitive market. Besides,

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