David Jones

3817 Words Sep 11th, 2010 16 Pages
8th October
Strategic Recommendations Report

Executive Summary
The Australian retail industry is experiencing significant changes in both macro and industry environments. Companies are required to improve customer service quality to retain customers as rivalry for customers is increasing due to the rising amount of online retailers. To meet this challenge, David Jones should expand into online retailing. Building customer loyalty will determine the viability of the transformation into a successful e-commerce company. Additionally, identification of stakeholders and their requirements are crucial in major organisational changes. To respond to changes in the external environment, David Jones should scale back
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Additionally, the increasing overseas migration from Asia (Australian government 2009) will have an impact on consumer behaviour. These demographic groups have higher spending patterns and higher preference for branded products, and hence potentially increasing the market for high quality products (Australian Government 2009).

Australia lacks an international image as a major tourism shopping destination, as compared to Hong Kong or Singapore, that have successfully positioned themselves as central shopping and retail destinations in Asia (Folk 2009). Additionally, the geographic distance from Asia reduces tourism shopping in Australia. The rise in protectionism around the world may negatively impact David Jones’ performance due to increasing prices (Kemp 2009).
2.2. Industry Environment Industry characteristics | High capital requirement and specialised assets | Economies of scale | Brand awareness | Low switching cost | High amount of competitors | Lack of strategic competitors | High amount of suppliers | Emerging e-commerce sites |
Table 2. Industry characteristics

High capital requirements, specialised assets and economies of scale of existing retailers reduce the incentive of competitors to enter the market. Similarly, the customer loyalty and brand awareness of David Jones’ differentiated product category reduces the incentive to penetrate the

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