Harvey Norman Business Analysis

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Contents Executive Summary 3 Introduction 4 Current Strategic Position 4 Figure One: Financial Analysis for Harvey Norman 5 External Factors 6 PESTLE Analysis 6 Economic Forces 6 Technological Forces 6 Political-Legal Forces 6 Ecological/Environmental forces 7 Socio-cultural forces 7 Porters Five Forces 7 Figure Two: Porters Five Forces 7 Figure Three: External Factor Analysis Summary 8 Internal Analysis 8 Figure Four: Internal Factor Analysis Summary 9 Recommendations 10 Conclusion 11 Executive Summary Harvey Norman Holding Pty Ltd (HNH) in June 2012 delivered a net profit of $227.41 million, a decrease of 39.2% from the previous year (HNH Annual Report 2012). Clearly the…show more content…
HNH’s Chairman was also out of touch with current trends and refused to acknowledge the internet as a sales channel let alone a mobile-commerce (Reidy 2013). HNH’s new strategic slogan of “click, pay and collect” supports the businesses commitment to become more viable and robust in a complex and difficult market (Reidy, 2013). The Omni-Channel strategy HNH implemented in 2012 includes (HNH Annual Report 2012, p. 4): 1. The ability to diversify product offerings to franchise operations, 2. Strong balance sheet underpinned by real, tangible property assets, 3. Strong asset position and working capital allows to conservatively manage the debt levels, 4. The digital, store and distribution centre channels are fully integrated. The business challenge retailers are coming to terms with is that the supply chain model was based on fulfilling consumer demands within stores (Baird & Kilcourse 2011). With the entrant of virtual technology increasing the knowledge and expectations of consumers, traditional strategies are largely missing out on consumer demands. The opportunity for the retail industry is to develop a clear pathway for consumers through the infinite channels to ensure the end result is a purchase within its stores. As studies show that 95% of all purchases by the consumer are still within a ‘bricks and mortar’ store (Baird & Kilcourse 2011). The below chart displays

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