Strategic Management at David Jones

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Introduction David Jones is a well established Australian high-end department store with 36 stores nationwide. Its focus is to deliver an exclusive, high-class shopping experience, supplying luxury goods at competitive prices to meet the high standards of their consumer base. David Jones continues to be successful in a country that suffers inescapably from ‘Tall Poppy Syndrome’, while also preferring to exude an air of wealth and status. Analysing the External Environment The General Environment Demographic Australia’s population is over 20 million and the gross household income per week for the fourth highest quintile is over $1096.00. Twenty per cent of Australian households are represented in this category. Economic The…show more content…
It is the sector that brings the real barriers. In David Jones' case, the cost to setting up a department store is in itself a high cost activity, with high risk of failure if not correctly located. Add to that the business of luxury items, which suppliers charge a pretty penny for, and the barriers for David Jones sector become very high. Substitutes The retail industry is saturated with substitutes, in part to low entry barriers. Online shopping and small boutiques stocking similar lines, brand names and designs provide David Jones potential customers with many substitutes. It is the David Jones experience that cannot be substituted; shopping in a large, upmarket department store. For the sector, substitutes are low. Buyers Buyers are the wildcard in the retail industry. Being able to research products for quality, suitability and price online, consumers are able to move from retailer loyalty to brand loyalty, giving them a lot of power. However, loyalty card systems increase the likelihood that shoppers will stay loyal to certain stores. Suppliers For the industry, suppliers have a moderate level of power, as they are able to switch distribution channels quite easily; such as Country Road's change to Myer after 30 years with David Jones. Suppliers can also become self sufficient by selling online. For David Jones' sector, supplier power becomes lower. Suppliers battle with each other for exclusive placements in high end stores, and stores such as

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