Strategic Management at David Jones

David Jones’ position in the retail industry and the availability of numerous suppliers in the market reduces the threat of forward integration. Suppliers also want to be associated with David Jones due to its strong brand position in Australia. In 2008, 50 new iconic brands were introduced to David Jones portfolio (Annual report, 2008), which reflects the willingness of suppliers to add their products in David Jones’ product offerings.

Supplier Power. With a vast variety of products available to Lowe’s, the supplier power is low. Lowe’s can choose from different vendors the products mix that differ from their competition. In addition, entering contractual agreements with vendors helps in lowering this risk.

In the past, JCP had, on average, one price campaign every day. The stores were full of sale signs and retail rise was getting out of control. JCP partnered with numerous exclusive collaborations which was hoped to bring about an expansion for the firm. However, due to the economic slump, the oversaturation of the market, and an expected lack of quality in the goods from the consumer perspective, JCPenney’s success was degrading in contrast to its competitors. (Sloan, 2010).

Bargaining Power of Suppliers: The bargaining power of suppliers in the industry is low. There are numerous suppliers in this industry, and the large department stores have the ability to negotiate for the lowest prices. In addition, the switching costs are low, as the products are not highly differentiated. There are a large volume of purchases in the industry, allowing the department stores to exert even more power over the suppliers.

Australia’s growth rate 0.6% for 2016 and the poverty is actually growing in Australia estimate 2.5 million people or 13.9% of all people living below the standards.The average wage in Australia in November 2013 was $57,980.The average full-time wage is $74,724.Average weekly earnings are $1,1462 in 3 death occurred among people aged 75.74% were mortality 1907 and 3 in 10 death were from disease 2013.4 in 5 natural causes.Also, 3.6 was the number of infant deaths per 1 thousand live births in Australia in 2013.

Market players generally have a wide variety of potential customers, which considerably weakens buyer power. Although consumers in this industry may be loyal to particular brands or chains, loyalty to retailer brands is arguably less important than competitive pricing. Many supermarkets run rewards programs for frequent shoppers, such as Tesco’s ‘Clubcard’, and these schemes can help companies retain customers and reduce buyer power.

David Jones Limited (DJS) is an Australian retailer tracing its origins back to 1838 when it first opened in Sydney to sell “the best and most exclusive goods” (DJS, 31 Oct. 2009). It has since expanded to become a national retail chain comprising of nearly 40 premium department stores. The subject of this analysis is a strategic business unit (SBU) that is playing an increasingly important role in the company’s future growth strategy; namely the provision of financial services. As the result of a strategic alliance with American Express (AMEX), DJS launched the David Jones American Express (DJA) card in 2008 (ASX Media Release, 20 February 2008). To effectively analyse the value proposition of this SBU and product it is important to

The retail industry has been highly competitive for many years. JCP, Kohl’s, Macy’s and Sears have been clashing for some time to keep the attention of the avid shopper. It would seem that each company would be on an equal playing field, but according to the strategic group map below, Macy’s is in a group all by itself. Macy’s pricing and number of stores are different for JCP. Macy’s promotes the branding of having high class products that have celebrity names on the tags, which draws the shopper who is attracted to being in the know. The Macy’s customer is willing to pay more for their product because they know that a celebrity made this, which ultimately allows them to connect with their favorite stars. The supplier power is what helps Macy’s stay in a different category than JCP, Kohl’s, and

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The intensity of rivalry and the threat of substitutes are strong components for J.C. Penney to consider as they continue to strive for increased revenue and market share. Their two primary competitors are Macy’s and Kohl’s, both of whom have fiercely competitive strategies to be strong retail operations. For instance, while Macy’s offers a multitude of promotional deals and is working hard to choose products based upon demographics and geographic segmentation, Kohl’s is attempting to reduce their inventory levels and improve their marketing strategies in order to become a stronger competitor in the department store segment of the retail industry. In order to compete with their competitors, J.C. Penney aims to focus on their previously successful promotions and home department segmentations by bringing in new reputable designers in order to attract a larger customer base. Due to the fact that the intensity of rivalry and threat of substitutes are both moderately strong in the retail department store industry, J.C. Penney ought to be diligent in their implementation of strategies in order to achieve success in the retail business.

‘We aim to return the UK High Street Retail business to its role as Britain's most popular stationer, bookseller and newsagent … Our plans encompass improved efficiency through cost savings and margin enhancement, while rebuilding the competitiveness and depth of our product ranges.' (Ms Swann BBC, July 2005)

The threat of new entrants is high in the fast segment. There is a threat of new entrants is because the entry barriers are very low. The business barriers to entry the market could take those forms: first one is the capital costs, the higher the investment required, the less the threat from new entrants. Secondly, regulation and legal constraints are the main concerned points. In most industries, regulations related to health and safety, products handling, and licenses to operate, export, or install new facilities. And other forms of barriers could be brand loyalty which could be an important factor in increasing the costs for customers of switching products. The new entrants need to change the valuable brand suppliers with its efficient economies of scale to have a reasonable supply chain network or corporate with the low cost producers to supply the products in the market. Also it might gain a large market share in the market as well. For instance, Sports Direct Company reported retail sales were £371m while gross profit increased 9.6 percent to £149m, it

The retail industry is highly competitive, with few barriers to entry. Each Company competes with many other local, regional and national retailers for customers, associates, locations, merchandise, services and other important aspects of the Company’s business. Those competitors include other department stores, discounters, home furnishing stores, specialty retailers, wholesale clubs, direct-to-consumer businesses and other forms of retail commerce. Some competitors are larger than JCPenney, have greater financial resources available to them, and, as a result, may be able to devote greater resources to sourcing, promoting and selling their products.” There are many factors that characterize competition, including advertising, service,

Other retailers have like products and same brands in their stores. Also, its prices are relatively high compared with some supermarkets and online stores.

In the clothing industry there is a threat for substitute products. With the wide variety of brands and quality of goods provided by the companies consumers can easily substitute the one company’s clothes or goods for another company’s. The preference of the consumers for the brands and quality of clothes or goods they are looking for increases the threat of substitutions in the