Strategic Position Review of Michael Hill Jewelers in New Zealand

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Michael Hill Jewellers (MHJ) is one of the most recognizable names in the New Zealand retail jewellery industry. In 1979, Michael Hill opened his first store in Whangerei. Until then, jewellery stores had been run primarily by craftsmen jewellers. Michael Hill changed this with the philosophy “to make jewellery buying less intimidating and more accessible to the public.” In order for any company to succeed, it has to take a look at the environment in which it operates. This is why an external environmental analysis is so important. This involves a continuous process of scanning, monitoring, forecasting, and assessing the external environment. Doing so will illuminate any opportunities to be exploited or threats to minimize. The first…show more content…
The jewellery industry needs to ensure that they purchase raw materials from only environmentally sustainable mining companies.

Due to the size of some of the companies in the jewellery industry along with the large sums of money and power that accompanies it, there are strict antitrust laws in place. The Responsible Jewellery Council is an international organisation set up to oversee and protect the jewellery industry from various practices. This council has set up antitrust policies in order to protect its members.
Industry Environment Analysis – Porter’s Five Forces
Porter’s Five Forces model is used to evaluate the degree of rivalry between competitors in a given industry through assessing the four forces that lead to this outcome. These forces are the threat of new entrants, the bargaining power of suppliers, the bargaining power of buyers, and the threat of substitute products.
Threat of New Entrants
Is the ease in which a new company can start into the retail jewellery industry. It is not difficult to start a jewellery store as the only requirements are start up capital and a premises. There are many small sole trader jewellery shops in New Zealand to attest to this. Therefore, the threat of new entrants is: HIGH
Bargaining Power of Suppliers
Is the control that suppliers have over the pricing and distribution of their products across the jewellery industry. Once the
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