Marketing strategy social Retail Enterprises

Question: Discuss about the Marketing strategy social Retail Enterprises. Answer: Introduction Strategic management is the continuous process of planning, monitoring, analysis and assessment of the various important aspects of the business in order to meet the objectives and goal of the organizations. Hence, it can be said that the success of any organization vastly depends on the success of the strategic management of that organization (Hill, Jones and Schilling 2014). The main aim of the study is to analyze and evaluate the various aspects of strategic management for Myer Australia. Myer is one of the largest departmental store chains in Australia. The company was founded in the year of 1900 and the founder was Sidney Myer. Sidney Myer came to Melbourne as a penniless Russian migrant. The departmental store industry of the retail industry in Australia is one of the major industries that contribute a lot for the economic success of the country. For this reason, there is a fare scope for Myer to expand its business in the country. The main products of the company are womens we ar, mens wear, childs wear, beauty products, fragrance and cosmetics, footwear, electrical tools and many others. The major market of the company is the retail or departmental store market (Myer.com.au 2017). Macro Environmental Analysis Some major external factors have significant impact on the business of any organization. These factors are called the macro environmental factors. The main purpose of this analysis is to analyze and evaluate the impact of those factors on the business of the organization (Baker 2014). There are two major tools for the macro environmental analysis. They are the SWOT Analysis and the PESTEL analysis. The macro environmental analysis of departmental store industry in Australia is done below with the help of these two tools. SWOT Analysis The SWOT analysis helps to identify the strengths and weaknesses of an organization or an industry. Based on that the opportunities and threats can be identified. The SWOT analysis of the departmental store industry in Australia is done below: Strengths The domestic market of the departmental store industry in Australia is a large one The barriers of entry in the market is a strength of this industry as the new companies have to face many difficulties Weaknesses Low productivity of this industry is a weakness The cost of production of this industry is high compared to the profitability The high intense competition is a weakness The high rate of tax is a weakness Opportunities There is a fare scope of new acquisition The scope of venture capital is creating opportunities Threats The frequent change in price is a threat The increase in labor cost is a threat Another threat is the low cash flow The limit in the financial capital is a threat Table 1: SWOT Analysis (Source: Bull et al. 2016) Pestle Analysis PESTEL analysis is one of the major tools to evaluate the impacts of various macro environmental factors on the organization. There are six factors in the PESTEL analysis. They are Political, Economic, Social, Technological, Environmental and Legal factors (Grnig and Khn 2015). The PESTEL analysis helps to assess the external risks of the organization. In case of Myer, the PESTEL analysis will help the organization to identify the risks that can be posed from the external environment. This is how PESTEL analysis can be applied to Myer scenario. All these aspects are discussed below: Political Factors: The political situation of the country affects the business of Myer. The stable political condition helps the growth of the industry and attracts foreign investors and trading partners. On the other hand, the unstable political condition discourages the business as well as the investors. The political condition in the retail industry is stable (Grimmer, Miles and Grimmer 2016). Economic Factor: The economic condition of the country has a great impact on the retail industry of Australia. The recent global financial crisis has affected the retail industry largely. As a result, the cost of production has increased and the level of profitability has decreased (Ho 2014). Social Factor: Social factor is another important aspect of the macro environment. The various social factors like the choice and preferences of the customers, the economic condition of the buyers and others have a large impact on this particular industry. Technological Factor: The introduction of various kinds of technologies has a great positive impact on the departmental store industry in Australia. These technological changes help this particular industry to perform in a more effective way (Rothaermel 2015). Environmental Factor: The retail or departmental store industry in Australia has become more environments friendly. The businesses have become more conscious about the effects of their businesses on the environment. The retail industry is taken various environmental initiatives. They are the introduction of green products that are not harmful for the environment; the introduction of energy efficient and energy conservation business operations; the introduction of three Rs that is reduce, reuse and recycle; the strategy for water conservation; the introduction of environmental charity and others. Legal Factor: The basic legal frameworks for the retail industry are the taxation policies, recruitment policies, employment management policies and others. These laws have effects on the business of departmental store industry in Australia. Based on the above analysis it can be said there are both strengths and weaknesses in the departmental store industry in Australia. The large size of the industry is creating many business opportunities for the companies in it. However, it can be seen that the global financial crisis is affecting the business of departmental store industry in Australia. This is the reason the cost of production and the labor cost of increasing and the portion of profit is decreasing. However, it can be said that with the help of proper business strategies, there is a fare business opportunity of this industry (Van Leeuwen et al. 2015). Porters Five Forces Model Analysis The main purpose of the analysis of Porters Five Forces model is to analyze and evaluate the extent of competitive rivalry in a particular industry. There are five factors in the Porters Five Forces Model (Suwardy and Ratnatunga 2014). The analysis of Porters Five Forces in respect to the departmental store industry in Australia is discussed below: Threat of New Entrance: This is a major barrier in the departmental store industry in Australia. The new companies face many difficulties to establish favorable supply contracts and leases as the suppliers do not want to provide credit to the new companies. The reason is lack of goodwill. On the other hand, it is impossible for the new companies to be competitive in this particular industry. Hence, the large retrial stores enjoy this advantage (Ulubeyli 2017). This situation provides more opportunities for Myer to expand its business. The only way to do this is to make effective business strategies that will give Myer the opportunity to introduce superior products in the market. Bargaining Power of the Suppliers: The suppliers have moderate amount of power, as there is many large retailers in this industry. The large companies use to exploit their relationship with the suppliers. It is the advantage of the suppliers to have a tie-up with the large corporation in this industry. Myer has more than 1200 suppliers across 12 different business sectors. The aim of Myer is to achieve 100 percent compliance with their suppliers. Currently, Myer has a healthy relationship with their suppliers that allow them to share information among them. Bargaining Power of the Buyers: In case of individually, the buyers do not have significant amount of power. It is difficult for buyers to bargain with the retailers in the markets. However, as a whole, the buyers have a significant amount of power. Due to the huge number of buyers, they have the power to control the price and quality of the products (Sutton-Brady, Kamvounias and Taylor 2015). Threat of the Substitutes: Wide range of products is available in the departmental or retail stores. Companies are providing the exact same products in different competitive prices. In this situation, the buyers can get the same product in different other stores at their preferable prices. This aspect of the industry affects the business of the companies. The retailers that offer superior and unique quality of products enjoy the necessary competitive advantage over the others (Phillips 2014). Competitive Rivalry: The extent of competition in the departmental store industry in Australia is very high as there is existence of some large companies. They are Myer, David Jones, Dimmeys and many others. All the companies provide superior quality of producers and this is the reason for the intense revelry in this industry. In addition, due to have goodwill in the market of the large corporations, the new and small companies cannot compete with them. This reason increase the extent of rivalry among the existing large companies (Medlin and Ellegaard 2015). The above discussion states that there is a lot of competition in the departmental store industry of Australia. The existence of large corporations has increased the level of competition. As a result, the buyers are getting superior quality of products as all the companies are providing superior quality of products to get the necessary competitive advantage. On the other hand, it is nearly impossible for the new companies to enter into this highly competitive market. Due to the presence of same products in many stores, the buyers have a significant amount of power to influence the price of the products. Competencies As per the above discussion, it can be observed that there are some major competencies of Myer. One of the major co potencies of Myer is the supply chain management of the company. Myer has a well-designed and improved supply chain management for their business. The supply chain management of the company is not about the distribution centers. The supply chain management of the company ensures the proper implementation of the entire end-to-end process. The supply chain management of the company includes the initial process, sourcing, distribution center and store management. Another important competency of Myer is the innovation in the various aspects of their business. The growth of the company is supported by the innovation. Myer has been successful to implement innovations in every aspect of their business. These are the two major competencies of Myer. However, some weak areas of the company need effective strategies to become efficient. They are the high labor cost, high cost of p roduction and many others. Conclusion and Recommendations The above discussion states that some major areas of Myer need effective strategies. The first area is the high competition that the company is facing. Due to continuously increasing competition, the company is losing its market share. In this case, the organization needs to make effective strategies to get the necessary competitive advantage. The company is facing challenge in the cost management sector as the cost of production is increasing. For this purpose, the company needs to employ effective cost management strategies to overcome this hurdle. The increasing global financial crisis is another challenge that the company is facing. With the help of effective financial strategies, the organization can overcome this financial crisis. Based on the analysis, some recommendations are provided below: It is recommended that the company should employ effective cost management strategies in order to reduce the cost of production. This step will increase the profitability of the company. It is recommended that Myer should take strategic steps to make the supply chain of the company more efficient. With the help of more effective supply chain strategies, the company can achieve the objectives of the organization. It is recommended that the company should develop effective strategies management strategies in order to achieve the ultimate goal of the organization. From the whole study, it can be observed that there are some business areas of Myer that is not as effective as it needs to be. These business areas need proper business strategies to revive. Hence, it is also recommended that the strategic managers of the organization need to develop and implement effective business strategies. The above study also shows that the lack of strategies has a long-term effect on the business of Myer. Thus, the adoption of effective business strategies will be helpful for Myer for the long run of the business. The future business of Myer will be beneficial from todays effective business strategies. References Baker, M.J., 2014.Marketing strategy and management. Palgrave Macmillan. Bull, J.W., Jobstvogt, N., Bhnke-Henrichs, A., Mascarenhas, A., Sitas, N., Baulcomb, C., Lambini, C.K., Rawlins, M., Baral, H., Zhringer, J. and Carter-Silk, E., 2016. Strengths, weaknesses, opportunities and threats: A SWOT analysis of the ecosystem services framework.Ecosystem services,17, pp.99-111. Myer (2017). [online] Myer. Available at: https://www.myer.com.au/p/about-myer/the-company/about-us/history/ [Accessed 17 Feb. 2017]. 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