Report

Case Analysis and Application of Strategy Models

 Executive summary

This group report will focus on the competitive strategies undertaken by business
organisations to compete with their rival firms for gaining a larger share of the market. The
issues in the strategic management of the company are identified here in this report. DJs
follow some crucial business strategies, which include low pricing, providing differentiated
products, and online business. Porter's generic strategy analysis of David Jones, which
includes Cost Leadership, focus, and Differentiation strategy, is done here in this report to
understand their position in the industry. The authority to gain more advantage that is
competitive and establish a superior future for the company needs to avoid strategic issues.
Table of Contents
Introduction................................................................................................................................4

Summary of the case study........................................................................................................4

Business level strategy of David Jones......................................................................................4

Corporate strategy..................................................................................................................5

Functional strategy.................................................................................................................5

Identification of the strategic issues...........................................................................................5

Theoretical Frameworks.............................................................................................................6

SWOT analysis.......................................................................................................................6

Porter’s generic strategy Analysis..........................................................................................8

Recommendations....................................................................................................................10

Conclusion................................................................................................................................10

References................................................................................................................................11
Introduction

This group report will focus on the competitive strategies undertaken by business
organisations to compete with their rival firms for gaining a larger share of the market. The
competitive strategy helps business organisation to plan the long-term goals and objectives
against their rival by analysing their strength, opportunities, threats and weakness in the
industry. In this report business, strategies of David Jones will help taken into consideration
to evaluate their issues in the process of management. SWOT analysis and Porter's generic
strategy analysis of David Jones will be done to understand their position in the industry.
Some recommendations will also be suggested to overcome the strategic issues that are faced
by David Jones.

Summary of the case study

David Jones founded the company in the year 1838. The main office of the company is
located in Sydney, Australia. The biggest competitor of David Jones in Australia is Myers.
David Jones has a good customer base in the major cities of Australia. In the year, 2014 it
was taken over by Woolworths, which is a company, based in South Africa (Xu et al., 2017).
There was an increase in the growth rate of department stores in comparison to the standard
department stores. The business organisation changes its business strategy by focusing more
on credit cards of customers to gather information from them and providing incentives to
their staff. DJ to serving the luxury shoppers are selling more products of the private brands.
The changes in DJ in 2015 came after the CEO was changed. The new CEO aimed at starting
the food business as he has experience of it in his earlier job. The idea of starting food halls
will be an effective strategy, as it will help in attracting more customers to their favorite
shopping destination. It is important to find out the strategy led by John Dixon the new CEO
of DJ is effective in the competitive environment or not.

Business level strategy of David Jones

David Jones a leading retailing business organisation in Australia has undertaken some
business strategies to gain competitive advantages in the global industry. The vision, mission
and values of the company are designed based on these business strategies.

Vision and mission: The vision of David Jones is to be a leading leader in the fashion and
food retailing industry by appealing the people with the brands and providing innovative,
premium quality and sustainable goods and services (Miller and Merrilees, 2016).
Corporate strategy
The corporate strategies are included in the business level strategy of David Jones, which are
discussed below:

 DJ aims at charging a reasonable price from its customers, which help customers of
different income group to afford the products. The adaptation of the retail mode by DJ
has helped in the process of reduction of product prices of DJs. To appeal to a large
section of customers, DJS implemented an effective pricing structure for its products
and services.
 DJ chooses a location for its stores, which will be easier for customers to find it
easily. They target a section of customers before opening their stores in a specific
location. The authority aim at investing in the designing of the store and existing store
refurbishment, so the stores can be designed as per the requirement and preference of
the consumers (Rugman and Verbeke, 2017).

Functional strategy
The functional strategies are included in the business level strategy of David Jones, which are
discussed below:

 DJ aims at satisfying all its customers by keeping a good eye on the changes in the
taste and preferences of the customers. DJ is known as a people’s organization as a
large number of people are associated with it. The authority of the DJs uses an
effective system of communication with all the employees and staff of the
organisation to make them aware of the goals of the organisation.
 DJ not only offers offline services but also online to the consumers. It helps the
customers in shopping easily the products from their comfort zone. It helps in
providing a better experience of shopping to the consumers, as they do not need to
visit different stores to collect their products. David Jones has an immense benefit
over most new online stores as they have massive information on demographics and
patterns of buying of the customers from their store card system (Miller et al., 2017).

Identification of the strategic issues

There are some strategic issues in this case study of DJ, which are discussed here as follows:
  DJ has a broader market segment, as its business is global. It can be seen that the DJ
has the majority of its customer base only in Australia. It fails to reach out to global
customers or appeal to global customers. The business organisation needs to change
its branding strategy for appealing to a wide range of users. DJ needs to change the
pace of implementation of strategies as more labels that are private are getting into the
stores of JT One, Distraction and Studio. The traditional branding strategy imposed by
Narin the former CEO was a total failure.
 DJ does not properly use the differentiated strategy related to business level strategy
in comparison to its existing rival organisation. It can be seen that Myers follows the
same strategy of providing products at a reasonable price. This was a major issue as it
affected the level of competitive advantage for David Jones. The customer used to
have two options David Jones and Myers before the arrival of L'Elegante. The
business strategy and the way of appeal to the customers followed by L'Elegante help
in gaining more customers. The home brands of the company, its diversification
strategy was the main threat for David Jones, as it lacks its strengths to differentiate
its products like L'Elegante.
 David Jones to provide satisfaction to the customers and work accordingly to their
change in taste needs to treat and serve their employees well without putting immense
pressure on them. It results in dissatisfaction with the staff, which results in a fall in
the turnover of the organisation.

Theoretical Frameworks:

Some frameworks have been applied for analysing the business strategies undertaken by DJ.
The internal and external business environment are analysed here and reason for
implementing those the business level strategies in DJ

SWOT analysis
Strengths

 DJ is considered the oldest department store in the retail sector not only in Australia
but also all over the world. DJs aims at providing a wide variety of brands and
products, which range from electrical goods to fashion products. DJs tend to cover the
portfolio of those internal and local brands and their own labels products and services.
 DJs have both financial and store services to cater to their targeted customers. The
facilities of store services include style advisors, free health screening services,
 personal shopping, and style advisors. On the other hand, the financial services
consist of Qantas frequent flyer points, David jones Platinum AMEX and store cards
(Bailey 2017).
 The use of Omni-channel retailing by using different channels such as online
websites, stores, etc. have helped in strengthening its position in the global market.
The acquisition of DJs by Woolworths Holdings also helped in strengthening their
position in the market.

Weakness

 The financial performance of the company declined drastically from 2009 to 2013.
The decrease in the revenue earned by DJs from $1985.5 million in FY2009 to $1845
during 2013. It was due to the challenging environments related to trading and the
strategy, which was implemented by the company for improving its profit margins.
This leads to a fall in the position of DJs and migration of customers to the retailers of
online international brands.
 DJs face the difficult and huge level of competition in the process of increasing their
penetration in the international and domestic markets. DJs are also losing their
potential customers to the online retailers of the international market as it falls
backward in embracing the online shopping standards.
 DJs emphasize the premium market and the main customers are the people with high-
income levels. However, in the current economic situation, the low disposable income
in the hands of the people reduced their tendency of spending on premium brands
(Gürel and Tat, 2017).

Opportunities

 The trends of online fashion are increasing among people as the business organisation
investing in technological development in their business operation. Customers prefer
online shopping as it provides them with convenient options along with efficient
services. DJs are focusing more on their digital marketing strategy for attracting more
customers for their company.
 DJs have opportunities for expanding their brand as the globalisation in the economy
has helped in bringing more brands, which lead to an increase in competition in the
retail industry. DJs will be benefitted, as they will able to cooperate with suppliers of
 the international market to introduce more brands in their stores. This will be a win-
win situation for DJs for expanding their services.
 The private label strategy undertaken by DJS will help in attracting more customers to
the company as the customers will get a wide range of choices of goods and services.
The internal reshuffling of the structure and system related to management will help
in enhancing the level of productivity and profitability of DJs (Sarsby 2016).

Threats

 The reduction in the real disposable income of the household during the global
recession from 2009 to 2013 has shown a downward flow of cash, which is
customers are spending less on premium brands such as DJs. This resulted from a
decrease in the profit margin earned by DJs at a huge level. The changes in the
preferences of the customers are a growing threat to DJs as the customers are seen
switching to brands such as Myers, Zara and K-mart.
 The level of competition faced by DJs is huge from the international retailers in
the retail sectors as the competitors are setting up shops in the major cities of
Australia. The strong currency of Australia and the exploration of the field of
online business create an influence on the sale of domestic products and services,
which is considered a threat.
 The cost price harmonisation strategy, which was adopted by DJs, resulted in the
loss of suppliers. This resulted in less variety of goods of different private brands
in the stores of DJs.

Porter’s generic strategy Analysis

Porter’s generic strategy helps in analysing the strategies that are followed by the business
organisation to maintaining competitive advantages. The three types of strategies that are
followed by the business organizations include Cost Leadership, focus and Differentiation
strategy. The business level strategies of DJs are analysed here as follows:

Differentiation strategy

DJs use the differentiation strategy by aiming at private and exclusive labels which help in
providing differentiated products from online stores, as ensures that consumers can shop
products of certain brands from one store. This strategy will also help DJS in minimising the
risk of excess inventory for retailers. The need for a discount can be lowered as the products
available in the store are well designed and exclusive which helps in driving foot traffic.  The
differentiation strategy boosted sales for DJs by a substantial margin and helps in gaining
competitive advantage in the market which resulted in more investment by customers than
their rivalry companies (Aisyah 2020).

Focus Strategy

DJs use the focused strategy to serve the needs of a particular section of customers. DJs
mainly focus on customers of Australia of any age group who are into shopping exclusive
and well-designed products. DJs provide a wide variety of products, which include fashion,
and lifestyle-based products. The management of the company is aiming at starting a food
business where customers visiting for shopping can also eat around in the food halls. The
company is focusing on providing customers with consistently superior quality, safe, flavour,
and innovative food at a great price value. The company is focusing on building food
business in the market of Australia, which includes bringing together products of DJ in BP
forecourt stores at a reasonable price (Islami et al., 2020)

Cost leadership strategy

Cost leadership is a generic strategy that is being followed by DJs to gain competitive
advantages. This strategy is the main aspect of their business objectives. The primary focus of
DJs focuses on providing a wide range of exclusive and well-designed products,
sustainability and environment but also ensures that the price of the products is kept at a
reasonable price to attract more customer base. The cost leadership strategy helps DJs in
keeping the price of the products and services at a lower rate, which helps in drawing the
attention of the customers by offering them a pocket-friendly shopping experience. The cost
leadership strategy has helped DJs in the reduction of the production cost, which resulted in
gaining higher margins of profits. The reason for the huge customer base of DJs is their low
price product, which helps the budget-conscious consumers to shop more quality products.
The lower cost of the business helps in the reduction of financial rates significantly. The
sustainability of the business helps in gaining a competitive advantage over its competitors
and during the poor economic condition in the economy. This strategy helps DJs in adopting
many techniques related to business, which includes appropriate allocation of resources,
engaging with suppliers offering quality products at a reasonable and lower price, and
financial management, etc. Therefore, it can be said that DJs is using the cost leadership
strategy for running their business efficiently (Kharub et al., 2019).

Recommendations

Some recommendations are discussed here for DJs to combat these strategic issues:

 To gain a competitive advantage, the company needs to implement some unique

strategy in the management system. DJs can provide exciting deals and discount for
the customers to attract more customers in their stores.
 It is recommended that the management of the DJs needs to focus more on customer
satisfaction to gain competitive advantages in their business. They need to understand
and research more on the changing needs and preferences of the customers and offer
the customers new products to gain more advantages over their competitors.
 The technical department of DJs needs to be restructured and employees with
comprehensive knowledge about social media marketing, promotion of online
business need to be recruited by the employers to increases their efficiency level on
the online activities of the company.

Conclusion

It can be concluded that DJs have a strong and honest relationship with the consumers since
the establishment of their business by evading any kind of immoral practice and preserving
sustainability in every stage. The issues in the strategic management of the company are
identified here in this report. DJs follow some crucial business strategies, which include low
pricing, providing differentiated products, and online business. Porter's generic strategy
analysis of David Jones, which includes Cost Leadership, focus, and Differentiation strategy,
is done here in this report to understand their position in the industry. Hence, the authority to
gain more advantage that is competitive and establish a superior future for the company needs
to avoid strategic issues.
References

Aisyah, R.A., 2020, January. The effect of differentiation strategy on competitive advantage.
In Advances in Business, Management and Entrepreneurship: Proceedings of the 3rd Global
Conference on Business Management & Entrepreneurship (GC-BME 3), 8 August 2018,
Bandung, Indonesia (p. 56). CRC Press.

Bailey, M., 2017. Absorptive capacity, international business knowledge transfer, and local
adaptation: establishing discount department stores in Australia. Australian Economic
History Review, 57(2), pp.194-216.

Gürel, E. and Tat, M., 2017. SWOT analysis: a theoretical review. Journal of International
Social Research, 10(51).

Islami, X., Mustafa, N. and Latkovikj, M.T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal, 6(1), p.3.

Kharub, M., Mor, R.S. and Sharma, R., 2019. The relationship between cost leadership
competitive strategy and firm performance. Journal of Manufacturing Technology
Management.

Miller, D. and Merrilees, B., 2016. Department store innovation: David Jones Ltd., Australia,
1876-1915. Journal of Historical Research in Marketing.

Miller, D., Merrilees, B. and Cooper, H., 2017. Contrasting cases of corporate heritage in
use. Foundations of corporate heritage, pp.247-58.

Rugman, A.M. and Verbeke, A., 2017. Global corporate strategy and trade policy (Vol. 12).
Routledge.

Sarsby, A., 2016. SWOT analysis. Lulu. com.

Xu, J., Gao, X. and Hammond, J., 2017. E-tailing in Australia: A preliminary analysis of
David Jones. The International Technology Management Review, 6(4), pp.149-157.