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HI6006 Competitive Strategy

1. Executive Summary

Competitive strategy is a strategy that is concern about the competition in the organization areas. It provides a solution to manage the competitive environment with admiration to competitors.  In this case study, David Jones Company is facing competition with the Myers Company. Both companies are performing well with a wide range of candidates. It has been analyzed that there is needed to make changes in the food department of David Jones due to its performance gap between estimated and actual sales revenue. Business strategy has been applied by the CEO of David Jones so that it would be able to take competitive advantage. A strategic management plan has been framed to achieve its goals and targets. It followed different applications of the strategic model to rectify the overall performance in a positive manner.  Business strategy is beneficial to develop a clear vision and mission of a company. A clear set of directions have been provided through the business strategy management plan. It is the term to ensure the goals of each team member. Different strategies models have been discussed that led to the growth of David Jones Company.

2.1 Introduction

David Jones and Myers Companies both is leading specialty retailers in Australia. A review of David Jones Company would be conducted. Tiredness in the food department of David Jones has been seen as Myers’s company supplies with the same brand in the same industry. David Jones was purchased by the South Africans in 2014 for $2.1 billion.  New CEO has been appointed by the head of Woolworth so that the performance of David Jones food department could be improved effectually.  The market for clothing and food has been enhanced day by day. It is one of the most tasks for the new CEO John Dixon to overcome the performance gap of the food department of David Jones. The business strategy would be followed in the competitive environment.  The main role of the new CEO is to develop and implement the business strategy to take advantage of the competitive environment.

2.2 A summary of the case

David Jones is one of the fashion industries since 1999. It has competition with Myers about leading specialty in-retailer. Both brands have a wide range of variety of branded clothing. Both companies are developed in major cities of Australia. Both companies have raised their income structure.  The infrastructure of both companies is well maintained as it is helpful to attract customers to the company (Madsen, 2015).

David Jones was taken by South Africa Woolworths in 2014 for $2.1 billion. South Africans were handling the same clothing brand at the same time. A differentiation strategy has been applied by David Jones. The market for specialty departments is growing at 7 percent per year as compared to 2 percent per year for standard specialty department stores (Block, et al.,  2015).

The new CEO Ian Nairn has been appointed to revise the policies and procedures of David Jones.  David Jones has lost their way to the development of the company. The firm focuses on Asian customers, provides an incentive system to staff members, High sales revenue-oriented, and gives importance to credit cards. Several stores would be improved with spending $400 million on it. Stores would be launched upon the country road. David Jones mainly focuses on private brands such as private brands have more profit margin as compare to pure brands. Market shoppers would be served well by the initiatives. Better services would be provided o the audience of clothing brands associated with David Jones (Block, et al., 2015).

At the same time, Myers is trying to restore all stores with better layouts and staff members. The race between David Jones and Myers is on.

Changes occurred in David Jones Company in 2015. The CEO Ian Nairn was replaced by new CEO John Dixon that is one of the British retailers Mark & Spencer. CEO Ian Nairn was eliminated due to personal reasons but it was rumored that it has done due to a misunderstanding with the head of Woolworth Ian Moir. There is needed to make changes in private labels such as studio, distraction, and RE. Nairn was following slow procedures of implementation of strategy such as traditional premium brand whereas Moir head of Woolworths wants quicker implementation of the strategy (Anwar, et al.,  2016).

THE new CEO’s last profile was Mark & Spencer food services and David Jones is facing little tiredness in the food department. He can apply marketing strategies to overcome the food issue. Moir the head of Woolworth has been agreed on it. The objective of David Jones is to develop high production of food halls, to develop famous destinations for shoppers, and development of the structure of the food department (Eaton, et al., 2015).

It has been analyzed that market has been expanding day today. There is the question in the case study that new CEO Dixon would improve the performance of the expanded market. David Jones would achieve goals or objectives in upcoming years. It has been analyzed that it could be achieved by following business strategy. David Jones food halls needed to be revised completely. There is a need to be captured in the entire market to take a competitive advantage.

2.3 Identification of strategic issues

It is necessary to determine the strategic issues of David Jones. The overall growth of David Jones Company has been declined. New CEO John Dixon was appointed to overcome the issues of the food area department of David Jones and to take competitive advantages such as Myers Company is also of the same brand and working on its business structure and staff member performance. Various steps could be followed for the identification of strategic issues such as the description of the vision, Identification of all hurdles to achieve goals, identification of all strength and opportunities, and identification of strategies to achieve goals and objectives of David Jones (Chen, et al., 2017).

Different strategic issue of David Jones has been identified such as-

1) Transformation of the company structure

2) Enhance the network of stores in various areas such as country road

3) Strengthen the core business

4) Apply differentiation strategy

5) Revise policies and procedures of David Jones

6) More Focus on Asian customers

7) Motivate staff members by providing them extra incentives

8) High sales oriented

9) Focus on the utilization of credit cards

10) Focus on private brands rather than pure brands

11) Make changes in private labels

12) Development of Food areas department

The new CEO of David Jones must work on all the identified strategic issues for the development of the food halls of David Jones. Like the other store, Myers is also working on its better layouts and staff members to achieve its goals and objective. It is necessary to resolve all the strategic issues of David Jones effectively and efficiently.  All the strategic issues of David Jones would be resolved and the performance of the company would be controlled effectively and efficiently. Review on procedures and practices of food department would be done that would lead to overcoming the tiredness of food department halls. All the strategies would be analyzed and evaluated after the identification of strategic issues of David Jones (Chen, et al., 2017).

2.4 Relevant theoretical concept

The theoretical concept about the business strategy is an important tool to provide guidelines to the manager of the company to achieve its goals and objectives effectively and efficiently. It includes all the tactics and different strategies that are required for the growth of the food halls of David Jones. It would be helpful to resolve all the identified strategies issues such as a focus on Asian customers, Focus on private brands rather than pure brands about the clothing department and food department, changes in the structure of a company, and evaluation of all organization activities (Laamanen, et al., 2017).

Business strategy is one of the strategies that are framed effectively and efficiently to reach company goals and objectives. It is helpful to be competitive in the industry. Its purpose is to determine all the requirements and needs of David Jones to achieve its goals and capture a share in the expanded market. Business strategy must be followed by the new CEO John Dixon that would lead to the great success of David Jones. It must include a competitive segment in different department stores. Business strategy is helpful for the decision making process.  It is beneficial for the decision of allocation of resources and staff members. It works to resolve all identified strategic issues of David Jones (Laamanen, et al., 2017).

It includes an action plan that would be applied to overcome the predicted risks and hurdles towards the growth of the food department of David Jones. David Jones Company would be able to be captured in the competitive market after following business strategy. It works to create a combination in a different department of David Jones such as all departments if a company are interrelated to each other. The kitchen department is related to the customer complaint department. Improvement in the kitchen department could decrease the overall customer complaint of the food department of David Jones. Business strategies are helpful to support decisions of each department that would lead to the proper set of directions of David Jones (Zerfass, et al., 2018).

The Competition based theory and profit increasing theory is associated with the main goals of David Jones Company. It is needed to establish a competitive advantage over the external marketplace.

It is important to focus on various areas of David Jones for the overall development of its food department and overall structure of company such as-

1) Planning – It is an important term or process that includes all planning activities that would lead to the long term growth of the food department of David Jones. It must be framed by every organization to achieve its goals and objectives (Zerfass, et al., 2018).

2) Identification of all strengths and weaknesses – It is necessary to take a review of the overall strength and weaknesses of David Jones. All the strength would be treated effectually for the development of David Jones. All the weaknesses would be overcome after the identification of all negative effects. It has various strengths such as-

1) It leads branded departments in Australia.

2) It has a unique home of brands.

3) It has a unique range of national and international brands.

4) It has strong customer service (Akter, et al., 2016).

Currently, David Jones Company is facing tiredness in the food halls of David Jones. It needs to be improving by following business strategy effectively and efficiently.

3) Maintain efficiency and effectiveness – It is important to maintain quality in the food areas of David Jones. It is needed to allocate all the resources of the company to develop an effective and efficient environment in the entire market (Block, et al., 2015).

4) Review and control- Business strategy is one of the important tools that must be followed. Taking reviewing and controlling all the activities is beneficial for the overall development of David Jones.

5) Focus on Competitive advantage – Business strategy is beneficial as it provides all strength of the company. The strength of the company could be utilized to take competitive advantages in the areas of Myers. It would lead to capture a market share in the competitive environment (Akter, et al., 2016).

2.5 Application of strategy model

The strategy model plays a major role in the development of the decision-making process as well as managing the organization. It is helpful to create a framework in a documented way about the communicative strategies (Evans, et al.,  2017).

Strategic planning is beneficial for developing plans and structures to achieve organizational goals and objectives. The strategic planning process could be followed for the evaluation of the strategic model. If the organization is following business strategy but still it is not able to achieve its goals and objective on time then strategic software could be applied for the growth of a company. Internal and external processes must be analyzed for the development of the overall structure of a company. Various strategy models could be applied such as –

1) Balanced scorecard –

It is an important tool such as strategy management that is found by Drs Robert Kaplan and David Norton. It includes objectives, goals, evaluation, and strategies that must be applied.

Goals – Assessment of overall goals and objectives of David Jones, Focus on private brands and improvement in the food halls of David Jones (Evans, et al.,  2017).

Evaluation – Analysis, and evaluation of all activities must be done for the development of David Jones.

Strategies – It includes an action plan and tactics that must be applied to overcome the predicted risks and problems.

A balanced scorecard could be created through Excel, Google Sheets, and reporting software.

2) Strategy Map

A strategy map is one of visual tool that is designed in a clear and simple design. Its main aim is to provide a strategic plan to achieve organizational goals and objectives. David Company has appointed new CEO to achieve the objectives of the food halls of David Jones. The strategy map would be framed by the CEO for the rapid growth of David Jones Food halls. It is one of the main parts of the balanced scorecard. It provides a way to manage a strategic management process that would be helpful for the growth of David Jones food halls. It combines all the goals in a single designed framework. It provides tasks and goals to every employee. It is helpful for a better understanding of the required elements for the growth of David Jones (Lanzolla, et al., 2020).

3) Gap Planning

Gap planning is known as ‘Need- Gap analysis and Need Assessment. It is the term that is called Strategic planning gap. It is beneficial to compare the actual condition and desired condition of a company. It provides a solution to resolve the gap between the actual performance and desired performance of a company. It is mainly utilized to determine the internal difficulties of a company. It provides a plan to overcome the internal difficulties of accompanying. Gap planning includes change agenda and shift chart (Lanzolla, et al., 2020).

4) SWOT Analysis

SWOT analysis is an important tool for the development of a company. It includes strength, weakness, opportunities, and threats of a David Jones such as –

Strengths

1) Strong connection with customers

2) Attractive ambiance and store design

3) Best variety for national as well as international brands

4) Directing branded department store in Australia

Weakness

1) Challenges in a competitive environment

2) Cash Flow problems

3) High production From Myers

4) Currently not managing good performance

Opportunities

1) Website enhancement

2) Transformed customer services

3) Product specialization

4) Products are beneficial for Christmas time

Threats

1) Structural challenge

2) Challenge of consumer credit market of Australia

3) Growth of Competitors

4) Chances of failure of John Dixon

SWOT analysis of David Jones is beneficial for the growth of the company. It explains its strengths that could be utilized to be competitive in the industry of cloth and food. Strategies could be applied to overcome all weak points of David Jones Company. Opportunities are defined as the positive change towards the development of a company.

2.6 Conclusion

Business strategy has been applied for the development of David Jones in the competitive environment. It has been concluded that David Jones Company is facing tiredness in the food department. The head of Woolworth has eliminated CEO Ian Nairn and appointed new CEO John Dixon for the growth of the food department of David Jones. The theoretical concept of business strategy including its strategic management plan has been followed. The application of the strategy model has been discussed effectively and efficiently. A revised process of the strategic management plan has been applied to resolve identifies strategic issues.

References

Akter, S., Wamba, S.F., Gunasekaran, A., Dubey, R. and Childe, S.J., 2016. How to improve firm performance using big data analytics capability and business strategy alignment?. International Journal of Production Economics182, pp.113-131.

Anwar, J., Shah, S. and Hasnu, S., 2016. Business strategy and organizational performance. Pakistan Economic and Social Review54(1), pp.97-122.

Block, J.H., Kohn, K., Miller, D. and Ullrich, K., 2015. Necessity entrepreneurship and competitive strategy. Small Business Economics44(1), pp.37-54.

Chen, Y., Eshleman, J.D. and Soileau, J.S., 2017. Business strategy and auditor reporting. Auditing: A Journal of Practice & Theory36(2), pp.63-86.

Eaton, D. and Kilby, G., 2015. Does your organizational culture support your business strategy?. The Journal for Quality and Participation37(4), p.4

Evans, S., Vladimirova, D., Holgado, M., Van Fossen, K., Yang, M., Silva, E.A. and Barlow, C.Y., 2017. Business model innovation for sustainability: Towards a unified perspective for creation of sustainable business models. Business Strategy and the Environment26(5), pp.597-608.

Laamanen, T., Maula, M., Kajanto, M. and Kunnas, P., 2017. The role of cognitive load in effective strategic issue management. Long Range Planning30, pp.1-15.

Lanzolla, G. and Markides, C., 2020. A business model view of strategy. Journal of Management Studies.

Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.

Zerfass, A., Verčič, D., Nothhaft, H., and Werder, K.P., 2018. Strategic communication: Defining the field and its contribution to research and practice. International Journal of Strategic Communication12(4), pp.487-505.

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