Business Analysis and Valuation Report
BUSINESS ANALYSIS AND VALUATION REPORT
Scheduled Class: Monday 2:00pm to 5:00pm
1. Introduction
Harvey Norman is now a public company that is listed on the stock exchange, whose principal activities primarily consist of an integrated franchising, retail and property entity. It is one of Australia’s most successful retail groups, operating more than 150 franchised department stores, which focus on selling computers, home entertainment equipment and home appliances. It offers Australian consumers an extensive product range, cutting edge technology and market leadership in most product categories. In this report, an in depth industry and company analysis will be provided in order to gain an understanding of the qualitative aspects of Harvey Norman’s operation.
2. Industry Analysis
2.1 Main Products
Harvey Norman belongs to the retailing industry. The main products offered by Harvey Norman consist of: electrical, computer, furniture, entertainment and bedding goods. However, being distinctive from its competitors, Harvey Norman is a franchise and the main brand owned by Harvey Norman Holdings Limited.
2.2 Future Prospects
In the next year, the competition in Australian retailing industry is likely to remain strong. Benefited from the Government’s stimulus package during the GFC, Australians’ ability to consume has recovered. Therefore, this boost in consumption has caused a pressure of inflation. In order to mitigate the negative effect of inflation, there has been frequent increase of interest rate by the Reserve Bank. Therefore, with interest rate rising, consumption in retailing goods is likely to reduce in the short term.
In the next five years, the Australian Dollar is going to remain strong. As a result, imported retailing goods are likely to be cheaper for Australian consumers. Retailers in Australia are likely to continue their expansion to the overseas market. It is because retailers demand further improvements
Scheduled Class: Monday 2:00pm to 5:00pm
1. Introduction
Harvey Norman is now a public company that is listed on the stock exchange, whose principal activities primarily consist of an integrated franchising, retail and property entity. It is one of Australia’s most successful retail groups, operating more than 150 franchised department stores, which focus on selling computers, home entertainment equipment and home appliances. It offers Australian consumers an extensive product range, cutting edge technology and market leadership in most product categories. In this report, an in depth industry and company analysis will be provided in order to gain an understanding of the qualitative aspects of Harvey Norman’s operation.
2. Industry Analysis
2.1 Main Products
Harvey Norman belongs to the retailing industry. The main products offered by Harvey Norman consist of: electrical, computer, furniture, entertainment and bedding goods. However, being distinctive from its competitors, Harvey Norman is a franchise and the main brand owned by Harvey Norman Holdings Limited.
2.2 Future Prospects
In the next year, the competition in Australian retailing industry is likely to remain strong. Benefited from the Government’s stimulus package during the GFC, Australians’ ability to consume has recovered. Therefore, this boost in consumption has caused a pressure of inflation. In order to mitigate the negative effect of inflation, there has been frequent increase of interest rate by the Reserve Bank. Therefore, with interest rate rising, consumption in retailing goods is likely to reduce in the short term.
In the next five years, the Australian Dollar is going to remain strong. As a result, imported retailing goods are likely to be cheaper for Australian consumers. Retailers in Australia are likely to continue their expansion to the overseas market. It is because retailers demand further improvements
References: Harvey Norman (2010), ‘About Us’, Website, http://www.harveynorman.com.au/page/1255509869113/about-us Harvey Norman Holdings Ltd (2010), ‘Company Profile’, Website, http://www.harveynormanholdings.com.au/companyprofile.htm Palepu, K. G. and P. M. Healy, Business Analysis and Valuation Using Financial Statements: Text and Cases, 4th ed., South-Western College Publishing, 2007.