David Jones (DJs) is a leading up-market department store chain, which is a public company, founded in 1838. It is one of the most recognised retailer brands in Australia that emphasizes on quality and style. While the retailing business changed in many ways, DJs maintained its commitment to provide high quality merchandise with the introduction of new brands. Through the continuing refurbishment of stores and continuing opening new stores across four major states in Australia, it currently has 37 modern, stylish stores located in most Australian states and territories. It also has its own factory at home which manufactures a large variety of goods from clothing to furniture. Apart from its home branded merchandise, it also includes a wide variety of excellent domestic and imported merchandise ranging from cosmetics, clothing, home wares, furniture and electrical.
Although the rivalry is very intense in retail industry, its successful “home of designer brands” strategy allows the company to strengthen its fashion leader in Australia, and it strategy of high margin brand-driven retailing has continued to generate large profit margin. Based on market capitalisation, DJs is valued at $2.5 billion.
Analysing the external environment
The general environment
Demographic: Australian population is around 22.6 million. There is approximately 60% of population which belong to middle income bracket, with weekly income between $524 to $1096. The lowest income quintile accounts for 19.6% of the population, while the highest income quintile accounts for 22.1 %, with a growth from 5.3 to 8 million people since 2003. The household weekly income is 55% to the middle income classes, 24.8% to the lowest income quintiles and 20.7% to the highest income quintiles.
Economic: The world’s economic environment is quite uncertain. Since the global financial crisis in 2008 hit many firms badly, many firms experienced major reduction in their profits. Although the economy has been gradually recovering, it becomes more difficult to economists to provide valid predictions about trends to anticipate in the world’s economic environment. The lack of confidence in predictions complicates firms’ efforts to understand the conditions they might face during future competitive battles.
Socio-cultural: Australia is a brand-conscious society and people value brand products. As mentioned, 60% of the residents come from middle class, though there are slightly more people than that who think they are in middle class. This means more people value branded and high quality product. They like well-designed and branded clothing, and are willing to pay premium price on high quality apparel in order to make themselves look affluent. The upper class also prefers to this kind of apparel to show their social class position. They are most likely to spend on new designer clothing on a regular basis.
Political-legal: Australia’s political environment is stable, open and progressive, providing firms a high degree of confidence and certainty. There are attributing to a strong system of checks and balance, and a highly respected judicial and law enforcement system.
Technology: Advanced computer-based technology has enhanced efficiency and effectiveness of firm’s day-to-day operation and marketing activities. It made ordering, sales and warehousing easier. Gathering data on customers is also far easier with point-of-sale systems that gather standard demographic information. This allows targeting of sales to a small group or even and individual.
Global: Emergence of new sales channels such as mobile webstore, mobile applications and social commerce has changed the way consumers wish to shop and interact with retailers and they become popular. Also, consumers are increasingly expecting more in terms of customer service and in-store experience when shopping. Another trend is that the global market is spread with increasing middle class who focus more...