Strategic Recommendations Report
The Australian retail industry is experiencing significant changes in both macro and industry environments. Companies are required to improve customer service quality to retain customers as rivalry for customers is increasing due to the rising amount of online retailers. To meet this challenge, David Jones should expand into online retailing. Building customer loyalty will determine the viability of the transformation into a successful e-commerce company. Additionally, identification of stakeholders and their requirements are crucial in major organisational changes. To respond to changes in the external environment, David Jones should scale back on capital expenditure on its existing business model and invest in technology to build a cutting-edge e-commerce platform. Improving the efficiency of existing operations would secure the financial position of David Jones, while resources are devoted to the new business model. Employee empowerment and establishing customer loyalty levels would realise higher customer service and build loyalty for current and future operations. These organisational changes would not only result in improved shareholder value, but also meet demands from different stakeholder groups.
Table of content
2.EXTERNAL ENVIRONMENT ANALYSIS3
2.1. Macro Environment3
2.2. Industry Environment4
2.3. Internal Analysis and Strategy4
3.1. Primary Stakeholders5
3.2. Secondary Stakeholders6
3.3. Social and Institutional Pressures and Trends7
4.1. Development of Future Operations7
4.2. Improvements in Existing Operations8
5.1. E-commerce platform10
5.2. Customer loyalty programs10
5.3. Employee Empowerment11
On behalf of Li & Partners consulting firm, we are pleased to present our strategic recommendations report. This report’s primary task is to recommend strategic and organisational changes to deliver growth in shareholder value. To support these recommendations, this report incorporates broad external environment and internal capabilities analysis on David Jones. David Jones’ stakeholders are also identified, as is the impact the recommendations have on them. Additionally, a Balanced Scorecard is constructed to illustrate the effect that our strategic recommendations will have on all stakeholders and future company performance.
2.EXTERNAL ENVIRONMENT ANALYSIS
2.1. Macro Environment
Political/Legal| Deregulation in retail industry's trading hours| Economic| Declining consumer spending due to global economic downturn| | Increasing energy expenditure due to global warming|
Socio-Cultural| Increasing demand for better work and social-life balance| Technological| Improvements in IT-Technology |
Demographic| Declining work-force due to aging demographics| | Increasing immigration|
Global| Improved international standing of Asian capitals| | Global protectionism|
Table 2. PEST-Analysis
The deregulation of the retail industry’s opening hours is expected to have a positive impact on David Jones’ sales (White 2008). On the other hand, declining consumer spending will negatively affect consumer behaviour (Annual report 2008), although government’s stimulus packages are expected to limit this impact (SRJ 2009). Additionally, as people are finding it harder to balance work and family commitments (Australian Government 2009), customer stream is expected to decrease. Global warming is expected to have a negative impact on David Jones’ performance as energy costs are rising (Annual report 2008). Technological improvements in information technology are expected to increase efficiency through the use of Internet and web-enabled...