Harvey Norman Business Analysis
Contents
Executive Summary 3
Introduction 4
Current Strategic Position 4
Figure One: Financial Analysis for Harvey Norman 5
External Factors 6
PESTLE Analysis 6
Economic Forces 6
Technological Forces 6
Political-Legal Forces 6
Ecological/Environmental forces 7
Socio-cultural forces 7
Porters Five Forces 7
Figure Two: Porters Five Forces 7
Figure Three: External Factor Analysis Summary 8
Internal Analysis 8
Figure Four: Internal Factor Analysis Summary 9
Recommendations 10
Conclusion 11
Executive Summary
Harvey Norman Holding Pty Ltd (HNH) in June 2012 delivered a net profit of $227.41 million, a decrease of 39.2% from the previous year (HNH Annual Report 2012). Clearly the company was not meeting the ever increasing demand of the retail consumers, that were becoming increasingly savvy and expecting more specification through on-line shopping and a getting in-store experience (Baird & Kilcourse 2011).
Slow off the mark, HNH finally recognised the power of online platforms and its influence as a sales channel it invested heavily in the fiscal year of 2012 to develop an integrated retail, franchise, property and digital operations with its release of the Omni-Channel Strategy. Online sales have been low as initially predicted, within HNH announcing it has been established for future gain (HNH Annual Report 2012). However, the retail industry would argue that HNH has not only been slow in changing the with retail environment, it has also failed to recognise that its new strategy will only address some of its business concerns, labelled with a poor customer focus and in store service (Reidy 2013).
Using Porters Five Forces analysis HNH faces high threats from rivals within the market, competing with well-known brands like Myer and savvy businesses that have embraced change like JB HiFi whom integrated its online experience five years ago (Reidy 2013; Wheelen & Hunger 2012). HNH also faces threats from
Executive Summary 3
Introduction 4
Current Strategic Position 4
Figure One: Financial Analysis for Harvey Norman 5
External Factors 6
PESTLE Analysis 6
Economic Forces 6
Technological Forces 6
Political-Legal Forces 6
Ecological/Environmental forces 7
Socio-cultural forces 7
Porters Five Forces 7
Figure Two: Porters Five Forces 7
Figure Three: External Factor Analysis Summary 8
Internal Analysis 8
Figure Four: Internal Factor Analysis Summary 9
Recommendations 10
Conclusion 11
Executive Summary
Harvey Norman Holding Pty Ltd (HNH) in June 2012 delivered a net profit of $227.41 million, a decrease of 39.2% from the previous year (HNH Annual Report 2012). Clearly the company was not meeting the ever increasing demand of the retail consumers, that were becoming increasingly savvy and expecting more specification through on-line shopping and a getting in-store experience (Baird & Kilcourse 2011).
Slow off the mark, HNH finally recognised the power of online platforms and its influence as a sales channel it invested heavily in the fiscal year of 2012 to develop an integrated retail, franchise, property and digital operations with its release of the Omni-Channel Strategy. Online sales have been low as initially predicted, within HNH announcing it has been established for future gain (HNH Annual Report 2012). However, the retail industry would argue that HNH has not only been slow in changing the with retail environment, it has also failed to recognise that its new strategy will only address some of its business concerns, labelled with a poor customer focus and in store service (Reidy 2013).
Using Porters Five Forces analysis HNH faces high threats from rivals within the market, competing with well-known brands like Myer and savvy businesses that have embraced change like JB HiFi whom integrated its online experience five years ago (Reidy 2013; Wheelen & Hunger 2012). HNH also faces threats from
References: Anonymous 2011b, 'Social Media World Forum; Retail Brands Investigate Social Shopping Trends at Social Media World Forum Europe 2011 ', Marketing Weekly News, p. 1026. Baird & Kilcourse, 2011 Collis, D J & Montgomery, C A 2008, ‘Competing on resources’, Harvard Business Review, July-August, pp