Strategic Position Review of Michael Hill Jewelers in New Zealand

Michael Hill Jewellers (MHJ) is one of the most recognizable names in the New Zealand retail jewellery industry. In 1979, Michael Hill opened his first store in Whangerei. Until then, jewellery stores had been run primarily by craftsmen jewellers. Michael Hill changed this with the philosophy “to make jewellery buying less intimidating and more accessible to the public.” In order for any company to succeed, it has to take a look at the environment in which it operates. This is why an external environmental analysis is so important. This involves a continuous process of scanning, monitoring, forecasting, and assessing the external environment. Doing so will illuminate any opportunities to be exploited or threats to minimize. The first step in the analysis is environmental scanning which is identifies any trends or changes which are occurring or have recently occurred in the environment. Once identified, the company can then strategise and react in order to exploit the phenomenon. Three useful tools in an environmental analysis are a PESTEL analysis, Porter’s Five Forces, and Strategic Grouping. Utilising these tools, an environmental scan of the jewellery industry will be performed.
PESTEL Analysis
Political
Many of the raw materials for the jewellery industry can originate in countries that have political instability. Of the top five diamond producing countries, Canada is the most politically stable, with minimal probability of any mining disruption due to war. The other four are a different situation. Russia is still in a state of internal turmoil regarding Chechnya and other breakaway nations, while Botswana, Angola and Congo are all in a constant risk of war both from within and from neighbouring war-torn countries. A war in any of the above countries would cause a considerable loss in production and have a significant impact on the jewellery industry worldwide.
Economic
The entire jewellery industry relies on commodities such as gold, platinum and

References: Antitrust Policies and Rules. (2008, October). Retrieved March 2012, from Responsible Jewelery Council: http://www.responsiblejewellery.com/files/RJC_Antitrust_Policy_Rules_Oct_2008.pdf Clark, D. (1998). Michael Hill Jewellers. Hamilton: Waikato Management School. Conflict Diamonds. (n.d.). Retrieved March 2012, from United Nations: http://www.un.org/peace/africa/Diamond.html Gold - Monthly Price. (n.d.). Retrieved March 2012, from Index Mundi: http://www.indexmundi.com/commodities/?commodity=gold&months=360 Hanson, D. H. (2011). Strategic Management - Competitiveness and Globalisation. Albany: Cengage Learning New Zealand. Michael Hill Company History. (n.d.). Retrieved March 2012, from Michael Hill Jewellers: https://www.michaelhill.com/default.aspx#companyhistory Our company: Partridge Jewellers. (n.d.). Retrieved March 2012, from Partrige Jewellers: http://www.partridgejewellers.com/index.php?id=51 Reducing Mercury in Artisanal and Small-Scale Gold Mining (ASGM). (n.d.). Retrieved March 2012, from United Nations Environment Programme: http://www.unep.org/hazardoussubstances/Mercury/PrioritiesforAction/ArtisanalandSmallScaleGoldMining/tabid/3526/Default.aspx What Countries Produce Gem Diamonds? - Diamond Production Map. (n.d.). Retrieved March 2012, from geology.com: http://geology.com/articles/gem-diamond-map/