Significant Business Risk Factors
1. Limited Shelf Life
Empirical evidence suggests that retailers must adapt to new product style trends in order to satisfy consumers and other key stakeholders (Ryan, 2011). In respect to Harvey Norman (HVN), failure to adapt will entail lower consumer demand, hindering growth and profitability. It is important to note a limited shelf life of HVN’s products exists due to changing trends. This in turn gives rise to the risk of inventory becoming obsolete and rising excess stock in the warehouse. Therefore, HVN should further emphasise on its inventory management, in order to minimise inventory build up and overall expenses in the entity. 2. Increased Competition from online shopping
Studies reveal that Australian consumers have embraced online shopping, recording a 23% growth in 2012 (Irvine, 2013). In order to combat the fierce competition in the online market, HVN introduced its ‘Omni-strategy,’ which focused on the enhancement of its digital store. There is evidence of success from this strategy with the firm recently named as ‘The Best Multichannel Retailer’ in the ORIA 2013 awards (Chanthadavong, 2013).
Despite this acclaim, it is of paramount importance that HVN considers enhancing its distribution channels, especially its digital store through better pricing on delivery times for online purchases
and a greater focus on personalised services for internet empowered consumers. This will sustain consumer expectations and ensure the firm captures a greater portion of its target market (Chanthadavong, 2013). 3. Threat from domestic competitors
Despite being one of Australia’s retail giants, HVN in recent times has been battling it out in the domestic market due to growing competition. In 2012, HVN was labelled as the most expensive Australian electronic giant recording a severe slump in its pricing position in comparison to its counterparts such as Dick Smith Electronics and JB HI-FI (Jager, 2013). The underlying...
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