Worksheet

Worksheet : Overview of the Business Joanna Benhamou

Introduction
Harvey Norman is one of Australia’s best know retailers. Harvey Norman has been created in October 1982, by the founders Gerry Harvey and Ian Norman (who passed away), and went public for the first time in October 1987. Harvey Norman Holdings Ltd is a public company, listed on the ASX. The market capitalisation of Harvey Norman Holding Ltd was $ 5.129 Billion in June 2016.

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Vision(describe the type of kind relationships they want; with customers; suppliers; competitors/ outline the dream state of the business/ where the business should be?
The vision of the company is the vision of its founders and also their view of where the business should be.

Gerry Harvey Motto “I have never been afraid to try something new”
Mr Harvey owns 30% of Harvey Norman Ltd. The spirit of the main founders influences the approach and work Culture at Harvey Norman and at their franchised-stores and reflect strongly the well-known Brand. It is an approach open to novelty and new innovations, continuously searching for it. Mr Harvey said “We are always looking for that new product, be it a computer, TV, refrigerator, even fabric on the lounge. There’s always something coming onto the market accelerating sales, we want to be the one that hits that hard”.

“Go Harvey, Go Harvey, Go Harvey Norman” communicates the vision of the company. It shows the business spirit and energy conveyed in Franchisee and remind us the motto for sporting teams. The culture of franchisee is a diverse combination of different management styles by owners and at the same time encourage their autonomy to have quick decision-making process to maintain innovation and a strong retail market share. The vision of its founder and the franchisee system is to be a one of the market leader in Australia in household retail market and make the business grow and grow nationally and internationally.

Mission (how the business is going to accomplish the vision – what of you business; -; what are we hoping to achieve/ 1 overall purpose of your business, what are you trying to achieve/ 2what does the business does products and services it provides/ 3 what is important to your business-the values your business lived by)
Harvey Norman is one of the biggest retailer in Australia of goods households.

The objectives are clear to be one of the best worldwide retailer in good sectors, provides good returns to shareholders and having a motivating workplace for employees and be involved in the local communities close to the stores.
The financial objective were set up to achieve a 30% increase of net profit and an increase of 25% of its profit offshore stores within 3 to 5 years, with a new flagship store concept. Ultimately, Harvey Norman aim a progressive and steady increase sales revenues and profitability of the company, And to develop continuously a friendly customer website and stay involved in the community by developing different projects. Harvey Norman to grow successfully needs to increase its distribution channels with the constraint to remaining efficient, adding new products lines, to extend to new markets (China,USA,India).

The Core Message “shop with confidence” and “everything for your home” and “Customer first” has a strong business value and conveys to consumers the message that shopping will be done at Harvey Norman with good quality, good service and good value.
The quality is our commitment and customers are buying a outstanding quality of products. The service by having convenient store close to you and also you can buy online or visit store and use all digital supports to shop there.
“Everything for your Home” which provides a wide range of products and services to meet the clients expectations and needs from a lot of big brands of suppliers.
The experience in store is made valuable and communicate a good quality for client by talking to friendly product specialists who can help you to shop on site or online.
The value that we are buying is a best price for good value which always is appealing to customers.
Listening to customer is also a part of the “Customer first” mindset of Harvey Norman by encouraging feedbacks to improve the shopping experience and make it more valuable and efficient for the customers.

Harvey Norman by its vision and mission has grown over the years and expanded in Australia and offshore since its creation in1982.

Geographic operations scope – Operating in one nation or multiple nations
Harvey Norman Brand has started by operating stores only in Australia and progressively has expanded offshore and at the same time has developed its portfolio accordingly.

The Harvey Norman retail and investment property portfolio delivers solid growing revenues by its market rents and outgoings, and increase of capital. It includes:
– 93 Harvey Norman, Domayne, JoyceMayne, all over Australia (owned property assets held under joint venture agreements).
– buildings and ownership of occupied land all over Australia
– 18 Harvey Norman in New Zealand and 5 Slovenia
– Administration building and the flagship Space showroom in Singapore.

The different geographic market exposures in Australia and Offshore
* 195 Franchisee stores
The Australian retail market is essentially a franchised system. There are 195 store located within Australia. Harvey Norman Limited is a developed system of franchises in Australia under 3 big brand names such as Harvey Norman, Domayne and Joyce Mayne.
Harvey Norman and its Australian Franchisee market hold 168 stores all across Australia (57 franchisee in New South Wales, 37 in Queensland, 10 in South Australia, 1 in ACT, 38 in Victoria, 2 in Northern Territory and 6 in Tasmania).
Domayne, started in May 1999 and do business for furniture, beddings, electrical products and
Source: Harvey Norman Website. Annual Report 2017 computers through its 18 franchised stores (12, in New South Wales, 2 in Victoria, 3 in Queensland, 1 in ACT)
Joyce Mayne was obtained in 1998, and the stores were changed to Domayne for 6 out of 7 the following year. There are 6 franchised stores Joyce Mayne within in Australia (4 in Queensland and 2 in New South Wales).

* 87 Company-operated stores, including Offshore stores
The offshore market is differentiated from the main Australian market as it is mainly company-operated stores, controlled and supervised by Harvey Norman trademark and there are also other non-franchised stores and flagship stores.(See Harvey Norman website)
New Zealand: 39 stores and Outlets
Ireland: 12 stores
Northern Ireland: 2 stores
Malaysia: 15 stores
Singapore: 13 stores
Slovenia: 5 stores
Croatia: 1 store
The space furniture branded in Singapore, Malaysia and Australia
Retail operations of non-franchised retail brands in Australia

Annual Turnover and Net Profit for the last five years
The operating segments of Harvey Norman Holdings, includes 11 segments franchising operations, offshore retail, other non-franchised retail, retail property, retail under construction or in development for resale, equity investments and other (See page 91 of the Annual Report 2017).
We are going to look at the Turnover and the Net Profit over the last 5 years for Harvey Norman, in franchising stores and company operated stores. (Sources data from Harvey Norman website. Annual report 2017)

Annual Sales revenues for the last five years
The annual sales revenues in 2017 have increased slower than 2016 by 2.79% to $2,905 Million dollars.The sales revenues have progressed regularly since 2013. We are going to look at the breakdown of the sales revenue from operating activities provided in the Annual report 2017. Sources data from Harvey Norman website. Annual report 2017 and Wall street Journal data about Harvey Norman Holding Ltd

Franchising operations
Australian franchisee sales including in Australia and New-Zealand, the brands Harvey Norman, Domayne, Joyce Mayne have risen by 5.4%.
The operating aggregated franchisee sale revenues for 2017 have reached a peak of $5.62 billions in Australia as the housing building market is still strong (including renovation and construction).
The sales growth and the increase of franchisee fees produced to Harvey Norman’s headquarters from Australian stores $ 304.5 million (up to 13%).
In addition, Harvey Norman has maintain a regular effort to provide an outstanding approach to grow the business, by its wide range of products, outstanding client service, its efficient distribution channels and marketing campaign and this has paid off.

Company-operated operating sales revenues, including Offshore stores
The total operating retail revenues generated overseas is about $1.83 billion
The contribution of the revenues from sales of products from Offshore activities for Harvey Norman has increased by 2.1%, mainly due to the New Zealand segment.
– The retail revenues in New Zealand has significant increase by 9.2% to 908.97 Millions dollars. Harvey Norman NZ has record sales in Homewares due to the success of the Westgate store in Auckland and great sales in new electrical and computer stores, opened in Queenstown. The brand is very strong in New-Zealand and continue to grow its market share.
– The other offshore markets sales revenue are quite the same in 2017 and is performing well.

Source Harvey Norman Website. Annual Report 2017

The property portfolio
The fair value of the property pool has been assessed for a $2.66 Billion dollars and is composed by:
Retail properties $ 2,037 million
Warehouse property $ 165 million
Office property $ 35 million
Property for development $ 3.35 million

Harvey Norman property value portfolio provides a strong financial stability.
In 2017, the property revenues including retail property and property developments for sale was stable and reached $357.6 million.
And the revenues coming from rent and outgoings from franchisees (franchises’ incomes) and other tenants non franchisees (third party tenants) from investment properties was $202.45 million in 2017 (+ 2.9%).

Profit the last five years
Harvey Norman obtained its revenues its operated sales in Australia, from its significant portfolio of investments and its and from its expanding strategy to be implemented in Offshore markets.
In 2017, Harvey Norman has realised 449 million dollars net profit (profit after tax and non-controlling interests).The basic earning per share 0.35c and fully franked dividend per share is 26c.
The Net profit of Harvey Norman has regularly increased since 2013. The net profit has risen by 28.79% from 2016 in line with the financial objectives of 30% profit growth target.
Sources from Wall street Journal data about Harvey Norman Holding Ltd

Franchising operations
The biggest contribution to the net profit over comes from the sales revenues in Australia from the operating segment in Australia including, non-franchises, franchises, by their operations and their fees. The franchising operations

Company-operated profit, including Offshore stores
The company-operated earnings have increased by 24% to $90 Million. In fact, the offshore flagship stores have contributed to this success by the unprecedented shopping experience (unique design and exceptional quality of products). The company-operated segment in the 7 offshore markets increased by 30% its net profit before tax to $100 millions. According to Gerry Harvey, “this a fantastic effort from our offshore operations”.

-The Harvey Norman Brand is a market leader in New-Zealand across all category of products.
In 2017, New Zealand stores net profit rose by 25% (because of strong sales of furniture, bedding, electronics) to 38.9 Millions dollars. The increase of the Net Profit in NZ can be explained by its rise in sales and investment property which became more valuable. The Harvey Norman NZ segment has paid enormous dividends (36.3 millions dollars) his parent Harvey Norman and generated also strong management fees (19.2 millions dollars).
– In Ireland the results are improving due new property business acquisition.
-The objective in those quite new offshore stores is to improve the margins, the brand position and results.

The property portfolio
In 2017, it was a record consolidated breaking profit (net profit before tax) for Harvey Norman of $639.81 Million dollars which included $107.38 million boost from the property reevaluation. The property portfolio can help to consolidate the company by leveraging economy of scales and by benefiting from new opportunities to invest and grow its capital.

Source Harvey Norman Website. Annual report 2017.

Total FTE staff
The total FTE indicate the achievement of the company by its employees, key element supported by the Harvey Norman strategy to retain outperforming employees.
FTE staff is an indicator of performance
The total FTE is number of working hours that exhibit one full time employee during a determined period of time, a year or a month.It is an easy work measurement by converting workloads hours into the number of employees we need to do that job. An actual FTE is an employee performance orientated tool that give us a workload measurement of an employee versus the supposed workload of his current post.
The number of employee full time equivalent employees employed in June 2017 was 5,200 and 5,158 in 2016 (Note in the financial statements, Annual report 2017, p.116). It has been quite stable that indicates that the employees must have performed well and contributed to the net profit increase in 2017 and 2016.
Keep the best Talents
The employee system of remuneration includes a package of wages and superannuation support, workers’ compensation, other employee benefit such as share options and performance incentives.
Employees are offered benefits to work at Harvey Norman discounted purchases on a lot of products, salary packages including laptops, tablets, smart phones, participation to a competitive car lease program and flexibility to balance work and family life. Harvey Norman encourage training to be able to provide experienced and knowledgeable specialist of products. A lot of advantage have been implemented to retain the best salespersons and also an interesting reward system based on sales performances which is highly motivating. Harvey Norman wants to succeed with an inspiring work culture open to a communication between employees and managers and open to new innovation on the market that any employee would like to be a part of this success.

Nature of the industry that the business operates
Harvey Norman has an outstanding performance over the last 34 years, due to its integrated retail, franchise retailing system and property investments and digital system.
Harvey Norman has established a franchisee system to operate its business and company-operated stores offshore and new flagship stores.

Real estate market
Harvey Norman has been involved in real estate market and owns a considerable property portfolio that generates important revenues.

Retail
Harvey Norman industry is mainly retail for computer, electrical, furniture and bedding goods and for commercial purpose.In fact, Harvey Norman is a leader in household goods retail. Harvey Norman operates by selling in store or online.

Harvey Norman offers a wide range of products, with the newest technology available and is leading the market in key areas’ products in the retail market.The extensive offer of products provides from electric goods, furniture, digital communication and computers, bedding and manchester, kitchen and cooking, white goods and small appliances to bathroom and tiles carpets and flooring.

Harvey Norman has opened a new upper market flagship in 2017 in Sydney store to expand and face potential challenge from the giant online retailer Amazon, with more market displays and features to custom the store strategy.The expansion of Harvey Norman makes it develop recently new designed stores in its offshore markets .Harvey Norman overseas in its Asian store has developed a luxury concept store offering premium furniture and homeware to its customers.

Today, Harvey Norman Global is operating in several countries to extend his ambition to be a leader in the retail market and has to compete with a lot rivals.

Main competitors
Harvey Norman is targeting its market well and facing competition of big retailers by outperforming them because of its competitive edge.

The market targeted by Harvey Norman consumers between15 to 50 years of age.
These products could be bought by educated individuals, young families, households and offices. Most of them are very interest by new technologies and electrical in addition of all the other basic products that Harvey Norman could offer. In general, these consumers are price sensitive and are looking for best value for money.

The main competitors are mainly JB Hifi, David Jones and Myer.
A lot of other competitors are trying to grab a part of Harvey Norman’s business such as Bing Lee, Freedom, Fantastic, Nick Scali, Super Amart, Clive Peeters, Ikea, Kmart, BigW, Good guys, Retravision. Harvey Norman offer such a large range of products that a lot more small competitors are involved in this market too.

The competitive advantage
Harvey Norman has achieved core abilities in order to compete in the retail markets such as:
a strong and well recognised brand by customers
an outstanding customer service
an wide offer of products with a lot of well-known brands
a strong franchisee network to supply customers on time
an efficient distribution channel
a committed involvement within the community
Harvey Norman has been focussed on enhancing its core competencies through marketing strategies, an ongoing increase of turnover and profitability and achieving progressively an expansion over new markets and winning new clients.
The competitive advantage over its competitors is also the results of its positive and strong relationship with customers and with its franchisees and the successful integration of the different locations of the business.The Porter and the SWOT analysis will provide a better overview of its impact on the business.

Other contextual factors could explain Harvey Norman’s strenghts to resist to its competitors.

Other contextual factors researched to support general knowledge of business (organisational conditions, resources related, customer related)
The internal factors which determined how the organisation “entity” is going to move forward the business and to respond to external environment. This can be explained by Harvey Norman approach, its organisational conditions and its resource related and customer related conditions.
These factors will impact quality, cost and time processes that will lead to a better performance for Harvey Norman core business.

Organisational conditions ?
1.Business Model as “Culture of Franchise”
Harvey Norman is a big retailer, operating with its own franchises’ system.
A Franchise is ‘the right to use Harvey Norman trademark and its business and ‘know-how’ as a small business owner. The franchisee buy the right to sell goods and services under the exisiting business model of Harvey Norman. In exchange of this right, the franchisee will pay an annual franchise fee and a percentage of its earnings (gross revenues as a royalty) to the franchisor Harvey Norman. The franchisee needs very little capital to start its business, compared to starting a company from scratch. Some franchised shops will be more specialised in computer, electrical or furniture or renovation.The franchise is expected to sell goods and services only approved by the brand and all marketing campaign have to be in line with the Brand decisions. At the same time, each franchised store is given some autonomy to perform and can advertise locally and decide the emphasis on products they are going to sell in the shop. A franchisee has to protect the reputation of the brand over the short and long term. The culture of franchisee at Harvey Norman encouraged to support to the local communities (school, sporting clubs, charities etc.). As each proprietor will develop its own management style which could end with a slight difference of culture from one franchise to another, Harvey Norman has a “multi-faceted” culture.
2.Leadership and a clear mission
Great Leader inspire and give a direction to the company.The founders’ style of leadership is turned towards innovation (discovery and product innovation) and open to ongoing exchange of ideas (he encouraged a free communication both ways with team and team leaders which a good communication practices), these both often improve results.Harvey strengths leading to success is to have been retailing savvy and he has an entrepreneurial mind, a clear understanding of business market trends and the importance of appropriate timing to satisfy the market. “He (Harvey) is a retailer driven by results” according to Stephan Kulmar (CEO of Agency Ideaworks).
3. Strong Board of Directors
A strong independent board of directors ensure an efficient corporate governance in overseeing the management process across all strategic decisions and their implementation.
4. Excellent training
The management structure involved highly qualified and experienced senior executives to support the strategy of the company. The company encourage employees to learn and explore as a way to stimulate employees to have a better understanding of technological advances and more opportunities to face change and ensure the organisation to be successful.
5. Remuneration and Rewarding system
Kevin Moore, retail marketing consultant argues this”high reward-based remuneration structure” could explain that Harvey Norman stays a leader in the retail industry. Most of the salespeople have high sales incentives in line with their performance and offer “fit to fit “solutions to accomodate as much as possible the clients’ needs. The employees are highly motived and helpful to make the sales progress and at the end the client walked out happy with his problem solved by the salesperson. As a result of this meritocratic system, Harvey Norman has encouraged the greatest salespeople to work for him. Shareholders are satisfied with their return on investment as they have been paid extensive dividends due to the record profit this year.

Resource related and Customer related conditions
We have gathered its resource related and customer related conditions via the 4P’s marketing strategy.In fact, Harvey Norman has a more modern approach of the “4P’s marketing strategy on Product, Price, Promotion and Place (Ritcher 2012) which can explain outstanding client ; resources’ management conditions.

1. Product (An extensive range of Products)
Harvey Norman has high quality of products which offer a large choice for customers in term of colour, price and size. “If you specialise you run the risk off not appealing to everyone”, Sean Adam (MD of the research company at Seed).
– Harvey Norman aim is to try to manage the evolution and appearance of new technology and trends. As the electronic industry is thriving, Harvey Norman has introduced a new product strategy. An increase demand for more technologic goods as lead Harvey Norman to try satisfy new needs of customers. Customer wants to “buy a value or solution to their problems”, not only products. The electronic industry is booming and Harvey Norman has developed specialised stores in “electronic and computer only” and also in Sydney as special areas dedicated to new technology to be introduced to customers and help them with a fit-to-fit solution, “service products”.
-The approach of to meet the needs of customer in store and online is the best way to follow the trends.
-In 2015, Harvey Norman has started a new strategy of offshore and now in Australia, which aims is to create a “give to customer an interactive & exciting shopping experience, with innovative layouts and immersive showrooms”. (see website Harvey Norman – Auburn shop in NSW).Harvey Norman has opened other stores, one in Ireland, one in Slovenia and in Australia and Malaysia and Croatia and New Zealand soon.The trading results of the flagship stores have increased in 2017 by 30.8%.
* In Australia for example. At over 174,000 square feet, the flagship store is a ” truly must-visit lifestyle destination.”(see website Harvey Norman – Auburn shop in NSW). With this incredible experience, the customer could be a part of Harvey Norman vision, and enjoy games hub, a spacious show room and special events and good deals and cheap prices to get a real “lifestyle experience” which go beyond a simple customer service and appear more attractive to customers.
* The flagship concept store has a bit a different strategy in Asia. In Asia, Harvey Norman has developed a with superior designer furniture and homewares in Singapore and Malaysia. In Singapore, Harvey Norman it is a bigger flagship store, over a 100,000 square feet, and offers an exclusive store design and unparalleled wide range of products in Asia. And in Malaysia, the Space showroom is expanding in the luxury retail market.

2.Price (A Competitive Pricing of products)
As its customers are very price sensitive, Harvey Norman ensure that its price are competitive with the market for its customers “customer cost” (including cost of product, delivery and other associated costs) and at the same to maintain a sufficient margin to generate profits for the company. Harvey Norman is highly competitive and has generated almost 30% of Net profit in 2017 by its pricing/cost strategy.
This pricing/cost strategy is explained by Harvey Norman ” Despite aggressive competition, floor margins across all product categories remained consistent with prior year and gross profit increased, the board reflecting the sustainable sales growth strategy adopted by each category”.

3.Place (Distribution strategy)
Harvey Norman has more than 200 stores cross all Australia and there is always a store near you to offer this extensive range of products to satisfy the local community and made shopping easier and convenient as you can find everything you are looking for in one shop. Every shop has an extensive display space and a wide range of products.
Efficient distribution network and less-costly way to handle stock is a part of the Online-to-Offline (O2O) business strategy.
The core strategy to integrate online channels via all the shops and increase synergies.
the delivery of products operate from local shop to customer based on store availability. The store-base fulfilment will select the most efficient way to deliver the product quickly to its customers.
The “convenience” is a key as much as possible to purchase by the option pick-up “click and collect” (via the app or online) or “pick up in 2 hours” in store allow the client to choose an item to any Harvey Norman shop and get notified when the product arrives to the closest shop for its customer.
The stock levels can be seen in real time and this information is also available to customers online.
The option”same delivery” when ordered before 1pm and “Home installation” allow products to be delivered, set-up in a record time and to connect with the customer.
The return of products bought online can be via the Harvey Norman store directly.

4.Promotion (Marketing strategy)
The tactical support is provided on a ongoing basis to franchisees by the Harvey Norman Holding to protect and promote all the different brands Harvey Norman, Domayne and Joyce Mayne to sustain a better competitivity in the retail market.
The marketing strategy has ensure an awareness of the brand Harvey Norman, increase the volume of exisiting customers and the volume sales, and promoting sales via a lot of promotional campaigns direct or indirect.(385 millions spent on it in 2017).
Personal shopper support, Loyalty cards contributed to “word of mouth” by satisfied customers directly to other customers and via social media
Aggressive advertisement campaigns: Harvey Norman has very strong advertising campaign in the medias (TV, radio and press) and is very present in customer minds.
In addition, Harvey Norman present a lot of its products via social medial (Facebook, Twitter, and You tube). On Facebook and Twitter, the Harvey Norman team will inform about updates and will try improve customer services by answering directly to clients questions, complains or feedbacks. On You Tube, the media team will to release a lot of videos to an audience over 1.5 Millions viewers, about new products, new features and technology. The marketing strategy has became “a two ways communication”, not only a promotion.

5. A mix of 4P : Proactive Online business -> “built a customer solution”
Harvey Norman has moved between physical stores to digital interfaces rapidly and this has been also supported by an efficient retail distribution network.
Real time customer advice is an excellent service
Harvey Norman has been highly reactive and launched its online business in 2011 including a lot of services which ensure a superior quality of client services. such as “mobile site, financing plan at 0% interest, call centre, stock information in real-time , live chat etc.”. All of these is a part of the Online-to-Offline (O2O) business strategy.
The “Customer first” program is to ensure the consumer will be satisfied by monitoring feedbacks at any time of the process and having a 2 ways communication.
The “live-chat” option provide an advice from experts in real time to the questions asked by the customers (96% of customers are satisfied by live chat).
Harvey Norman provides the option “click and collect” to customers, the ability to buy online and be delivered at home or to go to their local stores to pick up the item, a faster way to connect with the customer.

sentence to go to second question assessment
The internal contextual factors provide more insight about how Harvey Norman should run its business in general and how to satisfy the customers. The customers want more and more goods and services to be provided instantly and Harvey Norman is trying to respond quickly. Other factors can also could also influence the development of the business and its environment
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xxxxxxx. Conclusion (for the full assessment) still to do xxx
xxxxxx implications of the analysis and emerging issues

Strengths and Leader in retail:
Presence: Harvey Norman Holding has extended her presence in Australia and offshore.
system of franchises allow the structure to grow —easier to get into new markets
strong property portfolio
Expansion New stores: Harvey Norman Holdings will open new stores in 2018 6 stores (1 franchised store Domayne and 5 Harvey Norman company-operated stores 1 inIreland, 3 in Malaysia, 1 Singapore)
Employees qualified staff to advice customers; committed
Product offer: wide range of products
Market conditions:
Predict strong house market for renovation and building will be favourable for Harvey Norman franchised stores in Australia near future expected to grow by at least 2% every year until 2020.
Favourable conditions for new technology specialised stores as the lifestyle of consumers drive them for a big demand for technological goods to use at home, work or in their free-time.
Leader in retail market and outstanding results in 2017; Harvey Norman could be become a strong leader
New unique experience store: The flagship stores are selling a new concept store have been successful and we expect the opening stores to thrive more customers to the store
Customer: a design key solution to fit the customer needs and provide a solution to his problem when he/she came to the store

Weaknesses and Challenges:
New technology: always challenging to stay up to date and looking for new innovations and don’t want to miss an opportunity
Franchisee issue : Problem of transparency with the franchisee accounts.In particular, the problem of the debt raised to pay for purchase of inventory against Harvey Norman – has been transferred directly to the franchises 782Million $ in 2017, while Harvey Norman made an announcement that it would pay for the franchises’ debt in order to protect its reputation.
New flagship store company operated stores will increase debts of the company; new concept; maybe be obsolete after a decade ? Renewal of idea ongoing with a customer moving /changing all the time
Distribution channel issue: The complex model of stock fulfilment requires strong IT systems in place which are challenged as soon as the structure grows internally and externally challenge to provide accurate information in real time about availability and shipping.
Availability issue: The website is challenging business because of the stores’ autonomy some products online may not be available and may have different products in store near us.
Furniture business: For the furniture business, the pricing is not provided online and there is a belief that furniture cannot be sold online, this may be challenged in the future. –
Leadership issue: The strategy of the business and the company heavily dependant on Gerry Harvey. Plan of succession or future of the company when his founder won’t be alive
Board of directors: Some key board members leave following the arrival of new CEO, will need to be replaced by who? at some point …
Long term issue with the arrival of new competitors: How Harvey Norman will be able to improve and maintain a strong network to ensure its brand stay well-positioned in the retail market over the time ?
Need of new specialised stores in the future : Wide range offers or specialised stores more and more ? what area ?

Question about external factors
With the development of online technologies and mobile phone app , customers have expectations which can change and the quality of services has to be closely monitored to follow the trend of the market

Question about swot analysis

Question about competition and porter analysis ; threat ; behaviour
Sales revenues decrease ? Slow down in Sales due to new rivals in a very competitive market
high competitive market and thrive to be more competitive and adapt./react quickly etc. reducing production costs / increases sales etc.
Amazon threat – flagship space sydney etc. share the market ; expecting a reduction of 2-5% of Harvey Norman market share.
How Harvey Norman should respond to the competitors ?Amazon etc.
it is an important challenge as it is a very competitive industry.

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