Evaluation of David Jones Ltd - Case Study Example

An Evaluation of David Jones Ltd (Name) (Institution Affiliation) (Date) Introduction Notably, the Australian apparel industry is small but burgeoning. Many retail companies are now being opened in various Australian cities and internationally. With over thirty-nine stores, David Jones is one of the biggest department stores in Australia and offers a myriad of brands associated with typically fashion and beauty. As such this report gives an evaluation of the company with regard to its management and human relations practices. To achieve this, the report will give an account of both practical and theoretical approaches accordingly. Evaluation Established in 1838, David Jones, which is also known as DJs, is publicly held company owned by Woolworths Holdings Limited, a South African Company. Woolworth Holding Ltd bought the company from David Jones’s shareholders in April 2014. However, Woolworth maintained the name David Jones Ltd. Prior to its acquisition, the company had thirty-nine stores in different Australian territories and states. Woolworth has successfully operated in Australia for more than fifteen years through its subsidiary known as Country Road Group. Accordingly, Woolworth resorted to acquiring DJs as part of its plan to develop and expand its local South African supply chain therefore enhancing the Southern African Development Community Exports (Woolworthsholdings.co.za, 2015). David Jones’ board of directors resolved unanimously for the recommendation of David Jones shareholders to vote in favor of the acquisition scheme. Though the agreement was reached at in absence of a superior proposal, the independent expert hired concluded that the scheme was reasonable and fair to the shareholders (Pappu & Quester, 2008). Woolworth is a renowned chain of retail stores providing discerning patrons a selected range of high-quality apparel, beauty products, financial services as well food. In addition, the company is publicly held and is listed on the Johannesburg Stock Exchange operating under the code JSE: WHL (Woolworthsholdings.co.za, 2015). Woolworth acquired David Jones by purchasing each of the shareholder’s shares at AUD 4.00. Notably, the purchase of the shares represented 25.4% premium of David Jones Closing Price on 10th April 2014. According to Woolworth’s board of directors, purchasing the David Jones was of an advantage to the company than starting up an existing one. One of the advantages is that David Jones is already an established Company thus saving Woolworth the risks associated with starting up a new one such as business failure. The second advantage is that by purchasing David Jones, it meant that there would be an immediate cash flow compared to starting a new one. Contrastingly, a new business has to undergo a grace period within which the investors can get back their invested capital plus profits. However, the acquisition has its disadvantages. For instance, handling the already existing staff would be difficult as they already have a negative perception that they are under a foreign company from a third world country. This automatically lowers their working moral which would adversely affect the general performance of the company. Secondly, Australia already has a growing number of high-end retailers and thus it poses a threat to Woolworth as it affects its future growth. David Jones’ customers are mostly affluent, who love shopping in luxury stores positioned in Australian Cities. Moreover, its customers are characterized by online shopping. Thus, the marketing mix theory will be used to delineate how the business reaches its customers. To begin with, the products offered by David Jones are a mixture of extremely high quality as well as luxurious brands. For instance, the Melbourne Store, where I was on attachment, has luxurious fabrics such as 100% wools, silks and lambskin for both women and men. The apparel section comprises of a wide and shallow range of products as far as styles of dresses and other menswear and children wear are concerned. In the appliances section, the company offers a wide range of classy and quality renowned brands such iPhones, iPads and huge LCD TV screens. These products attract many affluent customers as they are attached to high-quality and expensive products. As far as the pricing is concerned, David Jones pricing structure is premium based, where the prices are high due to the exceptional quality and luxurious products offered. Moreover, the company takes advantage of its long established and strong brands thus attracting affluent customers who often wants to be associated with expensive products. As the Theory of the Leisure Class asserts, the most affluent consumer will buy expensive products as they believe that they are of high quality and classy (Veblen, 2007). From the company’s pricing of products, I learnt that most affluent people buy expensive products in order to maintain their class status and as such, a business can largely benefit from such an ideology. In regard to their distribution, David Jones has a total of thirty-nine stores and the firm plans to open more stores in South Africa and Asia in order to expand their business internationally. In addition, the company has an official online store where customers located in other countries as well as in Australia can select and purchase their products and receive them through shipping. Their promotion strategy is based on various marketing avenues. For example, the David Jones uses integrated digital platforms such as online magazines, YouTube, Facebook, Instagram and Twitter to promote their brand and products. The marketing team also engages in direct marketing whereby they send personalized emails to their customers updating them of the latest fashion garments and products. Customers buy products from David Jones stores because of their quality products, which are manufactured by most successful and admired brands in the world. As Pappu and Quester (2008), seventy-three percent of luxury consumers often consider quality to be the most important factor when shopping in the stores or even online. The second reason is the efficient online shopping system. Most customers find it easy to select and order online their preferences and also benefit from quick delivery as immediate plans are often put in place in order to make sure that a customer gets his or her goods in time. David Jones believes in the power of human relations and as such it employs people across the globe irrespective of their race, religion, sexual orientation among other discriminations. As Criffeth, and Hom (2001) asserts motivating the employees and motivating the customers are the primary driving forces behind a successful business. Similarly, David Jones has established a series of initiatives, which are aimed at motivating its employees to work as well as relate well with customers. To begin with, the company has a rewarding system, which aims at appreciating the efforts of the most performing employees annually. For instance, the company has wage policies, which involves paying employees an additional amount to what they earn in their salaries. The incentives at David Jones are given to workers in order to encourage them to increase their efforts with regard to customer relations and production. As Varma and Agarwel (2004) posit, rewards are payments made to the workers as compensation for the extraordinary services made by them to the company. Further, David Jones is mostly engaged in the intrinsic rewarding system, which motivates the employees to put more efforts in their work and line of duty. For example, the company often gives the employees the freedom to come up with marketing frameworks that can best attract customers. In order, to develop a close relationship with the company uses the soft HRM to manage its employees. For instance, David Jones often sends special acknowledgments to its employees during certain life events. These life events include weddings, the birth of a child or even the death of an immediate member of the family. As Marlow’s hierarchy of needs theory holds, belongingness and love is one of the most important needs any human beings yarns in life (Haslam et al., 2000). Equally, David Jones believes that each employee needs some sense of affection and care if they are to concrete in the working environment. The company understands that employees need attention, and social interaction for their performance to bourgeon. Moreover, David Jones pays a special attention to individual achievement thus appraising and promoting employees whenever necessary. Thus, employee acknowledgment plays an important role in increasing the employees’ performance. During my three-months-placement at the David Jones, Melbourne, I noticed three problems associated with the company. First, the employees are overloaded with work and do not have working shifts. The workers are sometimes forced to do extra working signings, which is not in their line of duty. As the motivational theory posits, work values play an important role in the life of an employee (McGregor, 1989). An employee will only be motivated if they feel valued and responsible; thus overworking them affects their performance negatively. Bad working condition discourages a worker from being productive in his or her line of duty. Thus, the company should hire more employees and stick to the specialization framework as it is indicated in company’s policies. This would increase the workers morale and the business would run in a defined way (Houger, 2006). Second, David Jones does not comply with the Occupational Health Security safety measure. During my placement, I witnessed a number of incidents where employees hurt themselves due to the improper handling of heavy and risky electrical products. For instance, an employee was electrocuted by a sophisticated Philips iron box as she was demonstrating how it works to a consumer. Thus, the company should take into consideration aspects such as manual tasks, first aid and workplace hazards; employees should be trained in all these aspects. Further, I realized that the store’s employee gave little attention to those they considered less affluent or not affluent at all. The employees often provided more assistance to customers who came in with flashy cars, and who seem to be exposed and rich. The reputation of the company often depends on the customer relations; thus, customers must be accorded equal and high attention at all times as they are the pillar of the business. Accordingly, the employees should undergo a series of training in order to improve their customer care skills as well as other related behaviors. Conclusion To summarize, David Jones is a renowned brand that has been in the market for decades and as such, its long experience is the reason for its success. The company is continuing to take advantage of the emerging markets globally and therefore it destined for greater heights. During my placement in David Jones, Melbourne, I learned that employees play a significant role in an organization as they are associated with daily running of the business. As such, employees should not be treated merely as a resource of the business; they should not be equated to machines and facilities. Furthermore, I learned that for an organization to have a performing and productive workforce, the soft HRM practice should be practiced, whereby the employer initiates different motivation programs such as reward incentives. In addition, I found out that when an employee is acknowledged through simple practices such as sending him or her wedding cards and letters of appreciation, he or she develops a sense of belonging. Therefore, he or she will work for the organization as if he or she owns it. Finally, I learned that there is always a room for improvement and there is no perfect employee or organization thus risking is the key to discovering more potential. References Haslam, S. Alexander, Clare Powell, and John Turner. "Social Identity, Self‐categorization, and Work Motivation: Rethinking the Contribution of the Group to Positive and Sustainable Organisational Outcomes." Applied Psychology 49.3 (2000): 319-339. Houger, V. P. (2006). Trends of employee performance. Collaborative effort between managers and employees. Performance Improvement, 45(5), 26-31. McGregor, D. (1989). The human side of enterprise. Readings in managerial psychology, 314. Pappu, R., & Quester, P. G. (2008). Does brand equity vary between department stores and clothing stores? Results of an empirical investigation. Journal of Product & Brand Management, 17(7), 425-435. Shop.davidjones.com.au,. 'Shop Online At David Jones - Women's Fashion - Beauty -Shoes & Accessories - Men's Fashion - Children's Fashion - Home'. N.p., 2015. Web. 5 May 2015. Criffeth, R.W. and Hom. P.W. (2001) Compensation and rewards: retaining valued employees, London International (educational) professional publishers. Varma and Agarwel (2004) personal management; A human resource systems approach, New Delhi: forward book dept educational publications Veblen, T. (2007). The theory of the leisure class. Oxford University Press. Woolworthsholdings.co.za, (2015). Announcements. [online] Available at: http://www.woolworthsholdings.co.za/whl_mini_2014/default.asp?disclaimer=accept [Accessed 7 May 2015]. Read More