Entrepreneurial Business Planning - Harvey Norman Holdings Limited - Case Study Example

Entrepreneurial Business Planning Analysis of Harvey Gerry La Trobe University (Student Name) Word Count: 2506 Skynews Business, S. (2017). Gerry Harvey part 2 - YouTube. YouTube. Retrieved 15 August 2017, from https://www.youtube.com/watch?v=H8hrvgaTbMw Executive Summary Regarded as one of Australia’s renowned best retailers, Gerry Harvey is an entrepreneur and currently the chairman of Harvey Norman Holdings Limited. Harvey Norman®, Joyce Mayne® and Domayne® are some of the popular brands owned by Harvey Norman Limited. As it would be indicated in this report, Gerry Harvey has managed to achieve a significant amount of success in his entrepreneurship journey. Notably, Harvey and his long-time friend and business partner, Ian Norman, first launched their retail business known as the Norman Ross chain back in 1961. Through his leadership skills and entrepreneurship character, Harvey worked hard to ensure that the Norman Ross Company grew from a single business unit to a chain of franchised complexes and by 1982, the business had more than 42 cogent franchises across New South Wales as well as Queensland. However, in 1983, the two businessmen found it necessary to sell Norman Ross hence starting the renowned Harvey Norman, which is now worth of billions. As it will be discussed in this paper, Harvey’s success has been largely necessitated by his entrepreneurship-oriented behaviour, leadership skills as well as his unending desire to exploit entrepreneurial opportunities. This report will dig out the entrepreneurial behaviour as well as skills and knowledge that has facilitated the growth of Gerry Harvey as far as entrepreneurship is concerned. His skills and character will be closely analysed against the theory of entrepreneurship as well as the concepts therein. TABLE OF CONTENTS 1.1Brief Background of Gerry Harvey 3 1.2Thoroughbred Business Interests 4 2.1He is a calculated risk taker 5 2.2Harvey is Creative/innovative 6 3.1Ability to Plan 6 3.2Communication Skills 7 3.3Marketing Skills 7 3.4Leadership 8 Appendix A: Harvey’s Worth 10 1 Introduction A significant number of business authors consider entrepreneurship as an important aspect in contemporary life. As Ahuja and Lampert (2001) posit, entrepreneurship was first considered as the most important aspect to national wealth creation back in 1987. This indicates that entrepreneurship is not only geared towards the creation of personal wealth but national wealth as well. For this reason, entrepreneurs are often highly regarded and should be accorded the necessary business environment to comfortably carry out their businesses. Just like Gerry Harvey, every entrepreneur must adopt specific fundamental traits that would see them through their businesses successfully. Accordingly, the next section will delve profoundly into Harvey’s entrepreneurial background as well as his motivation as an entrepreneur. 1.1 Brief Background of Gerry Harvey Born in 1939 in New South Wales, Gerry Harvey is a renowned self-made entrepreneur who is worth $2.3b as indicated in Appendix 1. He is currently the executive chairman of Australia’s most successful retail chain known as Harvey Norman Holdings. Gerry cofounded the company with his long-time friend and business partner Ian Norman. He attended school at Bathurst as well as Katoomba, primary school and high school respectively, and later joined a University in Sydney at the age of seventeen. As it has been noted with a famous entrepreneurs such Steve jobs and Bill gates, Harvey dropped out of University and joined the business world. Equally, as it has often been noted with a significant number of entrepreneurs, Gerry was always out to exploit any available and viable business opportunity. With this entrepreneurial spirit, Harvey began selling vacuum cleaners as well as fridges door-to-door. At a tender age, Harvey’s ambition had always to be a largescale farmer. While working as a door-to-door vacuum salesman, Gerry Met Ian Norman who was also a salesman. After their acquaintance, the two salesmen realized that they had a common business goal as far as being entrepreneurs was concerned. Accordingly, they managed to partner in 1961 hence opening their first store in Sidney. By 1979, their business had grown to nearly forty-two stores with a total yearly sales of approximately $240million (Group, 2017). The firm has experienced significant success over the years and currently retail brands such as Mayne, ® Domayne® as well as Joyce® among other many smaller businesses across Australia. 1.2 Thoroughbred Business Interests Notably, Gerry Harvey often embraces hands-on approach to all businesses engagements. For instance, Gerry has often appeared during T.V as well as Radio adverts for Harvey Norman as a spokesman. Moreover, Harvey often sets out time to give comments regarding economic as well as business matters both in the national press as well as television media. Seemingly, this has led him to having a considerable public profile. From a profound analysis one would not fail to note that Harvey is a relatively maverick businessman and this is the reason he has often criticized the Australian CEOs, especially with regards to the issue of remuneration. On several occasions, he has often been quoted positing that no single CEO or rather manager is worth the millions they usually get and that if this sect of personalities think they deserve such kind of monies, the company can reconsider paying them in options as well as shares. This indicates that as an entrepreneur, one should be bold and ready to tackle the issues at hand and not shying away from the problem; show leadership. As an entrepreneur with much interest in proper taxation laws as well as excellent business environment, Gerry has often been on the forefront fighting for the rights of entrepreneurs as well as the larger business community. For instance, back in 2010, Harvey actively participated in a widely condemned campaign that sought to remove the tax rules that allowed the Australian citizens shop on foreign websites without paying GST (Norman, 2017). Apparently, this campaign was largely supported by a significant number of bricks and mortar retailers of the Australian citizenship. The campaign was unstoppable and this forced the government to intervene by requesting the Productivity Commission to look into the matter and carryout an investigation as well as compile a report of on the current situation of the Australian retail industry (Heaton & Lucas, 2011). However, being an informed dissident entrepreneur, Gerry rubbished off the report calling it a waste of time as well as money hence not honouring it. From this biography, one gets to understand that Harvey has the traits of a determined leader who is ready to sacrifice for others. 2. Why Harvey is considered an Entrepreneur 2.1 He is a calculated risk taker Over the years, the myth that “entrepreneurs are typically risk takers” has unintentionally mislead nascent start-ups. According to Shane and Venkataraman (2000), many authors have often argued that entrepreneurs are risk takers, what they forgot to add in the phrase is the term “calculated.” It must be pointed out that entrepreneurs are not only risk takers but calculated risk takers. This certainly indicates that successful entrepreneurs often make informed risk-taking decisions as far as investing is concerned and this is the reason they will never invest all their money in a single business venture. In other words, they often spread their risks such that if one project fails they can count on the other one. On the other hand, most unsuccessful entrepreneurs often bet all their resources on one roll of the dice hence in case they fall, they fall spectacularly such that it would be difficult to recover (Oviatt & McDougall, 2014). Accordingly, Gerry possess this trait as he has often invested in various business ventures since the time he decided to become an entrepreneur. For instance, apart from investing in the furniture and electrical goods chain, Harvey has also invested in the racing-horse auction industry, where he controls as well as owns the Magic Millions auction market. Moreover he has interests in the energy sector, where he owns a number fuel companies. Further, Harvey also has bought shares in companies such as Briscoe Group as well as Emeco and DWS. According to the Forbes magazine, Harvey owns a stake worth nearly $18.9 million, a company whose shares have risen by twenty percent over the last twelve months. Even though the bulk of Hervey’s wealth is found in his core company, Harvey Norman, his investment is diversified and this can be proved by the number of mixed bag of smaller retailer stocks attached to his portfolio. This is in line with the concept of entrepreneurship which posits that successful entrepreneurs often figure out the best to way to reduce risk with all the steps they take in their business decisions (Oviatt & McDougall, 2014). 2.2 Harvey is Creative/innovative Gerry was once quoted, during an interviewing, saying that he never been afraid of trying something new. This trait has been found to be a common factor among a considerable number of successful entrepreneurs; they are naturally innovators and often do not shy away from embracing new ideas. This can undisputedly be associated with his entrepreneurial spirit that has often given him room to come up with good ideas which grow. According to Harvey, any idea that depicts promise as well is paying its way should be given a try (Oviatt, B.M. & McDougall, 2014). This is cogently buttressed in the theory of entrepreneurship, which posits that a successful entrepreneur often looks for innovative ways in which they can solve a problem (Norman, 2017). In other words, the entrepreneur often looks for a better way to do things; “ways that have not occurred to others” (Oviatt & McDougall, 2014). In one of the interviews, Gerry was quoted saying that an entrepreneur must believe in his or her ability to be creative. Harvey goes ahead to posit that the biggest block to creativity is often allowing oneself to think that it is impossible to be creative. 3. Harvey’s perspective of Entrepreneurship A profound research and analysis of Harvey’s school of thought with regards to entrepreneurship confirms a significant number of concepts and aspects that are well explained in the theory of entrepreneurship as well other entrepreneurial studies. 3.1 Ability to Plan From the analysis, it is quite clear that an entrepreneur must be in a position to plan. The ability to plan is an important skill that all entrepreneurs must possess. According to Gerry, this skill has often enabled him to develop plans that certainly meet goals is different areas. Gerry posits that this skill has enabled him to counter a significant number of challenges in the area of production, finance as well as marketing. This skill has been portrayed in the way he administers the board as well as management of Harvey Norman Group. Harvey has managed to plan for his employees with regard to periodical intrinsic and extrinsic rewards as well as needs hence the employee satisfaction and low turnover. This is certainly spelt out in the entrepreneurial concepts and theory (McDougall & Oviatt, 2010). 3.2 Communication Skills From Garry’s point of view, communication skills is a fundamental aspect to any entrepreneur who has a vision of succeeding. This is in line with the argument that business involves interacting with people and as such an entrepreneur cannot operate in a vacuum he or she needs to understand the best way to sell his concept, products or services in order to excel (McDougall & Oviatt, 2010). As Brown (2013) clearly states an entrepreneur need to in a position to interact effectively with his business team. In addition, entrepreneurs needs to have the ability to express himself or herself clearly both in writing and verbally (McDougall & Oviatt, 2010). This has definitely been proved by Harvey’s skills to bring together his team of employees in Harvard Morgan, where he is the executive chairman. Through an open-door policy Gerry is able to listen to the stakeholders and together with managers embrace the ideas brought forward. 3.3 Marketing Skills Another important concept that is synonymous with Harvey’s success which is significantly pointed out in the entrepreneurship theories is marketing skills. It is without doubt that after a close analysis and interaction with Hervey’s entrepreneurship journey, marketing skills plays an important role as far as becoming a successful entrepreneur is concerned. Gerry has often advocated to a considerable amount of the company’s resources to be used in marketing research and projects in order for the company’s market share to burgeon. This is certainly true as firm’s success or failure is often dependent on whether the firm’s concept reaches the market as well as interests the market (Brown, 2013). Certainly, proper marketing skills often result in potential customers wanting to purchase the products or services (McDougall & Oviatt, 2010). As noted with Harvey’s magnificent marketing skills, having such skills is often critical for entrepreneurial success. 3.4 Leadership Leadership qualities or rather skills is another fundamental requisite for entrepreneurial success. This is for the fact that entrepreneurs often assemble a team of skilled personnel that often play a big role in helping them achieve business success. As such, they must be in a position to effectively develop as well as manage the team (Bailey, 2017). This is evident in Harvey’s day to day running of the business as he often embraces the horizontal decision making technique where each employer’s ideas are embraced and the decision does not necessary come from the top management but within the followers. As the leader of the company, Gerry has managed to develop the vision for the firm as well as inspire the firm’s employees in order to effectively pursue this vision. Thus, this indicates that phrase that” people would rather be led than managed” is valid and has been proved viable. 4. Challenges Hervey Faces One of the main challenges Harvey as well as his venture has faced is the rise of the online sales, which are currently threatening the existence of Australian chain stores as well as the manufacturing industry. The coming of the online sales are significantly affecting the employment sector as more than 100,000 jobs in three years to come. To counter this challenge, Gerry has managed to run a campaign that seeks to advocate for the revoking of the tax free on imported goods to the value of a thousand dollars. Another challenge he is facing as an entrepreneur is the rapid increase of cheap counterfeit goods which tend to compromise his businesses. His continuous efforts to counter these challenges confirms that an entrepreneur should be ready to face and address a myriad of problems during his or her entrepreneurship journey. 5. Conclusion In summation, the report has clearly analysed Gerry Harvey, a renowned Australian entrepreneur who is currently the executive chairman of Harvey Norman. Through his entrepreneurial journey, the report has been able to confirm most of the concepts discussed in various entrepreneurial theories. The report digs deeper into the field of entrepreneurship and gives a clear picture of what it takes to be an entrepreneur. The report manages to portray the skills as well as characteristics associated with a successful entrepreneur. 6. Appendices Appendix A: Harvey’s Worth References  Ahuja, G. & Lampert, C.M. (2001). Entrepreneurship in the large corporation: a longitudinal study of how established firms create breakthrough inventions. Strategic Management Journal, 22 (6-7): 521 543 jun-jul. Alberici, E. (2012). Lateline - 19/03/2012: Online retailing threatens Australia: Harvey. Abc.net.au. Retrieved 15 August 2017, from http://www.abc.net.au/lateline/content/2012/s3458857.htm Bailey, M. (2017). Leadership News | afr.com. Afr.com. Retrieved 15 August 2017, from http://www.afr.com/leadership Brown, P. (2013). Forbes Welcome. Forbes.com. Retrieved 15 August 2017, from https://www.forbes.com/sites/actiontrumpseverything/2013/11/06/entrepreneurs-are not risk-takers-they-are-calculated-risk-takers-that-one-additional-word-can-be-the difference-between-failure-and-success/#7e2a450e3e14 Group, B. (2017). Stocks. Bloomberg.com. Retrieved 15 August 2017, from http://www.bloomberg.com/research/stocks/people/person.asp?personId=8725061&p iv a Id=6478902 Heaton, J. & Lucas, D. (2011). Portfolio choice and asset prices: the importance of entrepreneurial risk. Journal of Finance, 55 (3): 1163-1198 jun. McDougall, P.P. & Oviatt, B.M. (2010). International entrepreneurship: the intersection of two research paths. Academy of Management Journal, 43 (5): 902-906 oct. Norman, H. (2017). Management Structure. Harvey Norman Holdings. Retrieved 15 August 2017, from http://www.harveynormanholdings.com.au/management-structure/ Oviatt, B.M. & McDougall, P.P. (2014). Toward a theory of international new ventures. Journal of International Business Studies, 25 (1): 45-64. Shane, S.A. & Venkataraman, S. (2000). The promise of entrepreneurship as a field of research. Academy of Management Review, 25 (1): 217-226 Jan. Skynews Business, S. (2017). Gerry Harvey part 2 - YouTube. YouTube. Retrieved 15 August 2017, from https://www.youtube.com/watch?v=H8hrvgaTbMw Read More