Management Report - Myer Company Limited - Case Study Example

Running Header: Management Report about Myer Company Student’s Name: Instructor’s Name: Course Code & Name: Date of Submission: Letter To The CEO Myer Company Limited From Expert Management Consultant Ref: Management Report. This letter is to inform you of the important findings that were established during the company's competitiveness analysis. A comprehensive SWOT and Five-Forces Portal analysis was done with intention of establishing what the company has achieved, what it can achieve, the company's problems that hinder it from achieving the best. A comprehensive analysis was also done on the company competitiveness in the market. In these two analyses, it was established that the company is having a number of problems that include limited distribution channels, limited operation region, swift change of fashion and technology, and higher pricing. However, the company has an opportunity of entering into global operations, ability to merge with other companies to expand further and to expand its products to enhance diversity. In this regard, the company should consider exploiting its opportunities to improve its competitive advantages. It should also consider reducing its prices and being swifter in introducing new fashions and new technologies with intention of capturing more customers from the company's competitors. Based on the five portal analyses, the company is currently experiencing a stiff competition from the new entrant and also from the current existing rivalry. In addition, the company is also experiencing high customer bargaining power due to high competition in the industry. This hinders the company's from acquiring more market shares in Australia. However, the company has a higher bargaining power over its suppliers and low substitution risks. Therefore, the company should take advantage of the possible chances that it has to emerge more competitive in this industry in the country as advised above. This will assist the company to win customers' loyalty and thus, ensuring that they are more preferred in the market as compared to its competitors. Yours Faithfully ………… Name: Contents Letter 2 Contents 4 Introduction 5 SWOT Analysis 6 Strength 6 Weaknesses 7 Opportunities 7 Threats 8 Five - Porter Forces Model 8 Threat of New Entrants 8 Bargaining Power of Buyers 9 Threat of Substitute Products or Services 9 Bargaining Power of Suppliers 9 Rivalry among Existing Competitors 10 Conclusion 10 Recommendation 11 References 12 Introduction Myer Holding Limited is an Australian based departmental store group that is involved in selling diverse products across Australia. The company has established a good network of stores with a total of 66 stores across the country. The purpose of this paper is to analyze the company's performance and operation strategies with intention of advising the company's CEO on the best strategies to employ to improve the company's competitive advantage in the market. To achieve this, the paper conducts the company's SWOT analysis where the company's strength, weakness, opportunities and threats are analyzed one at a time. In this case, the paper evaluates aspects that assist the company to retain a higher competitive advantage, those that make the company to be unable to offer the most excellent services or products, the aspects the company has to improve on and the problems it is likely to encounter in doing so. The paper also conducts five-portal analysis to establish the company's competitiveness in the market. This established the company's threat from new entries, suppliers and buyer's bargain, chances for the company's products substitution and the company's rivalry from the existing companies in the industry. The paper then gives a conclusion and a recommendation. SWOT Analysis A SWOT analysis is designed planning techniques employed to evaluate the threats, opportunities, weaknesses and strength of an organization. This section will conduct SWOT analysis for Myer to assist in understanding the company's chances of remaining competitive advantage. Strength Myer departmental store group contains a network of 66 stores around Australia. This ensures that the company is accessible to all customers through their stores at any parts of Australia. This increases company's reliability and customer's satisfaction. The company also sells diverse appeal products focusing on all genders and age. This diversity ensures that the company increases its market shares in the Australia. Diversity in each category of each product ensures that the company caters for all individuals with different tastes. The company has also established e-commerce system that allows the sale of their products beyond Australia. Thus, the company provides customer based services. Moreover, the company sells diverse products including beauty products, electrical products and phones accessories. This ensures that the company can sell to diverse products. The diverse brands are normally provided in affordable prices an aspect that provides a number of choices to the consumer. Another company's strength is the presence of strong company's reputation and brand name in Australia. This increases the customers trust regarding the company's products (InvesrSmart, 2015). Weaknesses The company's major weakness is that it is limited to Australian population. Although the company has taken an initiative of developing an e-commerce system which gives them the ability to operate globally, the company is still regionalized. This is because they can only ship their products within Australia and thus, limiting their market shares and dominance within the region. The company also contains poorly developed or undeveloped channels of distribution that only serves in a number of places in Australia. Mostly the company only serves regions where their departmental stores are located and their surroundings. Moreover, its retail area prices are rising and it still contains inadequate utilization of showroom area (Parsons, 2015). Opportunities The company has a great potential to expand abroad. This is because the company sells quality products that are demanded in all parts of the world. In this regard, the company can manage to make more sales if they would expand their emerging market to abroad. The company has an opportunity of expanding its services and products to increase its level of diversity. The company also has an opportunity to expand its services and products sale by making mergers and acquisitions with other companies either in the country or abroad. The company also has a chance of improving its marketing strategies by exploring creative promotion techniques. Moreover the company has a chance of improving its showroom performance by using their staff members effectively and by training them. Threats The company sells perishable products in terms of fashion. The preferences of consumers are changing as well as their lifestyle on daily basis, therefore, the company must keep with the consumers pace or lose customer. The customers are currently cautious regarding their spending due to decrease in disposable income as a result of slowdown. The company also experiences complexity in targeting all society's segment. Myer is also experiencing a stiff competition from other international and national companies (Knight, 2013). Five - Porter Forces Model Five portal forces is a framework used to discuss the competition concept of a company. The paper will evaluate the company's competitive ability. It will also involve five competition forces which influence Myer as follows: Threat of New Entrants Myer is an Australian departmental store company that only operates within Australia. The company sells diverse products which target on diverse consumers who include clothing, electrical products, and phones products among others. These products can easily be accessed by Australians through other international companies that are emerging in the Australian market via e-commerce. Therefore, the company is experiencing threat of entry from emerging international departmental stores that sells their products through e-commerce and allows shipment to the country at a low cost. The industry is also experiencing new entry from retailers such Uniqlo, Zara, H & M, and Topshop who are increasing the competition in the market, making it hard for Myer to remain viable (Perrott, 2013). Bargaining Power of Buyers There are a number of companies that currently offers comprehensive retails products in the Australian market and also a number that specializes with appeal products. These companies include Uniqlo, Zara, H & M, Topshop, Harvey Norman, and David Jones. In addition, consumers can access these products from international companies offering them through e-commerce. Therefore, the buyers have a higher bargaining power since they have a number of alternatives to cater for their demands. In this regard, the company has to adhere to customers’ demands to remain viable in the market. Threat of Substitute Products or Services Myer sells a diverse range of products that range from women, men and children clothing, shoes, jewelry, toys, phones, electrical devices, and beauty products among others. Therefore, it is hard to substitute the company's products. The sale of diverse products enhances the company's ability to continue selling its products without experiencing any substitution's threat. Bargaining Power of Suppliers Myer Company Limited is a departmental store that acquires most of its products from different suppliers. This assists the company in ensuring diversity in their products to ensure that the company caters for all their customer's needs. This allows the company to choose their products from different suppliers based on their preference and the suppliers' terms. This gives the company a higher bargaining power than its suppliers for they have a number to choose from especially in the appeals, beauty products, jewelry, electrical products and phone products among others. The company has the opportunity of choosing from the best suppliers and thus, the suppliers bargaining power is quite low in this case (Myer, 2015). Rivalry among Existing Competitors There are number departmental retailing stores in Australia that compete with Myer Company Limited. These companies include Harvey Norman, David Jones, Target Australia, Kmart Australia, and Harris Scarfe. Just like Myer, these companies are also selling different range of products with a high level of diversity. Therefore, Myer is currently experiencing stiff competition and rivalry from all these companies such that the company must keep on employing different pricing, marketing, and product quality to remain competitive in the market. The company also ensures that it has enhanced the change of the fashion and technology in their diverse products (Perrott, 2013). Conclusion Myer Company has a number of aspects that promotes its position in the market and improves its ability to compete. This includes the product diversity, the company's ability to sell online, and a diverse source of suppliers. On the other hand, the company is experiencing a number of problems which include higher level of competition, drastic change of fashion and technology, higher customers bargaining power among other. Therefore, the company is currently experiencing both opportunities and challenges to emerge the best company in the retailing industry in the country. Recommendation The company stands a chance of performing better that it is doing currently in the market. To ensure that the company has managed to increase its market share, the company should consider advancing its operation to an international level. This can be highly achieved by introducing shipment to different parts of the world in their online sales. The company should also consider improving its distribution channels to effect products distribution in the entire region. The company should also consider offering fair prices for their products to attract more customers. References Knight, E. 2013,'Myer drawing a line in the sand,' [online] < http://www.smh.com.au/business/myer-drawing-a-line-in-the-sand-20130415-2hw2j.html> [Accessed on 14th April 2015]. Myer. 2015, 'Myer Company Limited', [online] < http://www.myer.com.au/p/online-shopping/payment-and-delivery/> [Accessed on 14th April 2014]. Parsons, F. 2015, 'The march by shoppers online is leaving Myer struggling to adjust to a new competitive landscape,' [online] < http://analysisreport.morningstar.com/stock/research?t=MYR®ion=AUS&culture=en-US&productcode=MLE> [Accessed on 14th April 2015]. Perrott, B, 2013. ' Poor strategy has left Australian retailers open to overseas entrants', [online] < http://theconversation.com/poor-strategy-has-left-australian-retailers-open-to-overseas-entrants-21009>[Accessed on 14th April, 2015]. InvesrSmart. 2015, 'Myer Holdings Limited (MYR)', [online] < http://au.investsmart.com.au/shares/asx/Myer-Holdings-Limited-MYR.asp>[Accessed on April 14th, 2015]. Read More