Give some suggestions about Macs management strategies for detail industry. Analyze some problems Of retail industry and suggest some solutions in future developments of the identified changes.
I will take the David Jones case as examples especially after the world financial crises to analysis retail industry. Next, I analysis this industry by using Strengths, Weaknesses, Opportunities, Threats (SOOT) framework. Us Mary cultural in retail industry. Give some examples.
I Will use the relevant course retail industry.Analyze some problems of retail industry and suggest some Weaknesses, Opportunities, Threats (SOOT) framework. Finally, state some rends of retail industry in different couture background. Point out Macs is the trend of this industry. Introduction In modern life, we can buy goods and service what we want in supermarket.
It makes our life wonderful and convenient. We cannot imagine that what our lives would become. Maybe, we will go back the life style thousand years ago. Now, we call this selling goods and service from individuals or businesses to customers (end-user) as retail industry.
Grew (2011) states that:”Retailers confront a seemingly impossible dual competitive challenge: grow the top line while also preserving their bottom line. Innovations in pricing and promotion provide considerable opportunities to target customers effectively both offline and online. ” With the development of retail industry, our life becomes more and more colorful and convenient. Therefore, people cannot without retail business. Actually, thousands years ago, there was action of retail.
In a way, the development of our society depends on the increasing retail actions.The early development of retail industry was very slow. People go to a settled place at a settled time merely to buy their articles for daily use. At that time, the suppliers also were the producers of the goods. This type of business contributed the development of cities.
With the inhabiting a region, the cities has become bigger and bigger. At the same time, retail industry grows faster and faster. Until 1852, the establishing of first department store BON MARCHER in France, the growth of retail business has been in high speed.
Retail has become a special and independent industry.After that, in 191 0, American A&P Company set up the first chain story. This inaugurated a new type operation in retail industry. KING SULLEN is the first supermarket set in 1930 America.
In 1947, 7-1 1 convenient store set up. Shopping centers appeared in 1945. In 1963, home centers built up in America. In 1 986, WALL – MART set up. From the history of the development of retail industry, we can find that this industry become increasingly bigger, more special and more diversifier. There are more and more influences in modern life. In modern daily life, retail industry plays a significant role.The independence of retail industry increases rapidly.
Without retail industry, people have to spend much more energy on finding the goods and service for their daily lives. With the development of retail industry, people could get the products ND service in an easier way. Specialist and diversification make the chain from producers to customers become more effective. At the same time, we should thank retail industry for reducing the cost and time spending on goods and service. Small profits but quick turnover is a most important characteristic of retail industry.Thus, we can say that a basic function of retail industry is distributing recourse in a reasonable way. With the development and use of internet technology, retail industry has become more and more various.
Such as shopping on internet is becoming a famous type of hopping. All Of above about make retail industry become more and more complete and convenient. In last 10 years, retail industry has become an important part of people’s daily life. Analysis Retail industry, as a kind of business actions, is influenced by many factors such as economic environment, culture environment, political environment and technology development.
In this part, I will analysis the role of retail industry in the whole economic environment. Then, I will analysis the influence from culture environment, political environment and technology development on retail industry. Economic environment Firstly, retail industry is a part of the whole business action influenced by the world economic environment, at the same time, influencing the development of world economic system. The relationship between retail industry and world economic system is contributing each other. Keep Hollander & Collation (1996) point out: “Economic benefits of retail diversification”.On one hand, with the development of world economic, retail industry has become more and more complete and professional. A stable economic environment provides a stable environment for retail industry to develop. Take globalization as an example, because of the pace economic environment, globalization has become a trend of the world economic system.
In addition, globalization contributes the retail industry to developing in a world wild. Globalization is a very important factor for the development of retail industry. Multinational company is a result of the development of globalization.As a manager of a multinational company, there are more benefits in a world wild economic environment. At the same time, there are more challenges for them.
In 2007, the financial crisis all over the world slowed down the placement of world economic. The environment of finance has been changed after that. Therefore, all managers of multinational companies have to face new challenges. Retail industry is one of industries which are influenced most by that financial crisis. On the other hand, the financial crisis brings more opportunities for retail industry.
The structure has been changed by this financial crisis. As a manager of a multinational company in retail industry, we should hold the opportunity to increase the percentage of market. Furthermore, retail industry will benefit the world economic environment.
The development of retail industry increases the dependence between different group as. Culture environment Secondly, retail industry is influenced by culture environment strongly. That because of the formation and development of retail industry is depending on different culture background in specific area (Eden 1993).
For example, in Chinese culture background, the type of retail industry is different from American retail. With a long term development, China has its special consumption custom. 20 years early, supermarket was very rare in China. People were not habituated to buying without shop assistant. Therefore, with different culture environment the type of retail industry is different. In addition, different culture environments influence retail industry in special field. For example, Pizza Hut is one of the most successful multinational companies in food retail industry.This company operates a lot of stores in many countries.
In Australia and America, Pizza is just a kind of food we eat very day. However, in China, Pizza has become a kind of fashion food. The customers are almost young people. If the manager of Pizza Hut operate his Pizza Hut store as the same as the type of operation in Australia and America, he profit will be fallacious. On the other hand, with the increasing of globalization all over the world, retail industry has become common in some case.
As I mentioned before, 20 years ago, supermarket such as WALL – MART was not popular in China,.But now, the situation is very different. Almost every city has a shopping center. Therefore, globalization makes the world culture environment becoming similar and retail industry is influenced by the changing of culture environment. For managers of multinational company in retail industry, cultural environment is a very important factor which they have to think about. Political environment and Technology development Although, retail industry is a concept of business the managers of multinational companies in retail industry have to think about the political environment and technology development.Firstly, the managers should understand the political system Of the country which the business operated in.
In different country the political system and the law will be different. It is very necessary to abide by the law. Secondly, the development of technology should not be ignored by the managers. Actually, technology is a very useful tool to contribute retail industry.
Take telecommuting as an example, telecommuting can benefit both retailer and customers in many different fields. It can save both time and money and allows retailer and customers to manage their time more flexibly.With the introduction of more technology, telecommuting may increase. It is important, then, for retailer to adopt methods of managing the telecommuting arrangement so that all parties can benefit. From this example, we can find so many advantages to retail industry. Also with the technology of internet retail industry will change much more diversification.
Therefore, technology development gives the managers f retail multinational companies more opportunities. Case analysis In this part, will take David Jones as an example to analysis the situation after world financial crisis.Then, give some solutions for the managers of retail industry. David Jones is famous in Australia as a high-end department store chain which owns about 37 stores locating in most Australian states and amount of brands.
David Jones which was founded in 1838 is not only Australia’s oldest department store, but also the oldest department store in the world still trading with its original name. With its main strategy on operating that sell sigh quality products at reasonable price to customers in nearly 1 80 years, David Jones has become an ideal place for Australian and customers from all over the world.However, in the recent years, especially after the world financial crisis, David Jones is facing the fact that is net profit decreases yearly. With the target to facilitate David Jones, in this article I will formulate one medium-run strategy to pull through the period of weak market. This strategy is focusing on combination of price and market environment.
First of all, reducing price of goods is a feasible method for David Jones to pep profit in short time. At the beginning, the present situation facing by Australia’s retail industry, especially by David Jones should be pointed out.According to report (Blair 201 1 with some influences on currency exchange, carbon tax, natural disaster, and the threats of further interest rate rise, the profit of Australia’s retail industry has an evident decrease. In addition, after the world financial crisis, income of most families has been affected.
Therefore, money has become a concern. In another word, people pay more attention on the price rather than brand of goods. As result of this, David Jones loses thousands of consumers. Therefore, reducing price of goods is a feasible method to attract consumers.Moreover, reducing the price has another benefit which David Jones will keep a lot of old consumers who usually consumed in David Jones. It will also benefit to David Jones after the world economic resurgence in the future.
However, some opponents argue that reducing the price actually reduce the profit of David Jones. That may be right in a way. Uric & Decals (2008, p. 494-51 7) claim that temporary price discounts are an important tool for retail managers to create profits.
The consumption demand of good will be stimulated to the larger extend.For example, the majority of customers cannot refuse the temptation when seller told customers they could get a 30% or more discount. The fact is the sales volume will increase with the reduction of price. The more sales volume could decrease stock which could reduce the cost of store.
At the same time, this strategy could increase the capital to help David Jones solve other problems in this period. However, one important thing should be pointed out. While reduce the price, David Jones should keep its high quality of goods and service.This is the basic and soul of David Jones. This is also the basic reason of why customers choose David Jones. Secondly, David Jones should be with a view to not only the price but also the market environment to keep its advantage in retail industry. As well known, market environment is a very complex factor which managers have to consider. In this part, I will just state new brand and consumption behavior of customers.
Firstly, David Jones should bring some new elements such, as new brands to attract new customers.On the period of worse trading environment, pricing new brands stay at reasonable and amazing price will dead a well trading condition which could stimulate consumers to purchase (Ruth & Venerates 2003). This not only depends on a fascinating price but also depend On the attraction Of new brands.
According to survey (Lois et 2001 70% consumers would like to have a try another brands if the new brand stay at the same quality and price. Hence, introducing new brands could stimulate many potential the group of consumers to loyal David Jones. Meanwhile, the replacing old brands by new brands could adjust the structure of David Jones store.Some popular brand will be sold in a short time which could make the sales cycle shorter. In addition, consumption behavior of customers is another important factor should be considered by David Jones.
Extraordinary retail environments can rebuild customers’ habitual behavior effectively (Caltech et al. , 201 1). For example, an elegant environment such as a classical decoration style will give customers a comfortable feeling to encourage them to consume. In conclusion, David Jones should focus on differentiation.
It means that David Jones should adjust its consumption environment to make it unique depending on different market environment.Differentiation is a business approach to show the Mayans certain characteristics valued in a special industry (Capped et 1994). In conclusion, David Jones needs to adjust the price of goods to adapt the world financial crisis and increase sales volume. Furthermore, David Jones should bring some new elements to attract customers depending on market environment and consumption behavior of customers, such as new brands and unique consumption behavior of customers-in addition, David Jones should combine these two approaches to inspire consumers and develop new consumers.
As a result Of this, the profit Of David Jones will be promoted. SOOT Analysis In the fact that, any industry has its own special situation. Retail actions exist for a long time in the world. It is with the development of human society. However, modern retail industry appeared only nearly 200 years. With the time moving, retail industry has changed a lot.
It is becoming increasingly completed and more suitable to modern life style. In this part, I will use SOOT (Strengths, Weaknesses, Opportunities, Threats) framework to analysis retail industry. Strengths First of all, retail industry has its own advantages.As I mentioned at the introduction, small profits but quick turnover is the main characteristic. As Cared (2007) says, there is a subtle relationship between the price and the demand.
When the price goes up the demand goes down. However, profits cannot only depend on the mount of selling. Because of this characteristic, a suitable management is becoming much more important to a multinational company in retail industry. In addition, the time of turnover is short. Retail industry does not produce the goods or invest on the development of technology.The only thing need retailers doing is buying products from supplier and selling to customers.
This makes retail industry pay more attention on a special thing. Furthermore, with the development of internet technology, the cost of operation has been reduced rapidly. More and more online shopping do not need physical shops any more. According to Bristol (1993), some moderate and slow changes have happened between profits and costs. Also, the coverage of burgeoning retail industry has become much bigger than before.
Weakness The management is the most important factor to retail industry.Retail industry is not as simple as we thinking that just buying and selling. It needs a lot of employees to operate the chain. All these jobs have to be deal with a management team. Therefore, the managers of retail multinational companies should consider all aspects such as transportation, advertisement and storage. High level independence on other industry is another weakness of retail industry. For example, a supermarket has to depend on manufacturing industry, transportation, and media.
Retail industry is just a part of the world economic system.Opportunities With the development Of human society, with the new technology use, retail industry has become more and more diversified. Many new types of retail are becoming more and more popular. For example, many customers can buy almost all products online without going there. In addition, on the internet, we even can buy the products from other countries.
Now, there is a new type of shopping which called “group purchase”. At the same time, our life is much more convenient than before. The retreats For many industries, financial crisis is the most threat.
Retail industry is a very sensitive industry.There are many complex relationships with other industries. Therefore, retail industry is influenced strongly by many factors. However, with the globalization increasing, retail industry trends to be diversification and international.
Multinational companies in retail industry should be the trend of this industry. Conclusion In conclusion, retail industry plays a significant role in modern life. Retail industry is a part Of the whole business action influenced by the world economic environment, at the same time, influencing the development of world economic system.In addition, retail industry is influenced by culture environment strongly. Globalization makes the world culture environment becoming similar and retail industry is influenced by the changing of culture environment (Lois 2001 From the SOOT analysis, we should consider that tit the speed of globalization faster and faster, managers of retail industry need enhance their strategies to meet the requirement of new situations.
About retail industry, I want to say that even though, retail industry looks easy as we think, it is very necessary to our life.