RETAIL INDUSTRY IN AUSTRALIA 5
Running head: RETAIL INDUSTRY IN AUSTRALIA 1
Myer Holdings Ltd Situational Analysis Report: Retail Industry in Australia
Student’s Name
Institutional Affiliation
Myer Holdings Ltd Situational Analysis Report: Retail Industry in Australia
Retail Industry in Australia
The Retail Industry in Australia has experienced positive performance in the past few years. Despite the rising house hold dept., weak growth in wages and strong housing market, supported by growth in household credits encouraged the consumer market to spend just as the perceived value of the goods increased. Despite the Global crisis of worldwide economic turmoil that has been experienced since 2007, Australia has continued to enjoy a strong economic stance in the retail industry. This is evident in its Annual GDP rate which ranges from 3.48%. From 1960 to 2013 (Bureau of Statistics 2013). This is according to the American Bureau of Statistics data. Myer Holdings is one of the company’s in the region that has reaped from the benefits of the strong Australian market. The company has recorded a growth of up to$2.5657 billion between 2006 and 2012. However, despite this success, the retail industry has experienced both internal and domestic challenges. The paper will focus on this analysis using PESTEL and SWOT analysis tools in the evaluation of the retail industry in Australia relating to Myer Holdings Ltd.
Source: (“Australia Retail Sales YoY | 2019 | Data | Chart | Calendar | Forecast”, 2019).
PESTEL ANALYSIS
Myer holdings ltd Pestle analysis is a strategic tool that will be used in analyzing the macro environment to determine the position of the Organisation in the Australian retail market. Changes that are experienced in the macro-environment areas have not only an impact on the Myer holdings but also the retail players of the Australian market (Forest et al. 2014). The company has a significant influence on the Australian GDP (2015). Therefore, factors in the macro-environment can influence the Porters five strategies which are responsible for shaping the competitive advantage levels in the Australian retail industry.
Political factors
Political stability in Australia has encouraged more suppliers and investors to venture their businesses in the area hence low risks of business failure and high return levels. The Australian government has focused on expanding the external business ties thus providing ample opportunities for retailers to get their supplies and clients globally by using E-retailing. The chairperson at Myer Holdings Ltd (during the release of the annual report) some of the political factors that affect the company. One of the political factors that were highlighted during the meeting was the uncertainty in political levels which include new trade charges and taxes. For example, one tax, pensioned that would affect the spending of the consumer is the carbon tax (“Retail trade trend | South Australia | economy.id”, 2019). The carbon tax will affect the consumer market, and thus lowering revenues of the company
Economic Factors
The Fluctuation of the Australian dollar and weakness in the global economy has adversely affected the growth in sales of the retail industry in Australia (industrial market 2015). Other economic factors that have affected the consumer confidence, as well as spending patterns, include high prices of oil, failing house prices and a decrease in GDP. The decrease in the rate of unemployment and inflation rates has directly influenced success in the retail business.
Social Factors
The increase in demand of high-quality goods among the Australians has provided a great opportunity for Myer Holdings Ltd to focus on satisfying the needs and expectations of their customers for them to gain a competitive advantage over DJs and other retail companies (Pestel Analysis Australian Retail Market, 2019). The population in Australia is diverse in terms of culture. Therefore, Myer holdings should have managed its products in the line of diversity through providing a wide range of products that will meet the needs of all the customers.
Technological Factors
The presence of international competitiveness in the Australian macro market is as a result of its developments in the use of the internet (Brown 2019). The presence of new technologies in the areas has accelerated the expansion capabilities into new markets. The satellite and network coverage in Australia has contributed to connections of different activities hence enhancing efficiency.
Legal Factors.
Taxation policies and worker’s regulations have been influencing the retail Industry in Australia. Laws like health and safety regulations, Compliance with disclosure and client’s protection has influenced the retail industry in one way or the other. For example, while opening new stores, the government of Australia needs to approve the opening to control legal activities in the region.
SWOT Analysis
Strengths
Myer Holdings target extra income earners. Also, the company has invested its efforts in styling up the entertainment world of the youth shoppers in the retail market (Australian Trade policies, 2010). One of the greatest strengths of the company is its loyalty card in retaining and attracting the existing buyers by handing out loyalty gift bags and other benefits which in turns keeps the customers coming (Smith 1999). It has also been observed that the pharmacies in Australia have presented a significant competition to Myer holdings in terms of perfumes and cosmetics. However, Myer Holdings buyers are retail shoppers. The appeal of the company is in attracting youth demographic in a reasonable income market. Another strength that has enabled Myer holdings to dwell in the market is its ability to bring out an extra benefit to the consumers like offering excellent insights and releasing field retails (Campbell & Chalmers 2008). Another significant strength of the company is based on the pillars like the opening of new stores all over the globe, comparative growth in its sales and an improvement in both the net profit margin and gross margin. It can be observed that the company works under sixty-six stores which provide eleven product and service categories such as intimate apparel, electrical goods, fashion accessories, women’s wear, and common merchandise.
Weaknesses
The high rate of non-employment in Australia and quiet user sentiments during the first half has played a significant role in restricting the growth of the company (Deery and Mahony 1994). The huge administration stimulus and low interstates have contributed to a decline in spending. According to the Bureau of statistics, the rate of unemployment in Australia has been observed to stay weak over the past few years.
Opportunities
Myer holdings limited stands a great opportunity in increasing its accessibility thus an increment in the number of customers (Rankin 1996). Myer Holdings Ltd brings out diverse benefits for the exposure of the user in various specialized retail stores. Also, the company stands a chance to improve to improve by offering refreshments to the consumers as well as introduce various categories of products.
Threats
The main threat of Myer Holdings Ltd is its main competitor DJS (Global Sourcing and Retail chains 199). The company competes with various stores, retailers and specialty wholesalers specifically in footwear and apparel stores.
References
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