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Retail Industry in Australia
Despite the Global and economic change in climate, Australia has managed to enjoy the changes. Australian macro market has enjoyed a strong and reliable economic stance. These benefits are evident in the history of the country’s GDP. The Annual Growth Rate of Australia is at 3.48% from 1960 up to 2013. This is according to the Australia Bureau of Statistics results. Mayer holdings are one among the few companies in the region that has managed to reap the benefits of strong financial performance in the country. Myer holdings have recorded a growth of $2.5657 billion from the year 2006 to the year 2012.
PESTEL ANALYSIS
Myer holdings ltd Pestle analysis is a strategic tool that will be used in analyzing the macro environment of the position of the Organisation in the Australian retail market. Changes that are experienced in the macro-environment areas can have not only an impact on the Myer holdings but also the retail players of the Australian market. The company has a significant influence on the Australian GDP. 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. The carbon tax will affect the consumer market thus lowering revenues of the company
Economic Factors
There are various economic factors that impact Myer holding ltd. These include the rate of inflation, economic cycle, and foreign exchange rate. These economic factors determine the aggregated investments and demands in the company. Even though various microenvironment factors like norms of competition influence the competitive advantage of Myer holdings, the firm can still use other factors like economic growth rate in Australia, retail industry indicators and inflation to forecast its growth rate economically. Another economic advantage that the firm holds in Australia is the efficiency in the countries financial market. Total sales for the company in a full year which ended on July 15th was observed to grow by 1% to $3,195.6. This was driven by the establishment of new retail stores in the region. The economic growth rate has been observed to increase significantly over the years especially in cosmetics and children’s wear. The government intervention in the Business has also been observed to favor the company as even after the taxes and exchange rates are deducted the company has still been able to make significant profits
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. 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. 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,
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. 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. 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. 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, Opportunities, and Threats.
It has been observed that the high rate of unemployment in Australia, as well as quiet user sentiment, has significantly influenced the growth of Myer Holdings Ltd.it has been estimated that the labor market in Australia has stayed weak throughout the years thus influencing the upturn in the financial system. However, despite the weaknesses present, there are diverse opportunities that the Australian macro market offers. For instance, the company has an opportunity to improve accessibility to have large numbers of customers. Also. Myer Holdings Ltd presents various benefits concerning users and exposure to different retail stores. On the other side, the retail company also experiences various threats. The primary threat of Myer Holdings Ltd comes from its main competitor DJs. Also, other small departments store and especially retailers and wholesalers who major in footwear productions and apparel stores.