Strategy Formation and Implementation for MYER holding limited Australian department store

Strategy Formation and Implementation for MYER holding limited Australian department store
BUSM3200 Strategic Management Assign ment marking criteria Semester 1 2017 SIM (45 %) Report Element High Distinction 80-100 Distinction 70 -80 Credit 60-69 Pass 50 -59 Fail 0-49 Identification of current business strategy (5%) Demonstrate s an excellent understanding of concept of business strategy and insightfully discuss es the general type of business strategy that the company/SBU implements by examining it s strategy statement and its value chain activities . a wide range of relevant informatio n sources and theories are critical ly analysed and synthesised to support the discussion . Demonstrates a good understanding of the concept of business strategy ; by examining its strategy statement and its value chain activities, general type of business strategy that the company/SBU implements is clearly identified and logically discussed; a range of relevant information sources and theories are critical analysed and synthesised to support the discussion . Demonstrates the understanding of the concept of business strategy; by examining its strategy statement and its value chain activities, general type of business strategy that the company/SBU implements is identified and discussed; some relevant information sources and theories are used to support the discussion. Demonstrates a basic understanding of the concept of business strategy; is able to identify the general type of the company/ SBU’s strategy by using some relevant information sources and theories. Demonstrates a poor understanding of the concept of business strategy; unable to use relevant information to identify the general type of business strategy for the company/SBU ; the discussion is po orly presented. Proposal of ONE new strategic initiative for the organisation to implement (10%) Proposes a strategic initiative that indicates full comprehension of the company’s strategic context. It is sensitive to contextual factors as well as all of the ethical, logical, and cultural dimensions of the problem. Justification of the proposed strategic initiative is complete (for example, contains thorough and insightful explanation) and exhibits the following: logic/reasoning, examines feasibility, and weighs impacts of initiative proposed . Proposes a strategic initiative that indicates full comprehension of the company’s strategic context. It is sensitive to contextual factors as well as all of the ethical, logical, and cultural dimensions of the probl em. Justification of the proposed strategic initiative is complete (for example, contains thorough and insightful explanation) and exhibits the following: logic/reasoning, examines feasibility, and weighs impacts of the initiative , but may miss some subtle points. Proposes one generic strategic initiative that is rather than one that is individually designed to address the specific contextual factors of the problem. Justification of the proposed initiative is superficial but includes the following: logic/re asoning, examines feasibility, and weighs impacts of the initiative proposed. Proposes an initiative that is difficult to evaluate because it is vague or only indirectly addresses the problem statement. Justification of potential solutions is superficial and does not include the following: logic/reasoning, examines feasibility, and weighs impacts of the initiative proposed . Proposes a partial initiative that is inappropriate for the problem or context. Justification of the initiative is poorly done, may be irrelevant, or is inappropriate. OR (Serious fail) Doesn’t propose a complete solution or proposes a solution that is unrelated to the problem or context. Justification of solutions is not done and/or fails to address the following: logic/reasoning, exam ines feasibility, or weighs impacts of the initiative . Develop ment of a strategy implementation plan (10%) Implementation plan uses relevant analytical techniques and addresses thoroughly the relevant contextual factors regarding the contents of change, the process of change, and change management for the strategic initiative proposed . Implementation plan uses relevant analytical techniques and addresses thoroughly the relevant contextual factors regarding the contents of change, the process of change, and change management , but missed some subtle points. Implementation plan addresses the strategic problem faced by the organiation but ignores some of the relevant contextual factors, and/or uses only partial analytical techniques of change management. Implementation plan addresses the problem but only in a basic or straight – forward manner, and partially uses analytical techniques for the strategy implementation. Fails to describe how to imple ment the strategic initiative in a manner that directly address es the problem faced shows little understanding of the analytical techniques for change management OR (Serious fail) Fails to propose an implementation plan, or proposes a plan that is unconnec ted to the problem /context faced by the organisation. Design of measurements and evaluation mechanisms for the strategic initiative implementation (10%) The success measurements developed are practical and address all key success factors /aspects in an appropriate hierarchy using the BSC and connected appropriately in the strategy map developed . Justify comprehensively and logically the suitability of the strategic initiative proposed based on the organisation’s strategic context. The success mea surements developed are practical and address most of key success factors /aspects in an appropriate hierarchy using the BSC and connected appropriately in the strategy map developed but may miss some links . Justify well the suitability of the strategic in itiative proposed based on the organisation’s strategic context. The success measurements developed are practical and only address some key success factors in an appropriate hierarchy using the BSC and connected logically in the strategy map developed. Justify reasonably well the suitability of the strategic initiative proposed based on the organisation’s strategic context, but may miss some key contextual issues. Most of the success measurements developed are practical but only address some key success fa ctors /aspects in an hierarchy using the BSC and connected in the strategy map developed, but may miss some key logic links. Justify the suitability of the strategic initiative proposed based on the organisation’s strategic context, but miss some important contextual issues. Only a few of the success measurements developed are practical and fails to address key success factors /aspects ; show little understanding of the concepts of BSC and strategy map. Failed to justify the suitability of the strategic initiative proposed. The overall presentation (including executive summary) and quality of the report (5%) The report is well organised and professionally presented, with a well written executive summary . It shows an e xceptionally clear understanding of subject matter and appreciation of issues; well organised, formulated and sustained arguments; The report is well organised and professionally formatted , with a well written executive summary. It shows a s trong grasp of subject matter and appreciation of key issues, but lack s a little on the finer points; it has clearly developed arguments , The report is logically structured with an executive summary. It has a c ompetent understanding of subject matter and appreciation of some of the main issues though possibly with some gaps , clearly developed arguments , relevant diagrams and literature use, The report is correctly formatted with an executive summary . It has s ome appreciation of subject matter and issues; work generally lack s in depth and breadth and with gaps. Often work of this grade comprises a simple factual description (i.e. basic The report is incorrectly structure d with a poor ly-written executive summary (or executive summary is missed) . The report only comprises a simple factual description (i.e. basic comprehension) but little application or analysis ; it p resents little appreciation of BUSM3200 Strategic Management Assign ment marking criteria Semester 1 2017 SIM (45 %) Marker: Signature: Date : well thought out and structured diagrams; relevant literature referenced. Evidence of creative insight and originality in ter ms of comprehension, application and analysis with at least some synthesis and evaluation. relevant and well structured diagrams , appreciation of relevant literature and evidence of creative and solid work in terms of comprehension, application, analysis and perhaps some synthesis. perhaps with some gaps , well prepared and presented. It also has s olid evidence of comprehension and application with perhaps some analysis. comprehension) but little application o r analysis. Work of this grade may be poorly prepared and presented. Investment of greater care and thought in organising and structuring work would be required to improve. subject matter and issues . Work of this grade may be poorly prepared and presented. Investment of greater care and thought in organising and structuring work would be required to improve. Access and Use Information professionally and Referencing (5%) Students use correctly all of the following information use strategies (use of citations and references; choice of paraphrasing, summary, or quoting; using information in ways that are true to original context; distinguishing between common knowledge and ideas requiring attribution) and demonstrate a full understanding of the ethical and legal restrictions on the use of published, confidential, and/or proprietary information. Students use correctly three of the following information use strategies (use of citations and references; choice of paraphrasing, summary, or quoting; using information in ways that are true to original context; distinguishing between common knowledge and ideas requiring attribution) and demonstrates a full understanding of the ethical and legal restrictions on the use of published, confidential, and/or proprietary information. Students use correctly two of the following information use strategies (use of citations and references; choice of paraphrasing, summary, or quoting; using information in ways that are true to original context; distinguishing betwee n common knowledge and ideas requiring attribution) and demonstrates a full understanding of the ethical and legal restrictions on the use of published, confidential, and/or proprietary information. Students use correctly one of the following information u se strategies (use of citations and references; choice of paraphrasing, summary, or quoting; using information in ways that are true to original context; distinguishing between common knowledge and ideas requiring attribution) and demonstrates a full under standing of the ethical and legal restrictions on the use of published, confidential, and/or proprietary information . Students fail to use correctly one of the following information use strategies (use of citations and references; choice of paraphrasing, summary, or quoting; using information in ways that are true to original context; distinguishing between common knowledge and ideas requiring attribution) and demonstrates a full understanding of the ethical and legal restrictions on the use of published, confidential, and/or proprietary information. General Comments:
Strategy Formation and Implementation for MYER holding limited Australian department store
1 BUSM3200 Strategic Management Detailed assignment guide Semester 1, 2017 Assignment 2 (Group Assignment): Strategy Formation and Implementation Weighting This assignment accounts for 45 % of the assessment in this Course. Due Date Monday, Week 1 2 Due T ime By 7.00 pm (Local time) Place via RMIT Blackboard electronic submission Format Report Length 7,500 words (Maximum) , 1.5 line spaced, 12 point Times New Roman. Note: The word count does not include references or appendices You will work in a group of five (5 ) with those in the same tutorial class to propose one strategic initiative and develop its implementation plan based on the strategic analysis of your individual assignment (Assignment 1). Your group formation will be completed by Week 7 either by yourself or by your local lecturer. The assessme nt wi ll be discussed in the Modules 2 , 3 and 7. W rite a 7500 word (Max) report, including 200 words of Executive S ummary, but ex cluding references and appendix. You will use the findings from your first assignment of all your group members to propose one strategic initiative for the organization encompassing a three -year time horizon. Your focus should also be on integrating the findings and feedback from your first assignment and then building upon these to create an actionable strategy implementation plan. The plan has to be achievable and realistic. Y ou have to clearly demonstrate what the strategic initiative is, why your plan can help the organization achieve and maintain a sustainable competitive ad vantage , and how this plan can be implemented . In this report, you are required to perform the following tasks: 1. Identify and discuss the current generic type of business strategy the organisation implements by examining its strategy statement and/or its value chain activities. 2. Propose ONE new strategic initiative for the organisation to implement. This initiative can be a major functional initiative, such as marketing, use of technology, product innovation, and M&A. Describe its contents in details. Justify why your initiative is strategic and how it can enhance the organisation’s competitive advantage . 3. Develop a strategy implementation plan that primarily focuses on the following areas: a. What needs to be changed to implement the strategy? b. Why the propos ed changes should be made? c. How will the changes proposed be managed and implemented ? 4. Explain how the organization will measure and evaluate the strategic initiative you proposed . Focus specifically on: a. A set of key success measures for the strategic ini tiative, using Balance Scorecard. b. Draw a strategy map that indicates the key success measures and their hierarchical relationships. 2 c. The suitability of the strategic initiative you proposed in the light of the external environment, the organisation’s strate gic capability, and its current business strategy. References should be utilised within this Report to validate the information presented, and should be drawn from academic sources and organisational information such as the website and annual reports. The business press may be used sparingly to identify relevant issues . Learning outcome/s and capability development This assessment is deliberately designed not only to test what you know, but to also build lifelong learning skills. It has been developed to give you the best possible opportunity to help the organization to survive and thrive into the future. The skills that you will be developing include:  cognitive conceptualisation skills  critical thinking and analysis skills  creative application skills. All these are valuable skills you will need in future employment. How well you are able to demonstrate these skills and knowledges will impact not only on you and your group (in terms of a mark) but also has the potential to influence the future of the cas e study organisation. Your work matters . Advisory notes for this assignment • You should conduct an extensive information search on the organisation selected. • Company websites, annual reports, and media reports are important sources of such information, but their objectives , and thus credibility , should be carefully analysed and evaluated. • You should use appropriate concepts and analyti cal tools in your report . • The report should be written in prose; however limited use of dot points is acceptable. • This advic e should be read in conjunction with RMIT assessment policy and the course guide. Guide for assignment presentation Written assignments must be presented in a professional format. Quality of presentation, especially literacy, will be considered in the mar king criteria . Written communication skills are an essential component of RMIT University’s courses. In line with RMIT policy, all sources of information must be fully referenced using standard Harvard or APA referencing systems. You are encouraged to us e referencing software such as Endnote for referencing and formatting. The assignment should be in report format and use Times New Roman font size 12, 1.5 line spacing. Assignment submission You are required to submit your assignment online. It should be attached with a coversheet, which can be downloa ded from the Course Blackboard and signed . Please submit it via the course Blackboard and not : 3 • Use only ONE student log -in account for your group/pair to submit the group/pair assignment into the Turnitin, and then to the course Blackboard . Otherwise you r Turnitin report will have a high similarity percentage . • Staff have access Turnitin information • Further submission instructions will be given in the seminars .
Strategy Formation and Implementation for MYER holding limited Australian department store
Strategic Analysis of Myer Holding Limited 10 STRATEGIC ANALYSIS OF MYER HOLDING LIMITED by NG YU REN (S3566185) Class: LF03 Course: Strategic Management Lecturer’s Name: Goon Swee Khiang Date: 22/2/17 Strategic Analysis of Myer Holding Limited Company Overview Myer Holding Limited is an Australian giant in the retail business. It is regarded as one of the largest department stores in the Australian subcontinent. It operates more than 68 stores that provide its customers with top products in fashion across the country. The company deals in more than 2400 brands obtained from numerous suppliers all over the world (Hoovers 2017, p.2; Myer 2017, p.1). The products include accessories, clothing, cosmetics and beauty products, toys, house equipment, as well as electrical appliances. Out of the 30 major shopping centers in Australia, Myer operates 25. A considerable market served by the company is in the New South Wales, Queensland, and Victoria regions. In 2009, Myer made an application to join the Australian stock exchange market to emulate the gains achieved by its main competitor David Jones. In 2011, it also acquired a 65% stake in Sass & Bide. Myer Holding Limited was established in the year 1900. Its founder Sidney Myer was an immigrant who settled in Australia from Russia and opened his first outlet, which grew to become one of the largest department stores not only in Australia, but also the world (Drury 2011, p.29; IBISWorld, 2017, p.1). After Myer purchased a draper store and other adjacent stores, it marked the birth of a mega department store. The company emphasizes on offering inspiration not only to its customers and employees, but also its shareholders. Currently, the firm has more than 12500 employees, 1200 suppliers, as well as 54000 shareholders. The communities served by the company benefit from numerous philanthropic activities conducted by Myer (Myer 2015, p.3). SWOT Analysis Strengths Myer’s primary strength is anchored on the positioning of its stores within a shopping environment. The company is a major player in the market in the department store sector in Australia’s retail industry. Moreover, Myer has a strong brand identity among its customers who perceive it as an upper class or elite department store offering high-quality premium products (Myer 2014, p.12). In addition, Myer makes use of its product diversity and quality as a competitive advantage. The company has established a broad range of prestigious brands to satisfy the preferences of its clients. For example, within the ground floors of its stores, Myer deals in well-known and established brands, such as YSL and Gucci. Myer also has a strong customer relationship department. The company offers special benefits to its most loyal customer who are offered Smartcards that allow them to enjoy discounted prices and great features in their favorite stores. These exclusive benefits include interest-free promotions that last for about 62 days, interest rates of about 15% as well as online account management. Myer also offers Fly Buy cards that are linked to Australia’s most renowned customer loyalty program. The points earned on this card can be redeemed for air travel, dinner in select restaurants, and vouchers that can be used in different stores around Australia (Myer 2015, p.14). Customer service is a pivotal pillar in the company, which is evident in its product strategy and branding in its stores. Weaknesses Pricing is a major weakness associated with Myer. The firm emphasizes on offering high-quality products at premium prices that are relatively beyond the capacity of the lower class. This leads to the company’s positioning as a luxury brand. Myer’s product positioning can also be perceived as a significant weakness in its business strategy. For example, even during the harsh economic periods when consumer spending significantly reduces, Myer rarely makes adjustments to its high prices. Similarly, Myer’s rarely engages in price wars to reduce the cost of its products to compete with its major rivals (Investor 2016, p.6-8). Doing so would contravene Myer’s reputation and image as a premium brand. This could have potentially adverse impacts on its customer base. Opportunities Myer has the potential to increase its expansion through the developing technology of online shopping. Digital platforms such as social media can also help Myer’s maintain and cultivate its close relationship with its customers. Social media platforms offer real-time feedback from different demographics of clients about their perceptions and preferences. The current trends in increased customer services and relationship management offer opportunities for Myer’s to enhance its customer loyalty program (Investor 2016, p.5). Online shopping will ensure that the company expands its reach to global customers and, hence, increases its market share in the industry. Threats The external environments possess a significant threat to Myer’s operations. This threat manifests itself in the form of governmental policies such new regulations governing taxation, policy changes in the industry, as well as economic downturns. In terms of developing an online shopping strategy, Myer’s is relatively behind in comparison to its competitors who have already created digital shopping platforms (IBISWorld 2017, p.2). In terms of competition, the biggest threat is manifested by large foreign departmental stores that would like to expand their operations into the Australian market, such as Tesco. Porter’s Five Forces Analysis Threats of New Entrants The threat from new entries into the department store sector is relatively low because of the capital-intensive nature of the business. Government policies and the economics of scale have a critical function to play in the department stores business, since they are required to increase or decrease stock levels at short notices. For example, large department stores often accrue cost savings through making large purchases, but small emerging stores do not have the financial strength to do the same (Armstrong and Kotler 2015, p.176). New government and regulation policies could also be an adverse barrier. Regulations are often a big barrier to prospective entrants into the industry because they have a huge effect on their profit margins. Another barrier to new entrants is the reputation and image built by existing businesses (Porter 2008, p.65). Venturing into this industry requires extensive capital investments that small organizations are not able to access. In this regard, the threat of new start-ups is relatively low. The Suppliers Bargaining Power Large organizations have the privilege of selecting from which supplier’s they are going to source their products. This implies that in the department stores sector, the power of suppliers is relatively low. In the recent past, large retailers such as Myer have gained an upper hand on the suppliers. This suggests that they can exploit the systemic relationship power that they enjoy over their suppliers (Griffin 2012, p.76). As large retailers continue to gain more influence on their suppliers, this threat remains relatively minimal. The Bargaining Powers of the Consumers Myer’s strength is that it can vary the price of various products within the same category in their large department stores. As a result of the disparities and preferences of their customers, the company is forced to stock a variety of products to satisfy its clients’ needs and demands. This implies that the switching cost of consumers is relatively low because they rarely leave the department store to find the products they need. Everything can be accessed in the large department store. Nonetheless, this suggests that the bargaining power of customers in the retail industry is relatively high (Porter 2008, p.68). However, due to Myer’s targeting strategy, brand image, and reputation of a prestige store, buyers do not have a significant influence on the company’s pricing strategy. Myer can not simply reduce its prices because it would imply that the organization is sacrificing quality, which would significantly harm the brand image. Availability of Substitutes Myer is a large department store dealing in the sale of a wide range of products. This implies that there is a huge availability of substitutes for customers shopping at Myer’s. Moreover, other electronic shops such as Harvey Norman could be offering relatively lower prices while also providing high quality and premium products. Other competitors also offer high discount rates on the same products which could be cheaper alternatives if the customers are not bothered in forfeiting quality for the price (Doole and Lowe 2008, p.106). The emerging online shopping industry could also be a significant substitute for some of Myer’s clients. Industry Rivalry The retail industry is characterized by high competition because of the high number of companies involved regardless of whether they are targeting different market segments. For instance, David Jones is a competitor to Myer even though they target different segments of the market. This is because they both deal in similar products, which makes competition among department stores very fierce (Armstrong and Kotler 2015, p.172). Core Capabilities of Myer Core capabilities are strategic aspects that a business must establish and sustain to attain a competitive advantage over its competitors. They are value added support aspects that assist the organization in attaining its core objectives that do not necessarily lead to competitive advantage, but are needed to ensure the company continues to operate (Roy 2009, p.17). Branding Myer’s branding offers it a strategic competitive advantage on the rivals. Myer makes use of a modern layout, presentation, and advertising strategies to market and promote its products consistently and clearly to its target customers (Meek and Meek 2003, p.86; Fifield 2012, p.61). The wording and layout used in these advertisements maintain the exceptional image and branding focus pursued by Myer. The competitive advantage is anchored on the company’s tremendously crafted brand image reputation, which has earned it the status of one of the largest premium quality departmental stores in Australia (Aaker 2014, p.98; Ferrell and Hartline 2014, p.92). However, Myer’s must also enhance its value-added capabilities, such as the capacity of its employees. It is important for Myer’s to ensure that its sales staff and other employees have the capacity to offer high-quality customer services across all its stores, since the corporate strategy is anchored on customer relationships. Positioning The choice of a competitive business location is also affected by the capacity and capability to raise the required resources. The strengths and weaknesses of the organization also play a critical role in positioning the business. In this regard, the best fit for a company lies between these factors and other environmental market determinants (Sengupta 2005, p.45). The brand visibility of the quality and premium products have become very vital to Myer because they also portray its prestige which is a core strength of the company (Wilson and Gilligan 2012, p.132). Myer has also positioned itself as one of the leading department stores not only in Australia, but also globally. The company leverages on its experience in the industry, since it has been in existence for more than a century. Marketing Myer’s marketing strategy involves four key factors. Firstly, it deals with a wide variety of products with the common denominator being quality. Secondly, the company has a highly competitive pricing strategy that allows it to target the upper and middle class. Thirdly, the company has a strong branding strategy that positions it as a quality, prestigious, and highly reputable brand. Finally, the company incorporates modern designing, presentation, and advertising in its stores. These basic concepts have established Myer as a leader in the Australian retail sector. Myer also incorporates a strategic focus generic marketing strategy in its operations (Zoephel 2011, p.126; Chernev 2014, p.72). Nonetheless, this strategy is not straightforward because the company has modified the concept to suit its business. Despite dealing with a wide variety of products, the company does not sell any brand labeled “Myer.” Conclusion Myer Holdings Limited has emerged as a leading player in the Australian retail industry. It has been in existence for more than a century. It specialized in selling a wide variety of quality products sourced from numerous suppliers. The SWOT analysis shows that the company has few weaknesses and many strengths which have helped it established itself as a premium and luxurious brand. The macroeconomic analysis shows that the company has numerous opportunities to expand and growth its business. The company has positioned itself as a quality brand through premium pricing strategies and having focused customer relationship activities. In summary, the future looks optimistic for Myer Holdings Limited. (1991 words) References Aaker, D. A. (2014). Strategic market management. Hoboken, New Jersey: Wiley. Armstrong, G., and Kotler, P. (2015). Marketing: an introduction (12th ed.). Upper Saddle River, NJ: Pearson Education, Inc. Chernev, A. (2014). Strategic marketing management. New York: Cerebellum Press. Doole, I., and Lowe, R. (2008). International marketing strategy: analysis, development and implementation. London: Cengage Learning. Drury, B. (2011). Alan Kohler’s eureka report: guide to personal investing. Carlton, Vic: Melbourne University Publishing. Ferrell, O. C., and Hartline, M. D. (2014). Marketing strategy: text and cases. Mason, OH: South-Western/Cengage Learning. Fifield, P. (2012). Marketing strategy. New York: Routledge. Griffin, R. W. (2012). Fundamentals of management. Mason, OH: South-Western Cengage Learning. Hoovers. (2017). Myer Holdings Limited company information. Retrieved from http://www.hoovers.com/company-information/cs/company-profile.myer_holdings_limited.971c1cb374c96ea2.html IBISWorld. (2017). Myer Holdings Limited – premium company report Australia. [Online] Available at: [Accessed Feb. 20, 2017] Investor. (2016). Myer company profile. [Online] Available at: [Accessed Feb. 19, 2017] Meek, H., and Meek, R. (2003). Strategic marketing management: planning and control, 2003-2004. New York: Routledge. Myer. (2014). Annual Report 2014. [Online] Available at: [Accessed Feb. 20, 2017] Myer. (2015). Annual report 2015. [Online] Available at: [Accessed Feb. 19, 2017] Myer. (2017). About us. [Online] Available at: [Accessed Feb. 20, 2017] Porter, M. E. (2008). Competitive strategy: techniques for analyzing industries and competitors. New York: Simon and Schuster. Roy, D. (2009). Strategic foresight and Porter’s Five Forces: towards a synthesis. München: GRIN. Sengupta, S. (2005). Brand positioning: strategies for competitive advantage. New Delhi: McGraw-Hill. Wilson, R. M., and Gilligan, C. (2012). Strategic marketing management. New York: Routledge. Zoephel, M. (2011). Michael Porter’s competitive advantage theory: focus strategy for SMEs. Grin Verlag Ohg.