David Jones Ltd (DJS), one of Australia’s oldest and most recognised department stores was founded in Sydney in 1838 and is a retailer of diversified products ranging from clothes to daily home products. This report’s purpose is to provide the David Jones’ Board and Senior Management advice through the assessment of SWOT, resources, capabilities and strategies with a Balanced Scorecard and Strategy Map as the measurement of the strategies.
Part A-1: David Jones Strategic Analysis – SWOT
STRENGTHS
• Brand Name, Product and Brand Portfolio
DJS was the first department store in Australia and its black-on-white hounds tooth was judged one of the Australia’s top ten favourite trademarks in 20061. DJS maintains a wide variety of products and
• Competitive environment
There are an increasing number of overseas and online competitors entering the Australia market. In addition, a strong Australia currency and online business exploration is also seen as a threat to retailers for it has a deflationary impact on domestic sales4.
• Growing employment and wages – rising cost of doing business in general
IbisWorld has stated that the capital to wage cost is expected to be 1:6.590 in 2013. Although industry research indicates employment and wages reducing in 2013, David Jones is increasing sales staff working hours and introducing hundreds of new positions in a bid to improve customer service and engagement.
Part A-2
From our analysis on the external environment we have understood that in recent years the Australian department store industry has been characterised by increasing competition due to the presence of online competitors and overseas specialists, like Zara and Top Shop. Moreover, adverse macro-economic conditions further decrease the potential profitability of the industry. In fact after the GFC, a deteriorated “consumer sentiment index” and a reduced real household disposable income together with a strong Australian dollar increase the level of rivalry significantly. In this kind of environment, we strongly believe that DJS must rely on two fundamental capabilities: first class customer engagement and customer service and Brand Positioning. These two capabilities are