Myer Swot Analysis
Contents 1. Introduction 2. SWOT analysis 3.
Stakeholder analysis 4. Strategic Initiatives 5. 1 Suitability and Feasibility 5. 2 Impact on major stakeholders 5. 3 Shareholder value implication 5.
Proposals to management 6. Strategy Map and Balanced Score Card 7. Conclusion Reference Appendix A External Analysis Appendix B Internal Analysis Executive Summary Myer, the largest department store retailer in Australia, re-listed on the Australian Stock in November 2009.
Howard McDonald (Chairman of Myer) declared an Offer to the investors in order to achieve Listing on ASX and provide Myer with additional financial flexibility to pursue growth opportunities, Since changing the ownership in 2006, Myer has been confronted by major transformations. Listing on ASX can help Myer improve access to capital markets, provide a liquid market for shares, provide an opportunity for employees and customers to invest in the company. Myer will have sufficient working capital, capital resources and liquidity to carry out its stated objectives on the completion of the Offer.
This report is to evaluate the strategies that given in the prospectus and to provide some recommendations. First, a SWOT analysis will be given. The second part is stakeholder analysis of for five major stakeholders of Myer. The third part will select four strategic initiatives and evaluate its suitability and feasibility followed by the assessment of the impact on both stakeholders and shareholders. The fourth part is the recommendation to the management of Myer. Finally, a strategy map and Balanced Scorecard will be provided to better demonstrate the strategy that Myer should focus its attention on.
. Introduction Myer, started from 1900, has become the largest department store in Australia. Myer has undergone a major transformation since changing the ownership in 2006. The strategy that Myer focuses are mainly on four parts which are new stores opening, comparable store sales, gross margin improvement and reductions in the cost of doing business. This can be a great opportunity for Myer to search for new market and maintain constant growth. However, the external and internal environment will be an important impact for the development of Myer.
The global financial environment has affected the Australian economy. Customer may change their preference. Moreover, the competitor’s strategy like David Jones and major stakeholders’ interests also should be included as the factors affect the further development. Considering all the factors above, we are selecting the most appropriate strategies for Myer to minimize the possible risks and to increase constant growth that will ultimately enhance shareholder value. 2. SWOT analysis The SWOT analysis is based on an extensive analysis of the external and internal environment.
Please refer to the Appendix A and B for further information. 3. Stakeholder Analysis (see Appendix B-1) Customers As one of the Australian largest department store retailer, Myer has remained approximately 3. 1m “high value customers” by Myer one loyalty program, and has been attracting 235000 MYER Visa Card and Myer Card holders currently. Customers concern about the quality of products at a reasonable price, after-sales service, prime store locations, benefit and reward regime, extensive brand offering, and Supreme shopping experience.
To satisfy all these requirements, the cost of doing business margin would increase, while the gross revenue might be partly or wholly influenced, thus customer’s interest would be opposed to the generation of shareholders’ value. Employees (excluding management level) Myer has approximately 14,000 team members and is committed to being an employer of choice, 87% of them are store staff, regardless of full-time, permanent part time or casual employment. They expect to obtain equivalent payment to their contribution, motivation system, and other value-added activates such as job security and training program.
Currently, Myer has a number of collective enterprise agreements with its team members and also has a positive relationship with key unions such as the Australian Services Union and the National Union of Workers. Myer makes superannuation contribution in respect of employees in accordance with legislation.
Besides, a number of initiatives are in place to enhance team development, customer service, selling skills, product knowledge and sales performance.
The contribution of employees supposed to be aligned with Myer’s strategic objectives; however their specific interests might be opposed to shareholders’ value since the cost of operating activities will increase. Debt stakeholders Creditors normally focus on the liquidity or solvency of the borrower in terms of current ratio and quick ratio, which indicate whether the company has enough working capital to cover the short-term debts. Myer will enter into a syndicated facility agreement to refinance the existing borrowings of the Myer Group.
Besides, creditors are interested in the business risks the company might undertake, which indicate the possibility that the company might be unable to pay back the long-term liability in the future.
From this point, the expectation on high return on investment and high profitability in the long run make the creditor’s interest aligned with shareholders’ value. Suppliers Myer sources its products from over 800 suppliers globally compromising 2400 brands, to provide customers with one of the broadest brand offerings by a single retailer.
Increased supplier collaboration and partnering efficiency with the implementation of Mymerch program enable Myer to speed to targeted market and better respond to the changing of customer preference. Suppliers concern about the growth of sales as that means more suppliers’ products can be sold. Moreover, the continuity of relationship and company image are also important to suppliers. On the other hand, suppliers always seek the higher pricing level that might cause a conflict of interest.
Generally speaking, the interest of suppliers is mostly aligned with shareholder’s value in a long run.
Community The last but not the least stakeholder is community/society. The major interests the community focused include local community engagement, environmental protection, and moral and ethics issues. Myer considers the focus on community initiatives as an enduring aspect of the corporate philosophy that could help to drive customer loyalty and reinforce the brand reputation. Myer’s rapid response to Victoria’s tragic Black Saturday bushfires in February 2009, donate $2. 5 million to the Salvation Army’s bushfire appeal, illustrates its strong connection with community.