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Internal Analysis of Myer Company

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Myer is an Australian department store company with approximately 60 stores at prime retail locations across Australia. They offer quality product and service with a wide range of high end brands. With the increase in competition for the past few years, Myer has been going through an identity crisis with their share prices falling to an all-time low of 82 cents in 2017. This has led to Myer revising its strategies.1Myer adopts a Differentiation strategy by offering premium quality products and services to a wide range of customer’s. Their current strategy is to improve the company wide focus in relation to product, price and customer service in order to improve its trading activities. In terms of product and price, Myer’s strategy is to provide new exclusive products backed by heavy marketing and promotions. They also intend to focus on products that have higher price transparency. In 2018, Myer invested in price competitiveness which led to increase in sales although week by week volatility still existed.

In terms of service, Myer’s focus is to strive to be the best by launching various new service initiative programs as well as providing Omni-channel experience for their customers like “Myer’s online”. Myers have also come up with an online marketplace named “Myer Market” which in addition to the traditional Myer store offers products from a wide range of boutique brands and sellers. According to its Executive Chairman, Mr Garry Hounsell, Myer’s online business is said to be an important asset which is now one of Australia’s fastest growing online business. Myer’s online business had a sales growth of 48.9% in the year 2017.

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By adopting a differentiation strategy, Myer gained a loyal customer base and brand loyalty because of which the customer’s price sensitivity is low. However, Myer should continue to innovate and find ways to stay ahead of their competitor’s to sustain in the long run.

Distinctive capabilities

Myer’s distinctive capabilities are its strong brand portfolio including Myer’s exclusive brands like “Basque” whose sales have increased by 15% and “Piper” whose sales have increased by 10%. They also have more than 60 stores in some of the best locations in Australia. They provide superior customer service and establish good supplier relationships like “Taking Shape”, a women’s fashion brand for plus size, who bagged the title for Myer’s Supplier of the year for 2017. Myer conducts this event every year to give recognition to brands and their suppliers for providing excellent retail experiences to their customers. Upmarket department stores like Myer are also costly to imitate and cannot be easily imitated by small retailers.

Reproducible capabilities

Myer’s reproducible capabilities include selling same merchandise as sold by others which may lead to availability of substitute products. Myer’s biggest competitor, David Jones offers similar products in the market.

Value chain of Myer

Value chain of Myer includes a set of activities which contributes towards the creation of valuable products and exceptional customer service. Myer’s Primary activities are as follows:

  • Inbound Logistics: It involves activities like recruiting staff, designing and development of Myer’s own label products, ordering merchandise from the suppliers and maintenance of optimal stock levels at each store. Myer uses Bestrane’s web based dock appointment scheduling solution to manage its inbound deliveries.
  • Operations: Myer’s operational activities include training the staff members, conducting research on the products, trends and prime retail locations. It also involves visual merchandising and creating attractive store designs.
  • Outbound Logistics: It involves packaging of the products and providing delivery services. Myer also offers the same day delivery service if the order is placed before 12pm.
  • Sales and Marketing: It involves activities like advertising and graphic design. The marketing team is also responsible for public relations, social media as well as loyalty and creative concepts.5Services: The services are handled by the staff in stores and their online customer service team. Myer also provides refund policy where the customers can return the goods or exchange it within 30 days of purchase subject to terms and conditions.

The above Primary activities of Myer are supported by various support activities like Firm infrastructure, Human resource management, Technology development and Procurement as shown in the diagram below, thereby helping to add value to the company as a whole.

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