David Jones 3

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Our staff of freelance writers includes over 120 experts proficient in David Jones 3, therefore you can rest assured that your assignment will be handled by only top rated specialists. Order your David Jones 3 paper at affordable prices!1.0 Introduction

David Jones (DJ) is a long history department store in Australia; it opened on the year 188. It is not only Australia¡¯s oldest department store, but the oldest department store in the world still trading under its original name. In the year of 000, 'the millennium began with David Jones reentering the Western Australian market, introducing the David Jones shareholder Rewards program and launching the David Jones website.' (http//www.davidjones.com.au/about/story_of_djs.jsp?SID=HomeDJStory) In the about same time, David Jones opens the Food chain. David Jones launches the eTailing and Foodchain in this year, the simple reason is provide service for their customer in some new ways. In June 00 they announced that they were to close their online operations and would also close Foodchain in same time.

.0 Industry analysis

.1 Retailing

David Jones is a typical traditional retailing department ¨Cstore. There are some troubled giants of retailing. For David Jones, 'In 000-01, David Jones recorded sales of $1.55 billion, up 5.8%frome $1.46 billion in 1-000. Same store sales, however, decreased 0.%. Profit also fell, with retail Earning Before Interesting and Tax down 17.8% from $58. million in 1-000 to $47. million in 000-01.' (brw.com.au/stories/00107 /11685.aspx) The poor retailing, increased competition, confused strategy and bad management are reason of decline profit. From the all of retail-industry analysis showing, department should be provide the new retailing approach following this situation. In this time David Jones launches the eTailing is possible and necessary.

. eTailing

Business models involving e-commerce changed during the year 000. In this year, an Internet war has been declared in Australia¡¯s retailing industry. Such as ColesMyer¡¯s Colesonline, which is integrating bricks and mortar business with its online operations. Myers, Kmart and target and David Jones were the first, third, fourth and fifth most popular sites. The second most popular sites, D-store, is now owned by retailer Harris Scarfe.

.0 Why DJ launched their new business in that time

David Jones launch the e-Tailing in the year 000 that timing is right, at that time 'clicks and mortar' is the compelling business model for retail; second, David Jones has the key assets and competitive edge required to compete successfully as a clicks and mortar player.

In the year of before 000, David Jones took a long-term view of e-commerce and had developed a strategically sound approach that was focussed on generating returns for shareholders. After considerable analysis and research, DJ focussed on building strong relationships with their customers through understanding exactly what they want in a traditional retailer, as well as a new economy e-retailer, and delivering on it. DJ have developed a multi-channeled e-commerce strategy aimed at capitalizing on the powerful David Jones brand and exploiting the latest technologies to deliver the best service and products to their customers. In the time, DJ have been developing growth strategies, which can be broken down into four key areas, Brand delivery is one of 4 key areas that mean is developing a multi channel brand delivery capability. David Jones On-line is being used to provide an opportunity to customers who cannot currently readily access the brand. It puts is on touch with a broader audience and give their existing customers another way to enter the stores.

The second key area for growth strategic is brand leverage. It will leveraging the brand to service their customers in new way. David Jones already has a strong capability in the food area. Foodhalls that is before the Foodchain, it produces some $100 million a year in turnover. DJ¡¯s target market is shopping for food more often as a result. Foodchain is very different to Foodhalls and concentrates on meal solutions, it provides everything from fully and partially prepared solutions to fresh produce. There is also a wine and spirits component, a small amount of grocery and a sit down and relax area. DJ plan to have a chain of around 40 within five years. From the marketing research, the total Australian market for food consumed at home is worth in excess of around $60b annually. If DJ achieve 40 stores on the ground it is possible Foodchain could account for around $500 million of turnover per annum or less than 1% of the total market. DJ will occupy a very specific niche designed to service the food needs of our core customers. Propose for David Jones provide the e Tailing that is get more approach for community with customer and get more benefit among the more and more competitor.

In the second reason for launches e Tailing and Foodchain, in 000 the Australian government increase the GST, David Jones going to extend their business, they want to make more profit form food marketing by this way to make more revenue.

Form above analysis for David Jones¡¯s eTailing and Foodchain. The reason for failure in 00 is the result of following First, David Jones knew that eTailing was a new way of reaching new customers that wouldn¡¯t be possible thought the traditional store structure.

In the other hand, David Jones aim for a narrower group of customers such as yuppie clients, offering them better service and products than other retailers. It didn¡¯t work. That is the reason why DJs¡¯ Foodchain ate itself. (www.davidjones.com.au)

4.0 Causes of DJ¡¯s Failure

In the mid of year 000, David Jones launched Foodchain and almost in same period DJ launched online retailing. DJs Foodchain business lost $ 0 million during the progress performed the business while on the other hand the online retailing division lost $ 7 million in less than three years time. There are DJ stores around Australia, which the central office needs to maintain the overall business activities. Foodchain was a concept that created by an overly ambitious former DJs CEO Peter Wilkinson respond to the competitive markets 10s in order to fixation it¡¯s market share with other growth companies.

4.1 Causes of failure on Foodchain business

Since the Foodchain concept is apply to all of the DJs branches over Australia same period of time, it is important for DJs to had a clearly ideas on the needs and wants of the different market segment. But DJs had neglected on doing precise market research. Operating first Foodchain David Jones store is great but there is troublesome of DJs due to did not analyze research the consumer needs or market demand before starting operating the Foodchain store. This is because in some store many gourmet foods had been thrown out because it has been expired or too much in supplying the food. DJs should get to know more about customer needs and wants by doing a survey so that can get to understand the customers better by gathering all the respond and feedback from the potential respondents. In applying the strategy to choose the location, DJ also put the foodchain store in poor location. That is make customer do not know about the existence about DJ foodchain store.

The second major that caused DJs fails on Foodchain strategy, DJ in operating Foodchain stores they provide varieties of gourmet food, Liquor and wine component. But the some of the products that they offer seems like more expensive than other retailer. In order to survive in this competitive market, most of the retail markets fight with each other by offering low price on their retail products. In order to gain the customer satisfaction DJs should provide more promotional tools such as give more big sales or discount, in order to attract customers to come to the stores. With this, it will result in the possibility of capture more profitability from potential customers.

DJ major business does not have an impact from Foodchain disaster, DJ may apply the right concept for perform the their major business (Department store). Since the first day the foodchain is launched, DJ use only few advertise to promote the Foodchain stores rather than promote the major business because the brand name of DJ is already well established and they think no need to spent to much expenses on advertising Foodchain stores.

4. Causes of failure on online business

David Jones in performing online business, DJ offering the same product in internet shopping with they offer in department stores, and it make customer prefer to buy straight in DJ than order from internet shopping. Internet shopping is not popular when it launched because many customer still prefer have a sensitive touch, see, feeling the product to consider to purchase, rather than buy in internet shopping. Except during a Christmas period DJ offer Christmas Hamper that can not be buy in department store only can be purchase through internet shopping. Due internet shopping only gain profit between Christmas period so DJ decided to quit from internet shopping or online retail.

David Jones Online business is the business-to-consumer eCommerce. Upmarket retailer DJs launched its Internet shopping site on the 16th October 000. The online store seems like do not attract those customers that fit the normal demographic of typical DJs customer. According to the DJs 00 Asia-Pacific Shopping Centre Conference, DJs main target customers are mainly female, those aged 0 ¨C 54 years, people that already married with children, with tertiary education, for those that employed full or part time, manager or professional type roles, and finally the most important is those that has above average income customers.

(http//www.propertyoz.com.au/data/events/papers/SCCA/Peter%0Wilkinson%0David%0Jones%0Ltd.pdf.) About one-third of the online user navigate to the site is coming from people in their 0s. This segment of customers has an affinity with dealing online business. It is the failure of DJs on launching online business due to it never doing well research on whether the target customers are the user friendly of online business or not.

5.0 Recommendations

In this case, David Jones absolutely did a wrong decision-making and took a wrong strategy for their new expanded business of Foodchain and online sales. Therefore, their profit margin has been low in past years and the price of their shares also has declined so that they have to shut the new business.

However, they can gain some experiences from the failure in this time. Internet still keeps developing and eTailing would become bigger in the marketing field in the future. Thus, they still have the chance to develop their online sales again in the future and they would success had they selected a correct marketing and management strategies. In fact, DJ launch their eTailing in 000 is a fit timing to develop their e-Business, the main cause that made them failed was they did not analyze the industry environment and did not select a good, fit strategy to develop their new business.

There are some suggestions for DJ that may be useful in the future as below

1. They should do the strategy analysis first, which means they should analyze the whole industry environment and analyze internal skill and resources as well. According to Viljoen and Dann (00), strategy analysis involves the gathering and use of information to ascertain the strategic position of the origination. Strategic analysis requires managers to recognize all the major forces at play in their industry and to decide whether the opportunities or the threats to the organization. (Viljoen and Dann, 00, p7) Marketing research is very important for an organization do some strategies decision making. DJ also have to analyze the environment before they run the Foodchain and online sales, they have to know what situation they may will into and who their competitors is. And how the competitors did before DJ run the similar eTailing business.

. If they repeat running the Foodchain in the future, they can emphases supply some special food that can not be found in normal supermarkets. And they can not make similar positioning with Coles or same level like Coles supermarket in the marketing, because DJ brand is in a higher level and they must put their business in the higher level which would fit their brand.

. In the future, DJ may repeat running the business in the future, because people can not leave IT at the moment. It would be a major industry in the future if it keeps going. Online sales are the same as traditional marketing sales in fact, eTailing also need an effective marketing strategy to make it can be successful. For DJ, they can only put limited products in their online sales, which can not be purchased in the DJ department store. People only can order in the Internet and DJ will deliver to buyers. They also need to do more ads and marketing promotion to introduce their online store to make reputation that DJ not only doing the department store, but also they also can do the online store as good as well. Their online products should also be high class and value products that can represent DJ¡¯s brand. They have to focus or target the higher income and middle age customers, because they normally are busy and have no free time to shop around which force them do a fast shopping. Online shopping maybe a good choice for them, because they can buy a high value product that fit their taste and preferences and these products can not be bought in a general store.

6.0 Conclusion

David Jones failed running on the eTailing and Foodchain business because of they took wrong strategies launch the new business. If they can follow a correct strategic management process that includes strategic marketing plan, internal management plan, strategy evaluation and control, they would not fail on the business. Strategic management is very important for every organization no matter it is small or huge, it can help the organization to get their organizational goal and missions.

Electronic Commerce is one of the most important aspects of the Internet to emerge. It allows people to exchange goods and services immediately and with no barriers of time or distance. However, the road to creating a successful online store can be a difficult and confusing one if organizations are unaware of the concepts and principles behind eCommerce. The trick to entering this market smoothly is to find out what the organization need to do before they have to do it. (http//www.online-commerce.com/) The eTailing business belongs to eCommerce industry, the firm also has to analyze the whole eCommerce environment and decide a good strategy to do the business before they decide to do it. DJ¡¯s failure can give many experiences to other department stores that plan to launch eTailing or eBusiness, and they also can avoid the wrong thing that DJ did before. This illustrates the fact that teat marketing should be an integral part of any company launching a new product or getting into a new market.

7.0 Reference

Viljoen, J. & Dann, S., (00), Strategic Management, 4th Ed., NSW, Pearson Education Australia

00 Asia-Pacific Shopping Centre Conference

http//www.propertyoz.com.au/data/events/papers/SCCA/Peter%0Wilkinson%0David%0Jones%0Ltd.pdf (Accessed 7th September 00)

Business Review Weekly

brw.com.au/stories/00107 /11685.aspx (Accessed 5th September 00)

David Jones website

http//www.davidjones.com.au/about/story_of_djs.jsp?SID=HomeDJStory (Accessed 5th September 00)

www.davidjones.com.au (Accessed 6th September 00)

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