The paper "Seeking and Securing Competitive Advantage" is a perfect example of a Marketing Case Study. Myer is a departmental chain store located in Australia (Myer, 2010). The company provides a range of products such as men and women wear, cosmetics, toys, books, food and furniture among others. Myer Australia has for a long time been the largest chain store in the country by revenue and store count (Myer, 2010). The company was started in 1899 with a humble beginning. Over the years, it has grown so fast due to operation strategies, effective expansion strategies, and efficient workforce among others.
However, the company has been faced with financial problems that have threatened its revenue generation and profits growth (Myer, 2010). This paper will carry out a competitive analysis of Myer Australia. First, it will highlight the financial turbulence faced by the company over the last years. Second, it will identify Myer’ s capabilities and will detail out the company’ s competitive advantage. Lastly, it will recommend a number of strategies to be implemented by Myer in order to ensure success. Myer’ s Current Performance Myer departmental store experienced a substantial amount of growth between 2000 and 2009 (Myer, 2005).
However, in the last three years, things have not been easy. The 115 years of chain store has suffered a decline in revenue and profits over the past three years. The profit in 2014 for the last six months of the year fell by a massive rate of 23.1% to about $62.15 million (Myer, 2005). However, the sales in the 2015 financial year increased by 1.7%. This represented one of the biggest fall for the company. In comparison, the financial results of 2015 were better than in 2016.
For instance, the 2015 half-year operating gross profits were $714.857 million and for 2016 it dropped to $694.081 million (Myer, 2005). In the last three years, there has been a strong performance in the childrenswear and womenswear, cosmetics and entertainment products (Myer, 2005). The sales in the other products were substantially low compared to the previous years. This is attributed to its margin expansion model used by the company. This model resulted in a cost base that was exceeding revenue which was too inflexible to blend well with the change in the retail industry. Myer’ s Capabilities According to the resource-based theory, a company’ s success factors that lead to sustainable competitive advantage are resources and capability (Newbert, 2008).
Capability can be defined as the collection of people, process as well as technology brought together for a specific purpose. In order to gain sustainable competitive advantage, organizations’ capabilities and resources should be rare, non-substitutable, non-imitable and valuable. In order to identify organizational capabilities, value chain analysis can be used (Newbert, 2008). Value-chain analysis is a tool that helps in identifying organizational capabilities and resources that have the potential to create value and boost competitive advantage. Porter has split the organization into primary and support activities.
The primary activities include inbound logistics, operations, outbound logistics, service, and marketing while the support activities include procurement, human resource, infrastructure and technology (Montgomery and Porter, 2009). Inbound logistics In Myer Australia, more than 50% of its products are supplied from outside Australia. Inbound logistics of Myer Australia is based on three concepts; using few links in the supply chain, forming effective partnerships with dealers and transferring products directly without storage (Myer, 2010). Operations Myer has about 65 departmental stores in Australia that offer about 11 categories of products.
The company has stores in six Australian stores (Myer, 2010). Their location includes main city centers, suburban areas, and high streets. The stores are located in Tasmania, Victoria, and Queensland among others. Outbound logistics
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