Case Study of David Jones
David Jones (DJs) is a leading up-market department store chain, which is a public company, founded in 1838. It is one of the most recognised retailer brands in Australia that emphasizes on quality and style. While the retailing business changed in many ways, DJs maintained its commitment to provide high quality merchandise with the introduction of new brands. Through the continuing refurbishment of stores and continuing opening new stores across four major states in Australia, it currently has 37 modern, stylish stores located in most Australian states and territories. It also has its own factory at home which manufactures a large variety of goods from clothing to furniture. Apart from its home branded merchandise, it also …show more content…
Bargaining power of buyers: The switching cost is low in retail industry, because buyers can switch to substitutes at little cost. Thus, buyers have high bargaining power over the sellers. Firms need to differentiate their product or service from competitors’ offerings to prevent buyers from switching to substitutes.
Bargaining power of suppliers: The bargaining power of suppliers is high in the market as suppliers’ goods are critical to industry firms’ marketplace success. The effectiveness of suppliers’ products has created high switching costs for industry firms. For example, the supply of various designer clothing is the major successful element to high end department stores, the deals between designers and the stores and quality of designer clothing directly affect the stores’ success.
Threat of substitute products: Substitutes include existing brands, potential new brands and substitute outlets. Apart from these, online shopping is increasingly popular in retail market due to its convenience. These present a significant threat to the industry firms. Moreover, low switching cost encourages consumers to switch to their preferred brands.
Rivalry among competing firms: Rivalry is high because it is a mature industry with a number of players. In such a slow-growth markets rivalry is very intense as firms battle to increase their market shares by attracting competitors’ customers as many as they