Strategic Position Review of Michael Hill Jewelers in New Zealand

1572 words 7 pages
Michael Hill Jewellers (MHJ) is one of the most recognizable names in the New Zealand retail jewellery industry. In 1979, Michael Hill opened his first store in Whangerei. Until then, jewellery stores had been run primarily by craftsmen jewellers. Michael Hill changed this with the philosophy “to make jewellery buying less intimidating and more accessible to the public.” In order for any company to succeed, it has to take a look at the environment in which it operates. This is why an external environmental analysis is so important. This involves a continuous process of scanning, monitoring, forecasting, and assessing the external environment. Doing so will illuminate any opportunities to be exploited or threats to minimize. The first …show more content…
There are many wholesalers in the industry, many based in Asia, giving the retailer alternative suppliers if the price is not right. Therefore the bargaining power of suppliers is: LOW
Bargaining Power of Buyers
Is the power belonging to the customer to choose to shop at a store. As there are many jewellery stores to choose from, many of which seem to have sales on every week, the customer can decide not only to shop elsewhere, but even try to haggle for a discount. Therefore the bargaining power of buyers is: HIGH

Threat of Substitutes
Is the probability that a consumer will purchase something else. Since jewellery is a luxury item and not a necessity, consumers will choose to spend their income on many thing before jewellery even makes the list. Not only do necessities come first, but other luxury items may be higher on the list of things to purchase like golf clubs or bicycles. Therefore the threat of substitutes is: HIGH
Degree of Rivalry
Is the level of competition within the industry. Even though only three out of the four forces were identified as high, the retail jewellery industry is still extremely competitive. The one anomaly was the power of suppliers and the only reason that was low is because the suppliers operate in such a competitive state as well, giving more bargaining power to their customers, the retailers. Therefore the degree of rivalry is: HIGH
Strategic Grouping

A competitor analysis compares a company against each direct

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