JB Hi-Fi business is a New Zealand and Australian retailer that sells home appliances, hardware/electronics, CDs, DVDs, Blu-rays and video games. The corporation is headquartered in Melbourne with a workforce of more than 7,800 employees. Currently, the retailer has approximately 112 stores including Tasmania, Australian Capital Territory, Victoria and New South Wales. It is among the most successful and fastest growing businesses of its kind. The organization operates in a highly competitive market, and the numerous technological advances require the company to adapt to entirely new strategies to compete effectively in the market. While market conditions have not affected the business adversely, restructuring the company’s strategies can enable the firm to be well positioned in the market. Regarding strategic objectives, the company strives to be the leading provider of home electronics with a large market share compared to its competitors. Besides, the firm endeavors to be profitable and socially responsible. Founded on the strategic analysis, the main risks the firm is likely to face include the shortage of funds in the economy, employment insecurity, and limited discretionary spending among consumers. By contrast, opportunities such as the growth of the social media, rising number of customers, and steady economic growth that can boost the company’s position in the market. Overall, the company needs to focus on developing a business model that is not focused on survival but has on thriving in the market to help minimize the impacts of the strategic risks.
Major Issues in the next 3-10 Years
The retail trade is one of the major driving forces in the Australia economy. As a result, news reports frequently base at least portion of their views of the country’s economy on the way retail businesses are performing (Alblas, Peters, and Wortmann 2014). Besides the major JB Hi-Fi economic ebb, the flow of the purchasing seasons, and the manner in which they affect businesses sales, JB Hi-Fi has several problems that it is likely to face in the next three to ten years. These challenges may include employee turnover, economic challenges, auditing, technology, meeting expectations of informed customers and conditions out of its control.
Technology and Disruptive Online Competitors
Maintaining the pace of current technology is a perplexing problem that JB Hi-Fi business is bound to face in the future. For example, Flammer (2013) stated that most retail businesses frequently use technology schemes that are many years behind the development of the modernity as a whole. Rowley and Cooke (2014) contend that the incapability of JB Hi-Fi retail business to keep up with technology initiatives like mobile digital vouchers is a challenge that the organization is likely to face in three to ten years to come. Due to the rate of turnover as well as the continuously varying economic environment, continual upgrading and keeping JB Hi-Fi networks and equipment running on the most current technologies will be difficult for business managers.
The purchasing of non-fresh goods online is a big challenge that JB Hi-Fi will probably experience in three to ten years. Cox, North, and Weingast (2015) contend that JB Hi-Fi should restructure how it carries out its business operations. For example, initially, there were staffs leading marketing and sales only into distributors, pop-and-mom and wholesalers (Buzan and Lawson 2014). However, currently they have carved out whole e-business works whose primary drive is to get goods onto various online platforms as well as engage online plans to improve sales, like collaborating with online competitors, coupons and online ads.
High Expectations of Informed Consumers
The continuous rise of mobile shopping in the current dynamic economy has resulted in consumers that are more perceptive. As Buzan and Lawson (2014) note, buyers can compare costs and search product ratings and reviews at every point in the course of their shopping, and several do a lot of investigation before even going to the store. Alblas, Peters, and Wortmann (2014) argue that this conduct has continuously been standard for the bigger-ticket products like appliances or electronics. Similarly, this dynamic may generate a significant challenge in future for JB Hi-Fi organization who have to figure out the manner to thrive in the era where the customer will be ultra-knowledgeable in numerous circumstances, and more informed than the sales staff (Flammer 2013). Flammer (2013) added that these buyers would be on a task to obtain a better bargain and are not likely to create impulse buying or be persuaded through the convincing sales pitch. Although consumer’s shift in online shopping behavior might be difficult for JB Hi-Fi business, it should not have to be (Buzan and Lawson 2014). Fleisher and Bensoussan (2015) write that if JB Hi-Fi organization prices are competitive, customers’ comparison-shopping will be beneficial. In spite of fears that shoppers will “showroom,” the opposite has demonstrated to be true.Clients regularly research on the web, then purchase in person. Besides, JB Hi-Fi may harness the existence of mobile technology to improve buyers’ in-store practice. Consequently, Cox North and Weingast (2015) further assert that the challenge of meeting the high expectations of an informed consumer will be faced by JB Hi-Fi. The reason cited is that e-commerce is getting more complex and expanding as consumers rely more on web research before compelling to buying.
Lack of workforces’ continuity is one of the main challenges that are likely to be experienced by the JB Hi-Fi business in future. Jones et al. (2016) claim that turnover rates are high in Australia retail and in such a way, workers leaving the JB Hi-Fi create difficulty for human resource experts who have to regularly train and find the new workforce, which might eat up valuable resources and time. Thus, when the resources are inappropriately used, JB Hi-Fi will run at a loss. Retaining and hiring talents may be a future matter of concern. There could be more supply than demand of workers to the point of getting JB Hi-Fi business production lower than product managers or software engineers supplied (Buzan and Lawson 2014). On the other hand, JB Hi-Fi industries could underrate how much worth a better operations staff can influence overall efficiency and productivity of their job. When JB Hi-Fi does not hire good individuals, they shall get a higher ratio of turnover, hence meaning that many business resources might be pumped into training, hiring and recruiting all over again.
The JB Hi-Fi retail organization highly depends on the economic well-being of the state. As the country grows and individuals have much money to use, businesses flourish (Leeflang et al. 2014). Conversely, in tough economic periods, the JB Hi-Fi corporate might be faced with probable shrinkage. Jones et al. (2016) as well show that the future uncertainty of universal economic markets will create difficulty in economic planning in JB Hi-Fi business.
Conditions Out Of JB Hi-Fi Control
JB Hi-Fi might face a range of matters beyond its control. The business might be concerned with the sustainability as well as the necessity to take part in environmentally sound exercises to reduce the quantity of waste the company produces. Through this, JB Hi-Fi will face tax issues, insurance requirements and varying government regulations as political climates change. From Flammer’s (2013) viewpoint, some issues that may affect JB Hi-Fi business will include the global competition, discount online retailers, the ever-growing look of larger corporate chains, unemployment and the economy and availability of credit. Additionally, JB Hi-Fi might face inadequacy in customers. Internal forces like providing the right combination of goods and providing the right consumer service may pose a challenge to the company. The business might find it hard to give customers the right products that they need and offer excellent purchase service.
Auditing is another challenge that the JB Hi-Fi organization may face in future. JB Hi-Fi organization faces stiff competitions from other corporates such as Myer and Harvey Norman retail stores (Wilson et al. 2014). According toBuzan and Lawson (2014), this competition might create price battle, imposing a necessity to keep strong management over some important data and inventory. Alblas, Peters, and Wortmann (2014) also argued that the JB Hi-Fi organization could be faced with poor and inefficient auditing strategies that make competing with other corporates difficult. Thus, the JB Hi-Fi business existing auditing schemes might be obsolete in future to provide adequate audits required to remain competitive. Maintaining a better sense of what products JB Hi-Fi stocks, when its inventory is low in different locations (online or physical), is vital to maximizing sales. Kiron et al. (2014) who argued that the future disorganization in JB Hi-Fi inventory tracking procedure or storage would lead to delays in fulfilling or lost sales support the idea. However, JB Hi-Fi can spend in the robust tracking database (either cloud-based or software) such as Scout Top Shelf or SOS Inventory to assist them easily manage their inventory from purchase for resale, via point of sale and stocking, to shipping and packing customers’ orders in future.
Porter’s 5 Forces and SWOT Analysis of JB Hi-Fi
As previously mentioned, JB Hi-Fi is one of the fast growing retailers of electronic products in Australia. However, the company faces numerous threats and weaknesses that are likely to hamper its business growth. Nonetheless, the strengths and opportunities offer the company better avenues to improve its market position. In such a way, a SWOT analysis was conducted to offer insights into the company and the various elements that are likely to affect its market visibility.
Strengths: JB Hi-Fi has numerous online and brick-and-mortar stores around Australia and New Zealand. These stores have grown in number over the last couple of years at a faster rate. The growth has been precipitated by the availability of a variety of products, which has resulted in high revenue and profit margins.
Weaknesses: JB Hi-Fi has witnessed a drop in the number of new customers as well as the slow growth of the firm’s Online Shop. Besides, the firm has a small number of business units with high costs of future corporate structures.
Opportunities: The large global market offers numerous opportunities to sell their products and gain huge market shares. Besides, the possibility of new acquisitions in Australia and around the globe offers more avenues for the business to sell its products on a global scale.
Threats: The growth of the Internet and new technologies typify various technical obstacles that the firm needs to overcome. Besides, strict government regulations and exorbitant labor costs are notable threats facing the business at present and in the coming years.
SWOT analysis involves observing the weaknesses and strengths of JB Hi-Fi and any possible threats and opportunities to the corporation. Consequently, once JB Hi-Fi has recognized SWOT, it can evaluate how to capitalize on its strengths, minimize the impacts of weaknesses, exploit the opportunities and decrease the effect of any threats (Leeflang et al. 2014). Besides, the JB Hi-Fi SWOT analysis evaluation provides depth strategic analysis of the businesses operations. From Cox North and Weingast’s (2015) viewpoint, the profile has been piled up by market line to convey an unbiased and definite view of the business’s key weaknesses and strengths as well as the potential threats and opportunities. This can assist JB Hi-Fi to formulate tactics that augment business to enabling it to understand its competitors, consumers, and partners better.
Analysis of JB Hi-FI’s external and internal environment cannot be undertaken without proper data. In view of From Jones et al. (2016), the primary sources of strategic information are Annual reports and SEC filings. The Annual Report is one of the main documents used to disclose business data to shareholders (Wilson et al. 2014). It is frequently the state-of-the-corporate report comprising new product plans, market part information, results of ongoing operations, financial data, and open letter from the Chief Executive Officer, subsidiary practices and development and research activities on future programs. Fleisher and Bensoussan (2015) maintain that Annual Reports are perhaps the best source of information on the JB Hi-Fi business. It provides data on the business’s fiscal year. Charts and graphs are often included to simplify complex information and make it understandable. Cox North and Weingast (2015) claim that annual reports include a cash flow statement, financial summary, income statement and balance sheet. A financial note at times is added in JB Hi-Fi report to describe accounting techniques it uses to record and report its transactions. Rowley and Cooke (2014) argue that the report offered to assist readers to determine what JB Hi-Fi owes and owns, its funding growth and operations, and how best the business is at generating money for investors. Hence, an annual report will help JB Hi-Fi maintain its accountability and transparency hence its growth in future.
The Securities and Exchange Commission filing (SEC) is an official document or financial statement, which is submitted to the United States. Financial experts and investors rely on SEC filings for information about JB Hi-Fi, for investment purposes. The SEC filing checks the values of data provided in those procedures and ensures that the information encounters certain necessities (Cox North and Weingast 2015). Many shareholders take to check these filings and often choose a particular form over another. Additionally, the Securities and Exchange Commission principles necessitate that businesses, which sell stock, mainly JB Hi-Fi, file numerous monetary reports with the Commission (Alblas, Peters, and Wortmann 2014). These business reports are public as well as offer a wealth of data. In SEC filings there are 10 K reports and 10 Q reports that will assist JB Hi-Fi to develop further in accountability.
10-K report is another valuable data source that offers shareholders with a complete picture of the JB Hi-Fi business. It resembles a prospectus though it contains more data than the annual report. For example, the financial statements are highly detailed. JB Hi-Fi always submits this comprehensive annual report within ninety days at the end of the business fiscal year (Kiron et al. 2014). Additionally, The SEC filing comprises much more detailed monetary data than annual reports; text can include environmental safety information products, research, distribution channels markets.
Risk and Opportunities
The term “risk” attracts a negative connotation among most people. However, for most businesses, risk does not mean anything negative, but it is worth nothing that risks have negative consequences for businesses. Nonetheless, transforming risks into opportunities is likely to result in better outcomes for the business. To begin with, the risks of having few consumers can create opportunities to improve profits. Currently, the firm faces the risk of losing its market share due to competitors and changing customer preferences. However, to mitigate this risk and improve market presence, the company can improve its profit margins by charging premium prices for quality products that health-conscious customers are willing to pay (Fleisher and Bensoussan 2015). Besides, risks due to the firm’s supply chain precipitate the need for cost cutting of materials. The company works with various suppliers who violate health and safety regulations, and the sale of such products may pose different health risks. In such a way, the company may opt to stop acquiring products from suppliers violating health regulations. Subsequently, the firm may consolidate around reliable suppliers, which offer the opportunity for cost saving through bulk purchasing and good prices due to higher product volumes.
Conclusion and Recommendations
JB Hi-Fi is a major retailer of home appliances, but despite its market share and presence, it is likely to face numerous problems in future. Notable problems include employee turnover, auditing, economic challenges, technology, and meeting the expectations of informed customers. Consequently, SWOT analysis can be the most useful analysis tool for JB Hi-Fi business. Likewise, the primary sources of strategic information of the store are contained in Annual reports and SEC filings. Once JB Hi-Fi business has established particular values associated to four quadrants of SWOT strategic analysis, it may develop a strategic business plan grounded on the data collected. For instance, after JB Hi-Fi has identified its inherent strengths, it could leverage them to follow the opportunities best suitable to the business, effectively decreasing possible vulnerability linked to threats (Kiron et al. 2014). Equally, through JB Hi-Fi identifying its organization’s weaknesses concerning the external threats, it can formulate a strategic plan that will minimize or eliminate them whereas developing defensive strategies. In light of this, JB Hi-Fi should have an outside corporate consultant to review the outcomes to give the most sensible strategic plan to avoid future failure.