Harvey Norman Case

Relevant Company Background

a) Company A: Harvey Norman, Industry: Multiline Retail; GICS Code: 25503020; Principal activity: Integrated retail, franchise and property enterprise including franchisor; sale of furniture, bedding, computers, communications and consumer electrical products; property investment; lessor of premises; media placement; and provision of consumer finance and other commercial advances. Product: electrical goods, furniture, computerized communications, bedding and manchester, small appliances, carpets and flooring; Market: Australia and overseas. Location: 283 stores in eight countries. Auditor: Ernst & Young. Partner: Katrina Zdrilic. (HVN 2013)

Company B: Myer, Industry: Multiline Retail; GICS Code: 25503010; Principal activity: The operation of the Myer department store business; Product: fashion and apparel for men, women, and children; accessories, cosmetics, homeware, furniture, electrical goods, and general merchandise; Market: Australia; Location: 67 stores across Australia. Auditor: Andrew J Mill. Partner: PricewaterhouseCoopers. The characteristics of industry: 1. Clear vision: set a target market and have clear value of products to customers. 2. Functional: build up strong brand image. 3. Concept: have a concept to better off from competition (Ramjee). These two companies sell very similar products, but Myer provide more fashion items, such as cloths, accessories and cosmetics.

b) According to the auditor’s report it demonstrated that both financial reports and remuneration reports complied with Corporations Act 2001 in Myer and Harvey Norman. (MYR 2013)

c) These two companies both focused on omni-channel strategies, which brought the advantages to the company and pressureed the competitors. Harvey Norman had three cores, which were “Quality”, “Service” and “Value”. It diversified the categories products and put more attention to the more profitable goods. In addition, it strengthened total assets to hedge the dispirited market and finally, it improved digital channels by buying online supporting and pick-up in store (HVN 2013, p5). Myer focused on both online business and digital channels, which connected with different types of customers through the media and advertising (MYR 2013, p15).

d) Harvey Norman (HVN 2013, p20) and Myer both faced very similar issues in last year that had affected the financial performance: both company faced negative macroeconomic condition resulted the people lost their consuming confidence due to the political problems, currency and interest rates. Also, the electronic goods had deflation price and the company lost market shares due to the competition. However, they also had distinct problems, such as Harvey Norman cannot offer the services as it promised.