Harvey Norman’s Business Model
The impact of innovation throughout the centuries has led to an increase in productivity which in turn has lead to economic growth as well as higher living standards. In business, the main focus of innovation has been regarding technology, especially on design and manufacturing processes. The integration of information technology with e-business has completely transformed the aspects of supply chain. It is a process through which products from suppliers reach the customers and implementation of technology has evolved the process from mass production to mass customization. Therefore, this report aims to access the impact of the supply chain on two organizations known as Harvey Norman and JB Hi-Fi. The importance of e-business on this two organizations can thoroughly is accessed through the help of this report. From this report, the aspects in the supply chain which are lacking in the two organizations can be identified for implementation of the correct solution.
The company of Harvey Norman is essentially one of biggest retailer of furniture, computers and electrical products among others. This company aims to provide the best household items to its customers (harveynorman.com.au, 2018). Harvey Norman consists of 57 franchise spread all over in Australia from South Wales to Northern Territory. Apart from that, it has numerous stores in other countries as well as incorporating to about 280 stores. Its two main brands, Domayne and Joyce Mayne have been the core leaders in the technological market. Through the aid of proper supply chain, the company has been successful in delivering its service to customers.
The company of Harvey Norman follows a complex business model. This is due to the fact that the company has various franchisees in each of its stores. Therefore, it is a difficult process to maintain and operate each and every one of them. Along with that, the company is also responsible for a superstore where standardise fulfilment is a must. As stated by Boonjing, Chanvarasuth and Lertwongsatien (2015, p.562), business models help in the organization of various strategies which are of benefit to a company. Therefore the company of Harvey Norman focuses on its different aspects such as diversification of items so that the number of people can buy it. It also focuses on the competitive price of the market to set their range accordingly to maximise their revenue.
Through the aid of the complex business model, the company also focuses on its multiple franchises so that the orders received can be organised properly for its customers which especially helps in the aspect of e-business. This business model also focuses on its other stakeholders mainly its employees because, without dedicated and effective employees, the company will not be able to deliver the products in a satisfying manner. Other than this aspect, Harvey Norman pays adequate interest in its marketing aspects as well as property development. This business model helps in the development of an overall strategy for the company that will be beneficial to all.
Main Customers of Harvey Norman
The company of Harvey Norman provides a wide range of products to its customers starting from beddings to consumer-based electrical products. This company does not have a specific target customer rate; instead, it welcomes all customers to purchase their products. In recent times, the company has essentially focused on digital marketing in order to attract more consumers. It uses digital marketing software known as Lyris’ which helps in the analysis of online customers to recommend them the products they might be interested in buying. According to McElheran (2015, p.1123), e-business has been spreading like a wildfire. Therefore, through its aid, it aims to sell their products to customers of various age ranges.
Every company has its source of preferred suppliers from where it receives raw materials and other items necessary it’s functioning. Some of the suppliers of Harvey Norman are Domus, Havit Lighting, Eglo, PHL, Hermosa Lighting, Brightgreen and Gerard Lighting among others. These suppliers essentially play a key role in terms of providing an adequate supply of materials for the organisation to prosper.
This company follows a traditional model of a supply chain where the products are delivered to different storage facilities. This aspect is conducted for the offline facility. However, the aspect of online supply chain plays a similar role. From there, these products are supplied to various stores of Harvey Norman from where customers get the opportunity to buy the products. There are five essential steps which are engaged in the process of e-supply chain (Touboulic and Walker, 2015, p.33). The first step after an order is received from the customers is that they are processed and the ordered item is packaged. After this, the order is taken to respective storage facilities from where it is delivered to respective addresses. However, if the order is in a far away distance, then there are multiple steps where the orders are passed before they can be sending to their destination. The lack of proper logistics is a huge disadvantage for the company as well as its customers as they are unable to track their orders along with its delivery time (Soto-Acosta, Popa and Palacios-Marqués, 2016, p.892).
JB Hi-Fi is an Australian retail company which mainly focuses on electronic goods and communications. It deals with various electronic gadgets such as Xbox, DVDs, electrical home appliances among others (jbhifi.com.au, 2018). This company has about 10 stores in Melbourne as well as Sydney and it aims at creating a more affordable market so that the consumers can easily purchase it. This company also has the latest gadgets and technologies along with a full range of electronic home appliances.
Supply Chain of Harvey Norman
The company of JB Hi-Fi follows a franchise-based business model as it has a quite a few branches and is expanding its business at a steady pace. This business model consists of seven steps which are essentially followed by the company of JB Hi-Fi. According to this model, it is necessary to understand the different aspect of one’s business for its proper functioning. Therefore, the company has made its motto to abide by the legal requirements of business in order to make important decisions. As commented by Wang, Gunasekaran, Ngai and Papadopoulos (2016, p.99), franchise model helps in proper analysis of company data in order to increase its revenue. Therefore, this business model essentially helps the company to support its various franchises and growing their in store as well as e-business. Although there are certain risks in this model because it requires higher capital cost if strategically planned such risks can be avoided.
The target customers of JB Hi-Fi are mostly the youth. Technology has taken over the world in the 21st century and the people who are the most impacted from it are the youth. Therefore, this company focuses on selling its product to a specific range of customers. As asserted by Pagell and Shevchenko (2014, p.47), customers are the key stakeholders to any business. Therefore, JB Hi-Fi provides its products at a reasonable price range so that the people of the young generation can buy the products of the company without any hesitation.
The company of JB Hi-Fi has engaged with some well-known companies as its suppliers. The company has partnered up with various multinational electronic companies such as LG, Apple and Samsung. Through the aid of such suppliers, this company thrives in the technological market.
The aspect of supply chain followed by JB Hi-Fi is from manufacturer to warehouses of the company itself. This helps the company to keep its products tagged so that they are easier to transfer to respective stores as required. This company is also actively involved in e-business through the aid of its online store. As the company mainly focuses on selling its products to the youth, it acts as the biggest advantage as this generation is hugely dependent on the internet and digital media (ideas.repec.org, 2018). The aspect of a supply chain is very much customer-centric for the company of JB Hi-Fi. It also provides an effective tracking system for its customers through which they are able to keep in track of their orders which are placed online.
JB Hi-Fi’s Business Model
Supply chain management caters to the aspects of the proper flow of goods and services from one end that is the producers to the other end which is the customers (Fahimnia, Sarkis and Davarzani, 2015, p.113). The two companies in this study known as Harvey Norman and JB Hi-Fi adequate follow the aspects of supply chain in management although they are designed a bit differently. One of the biggest differences in supply chain management is that Harvey Norman uses a long and traditional process while JB Hi-Fi follows a short but effective one. In the aspect of this management, JB Hi-Fi has an upper hand due to its effective implementation. According to Wiengarten, Bhakoo and Gimenez (2015, p.4967), the process of transportation and storage consists of the two most important aspects of supply chain management followed by the distribution of the product. In this respect, Harvey Norman implements effective packaging which assures the items to be in a proper condition until it reaches its destination. Through the aid of this comparison, it is clear that both the concepts of supply chain used by the two organizations have their own faults as well as benefits (Christopher, 2016). These aspects of the supply chain can be turned into their advantage, especially in terms of e-business by using the correct strategy and recommendations as stated in the latter section of this study.
Conclusion
Through the assessment in this study, it has been observed that in order to eliminate some of the negative aspects of a supply chain of the two companies, some effective strategies are needed to be implemented. These have been stated as follows:
One of the biggest disadvantages in the supply chain management the company of Harvey Norman is that it does not have a proper tracking system. Logistics tracking is of utmost importance, especially in e-Business because it provides assurance to customers about how far their order is. It also helps in the assessment of the data and time where the order might be delivered. Therefore, a logistics tracking with an integration of unique tracking ID should be implemented for the growth of its e-business.
The company of JB Hi-Fi mainly focuses on the youth; therefore its customers are youth-centric. As much as this acts as an advantage, it is also creating a barrier to the growth of the company. Therefore, electronic products that can by anyone despite their age are needed to be properly advertised in the e-business site of the company. The website should be user-friendly so that people other than the young generation can also use it with ease. This will undoubtedly increase the sales rate and revenue of the company.
Target Customers of JB Hi-Fi
The aspect of e-business is booming in the 21st century. However, it is incomplete without adequate implementation of supply chain management which is one of the important factors in the process of transportation of the good from suppliers to customers. Therefore, the importance of supply chain in e-business has been thoroughly depicted in this study through the aid of two organisations. The aspect of supply chain management is interdependent on the business model of organisations which have also been depicted in this study. Therefore, it can be stated that supply chain management depends on the nature of the business. In this case, as it an online business of the two companies known as Harvey Norman and JB Hi-Fi, proper tracking aspects are a must. As this generation is tech-savvy, advertisements of various products in e-business websites can also help in enhancing its growth. Therefore, the aspect of a supply chain with respect to e-business has been thoroughly described in its study.
References
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