JB Hi-Fi is known to be one of the Australian retailers associated with consumer products which specializes in the video games, Blu-rays, mobile phones and electronics. The company JB Hi-Fi has its Head office at Chadstone Shopping Centre, which is present in Melbourne. Although the company expanded in to New Zealand.
This pubic type of company specializes in the production of consumer goods which comprises of video games, Blu rays, Ultra HD Blu-rays, mobile phones and Telstra services. This company is one of the largest retailer of the home entertainment it offers products at low prices in a huge range of products (JB Hi-Fi | JB Hi-Fi – Australia’s Largest Home Entertainment Retailer. 2018). Home gears, memory cards, car sound and entertainment, digital cameras, fitness watches and a lot more home entertainment is sold by this company. Tablets, iPads, wireless speakers and the musical instruments are generally sold by this company.
The customers can be anyone who uses the entertainment products. JB Hi-Fi has topped the Roy Morgan’s yearly customer satisfaction selling furniture and are also the electrical retailers in Australia.
Most of the customers of JB Hi-Fi are of Australia. There is presence of both online and offline customers of the JB Hi-Fi. The company is also known to be the only retail company chain in Australia who selling Dell computer hardware in the retail stores. This company is also known to be one of the biggest CD retailers and also known for selling computer games, car stereos and televisions. The company also known to have 84 stores which is present all over Australia (Gillitzer & Simon, 2015). The main customers of JB Hi-Fi are the Australian people, however people from other parts of the world can buy the products from the online services. In the month of august 2018, JB Hi-Fi is known to be the seventh largest retailer of the consumer electronics and the appliance retailer in the world. According to the research it has been found out that there are around 800k fan following of JB Hi-Fi in the social media.
The biggest competitors of JB Hi-Fi are Harvey Norman, Scaale Capital and Fantastic Furniture. The other competitors of JB Hi-Fi are Coles, Myer, The Good Guys, David Jones, Bing Lee, Freedom, Nick Scali, Clive Peeters, Betta Electrical and Super Amart.
The biggest competitor of JB Hi-Fi is Harvey Norman which is situated in Australia and it deals in tablets, electrical appliances, furniture and other household goods. Harvey Norman sells all the similar goods which JB Hi-Fi sells and is therefore one of the biggest competitors in Australia. Another competitor is the Fantastic Furniture which is located in Australia and also sells home appliances, beddings, furniture and all the similar goods which the famous retailer of Australia deals in. Betta Electrical is another competitor based in New Zealand which also deals in electrical appliances and also have the online store dealing in home appliances (Bhattarai, 2016). Ikea is also one the largest competitor of JB Hi-Fi selling the similar products.
In the year 2004, the famous retailer JB Hi-Fi have bought seventy percent of the Clive Anthony’s chain in Queensland. It also acquired the chain of Hill and Stewart of New Zealand. After acquiring The Good Guys, it will be creating the domestic appliance retailing industry, JB Hi-Fi will be acquiring 31.1% market share. This retailing industry have generated revenue of $13.8 billion in the revenue of 2016-2017 and grew at the rate of 2.4% over the five years. In the last five years therefore, it can be said that the retailer JB Hi-Fi have made a noteworthy stride for capturing a huge share of the retailing aspect of the domestic appliance industry. After launching the JB Hi-Fi Home stores in the year of 2012, it had achieved in boosting the market share (JB Hi-Fi | JB Hi-Fi – Australia’s Largest Home Entertainment Retailer. 2018). JB Hi-Fi home stores usually deals in Whitegoods, housed appliances and cooking appliances. After acquiring The Good Guys, the collective buying power also gets increased. In the year 2016, JB Hi-Fi had 179 physical stores in Australia where 55 of them were JB Hi-Fi Home stores along with the online presence. It is seen that the biggest competitor of JB Hi-Fi, Harvey Norman will still be commanding a huge share of the industry.
Factors of production
The factors of production which are generally required by the business comprises of the land, capital and labour (Doyle, Alfonsi and Robertson, 2014). The total cost of the factors is then further divided in to the fixed costs and the variable cost. In terms of the factors, the cost of production for the business will be providing the total cost which will be incurred in order to run a business. In case of retailing business the total cost will be comprising of both variable cost and fixed cost. The factors which does not change in terms of the change in the output of the firm in the short run are known as the fixed factors. The fixed factors include machines, permanent employees, rents, plants and buildings. The fixed cost in this case includes land, salaries of the regular employees, insurance, building securities, machines, internet ad a lot more (Bhattarai, 2016). The above mentioned costs remained fixed irrespective of the changes in the amount of sales and therefore the total costs generate the total fixed cost. Whereas the factors of production which usually change with the change of output during the short run are known as the variable factors. The variable factors comprises of the raw materials, labour, fuel, power and a lot more. In case of increasing the output in the short run, the firm can increase its labour hiring, purchase more raw materials and can also use more power. There will be rise in the variable factors and the cost associated to it when the production rises. The amount of the variable factors also goes down when the production generally falls down’. The output of the JB Hi-Fi retail store is mainly concerned with the quantity of sales over time. The variable cost in this industry also comprises of the products sold, delivery and the shipping charges, casual staffs needed, telephone bills and the quantity of inventories available with them (Doyle, Alfonsi. and Robertson, 2014). Therefore, it can be said that the firm’s optimal size is known to be medium in nature.
Stability of the government
Australia is known to be politically stable, prosperous and peaceful country. The political stability, transparent regulatory system and a good governance system works for the economic resilience for the country. Australia is also ranked to be the universal top five on the Index of Economic freedom. The precise governance policies also provide multinationals with a secure and safe environment of the business. The business environment of Australia is also known to have ranked 15th out of the 190 countries for doing business. Voting is also known to be compulsory part of all the tiers of the government. The parliamentary system is also based on the British Westminster model. The legal system of Australia is also independent of the politics. Travel and relocation throughout the country is also known to be unrestricted in nature.
Figure 1Political stability
The current inflation rate of Australia is known to be 1.9%. The inflation is a kind of quantitative measure of the rate at which the aggregate price level of the goods and the services in an economy rises over the time period. Inflation also states the decrease in the purchasing power of the currency of the nation. The inflation is generally measured in variety of ways which depends on the type of the goods and services and it is also opposite to the deflation which indicates a decline in the prices of the goods and services. The rate of inflation in Australia is quite low in nature. The graph below shows the rate of inflation which shows that the rate of inflation was the lowest in the year of 2016. On the other hand it can be seen that in the month of January 2017 and in the month of July 2018, it has been experiencing the inflation rate of 2.1%. It has been noticed that in the year of 2016, the rate of inflation have been much less.
Figure 2 Rate of inflation
Unemployment is a situation where people are energetically looking for employment but currently are not employed. The rate of unemployment is the extent of unemployment and is computed as a percentage by dividing the number of unemployed people by the total number of the labour force. The country will be facing a high rate of unemployment during the time of recession. There are many reasons behind the high rate of unemployment in the economy. The unemployment can be either voluntary or involuntary in nature. Voluntary unemployment takes place and is mainly dependent on the decision of the individual. On the other hand, involuntary unemployment takes place as a result of the socio economic environment where the individuals operate. The rate of unemployment in Australia has known to be the tumbled to a six month low in the last month. The employment rises by twelve thousand which will be below the 19,000 level expected. At 12.5183 million, the employment is known to be the highest level in Australia. The unemployment rate in the month of February of the current year rose to 5.6 percent. The contribution of women in the labour markets also enhanced in the last few years.
Figure 3 Rate of unemployment
The graph above shows the rate of unemployment against the new jobs. The rate of unemployment had been the lowest in the year of 2017. It is seen that the year of 2015 have also seen a rise in the rate of unemployment levels.
The interest rate is generally the value of interest which is due every period as the amount of the amount lent, borrowed or deposited. The interest rate is the rate a bank or any other lender charges for borrowing its money. The average interest rate of the Australian is known to be around 3 percent.
Therefore, it can be said the firm JB Hi-Fi will be facing a suitable macroeconomic condition in the coming years. As it is known that the firm JB Hi-Fi deals in consumer products, CDs electronic gadgets and hardware, they are all normal goods and will experience an increase in demand in the upcoming years (Khraief et al.,2018). The products sold by JB Hi-Fi are elastic in nature as the organization already has a huge number of competitors in the industry.
According the latest surveys made by the National Australia Bank’s, Australia is known to have suffered from shortage of skills. Most of the firms complained that they had trouble finding suitable skilled staffs. Therefore, in the upcoming years, JB Hi-Fi can face problems in finding suitable skilled labours which might affect the operating cost of business.
The graph above shows the interest rate provided by the Reserve bank of Australia which shows that the rate of interest is at 1.5%
The Australian economy is known to be a large mixed market economy whose gross domestic product was found to be A$1.69 trillion. Australia is therefore known to be experiencing one of the longest period of economic growth in the developed world. Therefore it can be said that the economy of Australia is known to be in the period of boom. The economy of Australia grew strong at 1.1 percent. Therefore it can be stated that the economy of Australia is not recession. The economy of Australia has experienced uninterrupted growth in the last decade. Therefore it can be stated that Australia is known to face the longest period of recession free growth. The economic resilience of Australia over the last two decades have been envious for many economic in the world (Hellwig & McAllister, 2016). The real gross domestic product of Australia is known to rise at 2.7 percent from 2012 to 2016. The performance of Australia has been impressive over the past decades which have largely attributed on a hug rang of factors which comprises of the economic reforms, strong growth of the population and the strategic location of the booming region (Wang et al., 2017).
Australia mainly specializes in the export of iron ore, coal, wheat, natural gas, beef and petroleum. 16 percent of the iron ore is exported from Australia which is one of the largest exported good of the country. The economy of Australia remained resilient in nature. The value of the iron ore and concentrates have been valued at A$53,757 million. Gold, natural gas, beef, petroleum and the copper ores are exported in the year 2016. JB Hi exports its products in other countries including New Zealand.
The business practice which is economically viable in nature, socially responsible and environment friendly are regarded as sustainable practice. Corporations which will include socially responsible along with the environment policies are the elements of the growth strategy which includes sustainable values of the economy (Cusbert, 2017). The business sustainability requires the firm to maintain the principles of the sustainable development. Sustainability is a kind of development which attains the need of the current situation without compromising on the capability of the future generations. It is seen that sustainable business is a sort of business which has negligible negative impact on the local environment, society and economy. The business will be considered as sustainable when it incorporates the sustainability principles in to the business decisions. It also supplies eco-friendly products which replaces the demand for the non-green services or the products (Borland, 2015). A sustainable business in the organization will be participating in any kind of environment friendly activities which ensured that the products addresses the current environmental concerns. The externality is explained as the cost or benefit that has an impact on the party who will not choose for incurring the cost or the benefit. When their absence of any kind of externality, the allocative efficiency will be achieved (Lowe, 2018). There are different kinds of externalities ranging from positive to negative externality. An externality is said to be negative in nature when the economic activity will be imposing a negative effect on the unrelated third party (Bajada, 2017). Pollution is also one kind of negative externality. In case of selling appliances, furniture there are not many negative externalities. However, pollution from the factories might result in negative externality. Noise pollution during the process of production can also be an example of the negative externality. Negative effects of the farm production can also be termed as externality. JB Hi-Fi generates both positive as well as negative externality in the economy. The products which the firm usually sell produces a lot of soil as well as water pollution. Waste disposal from the factories in the water bodies produce a lot of pollution. The government in this case taxes on the products produced by JB Hi-Fi which causes pollution. All the stores of JB Hi-Fi also known to have cardboard and paper recycling bins. Some of the stores also known to have recycle all the old appliances. An externality is known to be positive in nature when there is positive effect on the activity imposed on the third party. The negative externality can take place either on the side of production or on the side of consumption (Bhatnagar et al. 2017). When the retail firm will be demonstrating up to date technologies to the local firms along with improving their productivity, it is known as the positive externality.
Conclusion
Therefore, in order to conclude it can be said that the Australia’s largest home entertainment retailer will be generating a high revenue. It will earn high profit despite of the presence of huge number of competitors. The stable condition of the economy of the country along with controlled inflation and the rate of unemployment will increase the sale of the various appliances sold by the home appliance industry. The report mainly states the business study report of one of the biggest home appliance and furniture retailer of Australia, JB Hi-Fi.The retailers who are dealing with similar products in the industry are trying hard to maintain the sustainability of the business by following the strict regulations. JB Hi-Fi also known to have a huge number of competitors in Australia, therefore it faces tough competition from the other industries. In order to maintain the sustainability in the business the retailer also focuses in dealing with sustainable products.
Reference
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Bhatnagar, S., Cormier, A. K., Hess, K., de Leon-Manlagnit, P., Martin, E., Rai, V., … & Sarker, S. (2017). Low inflation in advanced economies: facts and drivers. Bank of Canada= Banque du Canada.
Bhatnagar, S., Cormier, A. K., Hess, K., de Leon-Manlagnit, P., Martin, E., Rai, V., … & Sarker, S. (2017). Low inflation in advanced economies: facts and drivers. Bank of Canada= Banque du Canada.
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Borland, J. (2015). The Australian Labour Market: The More Things Change…. Australian Economic Review, 48(3), 225-242.
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Gillitzer, C., & Simon, J. (2015). Inflation Targeting: A Victim of Its Own Success?. International Journal of Central Banking, 11(4), 259-287.
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JB Hi-Fi | JB Hi-Fi – Australia’s Largest Home Entertainment Retailer. (2018). Retrieved from https://www.jbhifi.com.au/
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