Houzit homeware stores in Brisbane operates under the retail industry. The industry is a major catalyst of the country and a key determinant to the economic growth and social development in the future. The retail industry offers services that compliment sales and serves as an intermediary for products and services. The main factor contributing to the growth of industry include the rise in population, robust economic growth and an increase in purchasing power. The industry has experienced a rapid growth in Gross Domestic Product (GDP) accounting for 7850 million USD of the total growth (Ibis, 2018 p.1). In addition, the industry accounts for 3760 businesses that run over 4000 establishments (Ibis, 2018 p.1). The Australian retail industry is at CAGR of 2% (Modon intelligence p.1). The major players that exist in the Australian retail industry include IGA, the Audi, Franklins, Coles and Woolworths limited. Australia retail industry is driven by an increase in net worth of individuals, disposable incomes, and consumer confidence (ChrisPash, 2018 p.1). Currently, the industry still has the high-to-high attractiveness of the key players as a result of high market entry barriers and the weak bargaining power of suppliers and customers hence making some companies like Houzit gaining high market share rapidly.
According to Helms and Nixon( 2010 p.215) with the help of analyzing both internal and external environment, a company is able to develop a list of strengths, weaknesses, opportunities and threats that are contributed by the environmental factors. Houzit Company operates under the environment full of strengths, weaknesses, opportunities threats.
In terms of the internal environment, the company has several strengths including excellent staff who have a high academic qualification, high skills and knowledgeable about homewares. Furthermore, the company has a retail space that is bright and efficient for carrying out commercial activities. The customers are loyal and have repetitive purchases. In addition, the retailer offers a variety of products such as decorative items, bedroom fittings, mirrors and bathroom fittings that exceeds what the competitors are offering in terms of accessibilities, range and quality.
Houzit homeware stores face the challenge of limited marketing budget that develops awareness of the product in other regions where the company has experienced low sales in the past. Furthermore, the limited budget results from the company lacking critical mass and store cover. In addition, due to the rapid growth of competition, the struggle for continuity has facilitated to the growing long-term repayment plan that customers are considering.
In the external environment, Houzit has several opportunities surrounding the company. Proper utilization of these opportunities may lead to the exploration of new markets. The increase in sales outside the target area of greater Brisbane is an opportunity that the company should utilize to merge or open new stores on other regions. Technology growth is also another opportunity. The nature of Houzit products can generate high sales through online booking, delivery and social media advertisements. According to Singireddy and Daim, (2018 p.387) majority of people are currently considering doorstep delivery of items and online booking. Therefore, just as other retailers like Amazon that have been successful through an online advertisement, Houzit should start using the same criteria and strategies for gaining customers. Furthermore, the company also has an opportunity of adopting to mobility business that includes the company being able to implement mobile app, desktop apps, mobile web pages and desktop dedicated pages that enhances online commerce for the visibility of business and being appealing to all customers. What Houzit is offering is a website advertisement and they should have an online store as the world is evolving many people are trading online.
Houzit Company is also operating in a business environment full of the threats that can interfere with its operation or terminate the business. Local independent retailers poses a significant competition that drives prices down as the majority of the competitors have lower overhead costs as compared to the company. The competition from national chains entering the Brisbane markets is a great threat as the competitors enter the market with new or advanced products that gain the attention of loyal customers. The slump in the economy also possesses a great challenge as it reduces disposable income being spent on homewares.
The environment in which the business is operating is also influenced by some external factors like political factors, social factors, economic factors and technological factors. In term of political factors, there is a significant push from politicians and government about the sustainability issue with the company being associated with environmental issues such as energy conservation and waste management.
The main marketing target for Houzit Company is Brisbane area where the company has already established over ten thousand loyal customers and 15 stores. Following a successful business operation in the area, the company is expected to open more stores in the entire country. The Company has projected that by 2020 it will have opened homeware stores in every Australia capital and major towns as these places have a high consumption of the products. The growth will see the company experience a rapid growth from already 15 homeware stores in Brisbane to 100 homeware stores countrywide. In terms of marketing strategy, Houzit Company has a product differentiation strategy whereby it introduces new products upon reviewing the needs of the customers. The Houzit target markets is segmented into geographic and demographic segmentation with the company having several home stores in some parts of the Brisbane area. Furthermore, the company focuses on providing a variety of products to customers from diverse areas of Brisbane. In terms of the demographic segmentation, houzit company products are segmented in a way that it fits different ages, household size, race, religions, occupation and incomes. The company has no focus on age although it targets people above 18 years, as they are likely to purchase the products. People with high income are also main targets as their lifestyles fits the products of the company.
Competitors
The main competitors of Houzit are Oxfam and Hamlin Fistula Ethiopia (Australia). Oxfam Company offers large fair trade services and products ranging from kitchen items, fashion, lighting equipment’s, decorators, music and toys and wrapping implements. Hamlin Fistula Ethiopia (Australia) offers diverse product ranges of fair trade items such as hand-woven, homewares, food, toys, bath salts and clothing. Other competitors are IGA, the Audi, Franklins, Coles and Woolworths limited.
Conclusion
The retail industry faces a rapid competition and with effective market research Houzit company can explore all the market opportunities and gain competitive advantage. Houzit must differentiate its product time by time in order to retain its loyal customers and gain new customers. The business environment is full of threats and opportunities. Entrant of a new product by competitors is the greatest threats the company is facing. Majority of people being into technology in Australia is the greatest opportunity for the company. The organization needs to implement online sales and deliveries.
ASSESSMENT 2
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HOUZIT HOMEWARE STORES LIMITED CONTRACT FOR THE SUPPLY OF LIGHTING FIXTURES Procedure number: HHSL/56/JKRF/2018 for the award of a contract to supply lighting fixtures in the open tender procedure: Supply 500 units of lighting fixtures. This agreement of supply (hereinafter referred to as the “agreement”), entered into on this day of 10th November 2018 at 1500 hours by and between HOUZIT HOMEWARE STORES LIMITED (hereinafter referred to as the “buyer”) and HOMEWARE TRADE LIMITED (hereinafter referred to as the “seller”). RECITAL: WHEREAS, the buyer needs lighting fixtures in accordance with the specified instructions, documentation and specifications of the buyer’s technical documentation (as defined hereafter) for the supply of lighting fixtures; WHEREAS the seller has accepted the conditions of supplying lighting fixtures according to the instructions and specifications of the buyer, and the buyer has made an agreement to purchase lighting fixtures from the seller, subject to the conditions and terms of this contract; NOW, THEREFORE, in and for the consideration of the buyer’s and the seller’s agreement, for their successors, and themselves, and assigns which are permitted, hereto mutually agree as follows: 1. Subject to remuneration as agreed, hereby, the seller has agreed to supply 500 lighting fixtures according to the specifications and instructions of the buyer which shall be on a non-exclusive basis. 2. As agreed in this contract, the seller shall deliver the full number of complete lighting fixtures to the buyer’s premises according to the documentation signed on specifications basis and according to law provisions and polish standards as approved. 3. The seller shall, at their own expense and cost, supply the required lighting fixtures without any damages and in the complete working state to the premises of the buyer. 4. The seller shall supply the lighting fixtures and perform any after sales services with diligence and skill. 5. Any deficits and errors detected on the day of delivery by the buyer shall immediately be notified to the seller. 6. Any services and equipment not included in this contract fees and charges as may be agreed upon by the involved parties, as agreed upon and deemed incidental, necessary or essential shall be undertaken and executed to the satisfaction of the buyer without further additional charges. 7. For the supply of lighting fixtures and other services offered by the buyer, the buyer agrees to pay the seller a price equaling to the amount of $15000 subject to VAT and according to provisions of the applicable law 8. The seller is bound to bear all payments and costs related to the delivery of lighting fixtures to the buyer. 9. As agreed in this contract, payment shall be made upon delivery, inspection and acceptance of the lighting fixtures by the buyer and no additional payments shall be made for whatever reason. SIGNATURES: The contract has been signed by the involved parties as agreed upon on the date of this contract. Name:…………………………………………. Signature:………………………………………….. Name:……………………………………….. Signature:………………………………………….. WITNESS: Witness name:……………………………………….. Signature:………………………………………….. Witness name:……………………………………….. Signature:………………………………………….. |
Weekly Monitoring Reports
The progress of the Market Research Plan Description (week 1-2)
In the contract for the supply of lighting fixtures to Houzit Homeware Stores Limited, Lombards Consulting Limited was selected to carry out the market research work. The definition of the phases and selection of the supplier was 5% complete by the second week since the start of the project. It was found out that to successfully develop the information for the conduct of the market research, on-time questionnaires were needed to gather relevant data to be used in the research project. However, the needs for documentation information were 10% complete which led to them being late by one week. In addition, the identification of the information to be gathered for the conduct of the research was one week late. Furthermore, the identification of the source of information was 15% complete which resulted in one-week lateness.
The consultant requested Houzit Homeware Stores Limited to purchase all the materials for the research. As the marketing manager, I approved the consultant’s request except for the Australian chambers of commerce which would have cost $1,450 for the Australia wide surveys. The identification of the research participants was on time, although the technique for identifying the research was late for one week. In addition, the identification of the budget and the requirements for a time was 30% complete which resulted in a lateness of two weeks. While the consultant requested additional time for the project, I did not grant it since there was not enough time on hand.
Contractor Performance Description (week 5-6)
The primary market research which included interviews with Houzit Homeware Stores Limited customers and managers focus groups and customer surveys recorded a timely completion although the interviews scheduled for group buyers and Houzit Homeware Stores Limited managers were a bit late which resulted to a 50% completion of the project. Furthermore, the consultant reported having faced various difficulties while working with store managers. Moreover, the consultant requested for the internal data for customers to be taken offsite whereby I did not grant the request, which led to an on-time completion of the secondary market research which included the materials provided by Houzit Homeware Stores Limited, marking a 70% completion of the project. The findings for document research were established on time, while the development of the research report was late by two days which saw a 100% completion of the project.
As per the research project, it was found out that there was a need to include the lighting fixtures into Houzit Homeware Stores Limited assortment of goods. It was also found out that the industry size was large, with the demand for lighting fixtures being high in the South East corner. With only an approximate of 12 independent outlets supplying the fixtures. In addition, the growth of the industry is high, with a growth of 3.2% p.a. and a long-term growth rate of 2.7% p.a. The size of the target market is also large, with many people creating new dwellings at a rate of 45000 households p.a. thus increasing the need for the lighting fixtures. Furthermore, the income and activity rates are high, with the households spending approximately $560 per year on homewares. With a GDP of 3.2%, the economy was booming. Moreover, the government was offering incentives for homewares which minimized the use of resources or helped minimize waste. The report concludes that the additional lighting fixtures to Houzit Homeware Stores Limited assortment were a feasible idea due to the lack of organized competition, the growth of the economy and positive customer response.
The data used in compiling the report was from the home-ware trade association which is industry data and therefore valid. Additionally, the report was based on sources of data from original responses to the focus groups (having consent forms of participants which were signed), taped interviews, customer surveys and notes taken during conversations with Houzit Homeware Stores Limited’s customers, managers and staff. Secondary data sources were used and copies of the data used were available, cross-referenced and identified physically in the in the source document and report. Lombards Consulting Limited, where possible, used the scientific method of testing, prediction, formulation of hypotheses and careful observation in their research. In addition, Lombards Consulting Limited stated that they used other methods of ensuring greater confidence in their findings.
Usefulness and Relevance of the Findings against Research Objectives
The research findings were in line with the research objectives as they presented a clear review and research if Houzit Homeware Stores Limited should include lighting fixtures into its assortment of homewares. The research findings gave an in-depth analysis of the current forces impacting the market including the political, socio-economic, technological, environmental and legal frameworks affecting the sale and use of lighting fixtures. The research also reviewed the competition factors prevalent in the market where it established the existence of 12 independently owned competitors in the area. Generally, the research wholly captured all the essentials important and necessary for establishing the feasibility of Houzit Homeware Stores Limited to incorporate lighting fixtures in its assortment of homewares.
Performance
Generally, the performance of the project was satisfactory to the objectives of the research plan. However, Lombards Consulting Limited expressed concern about some challenges experienced in dealing with the managers of Houzit Homeware Stores Limited which led to limited time spent with the managers. In addition, Lombards Consulting Limited spoke about a healthy skepticism they built towards various assumptions made by Houzit Homeware Stores Limited managers about how the markets tend to work and perform. In addition, Lombards Consulting Limited expressed concern on the intellectual divergences between the mental styles of marketing researchers and line managers which tended to get into the way of productive relationships.
Review
The general manager’s response through the email was to express concern of his disappointment that Lombards Consulting Limited did not talk to the managers in charge of stores more since they had constant daily contact with the customers hence knew more about the needs of the customers. In addition, through an email, the group buying manager stated that the report was a confirmation of what the managers thought about the new category of assortments. Furthermore, the CEO passed congratulatory feedback from members of the board to the Consulting manager for doing a good job within a short timeframe, noting that a job of such intensity would have required around 12 – 14 weeks to complete.
According to the feedback received from various parties, it was clear that Lombards Consulting Limited could do better next time to the satisfaction of the managers. The general manager suggested that next time, Lombards Consulting Limited should engage in talks with the store managers more as they have daily contact with customers hence they best understand their needs. In addition, the group buying manager expressed concern that it would have been more satisfactory if he would have seen more opinion from Lombards Consulting Limited in regards to the business environment and opportunity.
The revised research guidelines have a few changes. In the definition or scope phase, the guidelines will be defining research objectives, defining research requirements and determining in-house research. The compilation of preferred suppliers or consultants will be eliminated as the Houzit Company has already identified the appropriate suppliers. The consultant or supplier consultant phase will also be eliminated as the phase is costly to the company. Research phase will be incorporated to monitor the milestones of the research and performance of a consultant or supplier. The final step will be reviewing of market research with stakeholders and summarization of reports. In summary, the next market research for the Houzit Company will be definition phase, research phase and reporting phase.
References
ChrisPash (2018). The 3 threats to Australian retailers in 2018. [online] Business Insider Australia. Available at: https://www.businessinsider.com.au/the-3-threats-to-australian-retailers-in-2018-2018-1 [Accessed 9 Nov. 2018].
Helms, M.M. and Nixon, J., 2010. Exploring SWOT analysis–where are we now? A review of academic research from the last decade. Journal of strategy and management. UK: emerald insight publishers, 3(3), pp.215-251.
Ibis (2018). Retail Trade – Australia Industry Research Reports | IBISWorld. [online] Ibisworld.com.au. Available at: https://www.ibisworld.com.au/industry-trends/market-research-reports/retail-trade [Accessed 9 Nov. 2018].
Mordor Intelligence (2016). Retail Industry in Australia Statistics, Analysis, Trends, Forecast (2018-23). [online] Mordorintelligence.com. Available at: https://www.mordorintelligence.com/industry-reports/retail-industry-in-australia [Accessed 9 Nov. 2018].
Singireddy, S.R.R. and Daim, T.U., 2018. Technology Roadmap: Drone Delivery–Amazon Prime Air. In Infrastructure and Technology Management (pp. 387-412). Springer, Cham.
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