Business Environment refers to sum total of the individuals and institutions which are outside business control. An organisation depends on the factors related to business environment since it affects performance of the business. Business environment comprises of internal along with external factors which has an effect on the functioning of a company. External environment comprises of the outside factors that has an effect on the business operations of a company. Harvey Norman is a multi-national retailer based in Australia that is instrumental in selling furniture, beddings, computers and the electrical products (Harveynorman.com.au., 2018). This report focusses on customer behaviour and regulatory policies that have an impact on the working of Harvey Norman. It discusses how competitor strategy along with public opinion has an effect on the business performance of Harvey Norman. The report discusses about the factors that cause challenges for the firm and makes use of frameworks that can help in resolving challenges.
Customer behaviour refers to study of the individuals along with groups that is associated with the aspect of purchase of a product or service. Customer behaviour is indicative of emotional and the behavioural responses that are involved in the process of buying a product. Consumer behaviour examines the emotions, attitudes along with preferences that has an effect on buying behaviour of an individual. The retail industry in Australia is very competitive and hence understanding the pattern of consumer behaviour poses to be a challenge for Harvey Norman. Consumer Behaviour is of crucial importance in the retail industry as it helps in knowing about the needs and impulses of the consumers in the present age. Harvey Norman should be able to assess the lifestyle of the people living in Australia that can help it in catering to the wants of the consumers (Sanders-Jackson et al., 2015). The products of Harvey Norman should be able to know about the target market that will be able to help it catering to the needs of large consumer base. Understanding the consumer buying behaviour is important for Harvey Norman as consumer insight can help the brand in restructuring itself that can help the company in getting higher turnover. In the event of Harvey Norman not observing the consumer behaviour they would not be able to find the gaps in relation to product portfolio. The finding of gaps in relation to product portfolio can help them in the aspect of launching new products that can satisfy the consumers (Kurnia et al., 2015).
Australia has national statutory framework which ensures that trading is carried out in a fair manner in relation to business along with consumers. The framework is enforced by Australian Competition and Consumer Commission (ACCC) and this acts as a challenge for the multi-national retailer, Harvey Norman (Naidoo & Gasparatos, 2018).There are state along with territory laws that helps in governing the aspect of consumer protection in Australia. Australian Consumer Law (ACL) helps in providing regulations relating to unfair contract terms along with consumer rights guarantees. They also help in providing product safety laws and unsolicited consumer agreement that the retailers in Australia have to abide by. National statutory framework exists in Australia that helps in regulating product safety along with information standard in Australia (Huang & Gamble, 2015). These regulations help in ensuring the fact that the products that are harmful are not circulated in the Australian market. The laws in Australia lays great emphasis on the aspect of consumer protection and there are many obligations that the retailers have to abide by within the Australian environment. The ACL deals with the liability of suppliers and the manufacturer in relation to injury caused by a product. In the event of consumer issues like deceptive conduct, statutory consumer guarantee and manufacturer liability the retailers would be penalized (Roy et al., 2018).This acts as a challenge for Harvey Norman in the Australian environment. Harvey Norman has to face liability in case of any defects of the products which acts as a challenge for the company in operating within Australia.
There are companies in Australia like Kogan and JB Hi-fi that deals with electronics that poses stiff competition for Harvey Norman. The products are offered at these companies at a discounted price that increases the level of competition for the company, Harvey Norman in Australia. The companies like Kogan along with JB Hi-fi have made use of innovative thinking that helps in improving consumer experience. These companies act as stiff competition for the retailer Harvey Norman in Australia. There are furniture companies In Australia like Design by Them, MJP studio, Ingrain Designs and Michael Hayes Furniture that act as a challenge for the furniture sector of Harvey Norman. The retailers offer percentage discounts along with multi-buy promotions that makes it difficult for Harvey Norman to operate in the competitive environment of Australia (Garg & Chauhan, 2015) The strategies of the competitors like buying and saving off some specific items acts as a challenge for Harvey Norman that hinders in the process of making profits for the firm. The competitor strategies like free shipping makes a large number of consumers buy furniture from MJP Studio, Ingrain Designs and that of Design by Them. The promotions of these retailers are targeted towards a particular customer group that is a major cause of the popularity of these retail companies dealing with furniture. Private sale is often run by these furniture companies that makes the competition very stiff for multi-national retailer called Harvey Norman (Stubbs, 2017).
Public Opinion refers to the desires and thinking of a large number of people. Collective opinion of people living in the society is a crucial factor that can help a firm in achieving success. People have a tendency of forming opinions regarding the individual companies by the application of universal values to the actions. Public opinion can help the managers in spotting the trends and it can be useful for a company in anticipating future. The managers can determine the trends in relation to marketing that can help a firm in the aspect of achieving success. Harvey Norman in Australia would have to make sure that the products are sourced in the ethical manner. In the event of the products being sourced in the unethical manner a firm can face hindrance and will lose the favour of the public in the present age (Goodman & Remaud, 2015). Harvey Norman should be able to make the customers aware that that information in relation to the products of the company are easily accessible. Sourcing responsibly is difficult for Harvey Norman owing to the complex supply chain. The process of supply chain being complex acts as a barrier in the path of operation of Harvey Norman. The people in the present age lay stress on the method of production of goods owing to the greater media security that exists in the present age.
The consumers in the present age are awakening to the aspect of sustainability that has an effect on the shopping habit of the people in the present age. Harvey Norman has to abide by Australian Consumer Law along with Australian Competition and Consumer Commission that can help them in staying sustainable within the environment. The retailers taking care of environmental issues can help in ensuring the fact that customers do not have to worry about the issue of sustainability. Harvey Norman can increase the awareness along with interest of the people by laying emphasis on the aspect of sustainability. The retailers in the present age have a close relationship with the consumers and they can respond to the enthusiasm of the customers by making into account the aspect of sustainability. Management system framework can be taken recourse to by Harvey Norman that can help in incorporating sustainability in the operational activities of Harvey Norman within Australia (Grimmer et al., 2017). This framework can help in guiding management in relation to competing priorities within Harvey Norman. This framework will be able to help the decision makers in the organisation in making trade-offs in relation to sustainability framework.
Conclusion
Business environment is indicative of individuals along with the institutions that is outside the ambit of business control. The internal and the external factors has an influence on the organisational policies and the functioning of an organisation. Australian retail industry is greatly competitive and hence understanding of consumer behaviour is of crucial importance for the success of Harvey Norman. The state laws in Australia wants to protect the consumers that acts as barrier in the path of success of Harvey Norman. ACL has strict contract terms that strengthen the consumers and hence retail companies in Australia have to maintain strict standard that can facilitate its operation in competitive environment of Australia. The presence of companies like JB Hi-fi that sells the electronic products poses threat for the electronics sector of Harvey Norman. Furniture companies within Australia like MJP studio along with Ingrain Designs are the competitors for the furniture sector of Harvey Norman. Public opinion can be useful for the mangers in identification of trends that can be of use for a company in anticipating future. Management system framework can be utilised by Harvey Norman that can help them in ensuring the aspect of sustainability in the operations of a company. This framework can be useful in guiding the management that can help the company in achieving the goals.
References
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Goodman, S., & Remaud, H. (2015). Store choice: How understanding consumer choice of ‘where’to shop may assist the small retailer. Journal of Retailing and Consumer Services, 23, 118-124.
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Harveynorman.com.au. (2018). Harvey Norman | Shop Online for Computers, Electrical, Furniture, Bedding, Bathrooms & Flooring | Harvey Norman Australia. Retrieved from https://www.harveynorman.com.au/
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Naidoo, M., & Gasparatos, A. (2018). Corporate Environmental Sustainability in the retail sector: Drivers, strategies and performance measurement. Journal of Cleaner Production.
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Sanders-Jackson, A., Parikh, N. M., Schleicher, N. C., Fortmann, S. P., & Henriksen, L. (2015). Convenience store visits by US adolescents: rationale for healthier retail environments. Health & place, 34, 63-66.
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