Target Market Description:
Harvey Norman targets a wide range of different customers across a number of interest areas and demographic segments. Because the company carries a significant range of goods, it takes a broad segmentation approach. It carries various products designed for different age levels. For instance, Harvey Norman carries household improvement products geared toward older, more affluent homeowners (Stockport). At the same time, it also carries low-cost electronics designed for students or individuals on a budget. It does put an extreme amount of focus on women between the ages of 25 and 45. It does this not only through the home section of its store, but also with its extensive collection of items for kids and expectant mothers. In addition, much of its catalogue business is geared toward women in that age range. Harvey Norman seems to be willing to have its products appeal to almost anyone, but it focuses extensively on those with grown-up home needs.
Competitive and Issues Analysis:
One of the primary issues that Harvey Norman faces in the modern age is dealing with the advent of the Internet. Long a company that focused on its stores and its catalogue business, Harvey Norman has established an extensive online arm, calling Harvey Norman Online (HNO). HNO is set up as its own franchisee, distinct from the actual Harvey Norman stores, but because it carries many of the same products and engages in the same kind of branding, it is, in effect, a very tangible arm of the overall company. At current, Harvey Norman is having to adjust to some of the price pressure being applied by its chief rival, Kogan. Kogan offers roughly the same types of products at much lower prices for the most part, which gives Kogan a significant advantage in the online realm. One of the chief issues for Harvey Norman at this point is recognizing that much of the value of its service – the high levels of customer service provided in its in-person stores – is not important or necessary in its competitive online world (Productivity Commission). Kogan has been able to undercut Harvey Norman, especially in the realm of consumer electronics, by 20-percent to 30-percent in some cases. These figures are significant, and they represent something of a competitive advantage for Kogan. At current, Kogan has been established in the online retail business for longer, so the company has a more established online following and a more streamlined infrastructure for handling online business.
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SWOT Analysis:
Strengths: One of the primary strengths of Harvey Norman is its brand. It has a well recognized brand across Australia, and its stores can count on people knowing the company by its name. In addition, it has more than 10,000 employees and more than 250 stores, including a growing presence in places like Malaysia. This gives the company a regional reach that allows it to expand its consumer base if necessary.
Weaknesses: The company was late to the online game, putting it at a disadvantage in comparison to some of its domestic competition. In addition, the company faces challenges with globalization, as consumers at home can purchase goods from retailers around the world. Lastly, the brand has been damaged somewhat by reports of unsavory business practices on the part of Harvey Norman.
Opportunities: The company has the ability to grow its online business significantly over the next few years. It has dipped its toes into that particular water, but it can compete on a lower cost basis with Kogan and others. Likewise, Harvey Norman has a chance to expand into other Southeast Asian markets.
Threats: The company is faced with both domestic and international threats. One of its internal threats is a continued diminishing of its business reputation. The company exists on the strength of that reputation and may face problems if it loses some of the luster. Likewise, it faces threats from new discount retailers that can use Harvey Norman as a showroom for products that individuals will then go home to purchase on a cheaper website.
