HARVEY NORMAN Table of Contents 1.0 Introduction: 2 1.1 Background: 2 1.2 Aims/Objective: 3 1.3 Scope: 3 2.0 Discussion: 3 2.1 Evaluating the critical issue of Harvey Norman 3 2.2 Internal contextual factors – SWOT Analysis 4 2.3 External contextual factors – PESTEL Analysis 5 2.4 Explaining the domestic and international contextual factors of Harvey Norman 6 3.0 Conclusion: 6 4.0 Recommendation: 7 References: 8 1.0 Introduction: Each and every organisation requires to maintain the organisational behaviour (OB) in order to improve the operational efficacy. In the opinion of Berg (2010), the internal and external perspectives of an organisation is required to define its organisational behaviour in the global marketplace. This analysis actually helps the management to take an attempt for improving the fundamental aspects according to the market requirement. The current study aims to identify the foremost internal and external contextual factors of an organisation to evaluate its impact on the business and decision making process of the chosen firm. In this regards, an Australian firm Harvey Norman has been considered. In addition, the study is going to explain the domestic and international contextual factors which can affect the organizational structure strategy of Harvey Norman. As a final point, a recommendation has been intended to produce by the researcher, so that the chosen firm could boost up the operational efficacy for attaining the long term sustainability in the global marketplace. 1.1 Background: Harvey Norman Holdings Limited is an Australian multinational retailing firm which has a large selling market of furniture, bedding, computers, communications and consumer electrical product in Australia. The firm had been established in the year of 1982 and its headquarter is situated in Homebush West, New South Wales, Australia (www.harveynorman.com.au, 2016). Now it has a world-wide presence with 86 stores around globe. In the year 2016, the revenue of the firm was A$ 5.3 billion (www.harveynorman.com.au, 2016). 1.2 Aims/Objective: Harvey Norman Holdings Limited is an ASX listed retail corporation in Australia with its standard principle of integrating the franchisor, retail sector and the other assets object. The key motto of the firm is Go Harvey, Go!! (www.harveynorman.com.au, 2016). 1.3 Scope: Harvey Norman is aiming on superior understanding of its online customers by using a Lyris’ digital marketing software (www.harveynorman.com.au, 2016). The management of the firm is expert to comprehend the customer requirement by offering the best products in its online store. This process helps the firm to increase more online conversion and by generating more leads for its 180 retail stores in Australia. 2.0 Discussion: 2.1 Evaluating the critical issue of Harvey Norman The saturated market growth of electrical goods is one of the critical business issue for Harvey Norman. The price depreciation of this segment is damaging the business profitability of the chosen firm. In this specific context, May et al. (2014) cited that the Harvey Norman could face a huge loss in the section of electrical products. Adding to this, the customer from the retail sector is extremely volatile in nature. The brand switching probability amongst the customers can be an another risk for the selected firm. Considering the opinion of Riordan et al. (2015), the customer has a great concentration on the pricing strategy of the products and its quality measures of the products. Therefore, the switchover cost of the consumers could increase the degree of competency for Harvey Norman in this competitive market area. Moreover, losing the customer faith and the loyal customer base due to the issue of illegal business practice can be a critical issue for Harvey Norman. 2.2 Internal contextual factors – SWOT Analysis Strengths - The firm is one of the largest Australian based retail sector selling the electrical, electronics and entertainment goods to its global customer. It has been identified that, currently the firm has spread its branches in the different countries such as New Zealand, Malaysia, Singapore, etc. (www.harveynorman.com.au, 2016). Considering the opinion of Posthuma et al. (2013), the management of the chosen firm provides an attractive promotional offers in order to increase the maximum number of customer footfalls in the stores. The current statistics indicates that the firm has approximately 250 stores across the globe (www.harveynorman.com.au, 2016). There are almost 10,000 employees in the Australian stores, which is also a great strength of this Australian retail firm (www.harveynorman.com.au, 2016). Weakness - There is a controversy and allegation of using an illegal business practices by the firm. Thus, the reputation of the firm in the international market has hampered (Osterwalder & Pigneur, 2010). In addition, the rigid competition from the international market players has limit the growth of Harvey Norman. Opportunities – It has been scrutinised that Harvey Norman is able to offer a high quality and standardised products at a low price range. Supporting this Dyson (2012) cited that this is one of the business tricks of the firm to draw the attention of the customers. On the other hand, the brand has expanded its product lines into different lifestyle product segment for enhancing the brand value. Thus, these type initiatives have assisted the management of Harvey Norman for increasing its business opportunity in the international market. Threats – It is a proven fact that the customers segment is highly mindful about the product quality and its successful brand name. Thus, Yuksel (2012) cited that marinating the customer preference and the attention towards the stores of Harvey Norman is a threat to the management as the market is highly inflexible with the level of core competence. On the other hand, it has been analysed that the price of the electrical products is decreasing by year on year (Pargaonkar, 2016). Therefore, the market saturation in the case of electrical goods segment can be a threat to the chosen firm. 2.3 External contextual factors – PESTEL Analysis Political – Political variability of the Australian government imposes an adverse impact over the business strategy of Harvey Norman. It has been identified that this type strategy is affecting the business output of the chosen firm (May et al. 2014). As a consequence of the string political barriers the brand value and the bard image of the firm is reducing as the selling value of the firm is going down. Economical – In Australia, the inflation rate can be considered as one of the major economic aspect to reduce the disposal income rate of the individual personnel and the business industry. According to the view of Sykes & Crawford (2007), the profitability of the retail sector is entirely depended on the customers’ purchasing attitude. Thus, reducing the income rate of the customer could minimise the total sale of the retail firm. Social – The persons form the different age group are the potential customers of the Harvey Norman as the Australian community like to do online shopping. In addition, the different mode of social networking channel is also a beneficial medium to enhance the customer attraction to the online store of Harvey Norman (Pargaonkar, 2016). Therefore, the chosen firm requires to increase the product lines for all the different age group of customers for improving the customer base and core effectiveness. Technological – The increasing demand of smart phone technology is the key driver to enhance the online retail market of Australia. Hence, in this section, Harvey Norman could get a sustainable position to expand the online stores. Environmental – It is known to all that the people of Australia is highly conscious about the environmental protection action (Yuksel, 2012). Thus, the Australian government has introduced several environment protection law so that the retail organizations in Australia could minimise the carbon footprints. The carbon tax law announced by the government has an optimistic effect to maintain a good and healthy environment by the retail firms. Legal – The sudden changes in the tax policy has become an issue to the business organisation while the market growth is saturated in different sectors. 2.4 Explaining the domestic and international contextual factors of Harvey Norman Apart from the critical internal and external factors there are several domestic and international contextual factors of the chosen firm. The using is digital technology is a good symbol for enhancing the organisational growth. However, issues in using the software is one kind of risk to the brand. In the words of Osterwalder & Pigneur (2010), the poor training of the workers has hampered the business growth of the organisations. The unavailability of the skilled workforce has also minimised the profitability of the firm. In addition, failure to use updated technological aspect has limit the global expansion of the retail firm. On the other hand, poor selection of the supplier and courier agency leads to the issues of delivery delay to the customer end (Posthuma et al. 2013). As a result, the firm is losing its customer value also. Moreover, poor monitoring on the market graph and the competitor activities are the reason of dropping the market growth and more customer attention. 3.0 Conclusion: The primary assertion of the study indicates that the internal and external factors of a business needs to be analysed for performing the business performance effectively. The alteration of the organisational policy is also needed to successfully execute the domestic and the international contextual factors of Harvey Norman. Hence, developing more customised business strategies and strategic initiatives is required to minimise the risk factors of Harvey Norman. 4.0 Recommendation: In order to increase the organisational productivity an employee management is initiative like employee health and safety measure and employee reward policy needs to be adopted. This would help the management of Harvey Norman to increase employee engagement towards the brand as the employees of the retail sector gets easily saturated towards the job role (Riordan et al. 2012). The management needs to keep focus on the employee holiday list and employee engagement programme to diminish the job monotony. This could be helpful for the firm to improve the business performance by refining the employee performance. Adding to this, Pargaonkar (2016) stated that more customer refreshment offers are required to launch by the management as the customers from the retail sector has the tendency to switch the brand easily. Therefore, the management of Harvey Norman requires to introduce several products as per the preference of the customers. Furthermore, a user friendly website with lucrative design could also helpful to draw the attention of the global customers. References: Berg, H.P. (2010). Risk Management: Procedures, methods and experiences, Risk: Analysis & Theory, 2 (1), 79 – 95. Dyson, R.G. (2012). Strategic development and SWOT analysis at the University of Warwick, European Journal of Operational Research, 152(1), 631-640. Harveynorman.com.au. (2017). Harvey Norman | Shop Online for Computers, Electrical, Furniture, Bedding, Bathrooms & Flooring | Harvey Norman Australia. [online] Available at: http://www.harveynorman.com.au/ [Accessed 19 Apr. 2017]. May, D.R. Gilson, R.L. & Harter, L.M. (2014). The psychological conditions of meaningfulness, safety and availability and the engagement of the human spirit at work, Journal of Occupational and Organisational Psychology, 77(2), 11-37. 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