Harvey Normans Business Strategy Revealed

Introduction to Harvey Norman

History and Background

Founded in 1961 by Gerry Harvey and Ian Norman, Harvey Norman started as a small electrical goods store in Sydney, Australia. The company has since grown to become a prominent retail player in the industry. In 1982, Harvey Norman was formally established as a partnership between Gerry Harvey and Ian Norman, and it went public in 1987, listing on the Australian Stock Exchange (Ivypanda).

In 1991, Harvey Norman expanded its business portfolio by including a computer superstore operation, further diversifying its offerings. The company continued to expand beyond Australia, making its first international foray in 1997 with the opening of a store in New Zealand. Subsequently, in 1998, Harvey Norman acquired The Joyce Mayne enterprise and Archie Martin Vox stores, which operated in the furniture and appliance business chain.

Since then, Harvey Norman has expanded its presence globally. It entered the Slovenian market in 2002 and entered the domestic markets of Malaysia and Ireland in 2003 (Ivypanda). With a strong foundation and years of experience, Harvey Norman continues to be a leading retail brand in Australia and beyond.

Business Overview

Harvey Norman is a diversified retail company that offers a wide range of products, including furniture, bedding, appliances, electronics, computers, and more. The company has established a strong presence in the market, catering to the needs of cost-conscious consumers as well as the middle class and upper middle class segments (PitchGrade).

Harvey Norman’s success can be attributed to its commitment to providing quality products and excellent customer service. The company focuses on delivering a seamless shopping experience through its extensive network of stores and online presence. With an omni-channel approach, Harvey Norman ensures that customers can easily access its offerings through multiple platforms, including physical stores, e-commerce websites, and mobile applications.

By embracing a franchising model, Harvey Norman has expanded its reach and established a strong network of franchisees across different regions. This approach allows the company to tap into local expertise and tailor its offerings to meet the specific needs of each market. Additionally, Harvey Norman has ventured into international markets, further diversifying its revenue streams and expanding its customer base.

As a part of its business strategy, Harvey Norman has also introduced private label brands, providing customers with exclusive and affordable options. These private label brands enable the company to differentiate itself from competitors and offer unique products to its target market.

Overall, Harvey Norman’s strong history, diverse product range, focus on customer experience, and strategic approach to growth have contributed to its success in the retail industry. The company continues to evolve and adapt to market trends, ensuring its position as a prominent player in the industry. To further understand the company’s strengths, weaknesses, opportunities, and threats, refer to our article on Harvey Norman SWOT analysis.

SWOT Analysis of Harvey Norman

A SWOT analysis is a useful tool for evaluating the strengths, weaknesses, opportunities, and threats of a business. Let’s take a closer look at each aspect as it pertains to Harvey Norman.

Strengths

Harvey Norman possesses several strengths that contribute to its success in the retail industry. These include:

1. Franchise Model: Harvey Norman’s business model relies on franchising, which enables rapid and cost-effective expansion while leveraging local entrepreneurial skills and knowledge (CQUniversity). This approach has been instrumental in the company’s growth and profitability.

2. Support System: The company operates company-owned stores that act as a benchmarking system and provide support for franchisees. This system offers insights, models, and best practices for franchisees to emulate, ensuring the quality and consistency of the brand across different locations.

3. Omni-Channel Approach: Harvey Norman has embraced an omni-channel strategy, integrating both online and offline retail channels. This strategy provides customers with a seamless shopping experience across various touchpoints, recognizing the changing consumer behavior towards digital shopping while maintaining the importance of physical stores for customer experience and product interaction.

4. Strong Supplier Relationships: The company maintains strong relationships with its suppliers, allowing for a diverse and high-quality product range. These relationships enable Harvey Norman to offer exclusive products, competitive pricing, and a differentiated product assortment compared to its competitors.

Weaknesses

Despite its strengths, Harvey Norman also faces certain weaknesses that could impact its performance. These weaknesses include:

1. Reliance on Franchisees: While the franchise model has been successful for Harvey Norman, it also poses challenges in terms of maintaining consistent brand standards and customer experiences across all franchise locations. The company must ensure effective communication and support systems to address this potential weakness.

2. Limited International Presence: Although Harvey Norman has expanded internationally, its presence outside of its core markets is relatively limited. This can restrict the company’s exposure to new markets and potential growth opportunities.

Opportunities

Harvey Norman has several opportunities to capitalize on in the retail industry. These opportunities include:

1. Market Expansion: There is potential for further expansion into new geographic regions and markets where the franchise model may not be suitable due to regulatory, cultural, or market factors. The company can consider operating more company-owned stores in these regions to establish a direct presence and adapt to local conditions (CQUniversity).

2. Digital Transformation: The increasing shift towards digital shopping presents an opportunity for Harvey Norman to further enhance its online presence and develop innovative digital strategies. Embracing e-commerce and digital technologies can help the company reach a wider customer base and improve overall customer experience.

Threats

Harvey Norman also faces various threats that can impact its business. These threats include:

1. Intense Competition: The retail industry is highly competitive, with numerous players vying for market share. Harvey Norman faces competition from both traditional brick-and-mortar retailers and e-commerce giants. Staying ahead of competitors and maintaining a strong market position requires continuous innovation and differentiation.

2. Economic Factors: Economic downturns or fluctuations can significantly impact consumer spending patterns, which in turn affects retail businesses like Harvey Norman. Economic uncertainties, such as recessions or changes in consumer confidence, can pose threats to the company’s financial performance.

By conducting a thorough SWOT analysis, Harvey Norman can identify its strengths and weaknesses, capitalize on opportunities, and mitigate potential threats. This analysis provides valuable insights for strategic decision-making and helps the company navigate the dynamic retail landscape effectively.

Harvey Norman’s Business Strategy

Harvey Norman, a leading retail company, employs a strategic approach that has contributed to its success and growth in the industry. Their business strategy encompasses several key elements, including a focus on franchising, diversified revenue streams, an omni-channel approach, international expansion, and the development of private label brands.

Focus on Franchising

Harvey Norman’s business model relies heavily on franchising. This approach allows for rapid and cost-effective expansion by leveraging the entrepreneurial skills and local knowledge of franchisees. The company supports its franchisees through a network of company-operated stores, providing benchmarking systems and sharing best practices to ensure consistency and brand quality across different locations.

Diversified Revenue Streams

To maintain a competitive edge, Harvey Norman has developed diversified revenue streams. In addition to their core retail business, they have expanded into other areas, such as property development and rental income. This diversification helps to mitigate risks and provides alternative sources of revenue, contributing to the company’s financial performance.

Omni-Channel Approach

Recognizing the shift in consumer behavior towards digital shopping, Harvey Norman has adopted an omni-channel approach (CQUniversity). By integrating both online and offline retail channels, they offer customers a seamless shopping experience across various touchpoints. This strategy combines the convenience of online shopping with the importance of physical stores for customer experience and product interaction.

International Expansion

Harvey Norman’s business strategy includes a focus on international expansion. While franchising remains their primary expansion model, the company also operates company-owned stores in regions where franchising may not be as suitable due to regulatory, cultural, or market factors. This allows them to directly control operations, adapt to local conditions, and establish a presence in diverse geographic locations.

Private Label Brands

Harvey Norman has developed a range of private label brands, offering exclusive products to customers and differentiating themselves from competitors. These private label brands enable the company to maintain competitive pricing and ensure a diverse and high-quality product range. By establishing strong supplier relationships, they are able to provide a differentiated product assortment and meet the evolving needs and preferences of their target market.

Harvey Norman’s business strategy, encompassing franchising, diversified revenue streams, an omni-channel approach, international expansion, and private label brands, has contributed to their competitive advantage and market position. These strategic elements enable the company to adapt to changing consumer trends and maintain a strong presence in the retail industry.

Harvey Norman’s Target Market

To effectively execute its business strategy, Harvey Norman focuses on targeting specific segments of the market. The company aims to cater to the needs and preferences of cost-conscious consumers, particularly the middle class and upper middle class. By offering a wide range of products at competitive prices, Harvey Norman strives to provide value for money to its target market.

Cost-Conscious Consumers

Harvey Norman recognizes the importance of appealing to cost-conscious consumers. This segment of the market seeks quality products at affordable prices. By offering competitive pricing, Harvey Norman aims to provide accessible options without compromising on quality. This strategy allows the company to attract and retain budget-conscious customers who are looking for a wide range of products that fit within their financial constraints.

Middle Class and Upper Middle Class

A significant portion of Harvey Norman’s target market consists of the middle class and upper middle class. These consumer groups have specific needs and preferences when it comes to lifestyle and retail products. Harvey Norman positions itself to cater to this demographic by offering a diverse range of products that align with their taste and lifestyle choices.

By understanding the purchasing power and preferences of the middle class and upper middle class, Harvey Norman tailors its product offerings to meet their demands. This includes providing a variety of options across different price points, ensuring that customers find products that suit their budget and lifestyle.

By strategically targeting cost-conscious consumers, particularly the middle class and upper middle class, Harvey Norman aims to capture a sizable market share and maintain a competitive advantage in the retail industry.

For more information on the business strategy of Harvey Norman, refer to our article on Harvey Norman’s Business Strategy.

Competitors of Harvey Norman

In the highly competitive retail industry, Harvey Norman faces strong competition from major companies that operate in similar markets. Competitors challenge Harvey Norman to continuously innovate, offer competitive prices, and provide exceptional customer service to stay ahead. Some of the major competitors in the retail industry include:

Competitor	Description
JB Hi-Fi	A leading retailer of consumer electronics, home entertainment, and appliances. JB Hi-Fi offers a wide range of products and competitive pricing.
The Good Guys	Specializing in home appliances and consumer electronics, The Good Guys is known for its extensive product selection and competitive deals.
IKEA	A global furniture and home goods retailer, IKEA offers affordable and stylish products for home furnishing.
Amazon	As a dominant online marketplace, Amazon provides customers with a wide variety of products, including electronics, furniture, and household items, with convenient online shopping and fast delivery options.
eBay	An online auction and shopping website, eBay allows individuals and businesses to buy and sell a broad range of products, making it a significant competitor in the online retail space.
Kogan	Kogan is an online retailer that offers a diverse range of products, including electronics, appliances, and home goods, at competitive prices.

These competitors challenge Harvey Norman to continuously improve its competitive advantage by offering a compelling product assortment, competitive pricing, and exceptional customer service. To stay ahead, Harvey Norman leverages its franchise model to rapidly expand and tap into local entrepreneurial skills and knowledge (PitchGrade). The company also focuses on its omni-channel approach, integrating both online and offline retail channels to provide customers with a seamless shopping experience.

Harvey Norman’s success in the face of competition can also be attributed to its strong supplier relationships, which allow the company to offer exclusive products, maintain competitive pricing, and provide a differentiated product assortment compared to competitors (CQUniversity). By continually adapting to changing consumer preferences and market dynamics, Harvey Norman strives to maintain its position as a leading retailer in the industry.

SWOT Analysis of Harvey Norman

To gain a deeper understanding of Harvey Norman’s business strategy, it is essential to conduct a SWOT analysis. This analysis will highlight the company’s strengths, weaknesses, opportunities, and threats.

Strengths

Harvey Norman possesses several strengths that contribute to its success in the retail industry. These strengths include:

• Franchising Model: Harvey Norman’s business model relies on franchising, which enables rapid expansion at a relatively low cost. This approach leverages local entrepreneurial skills and knowledge, contributing to the company’s growth and profitability (CQUniversity).

• Support System: The company operates a network of company-owned stores that act as a benchmarking system. These stores provide insights, models, and best practices for franchisees to emulate, ensuring consistent quality and brand representation across different locations (CQUniversity).

• Omni-Channel Approach: Harvey Norman has embraced an omni-channel strategy that integrates online and offline retail channels. This approach provides customers with a seamless shopping experience across various touchpoints, recognizing the changing consumer behavior towards digital shopping while maintaining the importance of physical stores for customer experience and product interaction.

• Strong Supplier Relationships: The company has established strong relationships with suppliers, allowing it to offer a diverse and high-quality product range. These relationships enable Harvey Norman to provide exclusive products, maintain competitive pricing, and offer a differentiated product assortment compared to competitors (CQUniversity).

Weaknesses

While Harvey Norman has numerous strengths, it is important to consider its weaknesses in the retail industry. These weaknesses include:

• Dependence on Franchisees: The success of the company’s business model relies heavily on the performance and capabilities of its franchisees. Any issues or inconsistencies among franchisees could potentially impact the overall brand image and customer experience.

• Market Saturation: In some markets, Harvey Norman faces competition from numerous retail players. This saturation can make it challenging for the company to stand out and capture a significant market share.

Opportunities

Harvey Norman also has several opportunities to further enhance its business strategy:

• International Expansion: The company’s international expansion strategy focuses on operating company-owned stores in regions where franchising may not be as suitable. This strategy allows Harvey Norman to directly control operations, adapt to local conditions, and establish a presence in diverse geographic locations (CQUniversity).

• E-commerce Growth: The continued growth of e-commerce presents an opportunity for Harvey Norman to further develop its online retail channel. By investing in online platforms and enhancing the digital shopping experience, the company can reach a broader customer base and tap into the growing online market.

Threats

While Harvey Norman has a strong position in the retail industry, it also faces certain threats:

• Intense Competition: The retail industry is highly competitive, with numerous players vying for market share. Competitors may offer similar products, pricing, or promotions, posing a threat to Harvey Norman’s market position.

• Economic Factors: Economic fluctuations can impact consumer spending habits and purchasing power. In times of economic downturn, consumers may reduce discretionary spending, affecting the demand for retail products.

By conducting a thorough SWOT analysis, Harvey Norman can leverage its strengths, address its weaknesses, capitalize on opportunities, and mitigate potential threats. This analysis provides valuable insights into the company’s business strategy and helps guide its decision-making processes.