Harvey Norman Entrepreneurship Climate Analysis essay
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Every business entity develops and relies on particular strategies in a given business environment to ensure its success. The strategies chosen must always take into consideration the external and internal environment within which that firm operates as this can determine its profitability. The case study of Harvey Norman Holdings is a good example of the process of identifying the business strategies. Over the last 30 years that the company has been in existence, it has grown significantly. To develop its strategies, Harvey Norman had to carry out an analysis of the external environment, which encompasses political and legal factors as well as technological, socio-cultural, demographic, environmental, and economic factors. These factors may be indicators of opportunities that the company needs to maximize on or may be barriers that can limit its operations. This essay therefore presents an entrepreneurship climate analysis.
Harvey Norman Entrepreneurship Climate Analysis
Harvey Norman carries out its activities primarily under the Australian franchise system. The company has a strong motto which is similar to the ones used when supporting teams. The “Go Harvey, Go Harvey, Go Harvey Norman” motto brings out the entrepreneurial spirit and enthusiasm that drives the company. Describing the culture of the company is difficult although like other enterprises, Harvey Norman has taken up the culture of its founders who were great entrepreneurs. In its overseas operations, the retail complexes are either solely owned or controlled stores operating under the Harvey Norman name. The strategies used by the company to achieve its present growth are of interest to numerous people who would wish to replicate such success in other ventures (Varley, 2010). This clearly shows that the company welcomes and implements new ideas.
Macro-environmental analysis is the initial step when conducting strategic analysis of a company; it is otherwise referred as pest analysis or pestle analysis. Looking at the social-cultural conditions and the demographics within which Harvey Norman operates, it is important to point at various factors that are in favor of the entire industry. Firstly, the lifestyle of the people has changed, and they now demand more equipment for entertainment, which means that the electronics industry must continue offering superior products for the same. This company takes such issues into consideration. According to Inma and Shelda (2006), presently, people are more conscious about the places they live in. They continuously seek to improve their houses; therefore, they constantly demand such products. Demographically, the population is rising although at a slow pace, and the majority of people especially with the Harvey Norman market are between 20 and 55 years old (Anthony, Daniel and Aidan, 2004).
The economic trends within the market are also critical indicators as they help indicate the purchasing power of the customers. Presently, the economic status of the majority of people is improving given that people’s earnings are rising (Inma and Shelda, 2006). However, the interest rates are also high which makes the acquisition of the needed capital through borrowing more expensive. The political and legal factors within a particular industry also influence the operations of the firms within that industry. Harvey Norman operates within an environment in which there is political stability. Additionally, the integration of the European Union is critical in the operations of the company as it has lead to harmonization of the trade laws and currency; it also facilitates the free movement of goods and services. The integration of the European Union also comes with the harmonization of the taxes which makes operations easier.
Presently, due to the technological advancement, more and more firms dealing with similar products as the ones Harvey Norman offers conduct their business through the internet by the use of the e-commerce tools. In addition, due to changes in technology, more customers demand products which are up-to-date with changes in technology. For instance, currently, most people would like phones that are able to run many applications. Industry players must therefore keep abreast with changes in technology and stock the latest models of phones, computers, and other electronic devices. This is because business sources the products from the environment, operates within it, and disposes its waste. Consequently, environmental legislations and regulations may affect a business. In the industry within which Harvey Norman operates, there are various legislations that have been developed in terms of waste management and the products firms can be able to sell (Inma and Shelda, 2006).
In terms of the organization’s overall attitude toward innovation and change, it is apparent that Harvey Norman emulates emergent business strategies such as e-commerce. This has seen the company’s record success in the past few years.
Conclusion and Recommendation
Harvey Norman utilizes numerous strategies to its advantage, but still must fight with its competitors who are also employing similar tactics. The above analysis clearly indicates Harvey Norman entrepreneurship climate. It is vital for the organization to focus on using e-commerce and design on-line portals since it will help to reach out to most clienteles since presently most consumers buy products online. Finally, with the introduction of mobile commerce, the firm will likely boost its sales.