Strategic Review of Australian Department Store David Jones

David Jones Limited (DJS) is an Australian retailer tracing its origins back to 1838 when it first opened in Sydney to sell “the best and most exclusive goods” (DJS, 31 Oct. 2009). It has since expanded to become a national retail chain comprising of nearly 40 premium department stores. The subject of this analysis is a strategic business unit (SBU) that is playing an increasingly important role in the company’s future growth strategy; namely the provision of financial services. As the result of a strategic alliance with American Express (AMEX), DJS launched the David Jones American Express (DJA) card in 2008 (ASX Media Release, 20 February 2008). To effectively analyse the value proposition of this SBU and product it is important to first examine the overall value proposition of the company. As defined by Kotler, a company’s value proposition is the set of benefits which it promises to deliver to consumers in order to satisfy their needs (Kotler et al. 2009). In the case of DJS these core benefits are the provision of an “empowering level of customer service”, a distinctive store ambiance, a unique and high quality product range and international brand portfolio offered at competitive prices, and a mission statement to “be the best full line, differentiated department store” (DJS Enterprise Agreement 2006). Key aspects of this proposition include the company’s focus on quality, luxury and aspiration. In terms of Maslow’s hierarchy of needs it demonstrates a desire to deliver an experience and array of products which satisfy needs of belongingness and self-esteem in a potential buyer (Maslow 1954). It also forms the basis for the company’s positioning strategy and its marketing orientation towards customer satisfaction (AFR Boss Magazine, October 2009, p.22). The company strives to deliver these key benefits to a primary target market consisting of “three generations of women (daughter, mother, grandmother) from households with above average disposable

References: Maslow, A. 1954, Motivation and personality, Harper and Row. Aaker, D. A., & Joachimsthaler, E. 2000, Brand leadership: Building assets in the information society, Journal of Consumer Marketing. Kotler, P., Adam, S., Denize, S. & Armstrong, G. 2009, Principles of marketing, 4th edn, Pearson Prentice Hall. Marketing Management, 2009, AGSM MBA Programs Graduate Diploma in Management.