Harvey Norman: Business Model, SWOT Analysis, and Competitors 2023

Harvey Norman, a renowned global retailer, has managed to thrive in the competitive consumer electronics and furniture market. This blog article delves into the business model of Harvey Norman, highlighting its key strategies and operations that have contributed to its success. Furthermore, a comprehensive SWOT analysis provides an insight into the company's strengths, weaknesses, opportunities, and threats. Additionally, this article sheds light on the major competitors of Harvey Norman and explores the potential landscape of the industry by the year 2023.

What You Will Learn:

• Who owns Harvey Norman and the background of the company's ownership.
• The mission statement of Harvey Norman and how it guides their operations and goals.
• How Harvey Norman makes money and the key revenue streams of the company.
• An explanation of Harvey Norman's business model canvas and how it is structured.
• An understanding of the competitors of Harvey Norman and the market landscape they operate in.
• A comprehensive SWOT analysis of Harvey Norman, highlighting the company's strengths, weaknesses, opportunities, and threats.

Who owns Harvey Norman?

The Founding Family: The Harveys and the Normans

Harvey Norman, one of Australia's largest retail companies, was founded by Gerry Harvey and Ian Norman in 1961. The company started as a small electrical goods store in Sydney, with the aim of providing quality products and exceptional customer service. Over the years, Harvey Norman expanded its offerings to include furniture, bedding, appliances, computers, and more.

Gerry Harvey and Ian Norman, childhood friends turned business partners, played a significant role in the company's growth and success. They established a strong foundation that allowed Harvey Norman to become a household name in Australia and expand internationally. Despite retiring from active management, both Gerry Harvey and Ian Norman still maintain ownership stakes in the company.

Public Ownership and Shareholders

In addition to the founding family's ownership, Harvey Norman is a publicly listed company on the Australian Securities Exchange (ASX). This means that shares of the company are available for purchase by individual and institutional investors.

As of the latest available information, the largest shareholders of Harvey Norman are often institutional investors such as pension funds, investment firms, and insurance companies. These entities may invest in the company due to its consistent performance and potential for long-term growth.

It is important to note that the exact ownership structure of Harvey Norman may change over time as shares are bought and sold in the stock market. Investors can acquire or sell shares in the company, potentially altering the ownership distribution.

Franchisees: A Unique Ownership Model

One distinctive aspect of Harvey Norman's ownership structure is its franchise model. A significant portion of Harvey Norman stores is owned and operated by franchisees. These independent business owners enter into agreements with Harvey Norman to use the brand name, benefit from the company's marketing efforts, and receive ongoing support.

Franchisees are responsible for the day-to-day operations of their stores, including staffing, inventory management, and customer service. They contribute to the success of the overall Harvey Norman brand by maintaining high standards and delivering a consistent customer experience.

While franchisees do not have direct ownership in the company, their contributions are vital to Harvey Norman's overall performance. The success of the franchisees translates into increased brand recognition, market share, and ultimately, shareholder value.

Conclusion

Harvey Norman is a company with multiple layers of ownership. The founding family, Gerry Harvey and Ian Norman, still hold ownership stakes, while public shareholders, including institutional investors, also have a significant presence. Additionally, the franchise model further adds to the company's ownership structure, with independent business owners operating Harvey Norman stores across Australia and internationally. This diverse ownership framework has contributed to the company's enduring success and its position as a leader in the retail industry.

What is the mission statement of Harvey Norman?

The Mission Statement of Harvey Norman

A mission statement serves as a guiding principle for a company, outlining its purpose and aspirations. For Harvey Norman, a prominent retail company specializing in electronics, furniture, and bedding, their mission statement encapsulates their core values and objectives.

Harvey Norman's mission statement is centered around providing customers with an exceptional shopping experience by offering an extensive range of quality products at competitive prices. They strive to be the preferred destination for customers seeking the latest in technology, home appliances, furniture, and bedding solutions.

Furthermore, Harvey Norman is committed to delivering excellent customer service and maintaining strong, long-term relationships with their clients. Their mission statement emphasizes the importance of understanding customer needs, exceeding expectations, and ensuring customer satisfaction.

In addition to their dedication to customers, Harvey Norman's mission statement also highlights their commitment to their employees. They aim to create a supportive and inclusive work environment that encourages personal and professional growth. By fostering a positive workplace culture, they believe their employees will be motivated to provide outstanding service and contribute to the company's overall success.

Moreover, as a socially responsible company, Harvey Norman's mission statement underlines their commitment to giving back to the communities they operate in. They actively engage in corporate social responsibility initiatives, supporting various charitable causes and organizations. By making a positive impact on society, they strive to be more than just a retailer but also a responsible corporate citizen.

Overall, Harvey Norman's mission statement encompasses their dedication to customer satisfaction, employee well-being, and social responsibility. It outlines their goal to be a leading retailer in the industry, offering a wide range of quality products, exceptional service, and making a positive impact on the communities they serve.

How does Harvey Norman make money?

Retail Sales

One of the primary ways Harvey Norman generates revenue is through retail sales. As one of Australia's leading retailers, the company operates a vast network of stores offering a wide range of products, including electronics, furniture, appliances, and bedding. By selling these goods to consumers, Harvey Norman earns income from the retail markup on each item sold.

Franchise Fees

Harvey Norman operates under a franchise model, which allows independent business owners to operate their stores under the Harvey Norman brand. In return for the right to use the brand and benefit from its established reputation, franchisees pay ongoing fees to the company. These fees typically include an initial franchise fee, ongoing royalties, and advertising contributions. This revenue stream provides a consistent source of income for Harvey Norman.

Property Investments

Another significant source of income for Harvey Norman comes from its property investments. The company strategically acquires and develops real estate properties to house its retail stores. By owning these properties, Harvey Norman can generate rental income from the tenants, including its own retail operations and other businesses. This diversified revenue stream helps the company generate long-term returns on its property investments.

Financial Services

Harvey Norman also offers a range of financial services to its customers, such as interest-free financing options and credit card facilities. By providing these services, the company earns income through interest charges, late fees, and other finance-related charges. The financial services division of Harvey Norman contributes to its overall profitability and helps attract customers who may not have immediate access to funds to make large purchases.

Online Sales

In recent years, Harvey Norman has expanded its online presence to capitalize on the growing e-commerce market. The company operates an extensive online store, allowing customers to purchase products from the comfort of their homes. Online sales contribute to Harvey Norman's revenue through the same retail markup as in-store purchases. Additionally, the online platform serves as a marketing tool for the brand, attracting more customers to their physical stores.

Conclusion

Harvey Norman employs a multi-faceted approach to generate revenue and maintain its position as a leading retailer. Through retail sales, franchise fees, property investments, financial services, and online sales, the company ensures a diversified income stream. This strategy not only allows them to adapt to changing market trends but also provides stability and growth opportunities for the business.

Harvey Norman Business Model Canvas Explained

Introduction to the Business Model Canvas

The Business Model Canvas is a strategic management tool that allows businesses to describe, design, and analyze their business models. It provides a visual representation of the key elements that make up a business and how they interact with each other. One company that can be analyzed using the Business Model Canvas is Harvey Norman.

Key Partnerships

Harvey Norman has built strong partnerships with various suppliers and manufacturers in the retail industry. These partnerships enable the company to offer a wide range of products to its customers. By collaborating with reputable brands, Harvey Norman ensures that it can provide high-quality products that meet the needs and preferences of its target market.

Key Activities

The key activities of Harvey Norman revolve around retail operations. The company operates a network of stores, both physical and online, where customers can browse and purchase products. These stores are strategically located in areas with high foot traffic and are designed to provide an enjoyable shopping experience for customers.

Additionally, Harvey Norman invests in marketing and advertising campaigns to promote its products and attract customers. The company also focuses on customer service, offering assistance and support to ensure customer satisfaction. This includes after-sales services such as product installation and warranty support.

Key Resources

One of the key resources of Harvey Norman is its extensive network of stores. These physical stores serve as a showcase for the company's products and allow customers to interact with them before making a purchase. The company also relies on a robust supply chain to ensure timely delivery of products to its stores and customers.

Furthermore, Harvey Norman leverages technology and information systems to manage its operations efficiently. This includes inventory management systems, point-of-sale systems, and online platforms for e-commerce. The company also invests in the training and development of its employees to ensure they have the knowledge and skills required to provide excellent customer service.

Value Proposition

Harvey Norman's value proposition lies in its ability to offer a wide range of products, competitive prices, and excellent customer service. The company aims to provide customers with a one-stop shopping experience by offering a diverse selection of products across different categories, such as furniture, electronics, appliances, and bedding.

Moreover, Harvey Norman strives to deliver value to its customers through competitive pricing. The company regularly offers promotions, discounts, and bundle deals to attract price-conscious consumers. Additionally, Harvey Norman's commitment to customer service sets it apart from its competitors. The company emphasizes personalized assistance, knowledgeable staff, and after-sales support to ensure customers have a positive experience.

Customer Relationships

Harvey Norman focuses on building long-term relationships with its customers by providing exceptional service and support. The company aims to understand its customers' needs and preferences to offer personalized recommendations and assistance. This includes providing product demonstrations, expert advice, and tailored solutions to meet individual customer requirements.

Additionally, Harvey Norman values customer feedback and actively seeks input to improve its products and services. The company encourages customers to provide reviews and ratings, which helps other shoppers make informed decisions. This customer-centric approach fosters loyalty and enhances the overall shopping experience.

Conclusion

By analyzing Harvey Norman's business model using the Business Model Canvas, it becomes evident that the company's success is built on strong partnerships, efficient operations, and a customer-centric approach. With its wide range of products, competitive pricing, and excellent customer service, Harvey Norman continues to thrive in the retail industry.

Which companies are the competitors of Harvey Norman?

Major Competitors

Harvey Norman, a leading retailer in the electronics and furniture industry, faces tough competition from several companies. Let's take a closer look at some of its major competitors:

1. JB Hi-Fi - Known for its extensive range of consumer electronics, JB Hi-Fi is a strong competitor for Harvey Norman. With a focus on high-quality products and competitive pricing, JB Hi-Fi attracts a similar customer base.

2. The Good Guys - As another prominent player in the electronics and home appliances market, The Good Guys competes directly with Harvey Norman. This company offers a wide range of products, including televisions, refrigerators, washing machines, and other household appliances.

3. IKEA - While primarily known for its furniture offerings, IKEA poses a significant threat to Harvey Norman's furniture segment. With its affordable prices and stylish designs, IKEA has successfully captured the attention of budget-conscious consumers.

Online Competitors

Harvey Norman also faces competition from various online retailers. These companies have gained popularity due to their convenience, competitive prices, and wide product selections. Some notable online competitors include:

1. Amazon - As a global e-commerce giant, Amazon competes with Harvey Norman across various product categories. Offering an extensive range of products at competitive prices, Amazon has revolutionized the shopping experience for many consumers.

2. eBay - Known for its auction-style and fixed-price listings, eBay attracts a large customer base seeking diverse products. With its vast network of sellers, eBay competes with Harvey Norman in terms of price and product availability.

3. Kogan - Kogan, an Australian online retailer, has gained popularity by offering a wide range of products at competitive prices. With a focus on electronics, appliances, and furniture, Kogan directly competes with Harvey Norman's product offerings.

In summary, Harvey Norman faces strong competition from both traditional brick-and-mortar retailers and online giants. These competitors challenge Harvey Norman to continuously innovate, offer competitive prices, and provide exceptional customer service to stay ahead in the ever-evolving retail industry.

Harvey Norman SWOT Analysis

Strengths

• Strong brand presence: Harvey Norman is a well-established and recognized brand in the retail industry, known for its wide range of products and quality customer service. This gives them a competitive advantage over smaller retailers and allows them to attract a large customer base.

• Diversified product offerings: The company offers a diverse range of products, including furniture, electronics, appliances, and home accessories. This allows them to cater to different customer preferences and increase their market share.

• Extensive distribution network: Harvey Norman has a strong distribution network with numerous stores located in various regions. This enables them to reach a wide customer base and ensures convenient access to their products.

• Strong online presence: In addition to physical stores, Harvey Norman has a robust online platform that allows customers to browse and purchase products from the comfort of their homes. This online presence has become increasingly important in the digital age and helps them stay competitive in the e-commerce market.

Weaknesses

• High dependence on the Australian market: While Harvey Norman has expanded its operations to other countries, including New Zealand, Singapore, and Ireland, the majority of its revenue still comes from the Australian market. This dependence on a single market exposes them to risks associated with economic fluctuations and changes in consumer spending patterns.

• Limited international presence: Despite their efforts to expand internationally, Harvey Norman's presence in countries outside of Australia is relatively limited compared to some of their competitors. This restricts their growth opportunities and may hamper their ability to compete on a global scale.

• Reliance on suppliers: As a retailer, Harvey Norman relies on suppliers to provide the products they sell. This reliance on external suppliers can be a weakness as it exposes them to potential supply chain disruptions, quality control issues, and changes in supplier pricing.

Opportunities

• Growing demand for online shopping: The rise of e-commerce presents a significant opportunity for Harvey Norman to further expand their online presence and reach a larger customer base. By investing in their online platform and improving the user experience, they can tap into the growing trend of online shopping and increase their sales.

• Expansion into emerging markets: Harvey Norman can explore opportunities to expand into emerging markets with growing consumer spending power, such as countries in Asia and the Middle East. This would allow them to diversify their revenue streams and reduce their dependence on the Australian market.

• Offering more sustainable products: With increased awareness of environmental issues, there is a growing demand for sustainable products. Harvey Norman can capitalize on this trend by offering a wider range of eco-friendly and energy-efficient products, appealing to environmentally conscious consumers.

Threats

• 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 online giants like Amazon. This intense competition puts pressure on their pricing strategies and requires ongoing efforts to differentiate themselves.

• Economic downturns: Economic downturns can significantly impact consumer spending, which may lead to a decrease in sales for Harvey Norman. They are vulnerable to economic fluctuations, and a prolonged economic downturn can pose a significant threat to their profitability.

• Rapid technological advancements: The retail industry is constantly evolving due to rapid technological advancements. Harvey Norman needs to stay abreast of these changes and invest in technology to enhance the customer experience and remain competitive. Failure to adapt to new technological trends could result in a loss of market share.

Key Takeaways

• Harvey Norman is owned by its co-founders, Gerry Harvey and Ian Norman, who have a significant stake in the company.
• The mission statement of Harvey Norman is to provide customers with quality products and excellent customer service, while maximizing profits for shareholders.
• Harvey Norman primarily makes money through the retail sale of furniture, electronics, and home appliances, both in physical stores and online.
• The Harvey Norman Business Model Canvas explains the key elements of the company's business model, including customer segments, value proposition, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure.
• Harvey Norman faces competition from other retail companies in the furniture, electronics, and home appliances industry, including companies like JB Hi-Fi, Officeworks, and IKEA.
• A SWOT analysis of Harvey Norman reveals its strengths, weaknesses, opportunities, and threats, such as its strong brand and extensive product range, the challenge of online competition, potential growth in international markets, and economic downturns affecting consumer spending.

Conclusion

In conclusion, Harvey Norman is owned by its co-founders, Gerry Harvey and Ian Norman. The mission statement of Harvey Norman is to provide a wide range of quality products at competitive prices, backed by exceptional customer service. They aim to create an enjoyable shopping experience for their customers.

Harvey Norman generates revenue through various streams, including the sale of electronics, furniture, bedding, and appliances. They also offer finance and insurance services, as well as operate franchised stores.

The Harvey Norman Business Model Canvas illustrates the key components of their business, including customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partnerships, and cost structure. This model helps understand how Harvey Norman creates and delivers value to its customers and generates revenue.

Some of the main competitors of Harvey Norman in the retail industry include JB Hi-Fi, IKEA, and The Good Guys. These companies offer similar products and services, and they compete for market share and customer loyalty.

Conducting a SWOT analysis of Harvey Norman reveals its strengths, such as a strong brand reputation and a wide product range. However, it also faces weaknesses, such as dependency on suppliers and the risk of economic fluctuations. Opportunities for Harvey Norman include expanding its online presence and entering new markets, while threats include intense competition and changing consumer preferences.

Overall, Harvey Norman has established itself as a leading retailer in the market, constantly adapting to the changing landscape and consumer demands. By understanding its ownership, mission, revenue streams, business model, competitors, and conducting a SWOT analysis, we gain valuable insights into the success and challenges faced by this well-known brand.

FAQs

What are the 5 elements of SWOT analysis?

The 5 elements of SWOT analysis are:

1. Strengths: These are the internal factors that give an organization an advantage over its competitors. They can include factors such as a strong brand reputation, skilled employees, or unique resources.

2. Weaknesses: These are the internal factors that put an organization at a disadvantage compared to its competitors. They can include factors such as a lack of expertise in certain areas, poor financial performance, or outdated technology.

3. Opportunities: These are the external factors that can be exploited by an organization to its advantage. They can include factors such as emerging market trends, new customer segments, or advancements in technology.

4. Threats: These are the external factors that can potentially harm an organization's performance. They can include factors such as increased competition, changing consumer preferences, or changes in government regulations.

5. Trends: While not always explicitly mentioned as a part of SWOT analysis, trends are often considered as an additional element. Trends refer to the general direction in which the industry or market is moving and can include factors such as technological advancements, shifts in consumer behavior, or changes in societal norms.

What is Harvey Norman's competitive advantage?

Harvey Norman's competitive advantage lies in several factors:

1. Diverse product range: Harvey Norman offers a wide range of products, including furniture, electronics, bedding, appliances, and more. This diverse product range allows them to cater to different customer needs and preferences, giving them a competitive edge over companies that specialize in a single product category.

2. Strong brand reputation: Harvey Norman has built a strong brand reputation over the years, known for quality products and excellent customer service. This reputation helps them attract and retain customers, as consumers often choose trusted brands over unknown ones.

3. Omni-channel presence: Harvey Norman operates both physical stores and an e-commerce platform, allowing customers to shop through multiple channels. This omni-channel presence provides convenience and flexibility for customers, enhancing their shopping experience and giving Harvey Norman an advantage over competitors that may only operate through one channel.

4. Competitive pricing and promotions: Harvey Norman offers competitive pricing and regular promotions, attracting price-conscious customers and encouraging repeat purchases. Their ability to negotiate favorable deals with suppliers and offer attractive discounts contributes to their competitive advantage in the market.

5. Strong customer service and after-sales support: Harvey Norman places a strong emphasis on customer service and after-sales support. They have knowledgeable staff who can assist customers in making informed decisions and provide technical support when needed. This focus on customer satisfaction sets them apart from competitors and helps build customer loyalty.

Overall, Harvey Norman's competitive advantage stems from its diverse product range, strong brand reputation, omni-channel presence, competitive pricing, and excellent customer service.

What is the business strategy of Harvey Norman?

Harvey Norman is a large retail company that operates a business model based on the sale of a wide range of products, including furniture, bedding, electrical appliances, computers, and other consumer electronics. The company's business strategy can be summarized as follows:

1. Multi-category retailing: Harvey Norman aims to provide customers with a one-stop shopping experience by offering a diverse range of products under one roof. This strategy allows customers to find and purchase various items in a convenient manner.

2. Integrated online and offline presence: Harvey Norman has embraced e-commerce and operates an online platform in addition to its physical stores. The company aims to integrate its online and offline operations to provide customers with a seamless shopping experience, allowing them to research, compare, and purchase products through multiple channels.

3. Competitive pricing and promotions: Harvey Norman employs a pricing strategy that aims to offer competitive prices on its products. The company frequently runs promotional campaigns, sales events, and discounts to attract customers and boost sales.

4. Customer service and product expertise: Harvey Norman places a strong emphasis on customer service and product expertise. The company trains its staff to be knowledgeable about its product range and provide assistance to customers. This strategy aims to enhance customer satisfaction and build long-term relationships.

5. Store location and layout: Harvey Norman strategically selects store locations, often in high-traffic areas or shopping centers, to maximize visibility and accessibility. The company also focuses on store layout and design to create an inviting and engaging shopping environment for customers.

6. Private label products: Harvey Norman offers a range of private label products under its own brand. This strategy aims to provide customers with more affordable options while also increasing the company's profit margins.

7. Expansion and international presence: Harvey Norman has expanded its operations beyond its home market in Australia and New Zealand. The company operates stores in several other countries, including Singapore, Malaysia, Ireland, Slovenia, and Croatia. This global expansion strategy allows the company to tap into new markets and diversify its revenue streams.

Overall, Harvey Norman's business strategy revolves around providing a wide range of products, integrating online and offline operations, competitive pricing, excellent customer service, strategic store locations, private label offerings, and international expansion.

What is SWOT analysis and examples?

SWOT analysis is a strategic planning tool used to evaluate the strengths, weaknesses, opportunities, and threats of a business or project. It helps assess the internal and external factors that can impact the success of the organization. Here are examples of each category in a SWOT analysis:

1. Strengths:

   • Strong brand reputation
   • Skilled and experienced workforce
   • Efficient supply chain management
   • Unique selling proposition or competitive advantage
   • Strong financial position

2. Weaknesses:

   • Lack of market research or understanding
   • Limited product range or narrow customer base
   • Inadequate technology infrastructure
   • High employee turnover rate
   • Weak online presence or digital marketing capabilities

3. Opportunities:

   • Emerging markets or untapped customer segments
   • Technological advancements to improve efficiency
   • Strategic partnerships or collaborations
   • Changing consumer preferences or trends
   • Government regulations favoring the industry

4. Threats:

   • Intense competition or new market entrants
   • Economic downturn or recession
   • Rapid technological changes that can make products or services obsolete
   • Changing government policies or regulations
   • Negative publicity or public relations issues

It is important to note that the examples above may vary depending on the industry, company, or project being analyzed. SWOT analysis provides a framework for organizations to identify key areas for improvement and develop strategies to leverage strengths, mitigate weaknesses, capitalize on opportunities, and counter threats.