Harvey Norman: A Competitive Business Model

This chapter discusses the unique features of Harvey Norman’s business model. As a retail industry business, it established a one-stop shop for customers. Harvey Norman’s franchising model is significantly different from the standard franchising practice in business. Each section of the Harvey Norman store is allocated to a different franchisee that pays rent and passes on a percentage of their sales revenue to Harvey Norman Holdings. Harvey Norman’s format has proven to be extremely effective, with each category within its superstores run by people who know the business. This format means that franchisees have a vested interest in making their segment of the superstore a success. In the current competitive environment, Harvey Norman has been successful in sharing costs, managing risks, maintaining quality and customer service, and offering a competitive price to the customers. Harvey Norman has quickly adopted online technology and outperformed its online competitors offering customer-friendly services.