retail module1

8/8/2019 Retail Module1

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RETAILMARKET

STRATEGY

Module 1


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Strategic retail planning processy Strategic retail planning process entails the set of stepsaretailer goes throughto develop a strategic retail

plan.

y It descries how retailers selecttarget market segments,determine the appropriate retail format, and build

sustainable competitive advantages.


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Strategic retail planning processi. Define the business mission

ii. Conducta situationaudit: marketattractiveness

analysis, competitoranalysis, selfanalysisiii. Identify strategic opportunities

iv. Evaluate strategic alternatives

v. Establish specific objective and allocate resources

vi. Developaretail mix to implement strategy

vii. Evaluate performanceand make adjustments


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Step 1: define the business missiony The mission statement is a broad description ofaretailers objectives and the scope ofactivities it plansto undertake.

y In developing mission statement, managers need toanswer 5 questions:

i. What business are we in?

ii. What should be our business in future?

iii. Who are our customers?

iv. Whatare our capabilities?

v. What do we wantto accomplish?


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Examplesy Wal-Mart's mission is to help people save money sothatthey can live better.

y

McDonald's: (QSCV) Quality, Service, Convenience,andValue.

y ShoppersStops mission: "Nothing butthe best".

y Eaton's:Satisfaction guaranteed or your moneyrefunded.

y To become a world class automotive engineering andproductdevelopment centre, and enableTata Motorsto become a world class automotive company.


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Step 2: conduct a situation audity -ananalysis ofthe opportunities and threats intheretail environmentand the strengths and weakness of

the retail business relative to its competitors.y The elements inthe situationanalysis are

i. Market factors

ii. Competitive factors

iii. Environmental factorsiv. Analysis of strengths and weakness


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Step 3: Identify strategic

opportunitiesy -identify opportunities for increasing retail sales

y Market penetration, market expansion, formatdevelopment, diversification


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Step 4: Evaluate strategic

opportunitiesy -evaluate opportunities thathave been identified inthe situationaudit.

y Retailer must focus on opportunities that utilize itsstrengths and its competitive advantage.


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Step 5: Establish specific objectives

and allocate resourcesy -specific objectives are goals againstwhich progresstoward the overall objective can be measured.

y These specific objectives have 3 components:i. The performance sought, including anumerical

index againstwhich progress may be measured

ii. Atime frame within whichthe goal is to be achieved

iii. The level of investmentneeded to achieve theobjective.


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Step 6: Develop a retail mix to

implement strategy

y -develop aretail mix for each opportunity in whichan

investmentwill be made and control and evaluateperformance.


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Step 7: Evaluate performance and

make adjustments

y The final step inthe planning process is to evaluate the

results ofthe strategyand implementation program.


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The real

secret to

success is

enthusiasm."

-Walter Chrysler


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Exercisey GOSHOPPINGVisittwo stores that sell similar

merchandise categories and caterto the same target

segment(s).How are theirretail formats (the elementsintheirretail mixes) similar?Dissimilar?Onwhatbases do theyhave a sustainable competitiveadvantage?Explainwhich you believe has a strongerposition.

retail module1

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