Strategic Planning in Retailing Dr. Shilpa Sindhu

Retail Strategy Retail Strategy is the overall plan or framework of action that guides a retailer. A firm determines how to differentiate itself from competitors and develop and offering that appeals to a group of customers.

Elements of a Retail Strategy Situation Analysis - Organizational Mission - Ownership and Management Alternatives - Goods/Service Category. Objectives - Sales - Profit - Satisfaction of customers - Image Identification of Customers - Mass Marketing - Concentrated Marketing - Differentiated Marketing

Contd… Overall Strategy - Controllable Variables - Uncontrollable Variables Specific Activities - Daily and short term operations - Responses to environment Control - Evaluation - Adjustment

Situation Analysis Situation analysis is a candid evaluation of the opportunities & threats facing a prospective or existing retailer. Organizational Mission An organizational mission is a retailer’s commitment to a type of business and to a distinctive role in the marketplace. It is reflected in the firm’s attitude toward consumers, employees, suppliers, competitors, government, and others. 1.- around products sold - around consumer needs 2. – Leader or follower 3. – Market Scope

Situation Analysis (Contd..) b. Ownership and Management Alternatives An essential aspect of situation analysis is assessing ownership and management alternatives, including whether to form a sole proprietorship, partnership, or corporation—and whether to start a new business, buy an existing business, or become a franchisee.

Contd… c. Goods/Service Category A line of Business to specify both a general goods/service category and a niche within that category. Jaguar dealers are luxury auto retailers catering to upscale customers. A potential retail business owner should select a type of business that will allow him or her to match personal abilities, financial resources, and time availability with the requirements

Objectives Sales Some Retailers may put more emphasis on sales growth, expanding their business, less emphasis on short run profits. Profit Retailer seeks minimum profit level Satisfaction of Public Image (Positioning) An image represents how a given retailer is perceived by consumers and others. A firm may be seen as innovative or conservative, specialized or broad-based, discount-oriented or upscale. Through Positioning, a retailer devises its strategy in a way that projects an image relative to its retail category and its competitors and that elicits a positive consumer response.

Identification of customers Mass Marketing Concentrated Marketing – particularly one market segment Differentiated Marketing – aiming two or more distinct consumers groups with different retailing approaches for each group

Overall strategy a. Controllable variables Store location- competitors, transportation access, nearness to suppliers, population density. Managing a Business- Human resource management, operations management Merchandise Management & pricing – width & depth of products, prices decided Communicating with the customers – image creation, atmosphere of the store & surrounding area, layouts, displays.

Overall strategy contd… b. Uncontrollable variables Consumers Competition Technology Economic conditions Seasonality Legal restrictions

Specific Activities Daily and short term operations Responses to environment

Control Evaluation Adjustment