Chapter 3: Strategic Planning in Retailing

Chapter Objectives To show the value of strategic planning for all types of retailers To explain the steps in strategic planning for retailers: situation analysis, objectives, identification of consumers, overall strategy, specific activities, control, and feedback To examine the individual controllable and uncontrollable elements of a retail strategy, and to present strategic planning as a series of integrated steps To demonstrate how a strategic plan can be prepared

Ownership and Management Alternatives SBA Small Business Planner A sole proprietorship is an unincorporated retail firm owned by one person A partnership is an unincorporated retail firm owned by two or more persons, each with a financial interest A corporation is a retail firm that is formally incorporated under state law; it is a legal entity apart from its officers

Figure 3-4: Checklist for Purchasing an Existing Retail Business Checklist to Consider When Starting a New Business

Sources and Uses of Funds Start-Up Capital How Start-Up Capital Works Sources and Uses of Funds Cash Flow Planning Inventory Fixed Assets (buy/lease, “lease-hold” improvements) Accounts Receivable, Insurance, etc. Expected Negative Cash Flow Contingency Funds

Strategic Implications of Target Market Techniques Retailer’s location Goods and service mix Promotion efforts Price orientation Strategy Figure 3-7: Selected Retail Positioning Strategies

The overall plan or framework of action that guides a retailer One year in duration Outlines mission, goals, consumer market, overall and specific activities, and control mechanisms Retail Strategy Sample Business Plans More Sample Business Plans SBA Business Plan Advice See Also Tables 3-5, 3-6 Figure 3-1: Elements of a Retail Strategy

Organizational Mission Retailer’s commitment to a type of business and to a distinctive role in the marketplace Figure 3-2: The Focused Organizational Mission of Frisch’s Restaurants

Table 3-4: Legal Environment and Retailing Store Location zoning laws blue laws environmental laws direct selling laws local ordinances leases and mortgages Merchandise Management and Pricing trademarks merchandise restrictions product liability laws and lemon laws sales taxes unit-pricing laws collusion laws sale prices price discrimination laws Managing the Business licensing provisions personnel laws antitrust laws franchise agreements business taxes recycling laws Communicating with the Customer truth-in-advertising and selling laws truth-in-credit laws telemarketing laws bait-and-switch laws inventory laws labeling laws cooling-off laws Uncontrollable Variables: Consumers Competition Technology Economic conditions Seasonality Legal restrictions Controllable Variables: Store location Managing business Merchandise management and pricing Communicating with customer Retail Strategy Figure 3-9: Developing an Overall Retail Strategy

Additional Concerns for Global Retailing Factors Affecting the Success of a Global Retailing Strategy Additional Concerns for Global Retailing Timing A balanced international program A growing middle class Matching concept to market Solo or partnering Store location and facilities Product selection In addition to the strategic planning process: assess your international potential get expert advice and counseling select your countries develop, implement, and review an international retailing strategy Figure A3-1: Factors to Consider When Engaging in Global Retailing Chapter 3 Discussion Questions: 1, 3, 6, 9