Key Issues What is retail strategy statement How does it differ from “mission” and “tactics” Career-search “strategy” The building blocks of retail strategy Process of developing retail strategy The characteristics of a “window of opportunity” SWOT analysis

Success comes from having a good strategy & executing it well Strategy vs Tactics Strategy Tactics Planning, Direction Broad Unstructured Problem solving Creative External focus Irregular Long-term Difficult to evaluate Success comes from having a good strategy & executing it well Implementation Specific, detailed Structured Problem solving Analytical Internal focus Regular Short-term Easy to evaluate

The Building Blocks of Retail Strategy Controllable Variables Store Location Store Format & Layout Merchandise Management Pricing Communications Uncontrollable Variables Consumers Competition Technology Economic Conditions Seasonality Legal Restrictions What are the environmental variables? What are the elements of the retail mix?

E.g., McDonald’s Retail Strategy What is McDonald’s … Target market Retail format Bases for competitive advantage What threats might it face in the future?

Developing an Overall Retail Strategy Target Market What’s the 3rd element of retail Strategy? Retail Marketing Mix: Controllable Factors Competition & Environment: Uncontrollable Factors Controllable Variables Store Location Store Format & Layout Merchandise Management Pricing Communications Uncontrollable Variables Consumers Competition Technology Economic Conditions Seasonality Legal Restrictions Retail Strategy The main focus: Bringing harmony between the controllable variables and the uncontrollable ones. Uncontrollable variables drive the controllable ones!

Which are Sustainable Competitive Advantages? Dropping prices Building a store at the best location Selling hot merchandise Increasing advertising Attracting better sales associates by paying higher wages Providing better customer service

Sources of Sustainable Competitive Advantages More Sustainable Less Sustainable

Process of Retail Strategy Define the Mission Situation Audit Identify Strategic Opportunities Evaluate Strategic Alternatives Establish Objectives, Allocate Resources Develop a Retail Mix Evaluate Performance, Make Adjustments

Situation Analysis Define the Mission Organizational Mission Statement Ownership & Management Product Category SWOT Analysis

Form for Mission Statement A mission statement should include: The product/service to be delivered The store’s claim (USP) Other important claims Identification of the target segment What the segment will get What the segment must give up

Situation Analysis Define the Mission Organizational Mission Statement Ownership & Management Product Category SWOT Analysis

Window of Opportunity Strong Weak High Window of Opportunity Low High

Identify the Strategies here SWOT Analysis Strengths Weaknesses SWOT Analysis is a systematic approach to optimizing the fit between external & internal var’s Retail Mix … plus Management capabilities Financial Resources Overhead Cost Structure Merchandising Capabilities Store Management Capabilities Store Locations Loyalty of Customers Retail Mix … plus Management capabilities Financial Resources Overhead Cost Structure Merchandising Capabilities Store Management Capabilities Store Locations Loyalty of Customers Opportunities Identify the Strategies here Consumer Trends Competitiion Economic Conditions Seasonality Legal Restrictions Threats Consumer Trends Competition Economic Conditions Seasonality Legal Restrictions

Process of Retail Strategy Situation Analysis Sales & Profit Corporate Objectives Satisfaction of Publics Image & Positioning Identify Consumers As a result of the Situation Analysis

Objectives Statement Any objective must be clear, concise, and realistic. Objectives are often based on profit, market share, growth, etc. E.g., “…to get a 15% market share and maintain a profit margin of 25% by the end of the fiscal year” for a particular store. Or, “to increase comp store sales by 15% by end of the year.” Note that each objective must have a time frame. 15%

Suggest Objectives for: Krispy Kreem Wal-Mart Burger King

Finalizing Retail Strategy Situation Analysis Sales & Profit Corporate Objectives Satisfaction of Publics Image & Positioning Image = how a retailer wants to be perceived by consumers Positioning = the strategy to project this image Identify Consumers Overall Strategy

Finalizing Retail Strategy Situation Analysis Corporate Objectives Identify Consumers Overall Strategy Retail Mix Variables Uncontrollable Variables Short-term operations Specific Activities (Tactics) Response to the environment

Monitoring Retail Strategy Situation Analysis Corporate Objectives Identify Consumers Overall Strategy Retail Mix Var’s Uncontrollable Var’s Short-term operations Specific Activities (Tactics) Response to environ. Evaluation Control (Monitoring) Adjustment

E.g., Chevron’s Control Mechanisms

Developing an Overall Job Strategy Your Target Jobs What’s the 3rd element of retail Strategy? Your “Marketing Mix”: Controllable Factors Competition & Environment: Uncontrollable Factors Controllable Variables Your education Job history Skills Interests Commitment Ability to distinguish yourself Uncontrollable Variables The economy Job availability The “competition” Etc. Job Strategy The main focus: Bringing harmony between the controllable variables and the uncontrollable ones. Uncontrollable variables drive the controllable ones!

Your Own “Product” Strategy Determine your target market Area of country Type of company Type of position Assess & exploit your competitive advantage Unique skills Experience Knowledge Develop then present yourself as a desirable “product”

What Firms Want How Important is this Characteristic? Critically % 8 12 16 54 Specific Business Concentration 50 16 9 24 1 49 GPA 40 17 10 33 31 Relevant Work Experience 30 21 22 14 Being a Bus. Major 20 10 How Important is this Characteristic? Critically Extremely Very Somewhat Not

% Critically Important What Firms Want % Critically Important Attribute Integrity 96.7 Strong work ethic 86.9 Professional demeanor 85.2 Initiative 83.6 Emotional maturity 80.3 Self confidence 79.0 Leadership ability 78.7 Personable 62.9 Creativity 55.0

E.g., Interpreting a Mission Action Skill Derived Knocking on doors Teaching Contacts Missionary Training Learning a 2nd Language Living in a Foreign Culture Working Long Hours Self-motivation, self-discipline, handling rejection, creativity Training, interpersonal skills, self-confidence, goal setting Leadership, time management, planning, communications Learning skills, adaptability to new concepts, perseverance Ability to work with a new culture, tolerance Dedication & hard work

What Is the Interviewer Really Asking? Tell me about yourself Why are you interested in this position? What are your geographical requirements? What are your salary requirements? Tell me a story! Do you have any questions?

Selling Yourself Preparation & Interview Network Practice Interviews Cover letter/ Resume Information Interviews Testing Resume Self- Evaluation Placement Center Library Alumni Database InfoTrac, Lexis/Nexis, Internet Self- Knowledge Employer Knowledge A Career Position

Telling the Same Thing … Should we tell the same story to every interviewer? Should we customize our presentation? … our resume? … our cover letter? Why? (Or why not?) For the same reasons, retailers must focus their strategy on their target market