Retail management - strategic planning

Strategic Planning

Components of Strategic Planning Planning

Is the anticipation and organization of what needs to be done to reach on objective.

Components of Strategic Planning Strategic Planning

Involves adapting the resources of the firm to the opportunities and threats of an ever changing retail environment.

Components of Strategic Planning

•Mission Statement•Statement of Goals and Objectives•SWOT Analysis•Strategies

Components of Strategic Planning Mission Statement is a basic description of the

fundamental nature, rationale, and direction of the firm.

Shoppers stop - Mission

Commitment to delivering higher level of sensory experience and retaining most preferred brand status among consumers by offering contemporary and relevant merchandise, great store layout and ambience, educated staff, food and events for complete shopping experience.

Contemporizing the product basket to offer premium and luxury value.

Sustaining leadership in the departmental store category, while building dominance in other formats, through a pan India presence, efficient processes and incomparable service standards.

Continuing to be a learning and profitable organization

Case Study - Mission

Our core purpose is to create value for customers to earn their lifetime loyalty.

This is expressed as two key values:

No-one tries harder for customers

Treat people as we like to be treated

Elements of a Mission Statement• How the retailer uses or

intends to use its resources• How it expects to relate to the

ever-changing environment• The kinds of values it intends

to provide in order to serve the needs and wants of the consumer

Components of Strategic Planning Goals and Objectives Are the performance results

intended to be brought about through the execution of a strategy.

VISION – Shoppers stop

To be a global retailer in India and maintains its no.1 position in the Indian market in the department store category.

Values We shall not take what is not ours. The Obligation to dissent (against a viewpoint that is not

acceptable). We shall have an environment conducive to openness. We shall believe in innovation. We shall have an environment conducive to development. We shall have the willingness to apologise and/or forgive. We shall respect our customers' rights. The value of trust. We shall be fair.

Statement of Goals and Objectives• Market Performance Objective

• Financial Performance Objective

• Societal Objectives• Personal Objectives

Statement of Goals and Objectives Market Performance Objectives represents how a retailer

desires to be compared to its competitors.

For example shoppers stop wants to reach no.1 position in departmental store category.

Market Performance Objectives• Sales Volume• Market Share

Is the retailer’s total sales divided by total market sales.

Image building activity in luxury segment.

Statement of Goals and Objectives Financial Performance

Objectives Represent the profit and

economic performance a retailer desires.

Financial Performance Objectives: Profitability

• Net Profit Margin• Asset Turnover• Return on Assets• Financial Leverage• Return on Net Worth

Financial Performance Objectives: Profitability

• Net Profit MarginIs the ratio of net profit (after taxes) to total sales and shows how much profit a retailer makes on each Rupee of sales after all expenses and taxes have been met.

Financial Performance Objectives: Profitability

• Asset TurnoverIs the total assets and shows how many Rupees of sales a retailer can generate on an annual basis with each dollar invested in assests.

Financial Performance Objectives: Profitability

• Return on Assets (ROA)Is net profit (after taxes) divided by total assets.

Financial Performance Objectives: Profitability

• Financial LeverageIs total assets divided by net worth or owners’ equity and shows how aggressive the retailer is in its use of debt.

Financial Performance Objectives: Profitability

• Return on Net Worth (RONW)Is net profit (after taxes) divided by owners’ equity.

Strategic Profit Model

Net Profit Margin

Net Profit*

Total Sales

Asset Turnover

Total Sales

Total Assets

x

*Net profit after taxes

=

Return on Assets

Net Profit*

Total Assets

Financial Leverage

Total Assets

Net Worth

Return on Net Worth

Net Profit*

Net Worth

x =

Financial Performance Objectives: Productivity

• Productivity Objectives:State the sales objective that the retailer desires for each unit of resource input: floor space, labor, and inventory investment.

Financial Performance Objectives: Productivity

• Space ProductivityAnnual net sales divided by the total square feet of retail floor space.

Financial Performance Objectives: Productivity

• Labor ProductivityAnnual net sales divided by the number of full-time-equivalent employees.

Financial Performance Objectives: Productivity

• Merchandise ProductivityAnnual net sales divided by the average dollar investment in inventory.

Statement of Goals and Objectives Societal Objectives Reflects the retailer’s desire to

help society fulfill some of its needs.

• Employment objectives• Payment of taxes• Consumer choice• Equity• Benefactor

Statement of Goals and Objectives Personal Objectives Reflects the retailer’s desire to

help individuals employed in retails fulfill some of their needs.

• Self-gratification• Status and respect• Power and authority

Retail Objectives

Retail Mission

Market Performance Objectives

Financial Performance Objectives

Personal Objectives

Societal Objectives

Sales Volume

Market Share

Self-

Gratification

Power and Authority

Status and

Respect Benefactor

Equity

Consumer

Choice

Taxes

Employment

Productivity

Profitability

Strategies

Strategy Is a carefully designed plan for

achieving the retailer’s goals and objectives.

Minimal Retail Strategies Get shoppers into your store. Convert these consumers into

customers by having them purchase

merchandise. Do this at the lowest operating

cost possible that is consistent with the level of service that your

customers expect.

Strategies

SWOT Analysis Is the identification and analysis

of a retailer’s strengths, weaknesses, opportunities and threats a firm faces.

Strategies

Target MarketIs the group or groups of customers that the retailer is seeking to serve.

Strategies

LocationIs the geographic space or cyberspace where the retailer conducts business.

Strategies

Retail mixIs the combination of merchandise, assortment, price, promotion, customer service, and store layout that best serves the segments targeted by the retailer.

Retail Planning and Management

• Strategic Planning

• Operations Management

•Administration

• High-Profit Retailing

Retail Planning and Management Strategic Planning Is a plan of action detailing how

the retailer will respond to the environment in an effort to establish a long-term course of action to follow.

Retail Strategic Planning and Operations Management Model

MissionGoals and Objectives

SWOT

Strengths Weaknesses Opportunities

Threats

Strategic Planning

Social and Legal Environment:Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

Competitive Environment:Behavior of Consumers, Competition and Channel Members

Retail Strategic Planning and Operations Management Model

Competitive Environment:Behavior of Consumers, Competition and Channel Members

Social and Legal Environment:Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

Retail Marketing Strategy

Target Market(s) Location(s) Retail Mix Merchandise Pricing Advertising & Promotion Customer Service & Selling Store Layout & Design

Operations Management

Buying & Handling Merchandise

Pricing Advertising &

Promotion Customer Services

& Selling Facilities

High-Profit Performance

Retailing

Retail Planning and Management Operations Management Deals with activities directed at

maximizing the efficiency of the retailer’s use of resources. It is frequently referred to as day-to-day planning.

Retail Planning and Management Administration Involves the acquisition,

maintenance, and control of resources that are necessary to carry out the retailer’s strategy.

Retail Planning and Management High-Profit Retailing

To be a high profit retailer, the retailer needs good strategic planning coupled with strong operations management.

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