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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.