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Retail Management: Internal Assignment (20 MKS)

The document outlines the 8 steps in preparing a retail market strategy, which include defining the business mission, conducting a situation audit to analyze opportunities and threats in the market, identifying strategic opportunities, evaluating those opportunities, setting specific objectives and allocating resources, developing a retail mix to implement the strategy, and evaluating performance and making adjustments. The situation audit involves analyzing market, competitive, environmental, and internal strengths and weaknesses factors to assess the attractiveness and threats in the retail environment.

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aarty24
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2K views

Retail Management: Internal Assignment (20 MKS)

The document outlines the 8 steps in preparing a retail market strategy, which include defining the business mission, conducting a situation audit to analyze opportunities and threats in the market, identifying strategic opportunities, evaluating those opportunities, setting specific objectives and allocating resources, developing a retail mix to implement the strategy, and evaluating performance and making adjustments. The situation audit involves analyzing market, competitive, environmental, and internal strengths and weaknesses factors to assess the attractiveness and threats in the retail environment.

Uploaded by

aarty24
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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RETAIL MANAGEMENT

Internal assignment (20 mks)

Q: What are the steps followed in preparing a retail


market strategy?

Roll no 38
T. Y. B. M. S
Def n:
A retail strategy is a statement identifying (1) the retailer’s target market (2) the format the
retailer plans to use to satisfy the target market’s needs, & (3) the bases upon which the
retailer plans to build a sustainable competitive advantage.

Elements of Retailing Strategy:

(1) Retailers target market


(2) Retail format
(3) Building a sustainable competitive advantage

STRATEGIC RETAIL PLANNING PROCESS:


The strategic retail planning process is the set of steps that a retailer goes through to develop
a strategic retail plan. It describes how retailers select target market segments, determine the
appropriate rail format, & build sustainable competitive advantages.

The planning process can be used to formulate strategic plans at different levels within a
retail corporation.

Step1: Define the Business Mission:


The mission statement is a broad description of a retailer’s objectives & the scope of
activities it plans to undertake. It should define the general nature of the target segments and
retail formats that the firm will consider.

In developing the mission statement, managers must answer five questions: (1) What
business are we in? (2) What should be our business in the future? (3) Who are our
customers? (4) What are our capabilities? (5) What do we want to accomplish?

Step 2: Conduct a situation Audit:


A situation audit is an analysis of the opportunities are threats in the retail environment and
the strengths and weaknesses of the retail business relative to its competitors.

A situation audit is composed of four elements: market factors, competitive factors,


environment factors, and strengths and weaknesses analysis.

(a) Market Factors:


Some critical factors related to consumers and their buying patterns are market size
and growth, sales cyclicality, & seasonality. Market size, typically measured in retail
sales dollars, is important because it indicates a firm’s opportunity for generating
revenues to cover its investment.

Large markets are attractive to large retail firms, but they are also attractive to small
entrepreneurs because they offer more opportunities to focus on a market segment.
Growing markets are typically more attractive than mature or declining markets.
In general, markets with highly seasonal sales are unattractive because a lot of
resources are needed to accommodate the peak season, but are underutilized the rest
of the year.

(b) Competitive Factors:


The nature of the competition in retail markets is affected by barriers to entry, the
bargaining power of vendors, and competitive rivalry. Retail markets are more
attractive when competitive entry is costly.

Retail markets dominated by a well established retailer that has developed a loyal
group of customers offer limited profit potential.

The final industry factor is the level of competitive rivalry in the retail market, which
is the frequency & intensity of reactions to actions undertaken by competitors.
Conditions that may lead to intense rivalry include: (1) a large no. of competitors that
are all about the same size, (2) slow growth, (3) high fixed costs, & (4) the lack of
perceived differences between competing retailers.

(c) Environmental Factors:


Environmental factors that affect market attractiveness are technological, economical,
regulatory, & social changes. When a retail market is going through significant
changes in technology, present competitors are vulnerable to new entrants that are
skilled at using the new technology. Some retailers are more affected by economic
conditions than others. Govt. regulations can reduce the attractiveness of a retail
market. Finally, trends in demographics, lifestyles, attitudes, & personal values affect
retail markets’ attractiveness.

Step 3: Strengths & Weaknesses Analysis:


The most critical aspect of the situation audit is for a retailer to determine its unique
capabilities in terms of its strengths & weaknesses relative to the competition.
Strength & weakness analysis indicates how well the business can seize opportunities
& avoid harm from threats in the environment.

Step 4: Identify Strategic Opportunities:


After completing the situation audit, the next step is to identify opportunities for
increasing retail sales. The strategic alternatives are defined in terms of the squares in
the retail market matrix.

Step 5: Evaluate Strategic Opportunities:


The evacuation of strategic opportunities determines the retailer’s potential to
establish a sustainable competitive advantage & reap long-tem profits from the
opportunities under evaluation. Thus, a retailer must focus on opportunities that
utilize its strengths & its area of competitive advantage.

Step 6: Establish Specific Objectives & Allocate Resources:


Specific objectives have three components:
(1) The performance sought, including a numerical index against which progress may
be measured, (2) a time frame within which the goal is to be achieved, & (3) the
level of investment needed to achieve the objective.

Step 7: Develop a Retail Mix to Implement Strategy:


The next step is to develop a retail mix for each opportunity in which investment will
be made & to control & evaluate performance.

Step 8: Evaluate Performance & Make Adjustments:


The final step in the planning process is evaluating the results of the strategy &
implementation program.

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