Running Head: RETAIL MANAGEMENT STRATEGY

KIBABII UNIVERSITY

NAME OF STUDENT: ROSIE NAFULA NASIKE

REGISTRATION NUMBER: BCO/0525/19

SCHOOL OF BUSINESS AND ADMINISTRATION

DEPARTMENT OF BUSINESS ADMINISTRATION AND MANAGEMENT

LECTURER: CONRAD MOGAKA

COURSE TITLE: RETAIL MANAGEMENT STRATEGY

COURSE CODE: BCP 412

TASK: TAKE AWAY ASSIGNMENT

QUESTION:

Policy Is Strategy In Retailing. Strategy Is Policy In Retailing. Write An Essay To

Demonstrate Your Understanding Of Strategic Retail Management In Light Of The

Aforementioned Statement.
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Introduction

Strategic planning is the process through which an organization defines its strategy, or

direction, and decides how to use its resources, including money and people, to accomplish that

goal. In strategic planning, various business analysis techniques such as SWOT analysis

(Strengths, Weaknesses, Opportunities, and Threats) and PEST analysis (Political, Economic,

Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological,

Economic, Ecological, and Regulatory factors and EPISTELS can be used (Environment,

Political, Informatics, Social, Technological, Economic, Legal and Spiritual)

For various reasons, strategy is an essential component of every retail firm. For starters, it

enables you to comprehend your organization as well as your history, the history of your firm,

and the general industry. Writing them down and incorporating them into the company's policy,

mission statement, and vision is an important component of strategy.

Strategic Retail Management

The core of the strategic planning process is that it progresses from a broad aim to

particular measures to achieve that goal; from the organization's overarching objectives to the

individual objective (goal) action plan for a single marketing program. It is also an interactive

process in which the draft result of each step is evaluated to determine what influence it has on

the previous stages and is adjusted as needed. Some components of the process may be ongoing,

while others may be carried out as distinct projects with a clear beginning and finish point

throughout a given time period. Strategic planning includes several stages for strategic thinking

inputs, which leads strategy formulation.

Elements of Strategic Retail Management

i. Strengths and disadvantages of the company

ii. Personal characteristics of major implementers (i.e., management and the board)

iii. Opportunities and dangers in the industry

iv. social expectations expand

The first two aspects are related to issues within the firm (i.e., the internal environment),

and the latter two are related to forces outside the organization (i.e., the external environment).

These variables are taken into account throughout the strategic planning process.

Strategic Retail Management Process

Retailers are expected to follow a step-by-step strategy or planning process while

designing retail strategies. The planning process discusses/involves the current stage of business,

strategy formation, a list of potential strategic choices, and strategy implementation. Given the

significance of strategic decisions to the future performance of the firm, a methodical approach is

required.

1. Determining the store's philosophy, goal, and objectives:

The retail strategic planning process begins with determining the store's mission for its

existence, and hence the scope of the retail store. A store's objective is to identify the items and

services that will be given to clients. It also addresses how a company's resources and

competencies will be employed to deliver customer happiness, as well as how the store will

compete in the target market against its competitors.

The mission also includes the way the shop operates. How will a shop run and carry out

its day-to-day operations? What is the plan in case of an emergency? All of these questions are

addressed in the store's mission statement. Vishal Mega Marts, for example, has a customer-

satisfaction concept that extends from "production to retailing."

This represents not just how it treats its clients, but also explains the secret of its

competitive advantage, i.e. the profit saved by eliminating intermediaries such as agents and

brokers; the commission saved is given to consumers in the form of low-priced merchandise.

Once the organization's mission has been decided, its goals, or intended future positions,

should be identified. The aims of a shop are described as the purposes that the store attempts to

achieve through its USP (Unique Selling Proposition) and activities.

2. Situational Analysis (SWOT Analysis):

The goal of doing a situational analysis on a store is to discover where the store is now

and to anticipate where it will be if the planned strategies are adopted. The disparity between

existing and projected future positions is referred to as the planning or strategic gap. Normally,

shops evaluate their external (environmental) and internal surroundings as part of organizational

analysis.

3. Retail Strategy Formulation:

Following an analysis of the shop's capabilities in terms of HR, finance, physical and

intangible resources, a store manager formulates retail strategy in terms of marketing, retail

positioning, and retail mix. Marketing is the means of achieving the desired results. As a result,

the marketing strategy should be developed in accordance with the core and secondary goals of
 Running Head: RETAIL MANAGEMENT STRATEGY
5

the shop. Marketing strategy is typically built on the basis of product and/or market segmentation

rather than the market as a whole.

Retail positioning is a strategy for a retailer's entry into a target market and competition

with its key competitors. Retail positioning, from the perspective of a retail store, is a step-by-

step approach for creating and maintaining a distinct and long-lasting image of the business in

the minds of customers.

4. Strategy Implementation and Control:

It is concerned with the design and management of retail systems in order to achieve the

best possible combination of a retail store's human, financial, physical, and intangible resources

in order to achieve the formulated objectives, without the need for scheduling and coordination

of various retail activities. Coordination between marketing and sales promotion departments, for

example, is critical for sales promotion efficacy. Furthermore, the collaborative attitude is

important to the success of plan implementation. If the retail store's plans are competitive and

marketing efforts are in line with demand, but sales promotion employees are not taking it

seriously or are ineffective, the outcomes will be disappointing.

Implementing new retailing tactics may need changes in the way employees function and

perform their tasks, which may elicit employee opposition. As a result, retailers should take

proactive initiatives to lessen employee resistance to change and persuade them that it would

benefit both the store and the employees in the long run.
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Importance of Strategic Retail Management

Strategic planning offers the following benefits:

1. Financial Advantages:

Strategic plans result in increased sales, fewer expenses, higher EPS (earnings per share),

and larger profits. Strategic planning provides financial benefits to businesses.

2. Organizational Activities Guide:

Strategic planning directs members toward organizational goals. It combines

organizational operations and efforts toward long-term objectives. It helps members become who

they want to be and do what they want to do.

3. Competitive Edge:

In today's globalized environment, companies with a competitive advantage (the ability to

deal with competitive dynamics) dominate the market and outperform in terms of financial

performance. This is conceivable if they can anticipate the future; the future may be foreseen

through strategic planning. It helps managers to foresee and fix problems before they become

major issues.

5. Risk Reduction:

Strategic planning gives information to analyze risk and develop strategies to reduce risk

and invest in safe company possibilities. As a result, the chances of making mistakes and

selecting the wrong objectives and methods are minimized.

6. Encourages Motivation and Innovation:

Strategic planning involves top-level management. They are not only devoted to aims and

plans, but they also provide fresh ideas for strategy implementation. This encourages motivation

and creativity.

7. Optimal Resource Utilization:

Strategic planning makes the optimal use of resources to generate maximum output.

Strategic Retail Management Planning – Approaches

1. Bottom-Up Approach:

Initiatives in strategy formulation are taken by various organizational units or divisions

and then conveyed upward for aggregation at the corporate level. These plans will then be

combined to form corporate strategy. The problem of this method is that corporate strategy may

wind up being an incoherent jumble that just reflects the divisions' aims prior to the planning

attempt.

2. Top-Down Approach:

The initiative is taken by the organization's upper-level executives, who design a

coherent, coordinated plan, frequently with the input of lower-level management. This overall

strategy is then used to set goals and assess the performance of each business unit.

3. Interactive Technique:
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In this approach, which is a hybrid of the bottom-up and top-down approaches, corporate

leaders and lower-level managers collaborate to build strategy, bridging the gap between larger

corporate goals and managers' particular understanding of individual circumstances.

4. Dual-Level Approach:

Strategy is developed independently at the corporate and company levels. All units

develop plans that are tailored to their specific circumstances, and these plans are evaluated on a

regular basis by corporate management. Strategic planning at the corporate level is constant and

focuses on the organization's bigger goals—when to acquire and when to dispose firms; how to

react to competition and the external environment; and what priorities to assign to the

organization's various units.

Conclusions

Strategic planning is defined as "a comprehensive self-examination of the goals and

means of achieving them so that the company is given both direction and cohesiveness."Strategic

planning is a methodical, officially recorded process for determining the handfuls of crucial

choices that an organization, as a whole, must get right in order to survive in the coming years.

One of the goals of strategic planning is to motivate employees to strive toward the

establishment of a new condition of affairs. The vision is a way to describe this ideal future, but

it works best to inspire and motivate if it is vivid — in other words, a vision should be a

"picture" of the future. Typically, the visioning process is the very first stage in the strategic

planning process. Strategic planning is a planned and methodical process for producing a

strategy for the general path or direction of an endeavor with the goal of optimizing future
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potential.Strategic planning is a business process used by many businesses to identify crucial

success elements that define the route for future development and profits.

References

Aaker, D. (1989). Managing assets and skills: The key to sustainable competitive

advantage. California Management Review, 31(2), 25–40

Aaker, D. (2005). The future of marketing: A perspective from David Aaker, prophet, a

strategic brand and marketing consultancy. Retrieved at March 20, 2016, from

https://www.prophet.com/downloads/articles/aaker-future-of-marketing.pdf

Andrew, P. M., Bruine de Bruin, W., & Fischhoff, B. (2007, December). Maximizers

versus satisfiers: Decision-making styles, competence, and outcomes. Judgment and Decision

Making, 2(6), 342–350. Retrieved at January 10, 2016, from http://journal.sjdm.org/jdm7830.pdf