2. Introduction
⢠Retailing Strategy outlines the mission and
vision of a retail organization
⢠Sets the tone for creating sustainable
competitive advantage through the optimization
of available resources
⢠Its more a planning process
3. Strategic Retail Planning Process
⢠Deciding the storeâs philosophy, mission &
objectives
⢠Situation Analysis
⢠Formulation of Retail Strategy
⢠Strategy Implementation & Control
5. Philosophy Speaks About Company
⢠Starts with identification of storeâs mission for its
existence & its scope
⢠Mission Deals with
⢠Goods & services to be offered
⢠Customer Satisfaction
⢠Sustainable Development
⢠Competitors
⢠Involves the way of Storeâs functioning
6. Objectives
⢠Objectives classified as:
⢠External Store Objective
⢠Internal Store Objective
⢠External objectives define the impact of store
on its environment
⢠Internal objectives define how much is expected
to be achieved with the available resources
7. Some of the Missions & Objectives
⢠Brand Philosophy of Croma
⢠If service wasn't important.
⢠If technology wasn't complex.
⢠If variety wasn't confusing.
⢠We would have no reason to be in business.
⢠We help you buy
⢠âFuture Group shall deliver Everything, Everywhere, Everytime for
Every Indian Consumer in the most profitable mannerâ
⢠At Westside our mission is to be the most preferred and consistently
profitable lifestyle retailer
9. External Analysis
⢠Economic environment of retailing
⢠Political environment of retailing
⢠Legal environment of retailing
⢠Socio-cultural environment of retailing
⢠Technological environment of retailing
⢠International environment of retailing
10. Internal Analysis
⢠Objective is to identify the storeâs capabilities &
weaknesses
⢠Resources grouped into:
⢠Human Resources
⢠Financial Resources
⢠Physical Resources
⢠Intangible Resources
11. Human Resources
⢠Sufficient Strength of employees at various levels
⢠Trained and capable employees to perform
assigned tasks
⢠Loyalty of employees
⢠Punctuality & regularity
⢠Competency Mapping for multitask performance
12. Financial Resources
⢠Total cash flow from storeâs present activities
⢠Ability of the store to collect money during
requirement / emergency
⢠Effective and stable financial policies
⢠Ratio between fixed and current assets
⢠Contingency plans in case of negative cash flows
13. Physical Resources
⢠Contribution of fixed assets
⢠Position of abandoned / unused assets
⢠Effective & updated Storeâs information system
14. Intangible Resources
⢠Present capability of companyâs management
⢠Effective R&D cell
⢠Competitorâs Intelligence System
⢠Effectiveness of storeâs loyalty programmes
⢠Capability of store manager
⢠Loyalty of customers towards store products
15. Porterâs Five Forces
Suppliers:
⢠Single Brand
⢠Multi Brand
⢠Niche Brands
⢠Exclusive Products
⢠Suppliersâ dependence on Volumes
Substitutes:
Threats:
Competition
⢠Buyer Willingness
⢠Technology
⢠Organized Vs. Unorganized ⢠Opportunity Gain / Loss
⢠Economies of Scale
⢠Diversity of competitors ⢠Assortments of
⢠Absolute cost advantage
⢠Cost Conditions Merchandise
⢠Capital Requirement
⢠Exit Barriers ⢠Rising Consumerism
⢠Government & Legal barriers
⢠Low Switching cost
Buyers:
⢠Organized vs non-organized Retail
⢠Buyersâ Information
⢠Cost of Product
⢠Product Assortments differentiation
⢠Buyerâs power to Negotiate
⢠Switching cost of Buyers
17. The Igor Ansoff Matrix
Existing New
Market Penetration
Market Development / Expansion
Existing
⢠Increase the Basket Size
⢠New Market Segments with
⢠Increase the Customer
RETAIL FORMATS
existing formats
⢠Increase the Purchase
⢠New Customer Base
Frequency
Retail Format Development Diversification
New
⢠New format with existing ⢠New Retail formats directed at
customers new market segments
MARKET SEGMENTS
18. Market Penetration
⢠Strategy adopted by firm seeking growth with
existing products in the existing market segment
⢠Customers can be increased by:
⢠Adding new stores
⢠Modifying product mix
⢠Cross-selling by salesperson can increase the
basket size. (Shirts with trousers, Pizza with Pasta)
⢠Buying frequency can be increased through
multiple offers and freebees
19. Market Expansion / Development
⢠Market Expansion can be done through reach outs to
new market segments or completely changing customer
base.
⢠It can be done by:
⢠Tapping new geographical markets
⢠Introducing Products to the range that will appeal to wider customer
base
⢠Addition of new stores in new cities or new areas in the
city
⢠Introduction of merchandizes like Pharmacy, Mobile etc.
will appeal to a totally new set of customers
20. Retail Format Development
⢠Carries more risk as the format may fail
⢠Normally used when the retailer wants to
introduce new product to existing customers
⢠E.g. CCD Express, Smaller retail formats of
Subway or Dominos or Crosswords corner etc.
21. Diversification
⢠Develop new products for new markets
⢠E.g. ITCs foray from tobacco based products to
introduction of FMCG like foods and apparels
(Wills Lifestyle). Latest additions are Greeting
Cards.
⢠Expanding across countries is also
diversification.
22. Developing the Strategic Plan
⢠How to Target Customers
⢠Look at the entire market from both size and segments
⢠Identifying a smaller segment that appeals the retailer
⢠Test marketing
⢠Final identification of the target customers
⢠Retailer should evaluate:
⢠Growth Potential of each target segment
⢠Investment needed to compete
⢠SWOT of the competition
23. Developing the Strategic Plan
⢠Retailer must ensure the following in order to be
successful in segmenting the market:
â Measurable : Is the segment measurable and
identifiable?
â Accessible : Desired response of the focus
marketing
â Economically Viable : Whether enough space is there
in the segment to make the
entry profitable
â Stable : Are customer characteristics
stable indicators of the market
potential
24. Implementing the Strategic Plan
⢠Merchandise must be single minded
⢠Displays must appeal to target market
⢠Advertising must talk to it
⢠Personnel must have empathy for it
⢠Customer service should be designed in accordance
with target market
⢠All implementations should follow-up with controls like
effectiveness of the long term competitive strategy.
26. International Trade
⢠Rise because of two factors:
⢠Removal of trade barriers between countries
⢠Rise in consumerism
⢠Retailers start as local or regional players
⢠Improve operational efficiencies and then become national
players
⢠Reasons for entering international market
⢠Saturation in domestic market
⢠Reach Dominance in domestic market
⢠Consumer behaviour is instrumental in shaping the business
of international retailer
27. Methods of Entering International Market
⢠Export
⢠Franchising / Licensing
⢠Mergers and Acquisitions
⢠Joint Ventures
⢠Organic Growth
30. Ethics in Retailing
⢠Customers
⢠Recognize rights of the customers regarding safety,
information availability, freedom to exercise choice,
delivery of services and grievances
⢠No regulations available in India
⢠Issues pertaining to invasion of privacy through electronic
media (Tele-calling, etc.)
⢠Community and the General Public
⢠Avoidance of hoarding and black marketing
⢠Contribution to charity
⢠Environmental sensitivity
⢠Avoid selling of socially taboo products like tobacco
31. Ethics in Retailing
⢠Employees
⢠Fair employment practices compliant with employment
legislation
⢠Equal Opportunities employment
⢠Addressing Employeesâ grievances
⢠Issues related to Sexual harrassment at work places
⢠More responsibility towards women employees
⢠Addressing Employee dishonesty
⢠Trusting his employees
⢠Business Partners (Suppliers, Logistics
Organizations, Banks, Other Professional
Organizations)
⢠Conducting Business in transparent manner
⢠Delivering value to all stakeholders
32. Ethics in Retailing
⢠Shareholders
⢠Highest standards of corporate governance
⢠Recall programmes for building trust of the customers
⢠Issues like Child Labour
Retailers resort to carpet bombing strategy as a part of aggressive expansion plans. A rapid roll out offers advantages like Building Economies of Scale, Creating Entry barriers, Capturing possibly scarce resources in terms of location, manpower etc and Building brands.