RETAIL STRATEGY
A clear and definite plan outlined by the retailer to
tap the market
A plan to build a long-term relationship with the
consumers
Process of strategy formulation in retail is the same
as that for any other industry
It starts with the retailer defining or stating the
mission for the organization
The mission is at the core of the existence of the
retailer
Other aspects of the strategy may change over a
period of time or vary for different markets
RETAIL STRATEGY
2. Establish Mission
3. Analyze Situation Objectives
4. Identify Options
5. Set Objectives
6. Obtain & Allocate Resources
7. Develop Implementation Plan
8. Monitor Progress & Control
RETAIL STRATEGY
DEFINE MSSION OR PURPOSE
Mission statement is a long term purpose of the
organization
It describes what the retailer wishes to accomplish
in the markets in which he chooses to operate
Retailers mission statement would normally
highlight the following
5. The products and services that will be offered
6. The customers who will be served
7. The geographic areas that the organization
chooses to operate in
8. The manner in which he firm intends to compete
RETAIL STRATEGY
CONDUCT A SITUATION ANALYSIS
Market Penetration
Market Development
Retail Format Development
Diversification
RETAIL STRATEGY
RETAIL STRATEGY
MARKET PENETRATION
Strategy may focus either on:
- Increasing the number of customers
- Increasing the quantity purchased by
customers(basket
size)
- Increasing the frequency of purchase
2. Financial Resources
Takes care of the monetary aspects of business
Shop rent, salaries and payments for merchandise
RETAIL STRATEGY
DEVELOP THE STRATEGIC PLAN
At this stage strategy is determined through which retailer will achieve objectives
Target Market – that segment of consumer market that the retail orgn.decides
to serve
Most retailers look at the entire market in terms of both size and consumer
segments to
which it might appeal
This enables the retailer to arrive at the best alternative that is most
RETAIL STRATEGY
DEVELOP THE STRATEGIC PLAN
5. Performance
6. Effectiveness of long term strategy by periodic evaluation
7. Ensuring that the plans do not degenerate into fragmented ad-
hoc efforts
8. Ensuring that all efforts are in harmony with he overall
competitive strategy of business
More than just replicating retail stores in other countries and markets
Export
Joint Venture
Benefits / Advantages
Key issues
Many joint ventures involve one local partner and one foreign player
Acquisitions
One organization acquiring another organization
Easy way of entering non domestic market without any complications
Considerations : management structure
new operating culture
financial burden
Example : Shopper’s stop acquiring bookstore chain Crossword,
Wal-mart acquiring ASDA
Mergers
Imply : Coming together of two organizations to form a combined
entity
Example : Retail giants Carrefour and Promodes in Europe
RETAIL STRATEGY
METHODS OF ENTERING A NEW MARKET
Organic growth
SUPPORT FUNCTION
SYSTEMS