Mind Map Gallery Retail Strategy - Strategic Retail Planning Process in 7 Steps
For my class. Two mind maps on seperate pages. Page 1: The first mind map is about retail strategy. Page 2: The second mind map is about strategic retail planning process (7 steps).Edited at 2021-02-01 06:12:20
Retail Format (Marketing Mix)
Target MarketNeeds & WantsSatisfaction
Basis for sustainablecompetitive advantage(Unique Selling Proposition)
Types of Merchandise& Services Desired
More FocusedMerch Mix
Sales rights fora specific region
Receiving exclusive or popularmerch in short supply.
Economies of scale
Employees ContributeTo Customer Loyalty
Long-Term EmployeesAre More Efficient
Data / Information
Sharing sales datawith suppliers
Retail Analytics (RA)helps identify...
number & value ofaverage orders
most popular products
most effective staff
most valuable customers
Important for convenience products(e.g., fast food) to have lots of locations.
Strategic RetailPlanning Process
1. Define the Business Mission
What do we do? (scope)
Who do we do it for?
How do we do it? (secret sauce)
What do we want to accomplish?
2. Conduct a Situation Audit (SWOT Analysis)
Market Attractiveness Analysis
Growing markets offer better margins & fluid customers(haven't yet developed loyalty to any brand).
Sales Cyclicality / Seasonality
Barriers to Entry
Economies of Scale
Availability of Great Locations
Bargaining Power of Vendors
Unattractive when merch is controlled by an oligopoly that dictates prices & terms.
Degree of Competitive Rivalry
High rivalry usually occurs where there is...
Large number of similar-sized competitors
High fixed costs
Lack of perceived differences btwn competitors
- Price wars- Expensive ads- Low profits
Value-oriented retailers are less elastic than premium retailers.
Retailers w/ lower levels of service are less impacted by low unemployment levels (i.e., fewer employees to pay higher wages to)
Regulatory / Legal
Taxes & gov't red tape can make entering a market less appealing, if not impossible.
Self-Analysis (Strengths & Weaknesses)
Experience/Ability of top management
Depth of management - capabilities of middle managment.
Management's commitment to the firm
Cash flow from existing business.
Ability to raise debt or equity financing.
Current liquid assets.
Overhead cost structure.
Quality of operating systems.
Management information systems.
Inventory control systems.
Knowledge/skill of buyers
Relationships w/ vendors
Capabilities in developing private brands.
Advertising & promotion capabilities
Quality of sales associates
Commitment of sales associates to firm.
3. Identify Strategic Opportunities
Retail Format Development
May involve redefining the mission statement.
4. Evaluate Strategic Alternatives
High if the strategic opportunity would use theretailer's strengths & area of competitive advantage.
Greatest investments should be made in opportunitieswhere the retailer has a strong competitive position.
5. Establish Specific Objectives and Allocate Resources
The retailer's overall objective is included in the mission statement.
Specific objectives are goals which progresstoward the overall objective can be measured.
The performance sought (including a numericalindex against which progress may be measured)
A time frame within which the goal is to be achieved.
The level of investment needed to achieve the objective.
6. Develop a Retail Mix to Implement Strategy
7. Evaluate Performance and Make Adjustments
If the retailer fails to meet its objectives, re-analysis is needed.
Starts with re-viewing the implementation programs
May indicate the strategy (or mission statement) needs to be reconsidered.
Would require a new planning process, including a new situation audit.
Actual planning processes have interactions among the steps.