Retail Management Study Set 1

Business

Quiz 3 :
Strategic Planning in Retailing

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Quiz 3 :
Strategic Planning in Retailing

Retail strategy is the overall promotional plan directing a company that influences its commercial activities and response to market forces including the economy and competition. Thorough and well-integrated market strategy would help the retailers in the following ways: • Integrated retail strategy would enable the small retailers to discover new market opportunities. • Enhances the operational activities of firm by enhancing the coordination and cooperation among the employees. • Provides a competitive advantage to the small retailers. • Helps to overcome difficult situations through well-coordinated activities. • Helps to define the target audience and implement consistent growth. Hence, comprehensive and well-coordinated retail strategy helps to increase the growth and profitability of small retailers. In absence of an effective retail strategy, retailers could not coordinate their employees. It would result in conflict of roles and responsibilities. It would affect the growth and sustainability of the retailers. Therefore, small retailers should develop a comprehensive and well-integrated strategy before starting their business.

Situation analysis involves collection of the past and future information for identification of external and internal forces that influence the company performance and its strategies. It helps to evaluate the market opportunities and threats for a business firm. It also helps to analyze the strengths and weakness of a firm. Difference between situation analysis of online shoe retailer and shoe retailer chain is elaborated below: Online shoe retailers: • Main focus of online shoe retailers include their online competitors, global influences, and cost efficiency • Online shoe retailers should try to develop user friendly and interactive web portals, it would help to increase online transaction • The company should ensure accuracy of orders and delivery to avoid extra shipping cost involved in returning of the products. Shoe retailers: • Shoe store chain measures the competition from brick-and-mortar stores and kiosks. • They should focus on their location, reach and ambience of store. • They should also improve their customer relationship management activities. Hence, situation analysis of stores working in same sector differs due to their nature and physical presence.

Retail strategy is the overall promotional plan directing a company that influences its commercial activities and response to market forces including the economy and competition. Advantages and disadvantages of starting a new store are listed below: Advantages: • Offers flexibility to the retailers regarding selection of the store location as per their requirement. • Helps in development of innovative business strategies as per the interests and strengths of the owner. Disadvantages: • Retailers would require a thorough market research for selection of their target market, location, opportunities and threat. • Initially the retailers would require high investment to create their brand image. • There might be high time lag in attracting customers and making profits. Advantages and disadvantages of purchasing an existing store are listed below: Advantages: • Purchasing an existing store would provide a competitive advantage to the retailer, since the store would be well known to the local public. • Time lag in attracting customer and making profits would be minimum; since, the store would comprise well-trained human resources along with an established brand image. Disadvantages: • There might be less flexibility in creating and enacting strategy tailored to new vendor. • Existing firm might involve poor reputation and goodwill in the market. Hence, advantages and disadvantages of starting a new store and purchasing an existing store are discussed above.

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