The document discusses strategic planning in retail. It outlines the key components of developing a strategic retail plan, including deciding the store's philosophy, mission, and objectives through establishing a vision and conducting situational analyses. It also discusses formulating a retail strategy using Ansoff's matrix to determine options like market penetration, product development, market development, and diversification. Finally, it discusses implementing the strategic plan and considerations around ethics in retailing related to customers, employees, suppliers, and other stakeholders.

1. Strategic Planning in Retail
Keywords:
Vision, Mission

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 store’s philosophy, mission &
objectives
• Situation Analysis
• Formulation of Retail Strategy
• Strategy Implementation & Control

4. DECIDING STORE’S PHILOSOPHY,
MISSION & OBJECTIVES

5. Philosophy Speaks About Company
• Starts with identification of store’s mission for its
existence & its scope
• Mission Deals with
• Goods & services to be offered
• Customer Satisfaction
• Sustainable Development
• Competitors
• Involves the way of Store’s 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
• “Future Group shall deliver Everything, Everywhere, Everytime for
Every Indian Consumer in the most profitable manner”
• At Westside our mission is to be the most preferred and consistently
profitable lifestyle retailer

8. SITUATIONAL ANALYSIS

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 store’s 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 store’s 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 Store’s information system

14. Intangible Resources
• Present capability of company’s management
• Effective R&D cell
• Competitor’s Intelligence System
• Effectiveness of store’s loyalty programmes
• Capability of store manager
• Loyalty of customers towards store products

15. Porter’s Five Forces
Suppliers:
• Single Brand
• Multi Brand
• Niche Brands
• Exclusive Products
• Suppliers’ 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
• Buyers’ Information
• Cost of Product
• Product Assortments differentiation
• Buyer’s power to Negotiate
• Switching cost of Buyers

16. FORMULATION OF RETAIL STRATEGY
(IDENTIFYING OPTIONS / STRATEGIC
ALTERNATIVES

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:
– Measurable : Is the segment measurable and
identifiable?
– Accessible : Desired response of the focus
marketing
– Economically Viable : Whether enough space is there
in the segment to make the
entry profitable
– 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.

25. INTERNATIONAL EXPANSION – A
GROWTH 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

28. THE RETAIL VALUE CHAIN & ETHICS
IN RETAILING

29. The Retail Value Chain

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 Employees’ 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

33. TESCO’s Steering Wheel Strategy