Key measure of the retailer’s success is selling as much merchandise as possible at the highest profit margin.
Retailers can no longer depend on random sourcing / buying in the hope that they will sell them all.
There are two major areas of profit leakage in retail. Firstly - lost sales resulting from lack of stock, and secondly - forced margin reductions (markdown) due to excessive stock.
There are processes and solutions in order to reduce and eliminate excess inventory and maximise profit. That is "Merchandise Planning".
Merchandise Planning is "A systematic approach by the retailer, aimed at maximising return on investment, through sales & inventory planning, in order to increase profitability”.
Main goal of Merchandise planning is to maximize the use of assets, and resources a company owns.
In the long run, effective merchandise planning can save time, help streamline business processes and objectives, and optimize and mobilize inventory to get it off the shelves into the hands of the consumers for the right price.
The retail strategic planning process starts with the identification of store's mission for its existence and hence the scope of the retail store. The mission of a store entails identifying the goods and services that will be offered to customers
Key measure of the retailer’s success is selling as much merchandise as possible at the highest profit margin.
Retailers can no longer depend on random sourcing / buying in the hope that they will sell them all.
There are two major areas of profit leakage in retail. Firstly - lost sales resulting from lack of stock, and secondly - forced margin reductions (markdown) due to excessive stock.
There are processes and solutions in order to reduce and eliminate excess inventory and maximise profit. That is "Merchandise Planning".
Merchandise Planning is "A systematic approach by the retailer, aimed at maximising return on investment, through sales & inventory planning, in order to increase profitability”.
Main goal of Merchandise planning is to maximize the use of assets, and resources a company owns.
In the long run, effective merchandise planning can save time, help streamline business processes and objectives, and optimize and mobilize inventory to get it off the shelves into the hands of the consumers for the right price.
The retail strategic planning process starts with the identification of store's mission for its existence and hence the scope of the retail store. The mission of a store entails identifying the goods and services that will be offered to customers
Retail Store Design, Functions/ Responsibilities of Store Manager, Retail Store Objectives, Principles of Retail Store Design, Types of Layout, Signage and Graphics, Feature Areas, Space Management, Tools used for positioning of items
Retail Image refers to how a retailer is perceived by customers and others.To succeed, a retailer must communicate a distinctive, clear, and consistent image.
Retail Store Design, Functions/ Responsibilities of Store Manager, Retail Store Objectives, Principles of Retail Store Design, Types of Layout, Signage and Graphics, Feature Areas, Space Management, Tools used for positioning of items
Retail Image refers to how a retailer is perceived by customers and others.To succeed, a retailer must communicate a distinctive, clear, and consistent image.
INTEGRATIVE PROJECT BSC IMPLEMENTATION & THE INTERNAL BUSINESS PR.docxmariuse18nolet
INTEGRATIVE PROJECT: BSC IMPLEMENTATION & THE INTERNAL BUSINESS PROCESS PERSPECTIVE 2
INTEGRATIVE PROJECT: BSC IMPLEMENTATION & THE INTERNAL BUSINESS PROCESS PERSPECTIVE PAGE 6
INTEGRATIVE PROJECT: BSC IMPLEMENTATION & THE INTERNAL BUSINESS PROCESS PERSPECTIVE PAGE 5
REVIEW: BSC IMPLEMENTATION & THE INTERNAL BUSINESS PROCESS PERSPECTIVE
SESSION LONG PROJECT
STUDENT, TRIDENT UNIVERSITY INTERNATIONAL
INTEGRATIVE PROJECT: BSC IMPLEMENTATION & THE INTERNAL BUSINESS PROCESS PERSPECTIVE 1
PRINCIPLES OF ACCOUNTING: MANAGERIAL ACCOUNTING-BUDGETING PAGE 1
PRINCIPLES OF ACCOUNTING: MANAGERIAL ACCOUNTING-BUDGETING PAGE 3
Abstract
For Module 3, consider the organization's mission and strategy from the perspective of its internal business processes (from your work on the case, your previous course work, and your background reading, you should be reasonably clear what such business processes are). In this section of the assignment you’ll begin to identify objectives and measures relevant to that perspective. Refer back to Objectives, Measures, Targets & Action Plans if you need to.
Once you’re reasonably clear on what’s involved, think about your organization and its business processes, and then:
Identify at least three objectives for improving the organization's internal business processes, and show how they relate to the mission, vision, and strategy of the organization.
• For each objective, develop at least one meaningful performance measure (metric).
• For each objective, identify at least one expected level of performance (target).
• For each objective, identify at least one new action or program that needs to be developed to ensure successful implementation of the organization's strategy (initiative).
• Comment briefly on the relationships of the process objectives that you've identified here to the finance objectives that you identified in the Module 1 SLP assignment and/or the customer service objectives that you identified in the Module 2 SLP assignment. How do they help to fulfill those objectives? If they don't (and they don't have to), what makes them more important than objectives that would relate to finance or customer service?
• Finally, do you wish to make any changes to your Module 1 or Module 2 objective write-ups in light of your Module 3 experience?
Nike Organization
An organization’s internal business processes has to be improved by placing objectives which are aimed towards the success of the business through good customer relations and even producing quality products. The main objectives of Nike Company are aimed at increasing the total revenue of the organization, reducing the cost of revenue as well as reducing the operating expenses thereby sticking to its vision of using innovation as its key strategy to attain success by acquiring a competitive advantage in the industry. This has helped in achieving maximum satisfaction for its customers hence increasing loyalty thus the competitive advantage .
2. Budgeting Merchandise
“A merchandise Budgeting in a Retail is plan
covering all phase of Retail operation for definite
period in the future. It is a formal expression of
policies, plan, objectives and goal laid down in
advance by the top management for the concern
as a whole and for each for it sub-divisions.”
Every business works within the confines of a
budget, which indicates how much it can spend
on various things. One key budget element for a
retailer is merchandise. Retailers must analyze
data to create merchandise budgets that are
affordable and put the business in the best
position to make a profit.
3. Objectives of Budgeting
Merchandise
To compel planning, this is a most
important feature of merchandise
budgeting, because the retail
merchandiser is forced to look ahead,
set target, anticipated problem and give
the organization purpose and direction.
To communicate idea and plans to
everyone affected by them. It necessary
to have a formal system to make sure
that each respective Manager is aware
of what he is supported to be doing.
4. Objectives of Budgeting
Merchandise
To co-ordinate the activities of different
department or sub-unit of the organisation.
This concept of co-ordination implies, for
example, that the merchandiser should base
its budget on merchandise requirement like
supplier, vendor etc. and that the
merchandise budget should in turn be based
on sales expectation
To established a system of control by having
a plan against which actual result can be
progressively compared
To motivate the employee to improve their
performance.
5. Component of Budgeting
Merchandise
Cost of goods from wholesaler
Other expenses like Shipping,
inventory management software,
labour for shorting, counting stock and
storage.
Cost for marketing the product, since
buying more goods will only be
profitable if customers buy them
6. Impact:
Positive Impact
Example: ITC Wills Lifestyle has set
static budget for the year 2012 is Rs.5
crores for camac street store, and
after complete the fiscal year they
achieve the total target and company
earned good revenue, this is the
example of positive impact of budget.
7. Impact:
Negative Impact
Example: Titan industries limited has
set the static budget Rs.10 crores for
the year 2012 for Tanisqe store at Bow
bazaar. And end of the fiscal year they
achieve only Rs. 7.5 core which has
not been fulfilled the set budget and
create a loss for company so, it is a
example of negative impact of budget.
8. Method for Budgeting
Merchandise
Basically two type of Budget are uses in
Retail:-
Static Budget
Flexible Budget
One technique that a retail business uses to create an accurate
merchandise budget is demand forecasting. Understanding
what consumer demand for merchandise is likely to be in the
future allows a retailer to devote adequate resources to
buying stock and managing inventory so as not to miss sales
opportunities. Demand forecasting relies on an analysis of
past sales data, as well as a projection based on upcoming
products, seasonal changes in demand, trends in customer
buying habits and plans for expansion at the retailer.
9. Method for Budgeting
Merchandise
Steps:
Set margin and inventory turn goals
Seasonal sales forecast for category
Breakdown sales forecast by month
Plan reductions – markdowns,
inventory loss
Determine stock needed to support
forecasted sales
Determine “open to buy” for each
month
10. Method for Budgeting
Merchandise
Example, ITC Wills Lifestyle uses
technique to compute the
Merchandise Budgeting that is given
below:-
11. Advantage
Define the objectives as whole.
Define result department has to
achieve
It helps to measure the actual
performance along with the variance.
It provides a system whereby resource
of the organigation is used in the most
efficient way possible.
12. Advantage
It indicates efficiency with which
various activities of the org. have been
co-ordinate.
It establishes a basis for internal audit
by means of regular examination of
departmental result
It provides a basis for measuring
productivity efficiency with a view to
paying a bonus to employee.
13. Disadvantage:
Wrong demand forecasting during
make the budget makes huge loss.
Sometime budget increase heavy
workload in between the employee
which resulting of low performance.