L4 RETAIL

• Strategic planning


  Adapting the resources of the firm to the opportunities and threats of an ever-changing retail environment
• Purpose of strategic planning

  To achieve and maintain a balance between resources available and opportunities ahead
• Components of strategic planning

  • Development of a mission statement
  • Development of a vision statement
  • Definition of specific goals and objectives
  • SWOT analysis
  • TOWS analysis
  • Development of basic strategies
• Mission statement


  How the retailer uses or intends to use its resources, how it expects to relate to the ever-changing environment, and the kinds of values it intends to provide in order to serve the needs and wants of the consumer
• Vision statement


  A basic description of the fundamental nature, rationale, and direction of the firm
• Objectives in strategic planning

  • Profit-based objectives
  • Stockouts
  • Productivity objectives (space, labor, merchandise)
• Profit


  The aggregate total of net profit after taxes, the bottom line of the income statement
• Return on investment (ROI)


  Can be defined by Return on assets (ROA) and Return on net worth (RONW)
• Stockouts


  Products that are out of stock and therefore unavailable to customers when they want them
• Space productivity


  Net sales divided by the total square feet of retail floor space
• Labor productivity


  Net sales divided by the number of full-time–equivalent employees
• Merchandise productivity


  Net sales divided by the average dollar investment in inventory
• Retail strategies


  • Get shoppers into your store
  • Convert shoppers into customers by having them purchase merchandise
  • Implement the above two strategies at the lowest operating cost possible that is consistent with the level of service that your customers expect
• SWOT analysis


  Examines the Strengths, Weaknesses, Opportunities, and Threats your organization faces
• SWOT is really useful but on its own but doesn't generate actionable ideas for improvements. That's where a TOWS comes in
• TOWS analysis


  Combines internal and external forces to come up with productive ideas of how to best use the information, with the main purpose of reducing threats, taking advantage of opportunities, exploiting strengths, and removing weaknesses
• Strategy classifications for retailing

  • Target market
  • Location
  • Retail mix
  • Value proposition
• Retail strategic planning and operations management model

  Strategic planning deals with adapting the resources of the firm to the opportunities and threats of an ever-changing retail environment, while operations management deals with activities directed at maximizing the efficiency of the retailer's use of resources