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Retail Market
Strategy~Eden Clifford
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What is a
Reta
il
Stra
tegy?
Sustainable Competitiv
e Advantage
Retail Forma
t
Target Market
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Targ
et M
arke
t &
Reta
il Form
at
Retail Concept
Retail Market
Fashion Segments
Retail
Formats
Conservative Traditional Fashion-Forward
Specialty Store
Fashion Bug The Gap The LimitedTalbots
BebeUrban Outfitters
H&M
Department Store
JCPenneyKohl’s
Saks Fifth Ave.Bloomingdale’sNeiman Marcus
Discount Store
Family Dollar
Dollar General
Off-Price Store
Ross Stores T.J. Maxx SteinmartBluefly.com
KmartWalmart Target
Macy’s
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Build
ing a
Susta
inable
Com
petitive
Adva
nta
ge
Relationship w/ Customers
Customer Loyalty
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Custo
mer
Loya
ltyBrand Image
Positioning
Unique Merchandise
Customer Service
CRM Programs
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Rela
tionsh
ips
with
Supplie
rsVendor Relations
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Effi
ciency o
f
Inte
rnal O
pera
tions
Human Resource
Management
Distribution & Information
Systems
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Loca
tion
Starbucks creates a competitive
advantage by picking multiple good
locations that saturate an area
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Multip
le S
ource
s
of A
dva
nta
ge
McDonald’s long-term success is based on providing
customers with a good value that meets their expectations,
having good customers with a strong brand name, and
offering convenient locations
By pursuing all these strategies effectively, McDonald’s has
developed a strong competitive position in the quick-service
restaurant market
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Gro
wth
Stra
tegie
s
Market Penetration
Market Expansion
Retail Format Development
Diversification
Growth Opportunities & Competitive
Advantage
Target Markets
Retail
Format
Existing New
Existing
Market Penetration Market Expansion
New
Format DevelopmentDiversification
(unrelated/related)
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Marke
t
Penetra
tion
Market Penetration growth
opportunity
Can involve either attracting
new consumers from the
retailer’s current target
market who don’t patronize
the retailer currently
Cross-Selling
Ex. BBW
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Marke
t
Exp
ansio
nMarket Expansion Growth
Opportunity
Ex. Dunkin’ Donuts has
been opening new stores
outside its traditional target
market in the northeastern
United States.
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Reta
il Form
at
Deve
lopm
ent
Retail Format
Development Growth
Opportunities
Ex. The UK based retailer
Tesco has employed a retail
format development growth
strategy by operating
several different food store
formats that all cater to
essentially the same target
market.
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Dive
rsifica
tion
Diversification Growth
Opportunity
Related vs. Unrelated
Vertical Integration
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Gro
wth
Opportu
nitie
s
& C
om
petitive
Adva
nta
ge
When retailers pursue
market expansion
opportunities, they build
on their advantages in
operating a retail format
& apply this competitive
advantage in a new
market.
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Glo
bal G
row
th
Opportu
nitie
sOf the 50 largest retailers
in the world, only 12
operate in one country
In India, men’s ready-
made apparel generates
about 2-3 times more sales
than women’s apparel
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Attra
ctiveness o
f
Inte
rnatio
nal M
arke
ts
Factors The potential size of the retail
market in the country
The degree to which the country does & can support the entry of foreign retailers
Country Potential Country Support
Population (+) Market share of modern retailing (+)
Population growth rate (+) Quality of infrastructure, transportation & communications (+)
GDP (+) Urban population (+)
GDP per capita (+) Market share of leading domestic retailers (-)
Retail sales (+) Ease of doing business (+)
Growth rate in retail sales (+)
Business-friendly laws & regulations (+)
Retail sales per capita (+) Political stability (+)
Income distribution (+) or (-)
Age distribution (+) or (-)
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Keys to
Succe
ssGlobally Sustainable
Competitive Advantage
Adaptability
Global Culture
Financial Resources
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Entry S
trate
gie
sDirect Investment
Joint Venture
Strategic Alliance
Franchising
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Stra
tegic R
eta
il
Pla
nnin
g
Proce
ss
Define the Business Mission
Conduct a Situation Audit
- Market Attraction Analysis
- Identify Strategic
Opportunities
- Self-Analysis Competitor Analysis
Evaluate Strategic
Alternatives
Establish Specific
Objectives & Allocate
Resources
Develop a retail mix to
implement strategy
Evaluate Performance &
Make Adjustments
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Ste
p 1
: Define
the B
usin
ess
Missio
nMission Statement
Ex. Maxine Clark, founder
& chief executive bear at
Build-A-Bear Workshop, in
discussing her goals for
the company says, “We
also believe strongly that
we need to give back to
communities in which we
have stores.
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Ste
p 2
: Conduct
a S
ituatio
n
Audit
Situation Audit
Market Factors
Competitive Factors
Barriers to entry
Scale economies
Bargaining power of vendors
Competitive Rivalry
Environmental Factors
Strengths & Weakness
Analysis
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Ste
p 3
: Identify
Stra
tegic O
pportu
nitie
sKelly Bradford presently
competes in gift retailing
using a specialty store
format
See Exhibit 5.4 pg. 137
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Ste
p 4
: Eva
luate
Stra
tegic O
pportu
nitie
sBoth the market
attractiveness and the
strengths and weaknesses
of the retailer need to be
considered in evaluating
strategic opportunities
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Ste
p 5
: Eva
luate
Perfo
rmance
& M
ake
Adju
stments
Components:
The performance sought may
be measured
A time frame within which
the goal is to be achieved
The level of investment
needed to achieve the
objective
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Ste
p 6
: Deve
lop a
Reta
il Mix to
Imple
ment th
e
Stra
tegy
Develop a retail mix for
each opportunity in
which an investment will
be made & control &
evaluate performance
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Ste
p 7
: Eva
luate
Perfo
rmance
& M
ake
Adju
stments
Evaluate the results of the
strategy & implementation
program
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Stra
tegic P
lannin
g
in th
e R
eal W
orld
Define the Business
Conduct a Situation Audit
Identify Strategic
Opportunities
Evaluate Strategic
Alternatives
Establish specific Objectives
Develop a Retail Mix to
Implement Strategy
Evaluate Performance & Make
Adjustments
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Assig
nm
ent 1
Prepare an analysis of a
company, using Glogster.
Identify its direct
competitors, its target
market & positioning, its
strategy w/ respect to its
competitors, its retail format
(the elements in its retail
mix: merchandise variety &
assortment, pricing
locations), and its bases for
developing a competitive
advantage to is competitors.
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Assig
nm
ent 2
Pick a company and
outline the retailer’s
strengths, weaknesses,
opportunities & threats
relative to its competitors.
Use Animoto (
www.animoto.com) for
each element of the
SWOT analysis.
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Assig
nm
ent 3
Explain & provide an
example of each of the
growth strategies using
Prezi or Photopeach.
Include Market Penetration,
Market Expansion, Retail
Format Development,
Diversification, and
Competitive Advantage
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Assig
nm
ent 4
Visit 2 stores that sell similar
merchandise categories and
cater to the same target
segments. How are their retail
formats (the elements in their
retail mixes) similar?
Dissimilar? On what base do
they have a sustainable
completive advantage?
Explain.
Create a podcast or use
blabberize explaining your
findings.
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Assig
nm
ent 5
Pick a store that you believe
has an effective customer
loyalty. Explain why you
believe it is so.
Remember to include the
activities that retailers engage
into to build loyalty: (1)
developing a strong brand
image, (2) having a clear &
consistent positioning, (3)
providing outstanding customer
service, (4) unique
merchandise, and (5) customer
Service
Use any media to sum your
explanations.
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Assig
nm
ent 6
Using Comic Life choose
a retailer and describe
how it has developed a
competitive strategic
advantage.
Include barriers to entry,
scale economics, customer
loyalty, and the availability
of great locations.