importance of strategic retail management

Opportunities address the following questions:  What should be changed? The retailing concept is an idea that examines the evolution of the and transformation of the retail life cycle. Business Strategy/Overview of Strategic Planning. Will you have a free-standing location? Here is a quick look at the steps in the strategic retail planning process. This is where you want to make sure you have adequate inventory levels to meet customer demand. In this article, we will define strategic management, explain how strategic management works, discuss the purpose of strategic management and provide an example of strategic management. Balanced scorecard in strategic management. Finally, threats are those external factors that can’t be controlled but are still a consideration. A mission statement describes the critical processes and performance that satisfies a specific customer. Later we will discuss in more detail the importance of inventory turnover and how it contributes to profitability. Retail hours are long. Tesco's Sir Terry Leahy Talks Retail Strategy. Strategic Management plays an integral role in making important decisions. In recent years, all around the world fierce competition has emerged because of some concepts such as globalization, fast technological changes, new consisted markets and changing customer expectancies and the competition has become more and more overwhelming. In most organizations, “strategic planning” is an annual process, typically covering just the year ahead. Are there any financial threats such as cost or debt? This can include a market attractiveness analysis, competitor analysis, self-analysis, Establish specific objectives and allocate resources, Develop a retail mix to implement strategy, Evaluate performance and make adjustments. And, in doing so, they imply the organizational priorities, the “why.” By adding this detail, the firm helps the broader organization focus on the activities that support the strategy. This concept was first introduced by Professor McNair from Harvard University. Strategic planning may also be a tool for effectively plotting the direction of a company; however, strategic planning itself cannot foretell exactly how the market will evolve and what issues will surface in the coming days in order to plan your organizational strategy. Importance of Strategic Management Why is Strategic Management Important in Business? Strategic management is the process of strategic analysis of an organization, strategy-focused objective-setting, strategy formulation, strategy implementation, and strategic evaluation and control. Let’s look at an example of how the retailing concept works using Barnes & Noble as an example. Building skilled and motivated sales and service teams 4. Too much product could lead to excessive markdowns which deteriorates profitability while too little desired merchandise might lead to missed sales opportunities. For example, if a firm has the objective to “grow category sales by 4% by increasing merchandising and promotional activity,” a relevant tactic might be to plan robust promotional activity in key seasons. Strategy is a vital component of any retail organization for several key reasons. This is tough. Allocate resources wisely, be sure to track your progress and alter your plan and strategy to meet changing internal and external conditions. Strategic planning in retailing in a global retail marketplace. Does your product meet your customer’s needs? Sales targets may seem unreachable. Develop a framework for your plan and define your KPIs in detail. We will focus on micro and macro factors in this module: Micro environments in retail is anything in the immediate environment including suppliers, customers, competitors, and stakeholders. Operation management ensures that all operations of business are going in desired direction. It defines strategy and explains the key concepts in … INTRODUCTION 1.1. How is the location you have chosen a good fit for your target market? S RM -S trategic risk management refers to a method to a s s ess the strategy of any organization. The examples are all internationally known retail companies, to facilitate an understanding of what is involved in strategic retail management and illustrate best practices. This allows them to understand the competitive advantage they have in the industry as well. Stage 2: Barnes & Noble expanded to various locations thus increasing sales, brand image, value, and profit. Strategic planning is a formal process firms (should) undergo to develop a plan for how best to compete, given the business environment, the firm’s own capabilities relative to the needs of the customer and the anticipated actions/reactions of competitors. The strategic plan is a shared document that serves as the “road map” for how the firm will pursue its strategic objectives, ensuring that the organization is aligned on priorities and action items across all functions. Business (or Strategic) managementis the art, science, and craft of formulating, implementing and evaluating decisions that will enable an organization to achieve its long-term objectives. Look at these slides reporting on a SWOT analysis of GAP Inc then let’s walk through a SWOT analysis for the GAP below. Whether it’s helping to find your next prospect or creating loyal fans for your brand, we aim to influence your target audience to ensure their next step is in the right direction towards your company.We offer a fantastic blend of marketing and technical expertise, which is why our team can gain a full understanding of your business and actually produce work that generates meaningful results.What makes a fresh and young marketing company? Before we begin let’s take a look at Tesco, profit wise it is the third largest retailer, and how retail strategy benefits them. At Fulcrum, it’s our team. Thus, there’s little room for confusion about what’s important. These elements are considered throughout the strategic planning process. Strategic management seeks to coordinate and integrate the activities of the various functional areas of a business in order to achieve long-term organizational objectives. Implementation and control refers to how the firm puts its strategic plan into place, including how it organizes cross-functionally and communicates priorities. Occasionally, organizations may look at a practical plan which stretches three or more years ahead. Strengths answer question such as:  What value do we bring to the customer? What does the signage look like inside and outside of your store? It regularly monitors every activity and takes all corrective measures as required according to prevailing situations. Are there any economic, political, or customer trends? Established for over 10 years, our clients vary in size and cover a wide variety of business sectors. Strategic management ensures the steps necessary to reach a business goal are implemented company-wide. This is based upon both the long-term economic attractiveness of the segment and the firm’s organizational capabilities. However, if successfully implemented, it will serve as a powerful tool for workforce intelligence and management. We are a local marketing and sales agency that help small/medium sized businesses and Start up. Certainly, a firm is responsible for managing its controllable variables. Even the best laid out plans can fail with the absence of a well defined roadmap. Macro environments are often outside of the retailer’s control and are typically of a larger scale and are usually of an economic and industry viewpoint. Some elements of the process may be continuous and others may be executed as discrete projects with a definitive start and end during a period. They also have a dependence on an older consumer. importance of strategic planning to retailers, Marketing communication Strategies and Planning, Promotion: Integrated Marketing Communication, Marketing Management & Strategic Planning, Decisions and Strategy : strategic planning is a formal process that evaluates the marke, Outline the steps of retail strategy planning, Describe the value of an organizational vision and mission, Explain how a retail strategy guides the decisions of an organization, “Grow category sales by 4% by increasing merchandising and promotional activity.”, “Increase profit to $150k by introducing new flavors and regional brands.”, “Reduce spoilage to <5% by increasing stock rotation in produce.”. What is the depth (how much you will carry of an item) as well as the breadth (number of SKUs) you will carry in your assortment? Managing time 2. Strategic planning is a … The actions included in strategic planning are: A firm might pursue any number of objectives for any number of reasons. What are the hours of operation for your store? Therefore, strategic innovation and tinkering with the ‘strategic plan’ have to be a cornerstone strategy for an organization to survive the turbulent business climate. Here is a video that walks you through the first five steps of the strategic retail planning process. Strategic management benefits all business ventures, including small business, for-profit, nonprofit and Fortune 500 companies. In stage 4 the retailer is highly established with better products, services, and locations most likely. In the third stage the company is established and the company is able to expand at a moderate pace and attract more customers. Despite their differences, both mission and value statements communicate the strategic scope of the firm. First, you are addressing the needs of your target market. Now that you have a better understanding of the retail marketing strategy and how the retail mix supports the strategy let’s round out our Introduction to Retailing by discussing the Retailing Concept. In addition, the retail mix should always have the target market in mind. Recruiting and supervising staff 3. You're obviously going to have to figure out your target market, right? What do we do well? Even you have done it within your budget and met the objectives of this project, and your business … Strategic management is critical to staying competitive and standing out in a crowded marketplace. The balanced scorecard takes a four-pronged approach to an organization's performance. Formulation of Retail Strategy: In this stage, after analyzing the store’s capabilities in terms … For example, PepsiCo publishes this mission statement: As one of the largest food and beverage companies in the world, our mission is to provide consumers around the world with delicious, affordable, convenient and complementary foods and beverages from wholesome breakfasts to healthy and fun daytime snacks and beverages to evening treats. Classify the general steps of strategic planning in retail In most organizations, “strategic planning” is an annual process, typically covering just the year ahead. Consider how much in sales Barnes & Noble might have lost over time due to Amazon’s entry to the market! Tactical plans are the short-term actions the firm takes to affect the controllable elements of the strategy. Managing changeNo manager can be effective in just one of these areas. While the values may be aspirational, the direction should communicate the strategic scope of the firm. One important thing to keep in mind is that any competitive advantages you have in your strategy should help form your retail mix. Through strategic planning, companies can anticipate certain unfavourable scenarios before they happen and take necessary precautions to avoid them. Here are some reasons why strategic management is a crucial business practice: Planning: This is an essential management tool for any company. After the objective for the organization is defined. Some who study business may not become chief executive officers (CEOs) or work in upper management, so it is important to understand why strategic management matters to all members and layers of an organization. They are skilled in four primary areas. Each of these examples illustrate how a short-term tactical execution supports the broader objective of growing category sales by 4% by increasing merchandising and promotional activity. Imagine a local grocery store chain is trying to compete with Amazon pantry. Let’s now take a look at the components of the retail mix that are ultimately the pieces of the retailer’s strategy. Lastly, it allows the retailer to respond to competition. But going further, we should make a distinction between mission and vision statements. This is where you can also include a general description of the responsibilities of each associate along with some type of detailed info on the organization’s structure. Imagine the scope of a business with stores in seven countries. The outcome of this process is a marketing plan, the “road map” for how the firm will pursue its strategic objectives. For example, a key competitor for JCPenney is Kohl’s. What is the layout of your store? Importance of Strategic Management It guides the company to move in a specific direction. They are not the same. Thus the strategies developed to act as a guide to making efficient and accurate decisions. It could also mean that the corporate marketing team develops in-store circulars or television commercials to promote sale items around Thanksgiving, asking store managers to bring in shippers and high backstock levels to ensure sufficient inventory is kept on-hand. Thus, rather than marketing a product or actively trying to sell it across a wide swath of the total population, customer analysis helps break the population into smaller homogenous segments. If Kohl’s drops prices a national brand such as Levi’s, JCPenney might follow suit. The low prices of these retailers are generally due to the low cost and often times cost cutting does attract competition (Stage 1). A retail manager's goal is to maximize productivity. Thus, the firm helps the broader organization focus on the activities that support the strategic opportunity and gives it meaning. Strategic planning is an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people. Very generally, we can see it as composed of seven steps. So how do we take our retail planning strategy and put it into an actionable plan? First, it allows you to understand your company as well as your history, your company’s history, and your overall industry. It also allows for a business planning strategy within the retailer. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. This could also be dependent upon the area in which you are located as well as the needs of the customer. We aim to take your audience on a journey. What promotional tools will you use to influence the consumer’s purchase decision and, overall, their intention to purchase? 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