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Cavite State University Bacoor Campus

Phase II, Soldiers Hills IV, Molino VI, City of Bacoor, Cavite

Written Report in

Retail Management

Submitted to:
Mrs. Janice Nealega

Submitted By:
(Group 1)
Yanola, Riza D.
Chua, Anna Gracia G.
Muoz, Romeo
Ofanda, Sarah
Quezada, Leony Jane
Zamora, Mary Rose
BSBM 3-1
RETAIL- is derived from a French word with the prefix re and the verb tailer meaning "to
cut again". It includes all the activities of selling goods or services to the final consumers for
personal use.
PART I. THE CHANGING ENVIRONMENT

MODULE 1: The Retail Environment

1.1 Introduction:

To understand the retail environment, it is important to understand the interrelationships


between the factors illustrated in Figure 1.1. In this module, we will consider how changes in the
consumer environment demographic, socio-economic and lifestyle trends have impacted
upon retail change. At the same time, government has been a major agent of change. Retailers
are regulated by an array of laws and ordinances that impinge on their operations. These can
affect licences to operate, health and safety matters, which goods to sell and hours of operation
through to planning ordinances on where to locate the business.

Technology is greatly contributing to improved operational efficiency for retailers and but
the importance of technology to future business success will become greater. There is, and will
be, an overwhelming need to effectively manage the business through business intelligence.
Retailers rapidly embraced the IT revolution through sharing data with their suppliers and
communicating with their customers. New technologies have been applied through-out the
supply chain to ensure that products can be designed/tested, manufactured and distributed
through supply chains quicker and at a lower cost than ever before. Markets and companies have
grown due to the links between innovation and technology.

Consumer

Technology

Retailer Government

Figure 1.1Factors influencing change


1.2 The Changing Consumer

Consumers are ever more focused on value for money. Asked about the main things that
have affected the grocery trip in the last 12 months, shoppers are concerned with the in increased
prices of products depending on their wants, needs, or even with their taste. In order to discuss
the changing consumer in more depth, we shall look at:

demographic trends
-Changes in the structure, growth, and movement of a countrys population. (Ex. Birth,
Age, Deaths, and Marriages)
socio-economic trends
- How economic activities affects and is shaped by social processes. It analyzes how
societies progress or regress in local or regional economy.
lifestyle trends
- Changes the way how people dress, eat, communicate, and also the allocation of
income.

1.3 The Retail Response

The retail response to these changes in consumer behavior has made the retail sector
one of the most dynamic in modern economies. Innovations in format development and
operating practices have enabled retailers to compete or even survive in a changing retail
environment. Two key responses will be discussed: retail innovation, and retail ownership.
Retail Innovation
Continuous innovation is a must in a retail environment that is changing so quickly.
Today, for example, people on new generation shows how the way they shop online
continues to evolve, so retailers go with the flow on having also retail sites. It is often
said that retail never stops moving. Retail has always served a consumer who craved
more, better and cheaperand was willing to go wherever necessary to get it. And while
retail may barely be recognizable since its earliest days, the need to differentiate from the
competition through innovation is as great as it ever has been..
Retail Ownership- Serves as a market niche.
1.4The Role of Government
The regulation of retail activity has shaped the structure of retailing in many country markets.
While most retailers have had to conform to national legislation with regard to operational
legislation, such as health and safety at work, hours of opening and employment laws, the
internationalization of retailing and the advent of the Internet have led to the establishment of
legal frameworks across national boundaries.

Competition Policy

In Europe, competition policy is normally dictated at national government level


unless an acquisition across national boundaries leads to the predator achieving a market
share which would be deemed uncompetitive.

In the UK, much of the focus on competition policy has been on price competition
and the potential abuse of market power by large grocery retailers. It can be argued that the
abolition of resale price maintenance (RPM) in 1965 was the catalyst to greater concentration
in British retailing

Retail Planning Policies


In essence, the first 20 years of planning policy was geared to maintaining the existing
shopping center hierarchy with a presumption against any type of development which
was not zoned for retail use, i.e. in-town centers or district centers.

MODULE 2: Theories of Retail Change

2.1 Introduction

Theories of retail change have been developed by studying past and current patterns of
retail development, at format, organization and industry levels.

Major theories of retail change:

2.2 Cyclical theories

The cyclical theories include the wheel of retailing, retail life cycle and retail accordion,
all based on the thinking that there is a cyclical pattern in the evolution of retail
institutions from which future business scenarios can be built.
2.3 Environmental theories
- Where a change in retail is attributed to the change in the environment in which the
retailers operate.

Two main environmental theories have been outlined evolution theory and institutional
theory.

Evolution theory suggests that successful organizations adapt to survive and succeed in
the changing environment, both the ultra-Darwinists.
Institutional theory propose that organizations go beyond tactical adaptation to absorb
into their fabric, design and organizational culture the technologies and socio-cultural
influences of the external environment.
2.4 Conflict theory

Is explained as a series of phases which existing retail organizations pass through when
challenged by a retail innovation.

MODULE 3. Retail Strategy

Theories of Retail

Environmental Theory
Where a change in retail is attributed to the change in the environment in which the
retailers operate.
Cyclical Theory
Where change follows a pattern and phases can have definite identifiable attributes
associated with them.
Conflictual Theory
The competition or conflict between two opposite types of retailers leads to a new format
being developed.

Retail Strategy

- A clear definite plan outlined by the retailer to tap the market.


- A plan to build a long-term relationship with the consumers.
- Process of strategy formulation in retail is the same as that for any other industry.

Strategic alternatives

Market penetration
Increase the basket size
Increase the customers
Increase the purchase frequency
Market development
New format for existing customers
Retail Format Development
New market segments with existing markets
Diversification
New retail formats directed at new market segments.

Strategic planning

- Involves adapting the resources of the firm to the opportunities and threats of an ever
changing retail environment.

Component s of strategic planning

Mission Statement
Is a basic description of the fundamental nature, rationale, and direction of the firm
Statement of goals and objectives
Are the performance results intended to be brought about through the execution of a
strategy
SWOT Analysis
Is the identification and analysis of a retailers strengths, weaknesses, opportunities and
threats

Strategies

Is a carefully designed plan for achieving the retailers goals and objectives.

3.3Corporate objectives and strategy

It is very important for a firm to decide exactly what it is trying to achieve. Freeserve is an
example of a company with very clear objectives. Traditional economic theory suggests that all
companies attempt to maximise profits at all times. Freeserve, however, has chosen to maximise
growth. This is seen as the most sensible objective in a market that is growing as rapidly as the
Internet. Worldwide Internet usage is expected to treble by 2002.
Having decided on growth as the prime corporate objective, Freeserve needed to develop a
strategy to achieve this target. Freeserve has recognised that in a rapidly growing, highly
competitive market, where there is a great deal of choice, the corporate strategy must focus
entirely on delivering value to the customer. The user has to be the only priority and the product
is the key to success.

The choice of corporate strategy will determine the marketing, human resource, financial and
operations strategies. Each must be compatible and carefully developed to achieve the overall
corporate objective. In such a competitive, rapidly expanding market the marketing strategy will
be of paramount importance. The marketing tactics employed will need to consider all aspects of
the marketing mix.

3.4 Environmental Analysis

is a strategic tool. It is a process to identify all the external and internal elements, which can
affect the organization's performance. The analysis entails assessing the level of threat or
opportunity the factors might present

Focus of Environmental Analysis

*Steepled Analysis is used for identifying attributes of keystone variables that make up an
organizations external environment, in terms of current and future operations.

*Scenario analysis is a process of analyzing possible future events by considering alternative


possible outcomes (sometimes called "alternative worlds"). Thus, scenario analysis, which is one
of the main forms of projection, does not try to show one exact picture of the future.

*Issue Analysis- this involves thorough examination of an issue without focusing on other
issues.

*Stakeholder analysis in conflict resolution, project management, and business administration,


is the process of identifying the individuals or groups that are likely to affect or be affected by a
proposed action, and sorting them according to their impact on the action and the impact the
action will have on them.

3.5 Resource Audit And Analysis


Is the process of going through everything that your business or oraganization has available to it.
This resources can take on many forms, and are not limited to just obvious items like cash and
inventory. The resource audit for your organization is likely to be unique to you because it will
take into consideration specific needs that your industry has for things like experience and
knowledge in a particular field .

3.6 Strategic Choice- is a part of strategic process and involves elements like the identification
and evaluation of alternatives which then leads to a choice. Once you have conducted the
external alternatives available to you should be clear.

SETTING OBJECTIVES & MAKING STRATEGIC CHOICE - Is one of the example of


strategic choice. Where in the business planning is a process that companies both large and small
use to determine a course of action that leads to revenue growth and increased profits .

3.7.LOCATION STRATEGY- Being in the right location is a key ingredient in a business success.
If a company selects the wrong location, it may have adequate access to customers, workers,
transportation, materials, and so on. A company's location strategy should conform with, and be
part, its overall corporate strategy. If a company strives to become a global leader in
telecommunications equipment. A company's executives and managers often develop location
strategies, but they may select consultants (or economic development groups) to undertake the
task of developing a location strategy, or at least to assist in the process, especially if they have
little experience in selecting locations.