Strategic Planning in Retailing

University Technology MARA Campus Dungun

[pic 1]

SUBJECT:

HTC610

RETAILING MANAGEMENT

Title:

CHAPTER 3

STRATEGIC PLANNING IN RETAILING

LECTURER:

MISS ZETTY MADINA BT MD.ZAINI

NAME:

NOOR ALIAH BINTI HALBE

1. Why it is necessary to develop a through, well-integrated retail strategy? Why would happen if a firm does not develop such strategy?

It is necessary to develop a through, well-integrated retail strategy. There are a lot of factor why it is necessary such as provide a through analysis of requirement for doing business for different types of retailers, it outlines retailer goals, to determines how to differentiate itself from competitors and develop an offering that appeals to a group of customers, the legal, economic and competitive environment studied, and others.

First factor why we need to develop a through, well-integrated strategy are it provides a through analysis of requirement for doing business for different types of retailers.  A good analysis must be done in a process of retail strategy because analysis such as to different type of foods, raw materials, can foods, and many more need different requirement. In USA, every foods and raw materials must followed FDA requirement. For example, eggs will be graded before sell to consumers according to FDA requirement. In Malaysia, the important requirement that consumer takes it seriously is HALAL logo in every product to make sure it can be used by Muslim consumers. HALAL requirement has been set and must be following to get HALAL logo. As retailers, they need to know all of this to make sure they retailed a suitable product to consumers.

Second factor are it will outlines retailer goals. When retailer start to construct retail strategy the first important things is determines retailer goals such as mission, vision, short term and long term goals. Other than that, they also need to determine whether the profit that they will have later can cover all their costs and also can growth business more and more. By doing demographic and financial studies, retailers can analyse their own market and sales that they can get in a month, half year, a year, five and ten years forward. It will help them to determine if their sales can cover all their expenses and also still can get profit from their sales.

Third factors are firm can determines how to differentiate itself from competitors and develop an offering that appeals to a group of customers. From demographic studies, firm can calculated their competitors pro and cons and try to upgrade their firm to be more competitive than other competitors. They need to go to consumers with good image and have their own uniqueness that can attract consumers and they become loyal customers. Firm concept should be decide and become a uniqueness of the firm.

Next, a firm’s total effort is coordinated.  When firm develop a well-integrated retail strategy, firm can coordinated every effort that they must do and already do. They can design their own strategy with critical point where others methods or solution need to find to dissolve problems. Effort that already used can be reported how it flow and every problems have been faced with the solution can be recorded so firm can used it again or improved it to better effort.

Lastly, firm can anticipated and avoided crises. Crises can happen in many ways such as price, cost, competitors, suppliers and savings. In term of price, firm may have problem with a price of other competitors. Competitors may have lower price from the firm and if firm also lower their price, firm may have problem in gaining more profit. Cost can be included as labor, utilities, transportation and others. If cost increases it will be problems to the firm. By do analysis, all this crises and problems can be avoided or can be estimate.

If firm does not develop such strategy firm may have difficulties to know which suitable decision should be made. Problems that need decision making will make firm answer question like this.  Which direction should be heading? How much sales we need to achieve in one month? How many labor we need to have? What product or services that can be sold to consumer? All this questions need to be plan and need to be analysing so we can make a perfect strategic planning for our firm.

Without strategic planning, bankers and investors cannot invest or give loan to our firm. This is because investors and bankers cannot see how our firm can give them profit and pay their loan. From strategic planning, investors and bankers can see how our firm being plan and what our expectation to our firm in ten more years. Investors and bankers also need to analyse our company whether this company have capabilities to conduct their own business

Firm cannot predict what will happen to their company. They do not know consumer demand, their market segmentation, crises and who is their competitors. This will make things hard to retailer and their firm will faces a problems.

1. How would situation analysis differ for a consumer of a fine dining restaurant and consumer of family restaurant?

Fine dining restaurant is restaurants that have elegance and grace styles that serve food in smaller quantity but have higher quality. Family restaurants are type of casual dining restaurants where food is often served on platters and diners serve themselves.

In fine dining restaurant, they serve limited customer in one day. Since their turnover rate are lower so their charges of food is high. The first things they need to do are do a market analysis. They need to differentiate their customers into potentials customers, family, and individuals. Since this is fine dining, there are no take out buyers. Almost consumers that go to fine dining restaurant are not in a big group. It is often a small group around two to four people in one table.

At this state, restaurants should stay with organizational mission. What is that mission want and follow the road to achieve the mission. For example, if the organizational mission is to give consumer the best fine dining services. Organization should find a alternatives to achieves the mission. They maybe have a best chef in kitchen and well-trained serving staff. This is to capture customer heart to make them loyal to our restaurant.

Demographic data need to collect before open the fine dining restaurant. Data such as what are types of consumer lives around the restaurant, what are suitable price and quality that need to present to consumer and what image that restaurant should be hold also are according to restaurant mission. Geographically, consumer for a fine dining should be middle to upper class of consumers so they need to calculate how many consumers are in their range customers. Consumer’s preferences and behaviour should take into consideration to decrease a problem of not able to understand their consumers.  

...