Planning is something that we do consciously or habitually all our lives. Internal environment – can be controlled, however, it can’t influence an external environment. How did this local chain come to this solution and how would they go about it? All strategic planning deals with at least one of three key questions: In business strategic planning, the third question is better phrased “How can we beat or avoid competition?”. Lastly, while mission statements function for internal communication and alignment, vision statements function as inspiration. Lastly, it allows the retailer to respond to competition. What is my pricing strategy? Let's say that you own a store. Take a few moments before we move on and see if you can provide an example using your favorite retailer we discussed initially. It is the process of specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. Finally, threats are those external factors that can’t be controlled but are still a consideration. With a strategic plan in place that optimizes the process of overseeing and managing inventory, including real-time data of inventory conditions and levels, companies can achieve inventory management benefits that include: The intent at this point is to increase market share (Stage 2). In the third stage the company is established and the company is able to expand at a moderate pace and attract more customers. 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. Occasionally, organizations may look at a practical plan which stretches three or more years ahead. Very generally, we can see it as composed of seven steps. 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. You also want to think about profitability and relate this back to the goals of your area as well as your organization. And then how best to sell your wares, correct? In order to determine where it is going, the organization needs to know exactly where it stands, then determine where it wants to go and how it will get there. It regularly monitors every activity and takes all corrective measures as required according to prevailing situations. Are there any economic, political, or customer trends? They are skilled in four primary areas. Building skilled and motivated sales and service teams 4. There are most certainly a number of environmental, political, economic, and social factors that affect all segments of the retailing industry. It often describes a future where the firm redefines the industry and benefits society overall. I need a minimum of 200 words. These are all key elements you want to consider. Part of the success of any retailer is taking that strategic plan and breaking it apart into actionable and meaningful steps that will lead to success. This internationalization of retail management has an important impact on the operations of businesses as well as in their business model. It defines strategy and explains the key concepts in … A strategic plan allows organizations to foresee their future and to prepare accordingly. Therefore, strategic innovation and tinkering with the ‘strategic plan’ have to be a cornerstone strategy for an organization to survive the turbulent business climate. Macro (external) environment – larger societal forces that affect the microenvironment. Michael Porter wrote in 1980 that formulation of competitive strategy includes consideration of four key elements: https://en.wikibooks.org/wiki/Business_Strategy/Overview_of_Strategic_Planning, https://en.wikipedia.org/wiki/File:SWOT_en.svg, https://commons.wikimedia.org/wiki/File:Pest-analysis.jpg, https://en.wikipedia.org/wiki/Market_environment, https://en.wikipedia.org/wiki/Strategic_planning#Strategic_planning_vs._financial_planning, https://commons.wikimedia.org/wiki/File:Retail_mix.jpg, Differentiate between macroenvironment and microenvironment considerations in strategic planning, Classify the general steps of strategic planning in retail. The business environment is a marketing term and refers to factors and forces that affect a firm’s ability to build and maintain successful customer relationships. What situational, monetary, or product mix is drawing customers away from traditional stores? Thus, it is marked by specific activities in which firms engage to build a marketing plan, ensuring that the entire organization is aligned on strategic priorities. Despite their differences, both mission and value statements communicate the strategic scope of the firm. Opportunities address the following questions:  What should be changed? One important thing to keep in mind is that any competitive advantages you have in your strategy should help form your retail mix. Does your product meet your customer’s needs? The outcome of this process, which… It isn’t only about WHAT the firm plans to accomplish, such as “grow category sales by 4%” or “increase profit to $150k” or “reduce returns to <5%.” It must also include the plan for HOW the firm can accomplish that goal, which implies WHY the objective is strategically important. Recruiting and supervising staff 3. A vision statement is future oriented, meant to inspire. 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. Later we will discuss in more detail the importance of inventory turnover and how it contributes to profitability. Strategic Management plays an integral role in making important decisions. A good strategy helps management prioritize activities within the company and how resources get spent. In addition, it would allow them to understand the weaknesses and strengths they possess that would hinder or help growth within the organization. The cost, and therefore prices, become higher for the retailer in this stage. Tesco's Sir Terry Leahy Talks Retail Strategy. Keywords: Strategic management, strategic thinking, strategic planning, aligning business strategy 1. 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. we see ourselves as active members of the local community helping local businesses by providing a variety of field marketing, btl marketing , door to door marketing, brand promotion, social media marketing, telemarketing, web and printed based marketing materials. Business Strategy/Overview of Strategic Planning. 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. The essence of the strategic planning process is that it moves from a general goal to the specific steps to reach that goal; from the overall objectives of the organization down to the individual objective (goal) action plan for a part of one marketing program. Thus, the key distinctions between the two documents are time, orientation, and function. So businesses are forced to think strategically and making decisions by using strategic planning more. With technology, change in consumer behavior, globalization, and consolidation, a data-driven retail strategy is more important than ever. Strategic management is the process of strategic analysis of an organization, strategy-focused objective-setting, strategy formulation, strategy implementation, and strategic evaluation and control. The actions included in strategic planning are: A firm might pursue any number of objectives for any number of reasons. This allows them to understand the competitive advantage they have in the industry as well. In essence it forces the retailer to make the customer top of mind and foremost in all strategy decisions. 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. It is completely possible to go about anything without planning at all; yes, POSSIBLE; but that involves a lot of risk and results are most often unsatisfactory and disheartening. Further, it also includes how the firm tracks progress toward its objectives, measuring performance so that adjustments can be made, if necessary. First, it allows you to understand your company as well as your history, your company’s history, and your overall industry. Strategic management is critical to staying competitive and standing out in a crowded marketplace. Instead of purchasing the fixed assets, the managers may buy such assets on rent to decrease the fixed capital investment. Importance of Strategic Management Why is Strategic Management Important in Business? Yet, in this setting, good retail managers thrive. However, if successfully implemented, it will serve as a powerful tool for workforce intelligence and management. Abstract and Figures This paper presents strategic management as an important business management concept. The global retail industry is continuing to evolve and become increasingly competitive. It is also an interactive process, so that the draft output of each stage is checked to see what impact it has on the earlier stages and is amended as necessary. Various business analysis techniques can be used in strategic planning, including SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats ) and PEST analysis (Political, Economic, Social, and Technological analysis) or STEER analysis involving Socio-cultural, Technological, Economic, Ecological, and Regulatory factors and EPISTELS (Environment, Political, Informatic, Social, Technological, Economic, Legal and Spiritual). In this case, it is likely the shopper experience, reflected in variety and local products. Employees play a significant role in retail management strategy and planning via decision making, entrepreneurial endeavors, and creative risks. In this stage competitors can now try to penetrate the market in stage 1. With the integration of the Internet as an effective marketing arm, it supplements the traditional marketing media being used by retailers. The outcome of this process is a marketing plan, the “road map” for how the firm will pursue its strategic objectives. It is the process of specifying the organization’s mission, vision and objectives, developing policies and plans, often in terms of projects and programs, which are designed to achieve these objectives, and then allocating resources to implement the policies and plans, projects and programs. And, in doing so, we understand that there is value in changing our assortment to provide more variety and popular local items for shoppers. Any government and other regulating body can be thought of as a stakeholder. A balanced scorecard is often used to evaluate the overall performance of the business and its progress towards objectives. Business (or Strategic) management is the art, science, and craft of formulating, implementing and evaluating decisions that will enable an organization to achieve its long-term objectives. Personal values of the key implementers (i.e., management and the board), Conduct a situation audit. Retail Mix is also referred to as the “6 P’s”. 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. Are there any financial threats such as cost or debt? Further, some firms support this by publishing mission and vision statements to provide direction for the organization and to convey its values. … Discussing and evaluating your retail mix in the organization offers a number of benefits. Strategic management can help companies reach their goals. 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. 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. Smaller shops closed down and an increasing number of customers came to Barnes & Noble. What is the layout of your store? Why is strategy imperative in a business this large? Strategic planning is the formal consideration of an organization’s future course. A strong implementation plan helps businesses to get their strategy in place. The main importance of strategic business management is to assist the business’ profit and decision making, yet its functions can also be broken down. Strategic planning provides multiple stages for inputs for strategic thinking, which guides the actual strategy formation. Strategic planning in retailing in a global retail marketplace. Human Resources Retail Management Strategy Retail is a labor-intensive industry driven by activities (buying, designing, marketing, engaging in customer service, and selling) performed by people. It gives a sense of direction to the entire team of the organization : It is very significant for … What type of product do you intend to carry? No discussion of strategic planning can ignore the micro and macro factors that are relevant in the success and possible failure of the retail business. S RM -S trategic risk management refers to a method to a s s ess the strategy of any organization. This both ensures that consumers’ needs are satisfied and creates a virtuous cycle wherein the firm can continue to innovate, developing products that suit its core consumers, despite changing needs and demands. It helps to understand how a business can combat any risk that might affect them. At PepsiCo, we aim to deliver top-tier financial performance over the long term by integrating sustainability into our business strategy, leaving a positive imprint on society and the environment. Some of the positive internal attributes are franchising opportunities and global brand recognition. After the objective for the organization is defined. In most organizations, “strategic planning” is an annual process, typically covering just the year ahead. This is not a traditional textbook or collection of case studies, but is intended to demonstrate the complex and manifold questions of retail management in the form of 18 lessons that provide a thematic overview of key issues and illustrate them with the help of comprehensive case studies. The Gap has strong competition, slow economic recovery, and increased labor costs. This is where you want to make sure you have adequate inventory levels to meet customer demand. Without it, a business has no way to gauge whether or not strategic management strategies and plans are fulfilling business objectives. There is also an opportunity for growth in Asia. We are a local marketing and sales agency that help small/medium sized businesses and Start up. Customer analysis is a critical activity that ultimately helps focus marketing and sales resources more efficiently. Strategic planning is the formal process firms (should) undergo to develop a plan for how best to compete, understanding the market and the factors that influence it, the needs of the consumer, the relative position of the competition, the firm’s own capabilities, and the financial implications, given required trade-offs. Too much product could lead to excessive markdowns which deteriorates profitability while too little desired merchandise might lead to missed sales opportunities. Occasionally, organizations may look at a practical plan which stretches three or more years ahead. The retail mix will differ based on the store and the type of product offered to the customer. Managing time 2. What is your anticipated turn as well as inventory levels? They are not the same. Will you be located in the mall? Here is a quick look at the steps in the strategic retail planning process. Formulation of Retail Strategy: In this stage, after analyzing the store’s capabilities in terms … A mission statement describes the critical processes and performance that satisfies a specific customer. From making big career moves, to the simplest of tasks such as presenting an idea; every measure requires considerable amount of planning. First, you are addressing the needs of your target market. Mission statements deal with what we do and vision statements deal with what we aspire to be. The Importance of Strategic Evaluation. Threats answer the following questions:  What are the threats to the business? A mission statement is current and/or future-looking, whereas a vision statement is always future-looking. So how do we take our retail planning strategy and put it into an actionable plan? Strategic sourcing is an approach to supply chain management that formalizes the way information is gathered and used so that an organization can leverage its consolidated purchasing power to find the best values. 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. 1. In this way, the objectives listed above might be revised to read: As you can see, the specific measurable goal didn’t change. The local store decides their goal is venture into the world of e-commerce by integrating an online website for customers to order products online, but can pick up their orders at the store. It requires an in-depth understanding of the business strategy, your workforce and the market. Consider how much in sales Barnes & Noble might have lost over time due to Amazon’s entry to the market! It defines organization’s goals and fixes realistic objectives, which are in alignment with the company’s vision. The resulting document is called the “strategic plan”. Thus the strategies developed to act as a guide to making efficient and accurate decisions. A retail manager's goal is to maximize productivity. The first two elements relate to factors internal to the company (i.e., the internal environment), while the latter two relate to factors external to the company (i.e., the external environment). Retail hours are long. We aim to take your audience on a journey. We are committed to investing in our people, our company and the communities where we operate to help position the company for long-term, sustainable growth. 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. These factors describe the business environment, how our own abilities can deliver value relative to consumer needs, and the likely actions/reactions of our competitive set. Store staffs likely include inexperienced, part-time or seasonal employees. Let’s now take a look at the components of the retail mix that are ultimately the pieces of the retailer’s strategy. Stage 3: As time progressed Barnes & Noble established themselves, opened even more stores, and saw greater profits. 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