levy & weitz

1. 5 th Edition

2. Retail Marketing Strategy Chapter 5 McGraw-Hill/Irwin Levy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.

4. Retailing Strategy Retail Market Strategy Chapter 5 Financial Strategy Chapter 6 Retail Locations Chapters 7,8 Human Resource Management Chapter 9 Information and Distribution Systems Chapter 10 Customer Relationship Management Chapter 11

6. Strategic vs. Tactical Decisions Strategic Tactical Direction Implementation Strategy statement Annual plan Broad Specific, detailed Unstructured Structured Problem solving Problem solving Creativity Analytical External focus Internal focus Irregular Regular Long-term Short-term Difficult to evaluate Easy to evaluate Note: Success Comes for Having a Good Strategy and Executing It Well

12. Why Does a Retailer Need to Focus on a Specific Target Market? Why Not Sell to Everyone?

13. Retail Market Opportunities for Women’s Apparel

14. Methods for Segmenting Markets Demographics Geographic Lifestyle, Psychographics Buying Situations Benefits Sought

19. Loyalty What does loyalty mean? Is It the same as liking a store? … Going to the store frequently?

21. Example of Positioning

28. Growth Opportunities

29. International Growth Opportunities Europe China Mexico, Latin America Japan

31. International Market Entry Strategies Direct Investment Joint Ventures Strategic Alliances Franchising

32. Steps in the Strategic Retail Planning Process 1. Define the business mission 2. Conduct a situation audit: Market attractiveness analysis Competitor analysis Self-analysis 3. Identify strategic opportunities 5. Establish specific objectives and allocate resources 7. Evaluate performance and make adjustments 6. Develop a retail mix to implement strategy 4. Evaluate strategic alternatives

33. Elements in a Market Analysis MARKET FACTORS COMPETITIVE FACTORS ENVIRONMENTAL FACTORS ANALYSIS OF STRENGTHS & WEAKNESSES Barriers to entry Bargaining power of vendors Competitive rivalry Threat of superior new formats Technology Economic Regulatory Social Size Growth Seasonality Business cycles Management capabilities Financial resources Locations Operations Merchandise Store Management Customer loyalty

35. Porter’s Five Forces Competitive Rivalry Bargaining Power of Vendors Barriers to Entry Large Customers Threat of Substitution

36. Strengths and Weaknesses Analysis Management Capability: Capabilities and experience of top management Depth of Management--capabilities of middle management Management’s commitment to firm Financial Resources: Cash flow from existing business Ability to raise debt or equity financing Operations: Overhead cost structure Quality of operating systems Distribution capabilities Management information systems Loss prevention systems Inventory control system Merchandising Capabilities: Knowledge and skills of buyers Relationships with vendors Capabilities in developing private capabilities Store Management Capabilities Management capabilities Quality of sales associates Commitment of sales associates to firm Locations Customers Loyalty of customers

47. Market Attractiveness/Competitive Position Matrix Market Attractiveness Competitive Position High Low Medium Maximum investment Consolidate position Invest to challenge leader Opportunities investment Build strength or exit Selective investment Build on strengths Cautious investment Harvest or divest Protect position Manage for cash generation Harvest or divest Harvest or divest Aggressive investment Cautious investment Minimal investment

49. Characteristics of International Markets U.S. Germany Japan Population (Millions) 266 82 126 Business Climate 3 10 24 Logistical Infrastructure Exc. Good Avg.

50. Attractiveness Ratings for International Growth Opportunities

51. Competitive Position in International Growth Opportunities

52. Evaluation of International Growth Opportunities

54. Evaluation of Retail Market Opportunities in European Community High Low UNITED KINGDOM NETHERLANDS Open Restricted MARKETS SPAIN ITALY FRANCE GERMANY BELGIUM PORTUGAL LUXEMBOURG IRELAND GREECE DENMARK GROWTH

55. Market Attractiveness Ratings for Growth Opportunities in Merchandise Categories Weight Market size Growth Vendor power Competitive intensity Social trends Score Junior’s (2) Men’s (3) Children’s (4) Furniture (5) Cons. Elec. (6) Soft Home (7) Women’s(1) Factors 20 20 15 20 25 10 9 4 5 4 5 540 7 3 4 3 5 445 5 6 10 10 6 720 4 5 9 2 6 505 5 4 2 5 6 485 6 8 1 2 4 435 7 6 8 10 9 805

56. Competitive Position Ratings in Merchandise Categories Weight Location Vendor relationship Costs Skills of buyers Image with customer Score Junior’s (2) Men’s (3) Children’s (4) Furniture (5) Cons. Elec. (6) Soft Home (7) Women’s(1) Factors 20 25 20 10 25 100 9 8 8 6 8 800 9 7 8 7 8 785 8 5 5 5 5 560 6 7 6 9 6 655 4 4 3 5 5 415 2 3 1 4 2 225 4 7 7 8 8 675

57. Evaluation of Merchandise Category Opportunities 1,000 Market Attractiveness High Low Medium Soft home Men’s clothing Women’s clothing Children’s clothing Consumer electronics 1,000 667 333 Low High Medium 333 667 Junior’s clothing Furniture