Page 79 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes Self Assessment

State whether the following statements are true or false:
1. The Indian retailing industry is increasingly becoming less-competitive.
2. Business is a continuous process.

5.2 Retail Market Strategy

A company’s strategy provides a central purpose and direction to the activities of the organization
to the people who work in it, and often to the world outside.
Using suitable strategies and communicating them to all important groups inside and outside
the corporate firm would gain cooperation from all corners.
Strategy if defined clearly by the top management and accomplished well, provides the purpose
and focus for all other activities and starts the organization on the road to successful operation.
‘Every long journey starts with taking the first step’, says a proverb. Obviously, the formulation
of a strategy is only the beginning but the beginning is the most significant point in any
enterprise.

5.2.1 Levels of Strategy for Retail Organisations

An organization’s strategy includes where it wants to go and how it intends to get there. This
definition applies both to the overall strategy of an organization and to the strategies of its
major sub-units. The implications of strategy at different levels can be distinguished. Analytically,
there are three levels of strategy:
1. Corporate level strategy

2. Business unit strategy or Retail Format level
3. Functional level strategy
At the corporate level, strategic decisions relate to organization’s wide policies and are most
useful in the case of multidivisional companies or firms having wide ranging business interests.
The nature of strategic decisions at the corporate level tend to be value oriented, conceptual and
less concrete than decision at the business or functional level. There is also greater risk, cost and
profit potential as well as greater need for flexibility associated with corporate level strategic
activities. These are natural outcomes of the futuristic, innovative and pervasive character of
corporate level strategy. Major financial policy decision involving acquisition, diversification
and structural redesigning belong to the category of corporate strategy.
At business unit level (retail format level) decision-makers are primarily concerned with the
immediate industry or product—market issue, and with policies bearing on the integration of
the functional units. Retail business level strategic decisions translate the general statements of
direction and intent generated at the corporate level into concrete functional objectives and
strategies for divisions or strategic business units (operating division of a firm which serves a
distinct product/market segment or a well defined set of customers or a geographical area).
Strategic decisions at the business level should include policies involving new product
development, marketing mix, research and development, personnel etc.
Functional strategic level strategy involves decision making at the operational level with respect
to specific functional areas-production, marketing, personnel, finance etc. Decisions at the
functional level are often described as ‘tactical’ decisions. These decisions are necessarily guided
by overall strategic considerations and must be consistent with the framework of business
strategy.

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