Page 81 - DMGT550_RETAIL_MANAGEMENT

Retail Management

Notes 2. Situational Analysis: The objective of doing store’s situation analysis is to determine
where the store is at present and to forecast where it will be if the formulated strategies are
implemented. The difference between current and future position is known as planning.
And the objective of conducting store’s situation analysis, normally study in the context of
external environment and internal environment.
External Analysis
The purpose of examining the store’s external environment is to study the opportunities
and threats in the retailing environment. The external analysis studies factors that affect
the macro-environment of the retailing industry and the task environment. Under external
analysis retailer studies these parameters:
(a) Economic environment of retailing
(b) Political/Legal environment of retailing
(c) Socio-cultural environment of retailing

(d) Technological environment of retailing
(e) International environment of retailing
Economic Environment of Retailing
(a) Inflation

(b) Employment
(c) Disposal income
(d) Business cycle
(e) Energy availability and cost

(f) Others
Political/Legal Environment of Retailing
(a) Monopolies legislation
(b) Environmental protection laws

(c) Taxation policy
(d) Employment laws
(e) Government policy
(f) Legislation

(g) Others
Socio-Cultural Environment of Retailing
(a) Demographics
(b) Distribution of income

(c) Social mobility
(d) Lifestyle changes
(e) Consumerism
(f) Levels of education

(g) Others

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