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Retail Business Environment

Notes (b) Internal store objectives are those objectives that define how much is expected to be
achieved with the available resources.

Example: To raise the store turnover by 20% in the coming year.

Formulation of Retail Strategy

After analyzing the store’s capabilities in terms of HR, finance, physical and intangible resources,
a store manager formulates a retail strategy with regards to marketing retail positioning and
retail mix.
Marketing is the way to achieve the set objectives, therefore, marketing strategy should be devised
according to the store’s primary and secondary objectives. Generally marketing strategy is
developed on the basis of product and/or market segmentation instead of the market as a whole.

Retail positioning is a plan of the store’s action for how the retailer will enter the target market
and will compete with its main competitors. Retail positioning from a retail store’s point of
view, is a step-by-step plan to create and maintain a unique and everlasting image of the store
in the consumers mind. This process reveals the fact that understanding ‘what the customer
wants’ is the success key to retail positioning in the market. Under retail positioning, a retailer
conveys the message that its products are totally different and as per customer’s requirement.
The reason is that its products are attracted towards items that are new for them with the
perception that if it is new, it will have some extra/added features. Retail positioning is made
possible under these circumstances:
By differentiation of the store’s merchandise from that its competitors.
By offering a high level of service after sales at nominal cost
By adopting low pricing policies.

6.4 SWOT Analysis of a Retail Sector

SWOT is a short form that stands for Strengths, Weaknesses, Opportunities and Threats. Firms
often apply SWOT analysis in figuring out how to build up their place in the market and to
discover new prospects for expansion and reputation management. Retail chains usually exercise
SWOT analysis on customers to observe what slits can be filled and how to react to definite
threats and opportunities.

Strengths

The first step in doing a SWOT analysis for retail entails identifying certain strengths. One
possible strength may be the retailer’s financial backing, meaning it has plenty of capital and
access to bank loans. Another strength may be the retailer’s cheaper wholesale prices.
Additionally, the retail company may offer unique products compared to other retailers. For
example, a clothing store may sell high quality but slightly defective clothing at a low price.
Whatever the case, a retailer should make a list of all its strengths vs. key competitors.

Weaknesses

When reporting weaknesses, the retail store or company should start with its most palpable
weaknesses. For example, through market research, the retailer may have discovered it has a
weak brand image versus key competitors. The retailer may also lack an identity. For instance,
the store may sell cheap and expensive brands. It may also be lacking in customer service.

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