Page 32 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 2: Structural Change in Retail Environment

company mission before a set of possible and desired opportunities is generated. This process Notes
results in the selection of a strategic choice. It is meant to provide the combination of long-term
objectives and grand strategy that will optimally position the firm in the external environment
to achieve the company mission.
Consider the case when strategic managers feel that a firm is overly dependent on a single
customer group, for example, a chain of record shops with principal customers 10 to 20 years
old. The firm’s interactive opportunities might include expanding the product line, heavily
emphasizing related product, accepting the status quo, or selling out profitably to a competitor.
While each of these option might be possible, a firm with a mission that stressed commitment
to continued existence as a growth-oriented, autonomous organization might find that only the
first two opportunities are desirable. In that case, these options would be evaluated on the basis
of payoff and risk potential, compatibility with or capability for becoming the firm’s competitive
advantage, and other critical selection criteria.

A complicated sub-process is used to derive the strategic choice. Strategic analysis involves
matching each of the possible and desirable interactive opportunities with reasonable long
term objectives and targets. In turn, these are matched with the most promising means – known
as grand strategies – for achieving the desired results. Each of the sets of alternative is then
evaluated individually and comparatively to determine the single set or group of sets that is
expected to best achieve the company mission. The chosen set (or sets) is known as the strategic
choice.
Critical assessment of strategic alternatives initially involves developing criteria for comparing
one set of alternatives with all others. As is the case in making any choice, a company’s strategic
selection involves evaluating alternatives that are rarely wholly acceptable or wholly
unacceptable. The alternatives are therefore compared to determine which option will have the
most favorable overall, long run impact on a firm.

The Legal Environment

Market economy in India is much more inclined towards the central, state and local governments.
Economic environment refers to the stage of economic development of the country like developed
or developing, state of agriculture, industry and service sectors, level of national income, its
composition or source-mix, i.e., percentage of national income derived from agriculture or
industry and the service sector.
Private label is a label unique to a specific retailer, account for about 20 percent of sales.
The government rules and policies are must be followed for existing in the market. The basic
legal conditions considered in environmental appraisal are:
1. Antitrust regulation
2. Protection laws

3. Environmental laws
4. Tax laws
5. Foreign trade regulations
Changes in government rules have been major effect to the future of many organisations.

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