Page 127 - DMGT552_VISUAL_MERCHANDISING

Visual Merchandising

Notes 5. International Environment of Retailing
 Growth
 Opportunities
 Others

Internal Analysis: The objective of studying the internal environment of its own store is to
identify the store’s capabilities and weakness. The store will try to increase its capabilities, and
overcome the weakness that deters the business profit. While doing the internal analysis, the
store examines the quality and quantity of its available resources and critically analysis how
effectively these resources are used. These resources for the purpose of examining are normally
grouped into human resource, financial resources, physical resources and intangible resources.
The questions may arise under these resources:

1. Human Resource
 Is the present strength of employees at various levels sufficient for future action?
 Are the employees trained and capable to perform the tasks assigned to them?

 Are the employees loyal to the store?
 Are the employees punctual and regular?
 Are the employees skills matched to their assigned tasks?
2. Financial Resource
 What is the total cash flow from the store’s present activities?

 What is the ability of the retail store to collect money at the time of requirement/
emergency?
 How effective and stable are the financial policies?

 What is the ratio between fixed and current assets?
 What are the contingency plans in case of negative cash flow?
3. Physical Resources

 What is the contribution of fixed assets?
 What is the position of abandoned/unused assets?
 How effective and updated are the store’s information systems?
4. Intangible Resources
 What are the present capabilities of the company’s management?

 How effective is the R&D cell?
 How good is the competitor’s intelligence system?
 How effective are the store’s loyalty programmes?

 What is the capability of a retail store manager?
 Are customers loyal towards the company’s products?
Formulation of Retail Strategy: After analysing 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.

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