Strategic Planning for Retail Trade

Table of Contents

A.Retail Trade Industry Environment3

Dominant Economic Feature of Retail Industry3

Significant Force Driving Change in Retail Industry5

Lower Prices5

Offering Lower Prices by Lowering Cost5

Significant Differentiating Competitive Characteristics6

Discounting Stores6

Private-Label Offerings7

Positioning on Strategic Group Map8

Factors influencing Company's Success9

Lower Price offering9

Superior Supply Chain9

Impact of Five Competing Forces on the Industry9

Threat of New Entrants10

Threat of Substitutes10

Intensity of Rivalry11

Bargaining Power of Buyers11

Bargaining Power of Suppliers11

B.Strategic Plan of “Smart Buy”12

Vision Statement12

Mission Statement12

Distinctive Competency12

Capitalizing on Market Opportunity12

External Threat to “Smart Buy”13

Counter Actions for the Threat13

Financial Objective13

Performance Measurement of the Objective14

Strategy for Achieving the Objective14

Functional Strategic Objective14

Performance Measurement of the Objective14

Strategy for Achieving the Objective14

C.Executing the Strategic Plan15

Use of Principal Managerial Components15

Strengthening Company's Mission17

Motivating Individuals and Team17

Goal Setting Theory17

Alderfer's ERG Theory17

Organizational Considerations for Structuring the Work18

Current and Emerging Organizational Characteristics19

Guidelines for Corrective Judgments19

Strategic Planning for Retail Trade

Retail Trade Industry Environment

Our company operates in the retail trade sector, with some warehouse club and supercenters. The company provides a wide range of products such as products for home, beverages and food, toys, sporting goods, entertainment and electronics. The company also offers jewelry, accessories and apparel. The central activities of the company are retailing for groceries, furniture, apparel and appliances.

Dominant Economic Feature of Retail Industry

The retail industry is highly dependent on the consumer purchasing power. The country's per capita disposable income represents the ability of a person to purchase services or goods. The per capita income is calculated by summing the income earned from every source like rental income, government transfers and wages etc, and subtracting expenses like tax payments, savings and non-tax payments like donations, forfeitures and fines. The net result is then divided by the total population of the country, like United States.

In the United States, the disposable income saw a positive growth in the past seventeen years. The meltdown of the financial system and recession which followed continuously has affected this positive trend severely. The decline in the income was witnessed by the millions of Americans who couldn't get a job again after losing one owing to crisis. As the financial sector made job cuts, the job losses found their way to the main street as the access to credit became limited for the businesses and the demand forecast were marred with uncertainty.

The per capita disposable income from 2000 to 2012 is as follows:

Table 1: Per Capita Disposable Income

Year

$

% Change

2000

28,885.00

3.92

2001

29,285.00

1.38

2002

29,964.00

2.31

2003

30,429.00

1.55

2004

31,184.00

2.48

2005

31,318.00

0.42

2006

32,303.00

3.14

2007

32,749.00

1.38

2008

33,229.00

1.46

2009

32,020.00

-3.64

2010

32,335.00

0.98

2011

32,529.00

0.59

2012

32,942.00

1.26

The purchasing power has seen some increase and is expected to rise as the economy stabilizes. As the warehouse clubs and supercenter segment of the industry primarily offers goods at lower prices, the company operating in this segment will continue to see good profits and increase in revenues as the consumers focus their purchases on value products instead of quality products.

Significant Force Driving Change in Retail Industry

Lower Prices

As the consumers divert their spending from quality products to products offering more value, the industry is faced with consumers who are very price conscious. This fact is evident from the increase in the profitability of warehouse club and supercenter industry as despite the recession they ...