Outline 3:

Growth Strategy
 Growth Opportunities
•Market Penetration.

•Market Expansion.

•Retail Format Development.

•Diversification:

- Related vs. Unrelated

5-2
 Growth Opportunities

Source5-3: Michael Levy, Barton A Weitz, Dhruv Grewal. (2014). Retailing Management. 9 (Exhibit 5-4)
 Market Penetration
• A market penetration growth opportunity
is a growth opportunity directed toward
existing consumer using the retailer’s
present retailing format.

• Market penetration approaches include

opening more store in target market, and
or keeping existing stores open for longer
hours. 4
 Market Expansion
• A market expansion growth opportunity
involves using the retailer’s existing retail
format in new market segments.

Retail Format Development

• Opportunity in which a retailer develops a
new retail format with a different retail mix
for same target market.
5
 Diversification
• A diversification growth opportunity is one which
a retailer intoduces a new retail format directed
toward a market segment that’s not currently
served by the retailer.
• Diversification opportunities:
• Related diversification: the retailer’s present target
market and retail format shares something in
common with the new opportunity.
• Unrelated diversification: has little commonality
between the retailer’s present business and new
growth opportunity. 6
 Outline 4:
Strategic Retail in Planning
Process
 The Strategic Retail Planning
Process
• The strategic retail planning process is the set of
steps a retailer goes through to develop a
strategy and plan (see Exhibit 5-7). It describes
how retailers select target market segments,
determine the appropriate retail format, and
build sustainable competitive advantages

8
 Steps in the Strategic
Retail Planning Process
1. Define the business mission
2. Conduct a situation audit:
Market attractiveness analysis
Competitor analysis
Self-analysis
3. Identify strategic opportunities
4. Evaluate strategic alternatives

5. Establish specific objectives and allocate resources

6. Develop a retail mix to implement strategy

7. Evaluate performance and make adjustments

Source : Michael Levy, Barton A Weitz, Dhruv Grewal. (2014). Retailing Management. 9 (Exhibit 5-7)
 1. Define the Business Mission
The first step in the strategic retail planning process is to
define the business mission. The mission statement is a
broad description of a retailer’s objectives and the scope of
activities it plan to undertake.
In developing the mission statement, managers need to
answer five questions:
• What business are we in?
• What should our business be in the future?
• Who are our customers?
• What are our capabilities?
• What do we want to accomplish?
10
 2. Conduct The Situation Audit
(SWOT Analysis)
After developing a mission statement and setting
objectives, the next step in the strategic planning
process is to conduct the SWOT analysis.

• Internal environment
• External environment
• Market factors
• Competitive factors
• Environment dynamics
11
 3. Identify Strategic Opportunities
After completing the SWOT analysis, the next step
is to identify opportunities for increasing retail
sales.

4. Evaluate Strategic Opportunities

The evaluation determines the retailer’s potential
to establish a sustainable competitive advantage
and reap long term profits from the opportunities
being evaluated.
12
 5. Establish Specific Objectives And
Allocate Resources
These specific objectives have three components :
1. The performance sought, including numerical
index against which progress may be
measured.
2. Time frame within which the goal is to be
achived.
3. The level of investment needed to achive the
objectives.

13
6. Develop Retail Mix to Implement the
strategy
The sixth step in the planning process is to develop a retail
mix for each opportunity in which an investment will be
made and control and evaluate performance.

7. Evaluate Performance and make

Adjustment
The final step in the planning process is to evaluate the
results of the strategy and implementation program. If the
retailer is meeting or exceeding its objectives changes
aren’t needed. But if retailer fails to meet its objectives,
reanalysis is required. 14
 SUMMARY
1. Retail strategy is a statement that identifies :
target market, format and resources,
suistainable competitive advantage.

2. Three approaches for developing a

sustainbable competitive advantage are :
building strong relationship with consumers,
building strong relationship with suppliers,
achieving efficient internal operations
15
 SUMMARY
3. Four types of growth opportunities that
retailers may pursue are market penetration,
market expansion, retail format development
and diversification

3. Strategic planning process consist of a

sequence of steps : define business mission,
conduct SWOT analysis, identify strategic
opportunities, evaluate alternatives, establish
specific objectives, develop retail mix,
evaluate performance and make adjustments 16
 EXERCISE AND DISCUSSION

1.What is McDonalds’:
-Target market?
-Retail offering (format)?
-Bases for competitive
advantage?

What Threats Might McDonald’s Face in the Future?

5-17
 EXERCISE AND DISCUSSION

• Starbucks 2. What is the target market,

retail offering, and source of
• Ace Hardware competitive advantage for each
retailer?
• Zara

5-18
 EXERCISE AND DISCUSSION
3. Choose a retailer that you believe has not
successful in other countries. Explain why !

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