4/18/12

Comprehensive case mining for growth

Click to edit Master subtitle style Amit kumar

Keshav kumar Pankaj kumar Shilpa dhavan

4/18/12

1. What can any retailer learn from this case?

4/18/12

The retail growth opportunity matrix can be applied to any retailer regardless of size, product mix, ownership format, etc. Growth strategy objectives can focus a retailers existing business, can expand the retailers scope of reach for its current operation(s), or can transcend traditional competitive boundaries. The growth levers represent a market opportunity in terms of geography/location, product/service offer, target customer, and format/channel. Used together, retailers can identify12

2. How can the principles in this case enable a retailer to better apply to the retailing concept? Be specific in your answer.
The

4/18/12

principles of this case apply mostly to a retailers goal orientation of growth and alternatives to attain growth. Growth orientation is one of four parts of the retailing concept: customer orientation, coordinated effort, value-driven, and goal orientation.

3. Where does your local supermarket fit in the retail growth matrix highlighted in Figure 1? What are the implications of this?
Most

4/18/12

local supermarkets fit into the upper lefthand corner of the retail growth opportunity matrix. The local supermarket seeks to leverage relationships with existing customers by increasing market penetration in existing geographic markets. The local supermarket should consider expanding both its growth levers (such as through changing the retail offer via home delivery, Web-based orders, store modernization) and growth strategy objectives (expanding into new geographic markets with similar as well as new market

4. Why is product/service intensification a good approach for a retailer interested in relationship retailing?
The

4/18/12

product/service intensification strategy seeks to optimize the existing offer to better serve existing customers. Relationship retailing concentrates on the customers total experience, monitors customer satisfaction, and stays in touch with existing customers via E-mail, phone calls, newsletters, etc. Relationship retailing is a form of product/service intensification.

5. Visit the Tesco Web site (www.tesco.com) and describe why its loyalty program is so widely praised.
Here

4/18/12

are some of the key components of Tescos loyalty card promotion: a. Members receive 1 point for each 1 purchase b. A number of extra point promotions are offered c. Customers receive a club voucher after a customer receives 15 points d. Points can be redeemed in store or online e. Club card members are offered special deals f. Tesco has a number of club card partners g. Club points can be converted to air miles h. Consumers have two years to redeem

6. Discuss why this suggestion is so hard to implement: To maintain sales growth in a retail environment characterized by accelerating format life cycles, firms must strive for a balance between updating existing formats and creating dynamic new ones.
A

4/18/12

retailers financial and human resources have to be balanced between renovating existing formats and creating dynamic new ones. A retailer can easily make the mistake of devoting all of its energies to new formats while forsaking older ones. Likewise, a retailer can err if it spends all of its resources on older resources while it ignores new formats.

7. For each of three different retail growth opportunity matrix strategies, set one objective that a retailer could monitor to determine whether it has been successful with that strategy.
Geographic

4/18/12

Intensification: Increased share of existing customers sales Geographic Extension: Percent of sales from new geographic markets Geographic Diversification: Percent of sales in new location formats such as airports, mixeduse developments

4/18/12

Product/Service

Intensification: Percent of sales in trading up merchandise Product/Service Extension: Sales from services that enhance existing products such as installation Product/Service Diversification: Percent of sales from new markets and/or service outside current core business

4/18/12

Customer

Intensification: Increase in customer loyalty, increase in customer satisfaction scores Customer Extension: Increased sales to existing customers Customer Diversification: Increase in sales to new target market customer groups

4/18/12

Format/Channel

Intensification: Sales revenue in updated retail formats Format/Channel Extension: Sales from multiformats Diversification: Increase in customer touchpoints.