Lect 3 - Retail Strategy Flashcards
(37 cards)
What is a strategy according to Johnson 2005?
The direction and scope of an organisation over the long term; which achieves advantage in an changing environment through its configuration of resources and competencies with the aim of fulfilling stake holder expectations - Johnson et al 2005
According to Johnson and Scholes 1999. what are the four main characteristics of a strategy?
1) Long term direction
2) Achieving some advantage over competitors
3) Scope of an organisations activities - the boundaries of a business in terms of products, design functions etc
4) Search for Strategic fit - matching the activities of an organisation to its environment
What is a retail strategy according to Berman and Evans 2013?
-overall plan or framework of action that guides a retailer which outlines the goals and objectives the retailer wants to achieve and determines how they will achieve them
How long is a retail strategy?
- Ideally one year long and it outlines retailers mission, goals and consumer market, without this strategy they may struggle to cope in the market place
What are strategic decisions?
- Normally in regards to gaining an advantage for an organisation over the long term
- By clarifying your company’s big picture aims, you’ll have the opportunity to align your shorter term plans with this deeper, broader mission – giving your operations clarity and consistency.
What is a strategic fit?
Matching the activities of a business to the environment in which it operates
What are the three strategic management stages put forward by Johnson et al in 2005?
1) The strategic position
2) Strategy choices
3) Strategy in action
What is the strategic position in Johnson stages?
This is concerned with understanding the strategic position of the organisation in terms of
- Where are we now?
- Its external environment, including the macro environment which includes PESTLE
- Internal resources and capabilities e.g what the firm is capable of - SWOT analysis
- The expectations and influence of stakeholders
What is the strategic choices section of Johnson et als stages?
Involves understanding the the bases guiding future strategy and whats best for corporate, business and operational stages
- Generating strategic options based on whats available in the external environment
What is meant by strategy in action section of Johnson et als stages?
This is concerned with translating strategy into organisational action through organisational structure, design and resource planning
- All about managing and enabling the change
What is a strategic mission? (Mission Statement)
- A broady defined, enduring statement of purpose that distinguishes a business from others of its type (Ackoff 1987)
- Answers two questions, what business are we in? and what business do we want to be in?
- Can sometimes be within corporate objectives such as Sainsbury’s
What is Asda mission statement?
To be Britain’s best value retailer exceeding customer needs, every day.
What is a situational audit?
This is a type of SWOT analysis where specific elements of the business are analysed
What is Micheal Porters 5 forces?
This is a business analysis model that helps explain why different industries are able to sustain different levels of profitability
What are the 5 forces of porters model?
1) Competition Rivalry
2) Supplier power
3) Buyer power
4) Threat of substitution
5) Threat of new entry
What is meant by Supplier power?
- supplier power is higher when many suppliers are present with established brands
- It determines how easy it is for suppliers to raise prices
- The more suppliers there are the harder it is for them to charge higher prices
What is meant by buyer power?
- When dealing with a few savvy customers they have more power over your prices, yet when dealing with more , power increases if u have more customers
What is competition rivalry?
- Rivalry increases when barriers to entry are low supplier or buyer power is high, and there is a high threat of substitutes.
- Where rivalry is intense, companies can attract customers with aggressive price cuts and high-impact marketing campaigns.
- In markets with lots of rivals, your suppliers and buyers can go elsewhere if they feel they’re not getting a good deal from you.
- On the other hand, where competitive rivalry is minimal, and no one else is doing what you do, then you’ll likely have tremendous strength and healthy profits.
What is bargaining power of retailers?
- This is high when there is a high concentration of buyers and large amount of purchases
What is threat of substitution?
- This refers to the likelihood of your customers finding a different way of doing what you do
- A substitution that is easy and cheap to make can weaken your position and threaten your profitability.
What is threat of new entrants?
- position in the market can be impacted by how easy it is to get into your market
- If it takes little money and effort to enter your market and compete effectively, or if you have little protection for your key technologies, then rivals can quickly enter your market and weaken your position. If you have strong and durable barriers to entry, then you can preserve a favorable position and take fair advantage of it.
- Need to take barriers to entry, government regulations etc into consideration
What is a competitive advantage?
An advantage over competitors gained by offering consumers greater value, either by means of lower prices or by providing greater benefits and service that justifies higher price
What does Porter 1985 suggest about competitive advantage?
- He observed that sustainable competitive advantage is the key to long term, above average performance
What did Porter say were the two types of competitive advantage ?
1) Low Cost
2) Differentiation
