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60 Cards in this Set

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customer service
-iffy, humans are less consistent.
-very difficult
market penetration opporutnity
invovles directing effortrs toward existing customers by using the present retailling format
do it by:
-attracting customers in its current target market who dont alraedy shop there
-buy more merchandise
cross-selling
sales associates in one department attempt to sell compelemntary merchandise from other departments to their customers.
market expansion opporutnity
employs the exisiting retail format in new market segments
-entering new geographic market segment w/ esentially the same retail format
retail format development opporutnity
-invovles offeringa new retail format-a format with a different retail mix-to the same target market.
-when a retailer adds merchandise categories
diversification opportunity
when a retailer introduces a new retail format directed toward a market segment that's not currently served
related diversification opporutnity
present target market or retail format shares somethign in common with the new opportunityl.
-can use same vendors, same distribution/mgmt information system
unrelated diversification
lacks any commonality b/t the present business and the new business
-considered very risky and often dont' work
--retailers have the least competitive advantage when purusing difersification
vertical integration
diversification by retailers into wholesaing or manufacturing
-has good benefit for large and sophisticated retailers that can invest heavily for the long term
backward integration
integrates by purchasing or otherwise partnering w/ distribution or manufacutring concerns. b/c of the requisite skills are different from those usually associated w/ retailing
forward integrate
manufacturer's marketin gactivies are very different from those of a retailer like Nike, Prada, Ralph Lauren
category killers and hypermarket retailers may be particularly suited to
succeed internationally b/c of expertise they've already eveloped at home
-economies of scale and efficient distrubtion systems
-developed unique systems and standaradized formats that failitate control over multiple stores
-category killer's narrow assortment and focused strategy->improves mgmt. coordination
-
sucessfully exploited intl growth opportunities are:
1. globally sustainable competitive advantage
2. adaptability
3. global culture
4. deep pockets
global sustainable compettive advantage
entry into non domestic markets is most successful when the expansion opportunity is consistent with the retailer's core bases of copmetitive advnatgage
direct investment
retail firm investing in and owning a division or subsidiary that builds and operates stores in a foreign country;
-requires the highest level of investment and exposes the retailer to significant risks, but it has the highest potential returns
join venture
formed when the entering retailer pools in resources w/ a local retailer to form a new company in whcih ownership, control, and profits are shrared
-reduces risk
-bad if partners disagree
strategic alliance
collaborative relationship between independent firms
franchising
offers the lowest risk and requires the least investment
-entrant has limited control over the retail operations in the foreign country, potential profit is redeuced, and the risk of assisting in the creation of a local domestic competitior is increased
strategic retail plannign process
set of of steps a retailer goes through to develop a strategic retail plan
-describes how retailers select target market segments, determine the appropriate retail format, and build sustainable competitive advanatages
steps for strategic retail planning:
1. business mission
2. situation audit
3. identify strategic opportunities
4. evaluate strategic opportunities
5. establish specific objectives and allocate resources
6. develop a retail mix to implement strategy
7. evaluate performance and make adjustments
1. mission stmt
broad description fo a retailer's objectives and the scope of activities it plans to undertake ->should define the general nature of the target segments and retail formats that the firm will consider.
2. situation audit
analysis of the opp. and threats in the retail evniornemnt and the strengths and weaknesses of the retail business relative to its competitiors
-market factors (consumers and buying paterns
-competitive factors (barriers to entry, vendors, rivalry,)
-environemtnal factors:PEST
-SWOT
bargaining power of vendors
less attractive when a few vendors control the merchandise sold in it
-have power to sell products to retailers really high
competitive rivalry
frequency and intensity of reactions to actions under taken by competitiors
-large number of similar size competitiors
-slow growth
-high fixed costs
-lack of perceved differences b/t competing retailers
small retailers can compete well by
-offering unique merchandise tailored to local community
-giving customers a personal touch
-developing ties w/ local community
3. identify strategi opportunities
ideitnfy opp. for increasing retail sales.. part of the strategic retail business analysis
4. evaluate strategic opportunities
evaluate opportunties that have been identified in situation audit
-determines the retailer's potential to establish a sustainable competitive advantage and reap long-term profits from the opp. under evaluation
5. establish specifc objectives and allocate resources
-performance sought
-time frame within whcich the goal is to be achieved
-the level of investment needed to achieve the objective
step 6. develop a retail mix to impelemnt strategy
-develop retail mix for each opp. in which investment will be made and to control and evaluate performance
step 7 . evaluate performance and make adjustments
-eavluate restuls.
profit path
measure dby net profit margin-how much profit
)after tax) a firm makes divided by its net sales
turnover path
measured by asset turnover-used to measure the productivity of a firm's investment in assets; net profits/ total assets
return on assets=
net profit x asset turnover
net sales
total number of dollars received by a retailer after all refunds have been paid to customers for returned merchandise: gross asmts of sales-customer returns-customer allowances
customter returns
value of merchandise that customers return b/c it's damaged, doesnt fit-->customer allowance
gross margin
net sales-COGS; also called gross prift; important measure in retailing. ; how much profit it's making on merchanidse sales w/o considering the expenses associated w/ operating the store.
-express as apercentage of net sales ->WAl-Mart has lower gross margins than jewelry stores
expenses
costs incurredin the normal course of doign business to generate revenues-discount stores usually have low selling expenses
net profit
measure of the firm's overall perfoamcne; net profit=gross margin-expenses
net profit margin
net prift/ net sales
assets
liabilites+ owners' equit; economci resources owned or controle dby an enterprise as a result of past transactions or events
liabilities
enterprise's obligations (naccoutns papyable) to pay cash or other economic resources in return for past, current, or future benefits
owners' equity
owners' investment in the business
current assets
can be convereted to cash within on year.
inventory turnover
used to evaluate how effectivley managers utilize theirn investmen in inventory=net slaes/ avg. inventory
fixed assets
assets that rquire more than a year to convert to cash
fixed assets-
asset cost-deprciation
asset turnover
net sales/ total assets
accounts payable
amt. of money owed to vendors
notes payable
principal and interest the retailer oweds to financial instituation
accrued liabilities
taxes, salaries, rent, utilities,
long-term liabilities
debts that will be paid after on year
stockholders' equity
common stock, hav voting rights, right to purchase more to maintain same percentage
retained eranings
portion of woner's equity that has accumulated over time through profits but hasnt't been paid out in dividends to owners.
return on assets
net profit margin x asset turnover
inventory turnover
net sales/ avg. inventory
performance objectives should include
-performance sought, including numberical index against which progress may be measured
-time frame within which the goal is to be achieved
-the resources needed to achieve the objective
top-down plannign
goals are set at the top of the org. and filter down therough the operating levels
input measures
asses the amt. of resources/money used by retailer to ahiceve outputs
output measures
measures the results of a retailer's investment deisions (how many sotres to build)
productivity measure
ratio of an ouput to an input, determnes how weffectively a retailer uses a reousrce