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 The process of gathering and analyzing

information from a variety of internal and
external sources for the purpose of reducing
risk before special business plans are
executed.

 The strategic planning process:

 Performing a situation analysis
 Identifying differential advantage
 Developing a mission statement
 Preparing company goals and objectives
 Planning detailed strategies

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 SWOT Analysis

Strengths: Develop and continue the specific areas within

a company (internal) that are successful.

Weaknesses: Identify specific areas (i.e., vendors,

distribution channels) within the company (internal)
that has potential weakness.

Opportunities: Identify external market opportunities to

contribute the businesses success.

Threats: Identifying external threats in the market place

(i.e., competitors, transportation costs). 4

Differential Advantage: Unique characteristics of a business

or product that may give it a superior position in the market
place.

Positioning: Perception a
customer has of a company or
product in relation to others.

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What is Wal-Mart’s
differential
advantage?

Apple?

TJ Maxx?

IKEA?

Urban Outfitters?

Forever 21?
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Value is embodied by a series of

activities and processes that provides
a certain value for the consumer

Expected

Augmented

Potential

The minimum value elements a given customer

segment expects from a type of retailer

Augmented

Potential

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Expected

The extra elements that differentiate

one retailer from another

Potential

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Expected

Augmented

Elements not yet perfected

by a competing retailer

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 Mission statement: A brief paragraph that concisely describes a

business and its reason for existence.

 Vision Statement: Detailed forward-thinking descriptive piece written

by a company.

 Code of Conduct: A statement of

principles and standards by which
business decisions are made.

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University Vision Statement

"Central Michigan University, an inclusive community of scholars, is a national
leader in higher education inspiring excellence and innovation."
-Adopted by the Board of Trustees, December 6, 2012

Mission Statement
At Central Michigan University, we are a community committed to the pursuit of
knowledge, wisdom, discovery, and creativity. We provide student-centered
education and foster personal and intellectual growth to prepare students for
productive careers, meaningful lives, and responsible citizenship in a global
society.
-Adopted by the Board of Trustees, December 2, 2010

Core Values
To achieve our mission, we adhere to the core values of integrity, respect,
compassion, inclusiveness, social responsibility, excellence and innovation.
-Adopted by the Board of Trustees, December 2, 2010
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 Goals are general and stated with clear focus.

 Objectives are specific so that end results are

easily measured.

 Based on goals and objectives, companies must

construct strategies to achieve these objectives.
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An ongoing process to satisfy customers

and earn a profit!

Controllable Uncontrollable
Variables: Variables:
•Store location •Consumers
•Managing business Retail •Competition
•Merchandise Strategy •Technology
management •Economic
and pricing conditions
•Communicating •Seasonality
with customer •Legal restrictions

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 Consumer demand for a certain product during a

specific week
 Store traffic issues
 The timing of product flow, promotions and
markdowns

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 Challenging economic periods

 Taking aggressive markdowns
 MSRP
 Gross Margin = Net Sales - COGS
 Curtailing expansion plans

 Modifying pricing models

 Price lining: good-better-best strategies

 Liquidating the company

 Making human resource cutbacks

 Layoffs

 Developing budget-conscious formats

 Second hand stores
 Consignment stores 18

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 Technological advances:
 Internet development
 The cashless society
 Apple Pay

 Information technology (IT)

 CRM
 POI
 QR

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 Multichannel retailing:  Global retail expansion

 Online shopping  Reasons for global expansion
 Direct-access shopping  Overstored home markets

 Mobile commerce  Competitive changes

 Apps  Attractive new markets

 GPS  Developing countries

 BRIC
 Demanding investors
 Customer sophistication
 Import snobbery

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Source: Options Integrated Multi Channel Retailing

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 Supply chain dynamics

 Vertical integration

 Customer-centric perspective
 Experiential retailing
 Frequent shopper incentives
 Personal shoppers
 Customer-friendly environment

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 Emphasis on branding
 The store as brand
 Building brand equity
 Brand equity: Consumers’ degree of awareness about the brand and
its image

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 A brand has equity from the consumer’s point of

view if
 the consumer has awareness of the brand
 the brand has a positive image.

 A brand/manufacturer has equity from the

retailer’s point of view if
 it achieves greater market share
 the retailer is able to charge premium prices for the
brand,
 the brand generates consumer loyalty.

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First brand that

consumer thinks of
when asked about
product category

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 Co-branding: Two (or more) brands join for the purpose of reaching customers
more effectively and increasing sales for both parties.
 External partnerships
 Internal partnerships
 Noncompeting partnerships

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 Resurgence of entrepreneurship
 Made in the USA

 Concern for safety and privacy

 ORC

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 Continued industry consolidation

 Reduce their store #’s or sizes
 Expand their formats or reallocate space
 Contract/expand workforces
 Profit vs. sales volume
 Target customers
 Management
 Technology integration

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 Mergers: Two or more companies pooling resources in order

to be one larger company.

 Acquisitions: The purchasing of one company by another.

 Friendly
 Hostile Takeover

 Divestiture: A parent company selling one of its businesses to

another company.

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 Causes and effects of mergers and acquisitions

 Low stock market prices
 New investments
 Mature retailers
 Diversify

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 Advantages of M&A  Disadvantages of M&A

 Strengths  Loyal customers confused
 Retail knowledge  Policies & procedures
 Economies of Scale  Identity loss
 Increase market share  Layoffs & restructuring
 Real estate/locations  Non-retailers as partners
 Positioning
 Eliminate conflicts
 Long-term expansion

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 Dynamics of divestiture

 Sell unrelated business

 Raise capital
 Preclude bankruptcy
 Reorganization process

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 Acquisition and divestiture parameters

 Rise of private equity ownership:___________________

 Leveraged buyouts:_______________________________

 Bankruptcy: Legal declaration to inform the public of the

financial insolvency of a company
 Chapter 11: Allows a company a grace period to reorganize its
financial affairs.
 Chapter 7: Indicates the company will liquidate stock and close
its doors.
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 Impact of ownership change

 Profitt's purchase of Saks Fifth Avenue
 Poison pill:__________________________________________
 Hudson’s Bay is new parent co. of Saks 5th Ave.
 Ralph Lauren Polo’s acquisition of Club Monaco
 L Brands’ diversification, divestiture, and acquisition

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