02_WB_SIRRSTR001_V1.a.22.pdf

02_WB_SIRRSTR001_V1.a.22.pdf

SIRRSTR001

UNDERTAKE STRATEGIC PLANNING IN RETAIL

WORKBOOK

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CONTENTS

05 INTRODUCTION

Analyse the operating environment

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Review organisational vision, mission, values and urrent strategy as available

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Consult with key stakeholders on current and future direction of the organisation

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Research and identify trends in consumer be- haviour to inform strategy development

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Conduct competitor analysis to inform strategy development

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Conduct environmental analysis of the retail market place

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Use information gained to determine strengths, weaknesses, opportunities and threats of the organisation

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Develop the strategic plan

Establish objectives that meet the desired future strategic position of the organisation

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Develop action plans outlining steps required to achieve strategic objectives

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Develop quantitative and qualitative evaluation criteria to be used in reviewing the strategic plan

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Ensure strategic plan aligns with organisational vision, mission, and values

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Circulate strategic plan to relevant stakeholders for comment, support and endorsement

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CONTENTS

35 Implement, monitor and evaluate the stra- tegic plan

Communicate strategic plan to all relevant stake- holders

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Implement plan, ensuring shared understanding of and commitment to strategic objectives addressing any barriers as they arise

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Monitor and refine the strategic plan as required

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Evaluate and review performance against strategic objectives and evaluation criteria

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INTRODUCTION

Elements 1. Analyse the operating environment

2. Develop the strategic plan

3. Implement, monitor and evaluate the strategic plan

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ELEMENT 01 Analyse the operating environment

Performance Criteria

1. Review organisational vision, mission, values and current strategy as avail- able. 2. Consult with key stakeholders on current and future direction of the organi- sation. 3. Research and identify trends in consumer behaviour to inform strategy development. 4. Conduct competitor analysis to inform strategy development. 5.Conduct environmental analysis of the retail market place. 6. Use information gained to determine strengths, weaknesses, opportunities and threats of the organisation.

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Criteria 1.1

Review organisational vision, mission, values and current strategy as available

By the end of this chapter, the learner must be able to: » Identify and examine their organisation’s vision and mission » Establish what their organisation’s core values are » Review their organisation’s current operating strategies

Vision and mission statements Vision and mission statements will be vitally important to your work as a strategic planner in retail environments. Both will help to guide strategic decision-making and work process- es and can help to rally employee efforts to bring about positive change. In many ways, they form the backbone of your organisation’s work. Both vision and mission statements can inspire individuals and groups to unify and work towards a singular goal. Although they differ slightly, they both help to prioritise issues and focus efforts. Vision and mission statements will already play a major role in defining what your organ - isation’s retail strategy is, so make sure you have a good grasp of both, establishing how they came about and why they are important. • Vision statements The vision is an idealistic version of what your organisation should look like after a stra- tegic plan has been carried out. The vision may take a broad focus, referring to aspects such as sales or reputation, or it may focus on more specific areas, such as customer satisfaction, pricing, or environmental issues. Whatever the focus of the vision, it should be expressed in a single statement. Most vision statements will be very short, like a slogan. For example, a vision relating to a retail set- ting may be: ‘Ensuring customer satisfaction, low prices, and continuous improvement.’ A strong vision will: » Help to establish what the organisation is about by giving it a strategic direction » Let customers and clients know what the company is about » Unify workers behind a clear goal » Help to motivate employees » Cut wasted effort, time, and resources on things that are not priorities

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• Mission statements The mission – which should also be written in a statement before being publicised – is more specific than the vision. It should directly refer to the work that needs to be done to reach the vision and include a list of desired outcomes. This will help raise awareness of the identity of the organisation, and encourage employ- ees to get involved and unify to achieve desired outcomes.

The mission statement should include:

» What the organisation’s purpose is and why » Some information on your organisation’s target market and what you aim to do for the people in it » A basic outline of the current work plan and any strategic plans in place » What problems and issues are going to be solved by doing the work, or what needs are going to fulfilled » Which employees and departments are going to be involved in carrying out the work Organisational values Your current organisational values can reveal a lot about the strategic position of your company. Values outline what is important to your organisation and why. They may include ethical and legal standards, as well as a commitment to treating customers in a particular way, and offering them something specific.

For example, your organisation’s values may be: » To treat all customers fairly » To treat all customers with respect » To provide equal opportunity to all workers » To advertise truthfully » To make a continual effort to drive down prices

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Current strategy

Taken together, organisational values, mission statements, and vision statements will pro- vide you with a detailed overview of the current operating environment. To begin to look deeper at how things run in your organisation, you will need to look at current strategic plans. You will need to identify your organisation’s current goals and assess the strategic action plan in place to meet them. The rest of this unit will look at how to assess current strategy and build new, more effective strategies. For now, picking out a few key strategic points will help you build an overview of your organisation’s operating environment, and help you to understand its strengths and weaknesses.

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Criteria 1.2 Consult with key stakeholders on current and future direction of the organisation

By the end of this chapter, the learner must be able to: » Identify who key stakeholders are in their organisation » Communicate clearly and confidently with key stakeholders » Discuss the strategic direction of the organisation in detail

Consulting with key stakeholders There will be a number of personnel – both internal and external – who should contribute to the strategic direction of the organisation, and you need to ensure you gain their input at an early stage. Stakeholders will have their own expertise, experience, and opinions, and therefore each will be able to add a new perspective on strategy issues. The more perspectives you seek, the better understanding you will have on strategy issues across your organisation.

Key stakeholders may include: » Managers » Supervisors » Owners » Directors » Head of departments » Clients » Customers.

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Discussing strategic direction You need to know how best to extract information and opinions from key stakeholders, and how to gather support for an idea or plan. It can be useful to organise a meeting in which all key stakeholders attend and contribute their knowledge, experience, and expertise. You may also need to lead these meetings, setting an agenda and making sure attendees have the opportunity to speak and be heard.

You will need to consider:

» Which personnel to involve in strategy talks » Which personnel have experience, knowledge, and a proven track record in strategic areas » How to summarise the current strategic position of the organisation » How to pinpoint what the strategic position going forward needs to be » How to communicate with different types of employees, customers, and clients » How to control difficult personalities » How meetings need to run » How to ask questions to get the best responses

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Criteria 1.3 Research and identify trends in consumer behaviour to inform strategy development

By the end of this chapter, the learner must be able to: » Research trends in consumer behaviour » Highlight trends which are most relevant to their organisation » Establish how research could be used to shape strategy development

Researching consumer behaviour trends

It will be necessary to carry out extensive research on consumer behaviour trends, using a variety of methods and research channels. Using multiple research methods allows you to form an overall picture of the retail envi- ronment, informing you on how shoppers like to shop, what they like to shop for, and what sort of customer care they expect while in the store.

You may carry out research by:

» Looking at consumer research online » Asking the employees who serve customers regularly » Conducting in-store research • Open/closed question questionnaires • Multiple choice questionnaires • Verbal questioning » Listening to social media chatter » Checking news sources and analytical sources • Industry magazines

• Industry blogs and news sources » Checking sales figures for products » Listening/watching TV and radio

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• Types of consumer behaviour trends Consumer behaviour research should look at the buying habits and shopping preferences of your organisation’s target audience. For example, if your target market is middle to old age men with large disposable in- comes, you will need to know what this group wants to buy, how they want to buy it, and where they want to buy it from.

Consumer behaviour trends may relate to: » Online purchasing

• Sales are increasingly moving online ○ Is this true in your business? » Speed of buying ▪ Is your target market more likely to impulse buy, or do they like to spend time finding out about different products before they commit? » Latest fashion buying • Do your target customers prefer top-of-the-range products and the latest trends, or are they more interested in practical, durable gear which is proven to do a job well » Budget buying • Do your customers search for budgets or do they have more to spend on high-quality items » Use of payment methods • Some customers will prefer to pay by cash, while others will prefer to pay by debit or credit card • Consider new methods of payment, including mobile pay systems and card touch systems • Does your company offer finance or staggered payment methods? » Preferences for fair trade products » Preferences for green energy products » Preferences for responsibly manufactured products

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Using consumer trend information in strategy development You will need to know how the information you gather on customer trends affects your business, and how your business can adapt to take advantage of these trends. For example, if you find out that a large percentage of your target market begin to use Android Pay and other mobile services, then you will need to adapt your strategy to make it easier for your customers to use this method in your stores. Another example may be, if you find out that the majority of your customers are buying online, then you may be able to downsize your physical store to save on costs.

You will need to consider:

» How customers prefer to shop in your organisation » The layout of products in your store

• Where do you put the most in-demand products? » How customers prefer to pay for items in your store » Whether customers react well to upselling and recommendations in your store » Whether customers react well to advertising in your store » How long customers prefer to spend in your store

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Criteria 1.4 Conduct competitor analysis to inform strategy development

By the end of this chapter, the learner must be able to: » Access information on competitor strategy and performance

» » Assess competitor strategies to gather ideas about their own organisation’s strat- egy Carrying out a competitor analysis It is important to carry out thorough competitor analysies of all direct competitors, in order to gain inspiration and ideas, spot opportunities, and identify threats. Before you begin, you will need to identify who your primary competitors are, where they are based, and how they carry out their business. For example, you may identify a local store which sells the same type of products as your organisation; you may also identify an online retailer who do not have a physical store, but that are still in direct competition with you. Once you have identified your organisation’s competitors, you can begin research. You may collect information from a variety of sources.

You can gather competitor information from: » Secret/mystery shoppers » Competitors’ online platforms • Their websites • Social media pages

» Credit checking and research companies » Checking share prices, if listed » Visiting stores to examine layout, staff numbers, customer service, and pricing • Important information You will need to find out specific information about your competitors to build a full picture of their operations. Some organisations will be easier to research than others, so you will need to find out how much information is readily available, and how much you must delve deeper for. Make sure that you operate within Australian law when carrying out research into your competitors and do not break privacy laws.

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You will need to find out about their: » Online strategy

• How do they use social media to market products and services? • What do competitors communicate to customers with their website? • Online marketing strategy • Online sales strategy – which platforms?

» Types of stores and the layout of products in those stores • How do competitors lay out products in their stores? » Customer service strategies • What sort of pre-sale and post-sale care do competitors’ customers receive? » Discount and loyalty strategies • Do competitors offer regular discounts or loyalty cards? » Pricing strategies • How much are individual items on sale for? • Do competitors undercut you? » Spending strategies • How much money is spent on products? » Staffing strategies • How many staff are employed on any one shift, and in what areas? Using competitor analysis to shape organisational strategy By carrying out competitor analysis, you will be able to see how your organisation’s strate- gy differs from other companies who you are in direct competition with. This information can allow you spot opportunities which your organisation is not yet taking advantage of. It can also help you spot things that you do better and worse than competi- tors, and this can help you shape your strategic plan to improve your organisation. For example, if you notice that a direct competitor is reaping rewards from offering dis- counts and special offers on their social media pages, then you may look at introducing this as part of a new strategic direction.

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Criteria 1.5 Conduct environmental analysis of the retail market place

By the end of this chapter, the learner must be able to: » Identify environmental factors on the retail market place » Carry out a thorough environmental analysis on your organisation

Environmental analysis

Your organisation has a responsibility to minimise it’s impact on the environment, and you will need to take this seriously to adhere to organisational, industry, and legal require- ments. There is a misconception that strategy should be solely about improving an organisation’s potential for building profit. While this is important, you should also look to take a wider view of how your store interacts with the environment around it, recognising its context and potential impact. You must continually look at strategy to establish whether operations are as environmen- tally friendly as possible, or whether new policies or efficiencies could be introduced.

You should consider:

» How your organisation disposes of materials » Your organisation’s recycling policy » How energy and resources are used • Think about: ○ Electricity ○ Water ○ Gas » How hazardous materials are handled and disposed of

» How your organisation’s activities impact on plant and animal life » Whether physical features surrounding your store need to be protected • For example, are there any rivers or water sources close to your store?

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Other strategic factors

There will be other strategic factors to consider in the wider business and social environ- ment, and these must also be taken seriously. • Technology It is important to appreciate the importance of online strategy in the marketing and selling of products and services. Online sales are now on the rise in many organisations, as cus- tomers begin to trust online retailers and the process of delivering items becomes easier.

Online presence can be improved by:

» Creating and regularly updating social media pages » Creating and regularly updating the organisation’s website » Setting up online shops • For example, on Amazon and Ebay » Online advertising • Videos • Ad services, such as Google

• Content advertising • Pop-up advertising

• Economy The economic climate will greatly affect retail strategy. It will affect both the price that you buy products and materials for, and the number of products and services that you are able to sell to customers. When there are tough economic times, customers will generally be less inclined to spend money, as they will have less disposable income. You will need to carefully strategise to keep costs down and boost sales as much as possible.

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Criteria 1.6 Use information gained to determine strengths, weaknesses, opportunities and threats of the organisation

By the end of this chapter, the learner must be able to: » Carry out a SWOT analysis » Understand the strengths and weaknesses of different parts of their organisation, and their organisation as a whole » Establish what opportunities and threats exist and prioritise these by importance. SWOT analysis A SWOT analysis is a vital part of any strategic planning and should be carried out at reg- ular intervals to keep an updated overview of your organisation. The SWOT analysis looks at the following areas, each of which is vital to the success of your business.

A SWOT analysis looks at: » Strengths

• What is your organisation doing well? » Weaknesses • Which areas is your organisation under performing in? » Opportunities • Are there any opportunities available to sell more products/services, cut costs, or improve the reputation of the business? » Threats • Are there any imminent or long-term threats which have the potential to derail your business?

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Strengths and weaknesses

It is important to be as honest as possible when assessing for strengths and weaknesses. Knowing your strengths can help you maximise them, to benefit your organisation finan - cially and boost its reputation. Knowing your organisation’s weaknesses can help you make improvements where they are needed most. It can be beneficial to separate your organisation and all its parts when looking for strengths and weaknesses; meticulously combing through your organisation can reveal strengths and weaknesses where you never thought they existed. You may choose to assess your organisation one department at a time, to make sure you understand where strengths and weaknesses lie in each area. For example, you might find out that your organisation’s online marketing operations are succeeding, but issues with the online checkout system are stopping customers from pur- chasing products. You will then be able to take appropriate action to fix the online check - out system, based on this information. To identify strengths and weaknesses, you should: » Consult personnel from different areas of the organisation • Lower level employees can also provide important feedback, so take note of their experiences and opinions when identifying strengths and weaknesses » Consult heads of departments and supervisory staff • These personnel will be best positioned to tell you about operational strengths and weaknesses in each area of the business » Ask for feedback from customers • Customers always know best ○ They are often best positioned to report on what works well and what doesn’t » Test operational areas yourself • For example, you may take on the role of a customer and try to order products online » Study >Page 1 Page 2 Page 3 Page 4 Page 5 Page 6 Page 7 Page 8 Page 9 Page 10 Page 11 Page 12 Page 13 Page 14 Page 15 Page 16 Page 17 Page 18 Page 19 Page 20 Page 21 Page 22 Page 23 Page 24 Page 25 Page 26 Page 27 Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 Page 37 Page 38 Page 39 Page 40 Page 41 Page 42 Page 43

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