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1. Imagine yourself as the CEO of a large firm in an industry in which you are
interested. Please (1) identify major trends in the general environment, and
(2) analyze their impact on the firm. (Use Internet resources.)
Industry : Retailing
Firm : Future Group of Kishore Biyani
In essence, retail change has been driven in the past by the interaction of
consumer, retailer and government: in the 1990s the role of technology is
increasingly important as an agent of change.
"Today's retail enterprises are facing new challenges that are unlike those of any
other era," said Ray Wang, partner at Altimeter Group. "Businesses and
individuals are driving technology adoption, not the organization's CIO." But
while consumer technology change is accelerating, retail enterprise technology is
stuck in the mud: "Antiquated technology impedes effective organization and
process change," noted Wang. So retailers have to learn what they need to know
about using today's technology to their advantage. They need to experiment and
innovate, "even if it hurts," according to Wang. "Retail companies need to fail
faster, and then succeed from there."
Wang identified five major trends that are reshaping the retail technology
landscape:
1)Mobility
2)SocialNetworking
3) Cloud computing: SaaS offers a number of agility benefits, such as the ability
to test applications without worrying about high investment costs and the ability to
flex capacity up and down to deal with busy seasons.
4) Analytics and game theory: The popular Facebook game Farmville is really
about "a set of incentives to take care of your 'farm,'" said Wang, noting that these
types of games can serve as testing labs for what motivates people. "Gaming
theory can be applied to how retailers incent people to buy things and what offers
to present them with," he said.
5) Video and unified communications: The combination of a deluge of data and
more visual fluency (see the phenomenal growth of YouTube) means video and
other visual representations such as pictograms, heat maps and bubble maps will
become the fastest-growing way of communicating. "There's an acceleration of
unified communications convergence that can be applied to learning, selling,
employee training, etc." said Wang.
While the Pacific Rim is characterized by such contrasts, there are also
some important trends which apply more generally to the region. The first of these
trends is a gradual improvement in the standard of living, with consumers having
more purchasing power than before. As incomes rise, so do expectations, leading
to increasing demand for a wide range of consumer items. The second trend relates
to a change in family structure, with more women working, marrying later and
having fewer children. Extended families, which previously may have shared a
home, are increasingly splitting into more than one unit. The third trend is a move
towards urbanization, accompanied by a change in the types of jobs which people
do. Put together, these changes are resulting in massive infrastructure
development. With this development come new jobs, better incomes and greater
demands for housing, cars, consumer products, food and clothing. As families gear
up for their new urban lifestyles, even the types of products that they need and
want are changing.
Political changes are also altering the characteristics of the marketplace. For
example, the return of Hong Kong to China in 1997 and China's transition to a
socialist market economy are likely to have far-reaching effects for retailers of all
kinds. In order to take advantage of the region's emerging opportunities, local
retailers and manufacturers must keep a close view on the rapidly changing
economic, political and social patterns in the region.
This review is about the the impact of these aspects of the wider marketing
environment on retailing in the Asia Pacific Rim and uses a series of short case
studies to illustrate the impact of the key economic, demographic, political and
sociocultural factors. Material for the case studies is sourced from a range of
academic, business and statistical publications. (For the purposes of this paper, the
Asia Pacific Rim region includes China, the newly industrialized economies
(NIEs) of Singapore, Hong Kong, South Korea, Taiwan, Japan and the developing
countries Indonesia, Malaysia, the Philippines and Thailand.)
Economic factors
1. Select an industry of your choice. Identify the changes that are occurring in
it and its wider environment (using tools like the PESTLE categories to
direct your search). You may try the following sites.
Industry : Retailing
A retail marketing environment consists of the external actors and forces that
affect the retailers ability to develop and maintain successful transactions and
relationships with its target customers. We can distinguish between the retailers’
micro environment and macro environment. The macro environment consists of
legal, social, economic and technological forces.
Demographic Environment
Political/Legal Enviornment
Social/Cultural Enviornment
In recent years, the concept of social responsibility has entered into the
marketing literature as an alternative to the marketing concept. The implication of
socially responsible marketing is that retail firms should take the lead in
eliminating socially harmful products such as cigarettes and other harmful drugs
etc. There are innumerable pressure groups such as consumer activists, social
workers, mass media, professional groups and others who impose restrictions on
marketing process and its impact may be felt by retailers in doing their business.
The society that people grow up in shapes their basic beliefs, values and norms.
People live in different parts of the country may have different cultural values –
which has to be analysed by retail business people/firm. This will help them to
reorient their strategy to fulfill the demands of their consumers. Retail marketers
have a keen interest in anticipating cultural shifts in order to spot new marketing
opportunities and threats. Several firms such as ORG, MARG etc. offer social /
cultural forecasts in this connection. For example, marketers of foods, exercise
equipment and so on will want to cater to this trend with appropriate products and
communication appeals.
Economic Enviornment
Technological Enviornment
“Giving Back”
Philanthropic efforts through supporting local charities and causes, donating a
share of its corporate profits to charitable giving, and encouraging and
supporting employees to volunteer for charitable causes, has a profound impact in
shaping the industry’s reputation. APCO’s reputation research for dozens of
Fortune 500 companies in other industries rarely finds philanthropy to be as
important as it is for this sector. Despite increasing expectations society has for
what companies are expected to do to give back, the retail industry is meeting the
very high expectations of stakeholders and represents a core reputation strength.
Expectations to give back are especially important among retail employees. For
many retail companies, employees play a very important role in giving back to
their communities through employeevolunteerism programs. The data reinforces
that employees are also members of the communities and are often recipients of
the philanthropic efforts by retailers. Philanthropy can generate significant pride in
their employers and, as a result, plays a very important role in defining reputation
that in turn helps to enhance employee engagement and recruit new employees.
Responsibility to Employees
Employment issues are undoubtedly one of the most challenging issues for the
industry. Across all audiences, fair wages are a fundamental expectation of the
industry, yet one that the industry is not meeting. However, the industry is seen
more favorably in the area of providing opportunities for job advancement.
Highlighting an industry’s “success stories” and emphasizing the chances an
employee has to move up through the ranks could help repair perceived
weaknesses in wages offered. Interestingly, Labor Relations (how the industry is
viewed in dealing fairly with employees who wish tounionize) has very little
impact on the industry’s reputation for all audiences except policy-makers. The
study suggests that labor relations issues have much less impact than what we
might expect.
Environment
Stakeholder expectations for addressing environmental issues continue to grow for
all industries.The study clearly shows that environmental expectations are
particularly important in defining the reputation of the retail sector. While
individual audiences differ in their environmental priorities, overall the most
impactful way to demonstrate environmental responsibility is through efforts to
promote energy efficiency. The data suggests an opportunity to build greater
awareness of the industry’s leadership in this area to enhance reputation. Almost
as important as Energy Efficiency in demonstrating environmental leadership,
Green Products emerge as one of the top opportunities for building reputation.
Despite recent efforts by some retailers to promote green products, the study
shows that there is room for improvement in communicating the industry’s
leadership. Demonstrating leadership on green products is especially important for
policymakers and can help to build the reputation capital needed to create a more
favorable policy environment. Employees also place a high premium on green
products when assessing the reputation of the industry. Although slightly less
important in defining reputation than the other environmental drivers, the industry
is generally viewed as meeting expectations for responsible waste and recycling
practices. The industry receives particularly high marks for offering recyclable
bags. Addressing waste and recycling issues is the most important environmental
expectation for community activists and a key strength that should be leveraged to
mobilize more advocates on the industry’s behalf. Land Use is the single most
important driver of reputation among community activists and addressing this
expectation is critical to the industry’s ability to mobilize advocates on its behalf
and reduce the number of vocal critics speaking out against new stores and the
industry as a whole.