RETAIL MANAGEMENT PRESENTATION ON

RETAIL STRATEGY

Submitted to
Dr. Vinod.N.Sambrani

By
Basirahmmed.S.Halkarni 17MBA010
KIMS, KUD, Dharwad
Outline
 Motivation and Agenda
 History
 Introduction
 Growth strategy
 Market penetration and Development or expansion
 Retail format development
 Diversification
 Conclusion
 References
Motivation and Agenda

 The retail management is booming area with lot of

career opportunities, its rapid growth over the years in
India. Examples like Walmart,Lowes, Decathlon etc.
 How retail management differs from the e –retail
management.
 History
 Retail comes from the Old French word tailler, which
means "to cut off, clip, pare, divide" in terms of tailoring
(1365). It was first recorded as a noun with the meaning of
a "sale in small quantities" in 1433 (from the Middle
French retail, "piece cut off, shred, scrap, paring").
 Retailing includes a set of activities that adds value to the
product sold to consumers for the personal or family
consumption.
 Retail markets and shops have a very ancient history,
dating back to antiquity. Some of the earliest retailers were
travelling peddlers. Over the centuries, retail shops were
transformed from little more than "rude booths" to the
sophisticated shopping malls of the modern era.
Introduction
 India is one of the fastest growing retail markets in
the world, with 1.2 billion people.
 Retailing in India is one of the pillars of its economy
and accounts for about 10 percent of its GDP.
 As of 2003, India's retailing industry was essentially
owner manned small shops. In 2010, larger
format convenience stores and supermarkets
accounted for about 4 percent of the industry, and
these were present only in large urban centres. India's
retail and logistics industry employs about 40 million
Indians (3.3% of Indian population).
Growth strategy

 Definition – Growth Strategy is to increase the size

and scope of the business to a certain level that is
more desirable.
 Growth strategy includes
a) Market penetration
b) Market development
c) Retail format development
d) Diversification
Ansoffs retail matrix

 An Ansoff Matrix (sometimes referred to as Ansoff

Growth Matrix or Ansoff's Matrix) has its roots in a
paper written in 1957 by Igor Ansoff.
 n the paper he proposed that product marketing
strategy was a joint work of four growth areas:
market penetration, market development, product
development, and diversification.
 When displayed visually, these four areas create the
Ansoff Growth Matrix.
 As part of a larger strategic planning initiative, an
Ansoff matrix is a communication tool which helps
you see the possible growth strategies for your
organization. The hard work is in selecting one of the
four Ansoff growth strategies.
 Market Penetration. The first quadrant in the Ansoff
matrix is market penetration. It is often adopted as a
strategy when the organization has an existing
product with a known market and needs a growth
strategy within that market.
Format Development.
 Market development is the second market growth
strategy in the Ansoff matrix. This strategy is used
when the firm targets a new market with existing
products.
 There are several examples. These include leading
footwear firms like Adidas, Nike and Reebok, which
have entered international markets for expansion.
Product Development
 Product development in the Ansoff matrix refers to
firms which have a good market share in an existing
market and therefore might need to introduce new
products for expansion.
 Product development is needed when the company
has a good customer base and knows that the market
for its existing product has reached saturation.
 In this case, the market penetration strategy is no
longer practical.
 A new product development strategy that caters to
the existing market is a better approach.
Diversification
 The diversification strategy in the Ansoff matrix
applies when the product is completely new and is
being introduced into a new market.
 An example of diversification is Samsung. It began
as a trading company, later expanding into insurance,
securities, and retail. Today, it is mostly known for its
electronics division.
 Today, it is mostly known for its electronics division.
 Wal-Mart

 Walmart Inc. uses its intensive strategies (Ansoff

Matrix) to grow the business and minimize the
effects of the retail industry’s competitive forces.
a) Market Penetration (Primary Strategy).
 Walmart’s main intensive growth strategy is market
penetration.
 In Igor Ansoff’s model, this strategy entails selling
more goods or services to the company’s current
markets.
 Current markets are those where the business has
existing operations
 In implementing this intensive strategy, Wal-Mart
Inc. sells more goods and services to its current
consumers by giving discounts and related offers.
 For example, as a cost leader, the company offers
discounted wholesale packages of various goods. In
addition, Wal-Mart enhances its online presence to
improve customers’ access to the products it sells.
 This access improvement contributes to the growth
of the company’s sales revenues
 A strategic objective related to this intensive strategy
is to increase the company’s market share, especially
in the biggest retail markets, such as the United
States.
 Wal-Mart applies market penetration by using the
selling point of low prices, which is achieved through
the cost leadership generic strategy.

b) Market development
 This intensive strategy is of secondary significance in
supporting Wal-Mart Inc.’s business growth.
 Market development involves offering the company’s
existing goods and services to new markets.
 For example, in using this intensive growth strategy,

Wal-Mart opens new stores in countries where it does not

yet have operations.
 A related strategic objective is to continue to establish
the company’s presence in new markets. This objective
includes online presence for retail transactions.
 The cost leadership generic competitive strategy
supports the market development intensive growth
strategy through low prices that attract consumers to
Wal-Mart stores in these new markets.
c) Product Development
 Wal-Mart Inc. uses product development as a minor
intensive strategy for growing the retail business.
 Based on the Ansoff Matrix, product development
involves developing and offering new products to the
markets where the company currently has operations.
 In this case, Wal-Mart has minimal investment in
new product development.
 The company focuses its investments on sales and
marketing, which are at the core of the retail
business.
 Nonetheless, using this intensive growth strategy
leads to the strategic objective of investing more in
research and development (R&D) to introduce new
services or improve Wal-Mart's existing products.
 The cost leadership generic strategy requires that
product development must focus on new products
that do not impose costly processes.
d) Diversification.
 This intensive growth strategy involves providing
entirely new products in new markets, which are
usually industries or sectors where the company does
not yet operate.
 For example, Wal-Mart Inc. entered the video
streaming market in 2010 upon acquiring the content
delivery and media technology company Vudu Inc.
 A strategic objective in using this intensive growth
strategy is to search for and acquire companies that can
be integrated into Wal-Mart's existing operations, such as
via the company’s e-commerce website.
 In following the cost leadership generic competitive
strategy, such acquisitions must involve high efficiency
and support low-cost operations, in line with Walmart
Inc.’s operations management strategy.
 Despite its use in the business, diversification remains a
minor intensive strategy in growing the company. Wal-
Mart Inc. has a low rate of diversification, as the business
focuses on retail operations.
Competitive advantage and strategic
opportunities

 The greatest competitive advantage lies for retailer

when they involves in the market opportunities which
follows their current strategic plans.
 Fruitful opportunities like entering new unfamiliar
markets and non profitable retail categories.
 When retailers consider market expansion :The
successful retailer in a new market is the one who has
expanded themselves in to their core stregnths,and
have become able to convey their expertise meaning
hereby what they do is the best around the globe/new
markets.
Conclusion
 The strategic planning is an ongoing process which
helps retailers to know their position in the
competitive market and bring the changes in their
strategy to become competitive.
References
 Hussain, S., Khattak, J., Rizwan, A., & Latif, A.
(2014). Interactive effects of Ansoff growth strategies
and market environment on firm’s growth. British
Journal of Business and Management Research, 1(2),
68-78.
 Moussetis, R. (2011). Ansoff revisited: How Ansoff
interfaces with both the planning and learning
schools of thought in strategy. Journal of
Management History, 17(1), 102-125.
 Sorescu, A., Frambach, R. T., Singh, J.,
Rangaswamy, A., & Bridges, C. (2011). Innovations
in retail business models. Journal of Retailing, 87,
S3-S16.
 https://www.walmart.com/
 Zentes, J., Morschett, D., & Schramm-Klein, H.
(2007). Strategic Retail Management. Springe