Guide to Environmental Scanning in Retail

Aug 25, 2024

Lecture Notes: Environmental Scanning in Retail

Introduction

  • The lecture is about environmental scanning in the retail space.
  • Focus on the IB curriculum and the importance of retail store application.
  • Key concept: Environmental scanning involves analyzing micro, macro, and market environments to find opportunities for management decisions and strategies.

Vision and Mission

  • Start by examining the business's vision and mission.
  • Ensure the alignment of actions with stated goals.
  • Adjust strategies if actions don't align with the vision.

Strategy Formulation

  • Define strategy as a plan of action.
  • Steps involve implementing, evaluating, and controlling.
  • Example from Kimberly Clark, focusing on key learning outcomes.

Micro Environment

  • Micro environment refers to the business itself.
  • Key business functions (10 total):
    • Production
    • Procurement
    • Marketing
    • Public Relations (PR)
    • Human Resources (HR)
    • Administration
    • General Management
    • Finance
    • Information Technology (IT)
    • Risk Management
  • Pay attention to risks posed by these functions.

SWOT Analysis

  • SWOT analysis for a company like Checkers.
  • Strengths:
    • Strong brand heritage
    • Covers various living standards measures (LSMs)
    • Product offerings like Simply Good
  • Weaknesses:
    • Quality issues
    • Staff friendliness
    • Store look and feel
  • Opportunities:
    • Staff training and wellness programs
    • Supplier management
    • Marketing
  • Threats:
    • Competitors
    • Inflation
    • COVID-19
    • Load shedding
    • Elections

Resource-Based Analysis

  • Tool to identify resource gaps and add value.
  • Steps:
    1. Identify resource gap.
    2. Assess value addition.
    3. Utilize resources better than competitors.
    4. Competitive advantage and ROI.
    5. Finalize objectives and budgets.
  • Example of Pick n Pay's deli initiative.

Value Chain Analysis

  • Process to add value to business.
  • Primary Activities (Checkers example):
    • Trolleys
    • Stock (SKUs)
    • Cashiers
  • Add value through innovations like AI-enhanced trolleys and efficient cashier systems.
  • Secondary Activities:
    • Marketing strategies (social media, promotions)
    • Human resources (training, wellness programs)

Balanced Scorecard

  • Tool for evaluating business perspectives.
  • Acronym: FICKL
    • F: Financial Perspective
      • Low-cost strategies, supplier negotiations.
    • I: Internal Perspective
      • Equipment upgrades, process improvements.
    • C: Customer Perspective
      • CRM plans, loyalty programs, promotions.
    • L: Learning and Growth
      • Training programs, staff development.

Conclusion

  • The lecture covered tools for environmental scanning in the micro environment.
  • Focus on using SWOT, resource-based analysis, value chain, and balanced scorecard to gain a competitive advantage.
  • Emphasis on continuous improvement and adaptation strategies.

These notes provide a high-level overview of the lecture content. They are organized to help study and remember the key concepts discussed.