Student: Kim Thanh Nguyen

Student: Kim Thanh Nguyen

Student number: 7846383

SECTION 1

What is the purpose of developing a formal retail strategy?

- Determine where the company going to go and how the company going to get there; understand where the company is at the time so they will not get lost.

- Help to build a huge and strong base from the bottom - fundamental(customer service, staff training, etc ) like building a tower- the stronger the base the higher the tower going to reach.

- Develop a short-term and long-term plan for sale, marketing, human resources, etc.

- Determine the vision, the target for each step in the plan: when the company knows their targets they are easier to get there.

- Analyst the economic, competitive environment, and legal.

- Analyst and response to any types of situations that come from the market and the competitor.

- Help to understand and calculate the risk that the company can have so they can avoid or create a plan to face the risk.

- Determine how to make a difference to competitors.

SECTION 2

What are the expected and augmented value chain elements for each of these retailers?

A. Home Depot

Expected value chain: home furniture, home machine, tools indoor and outdoor.

Augmented value chain: -Special price for Depot Consumer Credit Card owner.

- Expensive high tech product that only available in store

B. Ikea.

Augmented value chain:- Small plants and fast food

- Showroom: *for people to know which items work best for their purpose.

*offering free ideas to the customer to design their own house.

C. Local fruit-and-vegetable store

Expected value chain: - fresh fruit and vegetable every day directly from farms

Augmented value chain:- Placing an order by phone call.

- Discount on the membership program.

- Online shop:* Accept to pay when items are delivered.

* Accept Alipay, Paypal, American Express.

SECTION 3

What are the pros and cons of starting a new hair salon versus buying an existing one?

Starting a new hair salon

Pros:- Flexible for the owner to select the location, store name, the process of staff training, the process of store operating.

- The owner can be free to develop a new innovative business from his/her idea.

- Create a new brand that customers can trust and customers are more likely to try new things.

Cons:- Do market research for customer demand, location, threats, and risks.

- Spend more money to create a store location, develop brand name, customer loyalty.

- Find a place to buy machines and stuff with the lowest price and highest value that they can get.

- Lack of experience ( for example: do staff training without the experience of the previous owner).

- Customer might not trust the store because it is a new name on the market so the store can be lag of customer at the first time store open.

Buying an existing hair salon

Pros: - Less money to spend to develop store brand name and location; the store can already be recognized by its old customer so the store does not have a lag of customer.

- Already have the process to train the staff and operation process for the business to run immediately.

Cons:-Might have existing problems; the existing store can have a problem so the owner has to sell it for a low price, it can be the location problem, a problem with the brand, customer problems ( bad service, bad customer feedback, etc)

- Less advantage to build a new idea of operating and keeping up with hairstyle trends.

SECTION 4

Why would a supermarket want to lease space to an outside operator rather than run a business, such as dry cleaning, itself? What would be its risks in

this approach?

Because: - The supermarket can still earning money from leasing without the risk of opening a new small business; less staff - decrease the money on paying staff.

- People can enjoy going back to the supermarket that can develop their brand name because it can offer a different kind of services that can save time and money for the customer (it is convenient for customer so they do not have to go anywhere else to do their work)

- Increase the sale of the supermarket ( for example when people come to a supermarket they mostly looking for grocery but when you need to go to a dry cleaning, a bank or a mobile shop in a supermarket without the demand of grocery at first, you can have an idea of buying something from the supermarket when you are there because it just right a front of your eyes)

Risks: - Because there are other businesses running inside a supermarket so there will be fewer items that the supermarket can sell which will affect their brand name( people can likely go to the supermarket to use other services rather than buying items from the supermarket

- The supermarket has to be responsible for any situation that comes from the outside operator that happens in their store ( for example a customer experience an insect in his/her Starbuck cup of coffee that were bought in Safeway store)