The Global Retailing Industry - Research Paper Example

The Global Retailing Industry Executive Summary The retailing industry of present times is doing phenomenally well. This is because the field of retail management is now being treated as science. This is such a huge trend in the recent years that one can learn immensely from it. This paper takes a keen look at the retailing industry which has been on the rise with the passage of time and how it has contributed towards the world of business and the economic bases of the countries. It is an important field as it has brought together strengths from different areas and mixed them well with each other. The retailing industry is dependent on the global chains like Walmart, Carrefour, Tesco, Metro and so on. The manner in which these chains are functioning is an interesting one, because all of these bank heavily on the global linkage as well as the sale of goods and services from fixed locations worldwide. Also this paper studies the basis of the stores which are a very significant part of the retailing industry. These could include the department stores, supermarkets, discount stores, variety stores, warehouses, general merchandize stores, general stores, big-box stores and many other forms of convenience stores. The traditional store format has been upgraded and this is also a scientific invention which has come about with the passage of time (Feinberg 1997). The different technological advancements which have come about within the retailing industry have also helped shape up the new outlook that this industry has had now. The pricing mechanisms have changed and the focus now is on providing the best possible goods and products to the customers so that they can come back to these chains and stores and hence build long-lasting relationships. The retailing industry does not sell goods and products rather it makes relationships with the people on a long term basis. This paper also studies the transfer mechanism where counter services, door to door sales centers, delivery regimes and self-service measures are discussed in entirety. The different retailing techniques are also given significance here because these form the core basis of success for a retail chain more than anything else. The sales mechanisms bring forward the manner in which sales will actually be the main thing within the retailing industry. Customer service remains quintessential here since it is the actual zone where the retail chain and the customers get in touch with each other. The dissonance value is also highlighted here because often it has been seen that the customers are unhappy or disgruntled with the products that they have bought (Hunt 2003). The customer service is termed as excellent if there are measures enacted to look after the needs of the customers and to make sure that the customers get the best return on their purchases. Similarly consumer spending and the related limitations are also pinpointed here to suggest for the extent that the customers can spend at a given time, and how they will fare once they are given some form of discounts, etc. This paper will hence address all such issues in detail. Case Analysis Synopsis of the Global Retailing Industry The retailing industry is competing rigorously on a global level because the need to satisfy the customers is immense. Now the fight to survive within the business world is increasing with each passing day. The retailing industry is analyzed in terms of the Porter’s five forces model, the competitive advantage within its own industry, and the corporate case with a few examples. The retailing industry is vibrant because it brings to light the perspective of understanding the customers, the intermediaries, the stakeholders and indeed the globally recognized chains. The number of customers is increasing by the day and it is only natural to have as many chains and stores as the business can have within its folds. What is even more interesting is the fact that the retailing industry has realized that its potential is immense and that it has to do a lot more than it is doing at the moment (Varley 2001). The traditional concept of selling has now changed into building long-lasting relationships which these chains are doing ever so well now. From a global standpoint, the retailing industry is bringing in the cash and dividends, while drafting high budgets for expansion all across the world. Global chains like Walmart and Tesco are expanding at a phenomenal speed in different continents of the world and at different locations are also aligning with the local businesses and chains to have a localized feel all over. Porter’s Five Forces Model The five forces model presented by Porter look at five different factors: the competitive rivalry that exists within the relevant market domains, the entry level barriers that come about when a new entrant enters the zone, the power of the suppliers, the influence of the buyers and lastly the role of the substitute products and services that are on offer. The five forces model therefore pinpoints the significance of the retailing industry in the light of the different local zones and territories where it wants to expand its very basis. The localized feel of the retailing industry helps it to target its own customers with global offerings in the form of goods and services. The five forces play an important role within the understanding regimes of the retailing industry worldwide. There are separate representations of the five forces model in varied locations and areas of the world (Welsh 2006). This is because the five forces model nearly covers all the tangents which are so very important to know about on the part of the marketers as well as the customers at some point in time of the local business operations. The entry of globally recognized chains and stores is indeed at times a very difficult proposition as it addresses quite a few areas. The local culture plays an important role and so does the financial and budgeting aspects which make up for a larger share of the chain’s higher management discussions and debates. The power of the suppliers has to be kept under the scanner so that they give the best possible products at the most cost effective rates and prices. The retailing industry depends a great deal on the suppliers because these suppliers will pave the way for future replenishment of the products and goods. This must happen on a proactively consistent basis, and there should not be any hiccups or problems at all. Similarly, the buyers are an important tool within the five forces mode. If the buyers or customers do not throng the stores or chains, it would be useless to have these chains in the first place. The investments that have been allotted to them would be an exercise in futility. Competition is on the rise and understanding this philosophy will be a very important element (Thomas 1993). This is because competition can literally make or break a chain for that matter. If competition is the king within a market, then the global chain has to be proactive in its approach to give the very best time and time again. The last pointer is related with the coming in of the substitute products and services that will eventually overpower the global chain under discussion here. Hence it is important for this chain to make sure that the substitute chains will not thwart its business and that keeping one step ahead of the competition would always prove to be the strength of the chain. These discussions are very necessary whenever the five forces model is studied in-depth and in detail. The five forces model presented by Porter stands helpful for the retailing industry because this industry has its good and bad points. The strengths and weaknesses are in relation with one another, and thus must be understood in proper light (Keleher 1999). The retailing industry relies on these five forces because each one of these presents a totally different viewpoint of the industry as a whole and the global chains in particular. The retailing industry is dependent on new entrants as they bring about a difference within the local markets, introduce new sales techniques and pricing ranges, incorporate transfer mechanisms which are top of the line and state of the art, and determine the exact basis of satisfying the customers through innovative and facilitative services. These services would eventually win the hearts of the customers and thus these customers will come back again to the global chains, which would make these chains profitable in the long term (Culpan 2002). The relationships are thus built over a long period of time, which is always a very beneficial thing. The new entrants are always exciting for the business in general and the local markets in particular. Due attention should always be given towards the research basis of the global chain which has entered into new markets. Proper importance will ultimately find out results which are long-lasting and have positive impacts for the sake of the business in the long run. Therefore the new entrants should not be seen as a discouraging factor, rather it must be found out as an area where potential could be explored by the global chain within the local markets. As for the power of suppliers, one must understand that the suppliers have a role to play since they form the core basis of bringing in goods and supplies to the global chain which has made its way within a new market. The suppliers will eventually be in close relationship with the chain as the replenishment of products and goods would be done on a consistent basis. There would be solid linkages between them as a result of these trading opportunities. The same could also be said about the buyers or the customers, as they would come back to the chain where they purchased their groceries from. However it is important to note that the buyers will have to be given the end benefits time and again so that they could find out the differential offering and hence visit the global chain. The buyers should be told and in essence practically given a benefit so that their return visit is ensured (Peterson 1993). The role of both the buyers and the suppliers is of importance as both of these lie on the different ends where the global chain is in the middle. The buyers and suppliers will have to be kept away from each other because their roles are not such that they should get in touch with one another. This will eventually harm the business of the global chain and hence the business might suffer a setback if there are direct associations between the two. The Evolving Global Retailing Industry The retailing industry the world over has changed for the better. This is because there have been inventions and new advancements which have made their mark within the world of business and more specifically in the retailing industry. The retailing industry has become big because it has set its sights on improving for the betterment of not only its own business but also towards providing the end customers with state of the art services and unmatched facilities worldwide. These are important elements that shape up the relevant discussions because this will help the basis of enhancing the retailing industry on a consistent basis. The strategic basis of the retailing industry is also suggestive of the fact that the global chains are most definitely looking forward to receiving the pluses that the new advancements under the umbrella of technology has brought about. There are many opportunities that can be taken forward by these global chains because the retailing industry is on the move. More than anything else, the retailing industry is committed to comply with the global standards which are becoming up to date and advanced with each passing day. There are important and serious legal issues that a global chain might plunge into if proper measures are not adopted in a quick manner. Hence the compliance with standards and best practices is indeed the best route forward. The retailing industry is bound to follow the rules and regulations of the land where it has opened up its outlet. This is because the political pressures and compulsions are very significant and following them becomes even necessary for the chains that have opened up their chains in different locations of the world (Harwell 2006). Special emphasis is paid on the fact that the world of retail has seen the role of technological advancements and hence complying with the changing norms and routines is not only essential but also following them becomes very necessary. This is so said because if a chain does not adopt the latest trends and techniques then other chains might just raise the competition and bring in new and novel practices that are unheard of within the local competitive domains. It is therefore a good practice to have as much incorporation of technological tools within the retailing industry as one can because the future world of retail has all of these things covered in a very good capacity (Powell 1987). Also the owners and general managers of these global chains have understood that if they do not move forward, someone else will come in front and take their position. Hence it is the need of the time to bring in retail advancements and incorporating them in a quick manner so that success for these global chains and the retailing industry can be ensured in a transparent manner. This indeed will bring in the results that have been planned by the retailing industry owners and general managers. The Strategic Context of the Global Retailing Industry Strategically speaking, the retailing industry of present times is driven for attaining success. This is because the retailing industry has set its vision on satisfying the customers but the internal mission is to cater to the global markets by opening up new chains and stores in different markets of the world. The strategic tilt is very effective since it speaks of the long term where the retailing industry has been successful in the last 2-3 decades. If the tactical steps are something to understand here, then one can suggest that the strategic directions are pretty much clear as every global chain wants to move ahead in a rigorous manner. The chains like Walmart and Tesco have specifically known how to address different market needs and requirements by opening up varied kinds of stores worldwide. For example, these companies like to have small stores within locations where the target population is less but has convenience stores where the people are moving at a fast speed or when they are driving on a highway. These big chains have understood the psyche of the customers and hence have changed their own selves in line with the growing needs of the time (Jain 2003). If they had not done so, there would have been serious problems as per their opening of the chains in different areas and territories of the world, and more so their business would have come down considerably. The global retailing industry is on the rise because it wants to expand for all the right reasons. World’s biggest chains have set things right already and they know that if they keep on doing the same from a strategic perspective, they can achieve a lot in terms of building their customer bases as well as exponentially increasing their profit margins. It is always good to think strategically because this can find out the direction through which the organization (and in this case the global chain) can become a successful one, and try its best to outsmart the competitors which are attacking it from all angles and positions. Role of the Retailing Industry in the Competitive Business World of Today Competition can mean a lot for any business in the world of today. This is because competition asks of the global chains to invest within their infrastructure so that these can find the best possible routes towards growth and development. The retailing industry is an interesting one because it is continuously on the rise, and the competitive activities are bringing in the best results for the sake of the customers. Competition is an important element within the world of business as it pinpoints the basis of gauging the psyche as well as outlining how customers would shape up if they are given more discounts and other privileges. The role of the retailing industry becomes even more important when the competition warms up, as this is a much understood thing. Firms find it attractive to invest within newer markets because these corporations and companies believe that their businesses would increase in an exponential way, and that these companies would reap the rich profits that come attached with the exploration of new areas and territories – markets in essence (Blenkhorn 2005). Building infrastructure and then maintaining these would mean that the retailing industry has to invest heavily within these ranks, and then look after the needs and requirements of the customers. Bringing in funds for the maintenance is also very necessary because if the global chains are not given the backing that they require, there could be serious problems. The competitive business world depends a great deal on the stakeholders because they bring in value which is much sought. The retailing industry is therefore always grateful upon these stakeholders as they are giving in their money and time towards the smooth running of the business. If these stakeholders pull off their hands, there would be serious consequences for the entire retailing industry which would put the customers in a state of confusion and hence the standards of the global chains would go down drastically. Therefore it is a good practice to have those stakeholders who are very much aligned with their strategic goals and objectives, and not have any stakeholders on board who are least interested in the smooth running of the business. Customer Service is at the heart of the Retailing Industry It is a fact that within these global chains and indeed the overall retailing industry, customer service has had the best share more so because it is the reason for which these chains and stores are in function. State of the art customer service is much preferred because this means a lot for the customers if they know beforehand that they would be looked after well when they visit these chains and stores, and discounts are aplenty as per their visiting the retail outlets. This is an ever-increasing phenomenon which will be discussed at length in the coming times as well. The customers are now demanding their rights if the same are not given to them by the retailing industry. In such a case, it is detrimental to the cause of having any retailing industry because if this retailing industry cannot look after the rights of the customers, there is no reason that these chains should be in operation (Greene 2004). There is much to learn from such quarters because these chains and stores would not be able to bring in business and more so the customers if these customers know beforehand that there is absolutely nothing on offer for them. Hence customer service is regarded as one of the most important elements when one discusses business and more specifically the retailing industry because it brings customers back to the chains on a regular basis. What is even more interesting is the fact that people endorse one another to visit the retail chains and outlets that eventually adds to the customer base of the retailing industry as a whole. If the customer service suffers, the entire retail chain goes down, which means that its operations are no good if there is no room for understanding the psyche of the customer and how he views the retail chain and its goods and offerings. There is a great amount of expectation at hand which needs to be understood within the proper contexts, and which can go a long way in building trust and confidence between the customers and the retail chain itself. If this trust is on solid footings, there is no doubt that the customers will come back and forth to purchase goods of their choice from there, but if there are any weaknesses present within the relationship that has been thus formed between the customers and the retail chain, there would be less traffic at the chain itself (Greenwood 1986). Therefore it could be rightly said that the retailing industry depends a great deal on the customer service because its very basis is reliant towards bringing sanity for the sake of the business and indeed the entire retailing industry. The world of retail would be hit very badly if there are no measures taken to serve the basis of the customer. In essence, the role of the stakeholders, owners and managers becomes very important as they would ensure that the customer service is top notch and that there are no problems which are encountered over a period of time. This ensures success for all concerned. Conclusion and Recommendations In the end, it would be adequate to suggest that the global business of the retailing industry is being run on relationships alone. These relationships are such that they derive the basis of work for the retail chains and outlets. The strategic tilt and the long-lasting relationships play significant roles within the domains of carrying out sound business when one speaks specifically of the retailing industry. The five forces model suggests for the exact positions that the retail chain has to consider when it is trying its best to make its mark within a new location. The manner in which the entrants are analyzed by different competitors (retail chains and stores) is something to understand from a global perspective (McWilliams 2002). Also when suppliers and buyers are playing their part in a proper way, then there is success written all over the global retailing business that is being conducted. The substitute products in the form of new chains opening up is always there and should be kept away by introducing new schemes (like discounts and award programs) as well as by retaining customers by building relationships and associations. The five forces model basically is the five threats that any global chain within any location of the world might just face. These threats can play a negative role but if seen from a positive mindset, can have long-lasting and seriously optimistic effects for the sake of the entire retailing industry. It is rightly said that these five forces would bring in sanity if proper care and attention is paid by the people who matter the most within a retail chain. It would be sound to recommend here that the retailing industry is a booming one hence the people associated with it are gaining quite rich dividends if they are working for the global chains and superstores that are of international repute. The retailing industry is doing wonders because the sales techniques are becoming advanced with each passing day, and that there is a lot of emphasis on gaining the best dividends from the basis of the customers, who will come back and forth to these chains, thus benefiting the entire retailing industry as a whole. It is also recommended for the global chains to explore the markets in an adequate way before they take the actual move, and bring their name to the different continents of the world (Davies 2002). After all, it is always a good exercise to understand how the retail chains would receive support or the lack thereof if these enter into new zones and start conducting the basis of their business. All said and done, the retailing industry is a phenomenon that is on the rise and much can be earned from the new philosophy of selling for the sake of the customers in a capacity that they would like to receive in terms of goods and offerings. 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