Group :2

Optimizing Business Expansion of Business Redefining the Business

• Leads to Superior Customer Value Proposition• Economic Advantage

It is the retailers’s responsibility to determine & understand these reasons or needs and ensure that the formats focus on addressing them

Buyer purchases for their reasons, not those of a retailer

The selling Process that begins only when we earn buyer trustFortune Institute of International Business

ExtensionRelationship

Intensification Diversification

RetailingRetailing

PrinciplesPrinciples

Fortune Institute of International Business

The retail growth opportunities can be classified on the basis of their desired outcome::

Growth Strategy Objectives Growth Levers

Focuses on the existing business Includes Spectrum of :

Intensification of the current scope of the business

Logical Extension Strategic diversification

Represents the horizontal axis of the matrix & pertaining to the market opportunities with respect

to :

Geography/Location Product/Service offered Target customer Format/Channel

INTENSIFICATION

Strengthens position in existing markets by increasing market positioning.

IMPLICATIONS :• Enables the retailer to explore opportunities• Fills gaps in existing markets Ex: Walmart

Geographic ExtensionExpand more with similar market

characteristics to reach more customers in target segment.

IMPLICATIONS :Retailers facing saturation in major metro

markets enter into small & urban markets. Ex: Vishal Mart

Geographic DiversificationExpand into new locations with different

market characteristics to reach new customers

IMPLICATIONS :Opening stores in alternative locations like

airports, entertainment venues allows increased shopping frequency amongst the existing customers. Ex : Loreal, Revlon

INTENSIFICATION

Optimize existing offer to better serve existing customers

IMPLICATIONS :Growth can be achieved by capturing the

unsatisfied desires in the consumer market place. Ex: Ambience of Lowe’s stores to appeal the females customers

Product/Service Extension

Expand existing offers to leverage relationships with existing customers & attract new customers.

IMPLICATIONS :

Enhances the physical product offer that the retailers seek to create solution-driven concept.

Ex: EDLP in WALMART

Product/Service DiversificationConvert into other sector to create value for

new & existing customers in a wholly new area.

IMPLICATIONS:Offering new services outside their core

competency . Ex: Virgin Atlantic, Reliance.

Customer IntensficationBuild & Maintain customer loyalty &

SatisfactionIMPLICATIONS :“Best Customers” who spend freely Ex: Marketing & Loyalty Programs.

Customer ExtensionDiscover areas of uncovered potential to sell

more to existing customers

Customer DiversificationTarget new customer Groups in addition to the

existing loyal customers.

Format IntensificationEnhance the shopping experience of existing

customers with updated formats.

IMPLICATIONS :While the scarcity in the stores leads to quality

investing rather than quantity.

Format ExtensionTarget customers in shopping situations

& satisfy different shopping needs of same customers

Format DiversificationEmbrace creative use of available

consumer touchpoints