Do you recognize this company?
In 1960, Tom Monaghan and his brother raised $500 and bought a small Italian restaurant near Eastern Michigan University
Tom found a new partner and opened several outlets near other universities
By 1965, on his own, he deleted every item except pizza, and specialized in takeout and delivery
They grew through franchising arrangements
At the time, they had a high quality product and free delivery
Their initial customer market was well-defined: students

What has happened to Domino’s since?
They have diversified into several types of pizza
Competition has grown significantly
Others have competed on higher quality
On-campus food has grown
Their strategic fit has changed
The world's #1 pizza delivery company and the #2 pizza chain overall (behind TRICON's Pizza Hut), Domino's Pizza boasts in excess of 6,200 stores (almost 90% are franchised) in more than 60 countries.
Pizza firms have been competing on quality

Menu Items
Classic Hand Tossed This is the one … the only … the original … Domino's pizza crust. This crust has helped make Domino's the world leader in pizza delivery
Crunchy Thin Crust Perfect for those who like a crisp, thin pizza crust. Ultimate Deep Dish Dive into a thick pizza, filled with your favorite toppings. Sides Domino's Breadsticks Our fresh-baked Bread Sticks are mouth-watering good. Domino's Buffalo Wings There's lot's of zing in these wings!
 Double Cheesy Bread It's a cheese-lover's terrific treat.

Strategic Planning and Contemporary Challenges

• What is your mission?Who are we in the marketplace? E.g. Bradless was criticized for having an unclear mission, unclear image
• What are your goals? Leader, follower, challenger, nicher
• Who are your customers?
• Then, what is your marketing mix?
• How can you control and establish benchmarks?
• All must relate together with retail consistency

Retail Consistency
Retail Consistency must be throughout each phase of the strategy diagram.
Each step must lead to the next
All must match
Successful firms easily match this test.
 

A Strategy is a Plan for Action
Mission:  what business are we in?  Goods vs. services?
What business aren’t we in?
How can we not try to be everything to everyone?
What goods and services do we provide?
Will you be a leader, a challenger, a follower, a nicher?
 

Figure 3.2 The Focused Organizational Mission of Frisch’s Restaurants
 

Kroger’s Goals

• Increase its identical food store sales growth target
• Reduce operating and administrative costs by more than $500 million
• Further leverage its size to achieve even greater economies of scale
• Reinvest in its core business to increase sales and market share
• The Kroger Company spans many states with store formats that include grocery and multi-department stores, convenience stores and mall jewelry stores . We operate under nearly two dozen banners, all of which share the same belief in building strong local ties and brand loyalty with our customers.

http://www.formanmills.com/locate.htm

Starting a New Business vs. Buying an Existing One
New

• Strengths
• Weaknesses
• Opportunities
• Threats
• Short and long term planning
• Financial plan
• Organizational and personnel plan

Buying an Old location, or old business

• Why is it for sale?
• What happened at this site in the past?
• How do customers feel?
• Existing Debts?
• Property inspections
• Fresh inventory?

Types of Retail Objectives - tells you what you need to do
Sales
Market share
Profitability
Store expansions to new areas
Store acquisitions - Just for Feet, later Meldisco
Store redesign - WaWa
Change of image - Sears?
Positioning - your position relative to others in the market in terms of attributes of importance to the customer

Image and Positioning
 

What type of image do these stores have? How are they perceived in relation to others that consumers consider?
Clothing Retailers

• Banana Republic
• Old Navy
• The Gap

Hotels - which of these are part of the same chain?

• Hampton Inn
• Hilton
• Doubletree
• Embassy Suites
• Homewood Suites
• Red Lion Inns

Positioning Approaches

• Mass merchandising is a positioning approach whereby retailers offer a discount or value-oriented image, a wide or deep merchandise selection, and large store facilities
• Niche retailing occurs when retailers identify specific customer segments and deploy unique strategies to address the desires of those segments rather than the mass market

Figure 3.7 Selected Retail Positioning Strategies
 

CLASS EXERCISE

What is the Customer Looking for?
Entertainment?
Name brands?
Friendly service?
Convenience?
Different product attributes?
Different services?

Definition of Target markets
Mass market
Niche (concentrated)
Multiple markets
Consider how supermarkets have changed

Strategy - What happens if an element doesn’t match?

Controllables

• location
• management
• merchandise
• pricing
• personnel
• communications

• tenants
• competition
• customer change
• legal restrictions
• technology
• economy
• road changes

• Greater mix of items
• Extended store hours
• Multiple languages
• Image - fashion
• Store not functional - fun!

• How create preferred shopper?
• Mailers?
• Cards?

• Determine categories of goods desired by customers
• Determine categories of goods not wanted by customers
• Determine the mix of goods wanted so that you are not carrying too many brands, sizes, etc.
• Which items do you expect a Goodwill store to carry?
• What items will be new? Used?

Factors to Consider When Engaging in Global Retailing
 

International Retailing

• Are stores the same in country X?
• Are stores different in country x?
• How do people buy ________ in country x?
• How much do they need?
• How will they get it home?
• How much can they afford?
• How much can they store?

• How much can they pay?
• How often can they pay?
• How can they get to your store?
• Who are your competitors?
• What are the laws?
• Examine McDonald’s Web site to learn how they have adapted their retail stores. Sites are listed by country.
• Found at: http://www.mcdonalds.com

McDonald's Worldwide Corporate Site
McDonald's is the largest and best-known global foodservice retailer with more than 28,000 restaurants in 120 countries.
Yet on any day, even as the market leader, McDonald's serves less than one percent of the world's population.

Our outstanding brand recognition, experienced management, high-quality food, site development expertise, advanced operational systems and unique global infrastructure position us to capitalize on global opportunities.

Strengths and weaknesses
We plan to expand our leadership position through great tasting food, superior service, everyday value and convenience.
Our efforts to increase market share, profitability and customer satisfaction have produced high return to shareholders -- a compound annual total return of 21 percent over the past ten years.
 

Our Vision...
McDonald's vision is to be the world's best quick service restaurant experience. Being the best means providing outstanding quality, service, cleanliness and value, so that we make every customer in every restaurant smile. To achieve our vision, we are focused on three worldwide strategies:

Be the best employer for our people in each community around the world.

Deliver operational excellence to our customers in each of our restaurants.

Achieve enduring profitable growth by expanding the brand and leveraging the strengths of the McDonald's system through innovation and technology
 

McDonald’s India
McVeggie™
Breaded fried vegetable patty consist of peas, carrots, green, beans, red capsicum, potatoes, onions, rice and seasoning.  The burger also includes lettuce, eggless mayonnaise in a toasted sesame seed bun.

http://www.mcdonaldsindia.com/ourfood/ingredients.html