2 - The characteristics of successful retailer models

Abstract

This chapter focuses on the characteristics of successful retailer models. A retailer's successful model includes a successful retail strategy and a successful growth strategy. To develop a successful retail strategy, the retailer needs to target the right market, choose a suitable retail format, and more important, develop its Competitive Advantages (CAs) based on the resources it has. Without CAs, the retailer is vulnerable in retail competition. The right retail strategy makes the retailer achieve Inward Focus (IF) and contributes to its success. However, current success measures the results of the past performance and current profits are derived from the customers won in the past. To keep its success, the retailer needs to develop Outward Focus (OF), focusing on building long-term customer loyalty, which indicates what tomorrow's profits will be and corporate future success. To develop a successful growth strategy, the retailer needs to take a chain operation, develop multiple formats, etc. The case of Wal-Mart gives a good example for developing both successful retail strategy and corporate growth strategy, while that of Kmart provides a deep lesson in unsuccessful strategies. Chinese retailers can learn from both the success and the failure of these leading MNRs.