Retail Strategic Analysis Flashcards

A retailer's 'assortment breadth' refers to:

Answer: The total number of distinct product categories offered

Assortment breadth measures the variety of different product categories a retailer carries, while depth refers to options within a category.

Which strategic framework evaluates industry attractiveness by analyzing suppliers, buyers, substitutes, new entrants, and rivalry?

Answer: Porter's Five Forces

Porter's Five Forces assesses competitive intensity and profitability potential through five structural forces shaping an industry.

A retailer pursuing an 'everyday low price' (EDLP) strategy would most likely report:

Answer: Stable sales with lower average promotional costs

EDLP produces consistent sales flow and reduces advertising and markdown costs compared to high-low promotional strategies.

In the Ansoff Growth Matrix, selling existing products to new customer segments is called:

Answer: Market development

Market development involves expanding into new markets or customer segments with the retailer's current product offerings.

Which of the following is a leading indicator of future retail sales performance?

Answer: Consumer confidence index

The consumer confidence index reflects shoppers' spending intentions and is a forward-looking predictor of retail sales trends.

A retailer's 'merchandise margin return on investment' (MMROI) combines which two performance dimensions?

Answer: Gross margin percentage and inventory turnover

MMROI (also called GMROI) multiplies gross margin percentage by inventory turnover to show margin earned per dollar of inventory invested.

When a retailer reduces SKU count to improve supply chain efficiency, this strategy is known as:

Answer: SKU rationalization

SKU rationalization eliminates underperforming or redundant items to reduce complexity, lower costs, and improve inventory efficiency.