Small businesses have many constraints that do not allow them to be as effective as power players. For instance, they cannot spend millions of dollars marketing their stores and promoting their brand. However, there are still ways of competing with large corporations. Power players are able to provide the lowest possible price (Kahn, 2018). On the other hand, independent retailers can increase the value of their products by offering a unique customer experience (Kahn, 2018). The goal is to increase the product’s perceived value when it is not possible to decrease its price. Being small also provides many opportunities – while it is not simple for power players to make quick decisions because of organizational complexities, small businesses can instantaneously react to market demands and trends (Kahn, 2018). For instance, independent retailers can change suppliers and make modifications to product assortments in less time than large retailers.
Opportunities for Different Categories
- Personal sellers have been crucial to the success of department stores. Therefore, department stores have the opportunity to bring this one-to-one relationship between the retailer and customers by offering mass customization (Blanco, 2018).
- Drugstores can enrich their customer base by reaching previously unserved markets and trying new business models.
- General Apparel has the opportunity to offer its clients products they need by conducting consumer research (Blanco, 2018).
- Home Improvement and Hardware should collaborate with the scientific community to provide safe products. This strategy will allow retailers in this category to win more customers.
- In Jewelry and Accessories, an increase in same-store sales has become a trend. Therefore, there is an opportunity to build on this pattern by improving the presence of physical stores and creating a more favorable brand image that will allow the retailer’s stores to be distinguished from other companies (Rajagopal, 2019).
- Mass merchants have the opportunity to win customers by offering more types of products and decreasing delivery times (Rajagopal, 2019).
- Because the category of supermarkets is segmented, there is an opportunity to create a massive chain and take dominance. It is crucial, however, to ensure the constant flow of customers – home delivery and a unique in-store experience may be the solution (Blanco, 2018).
- Retailers in Women’s Apparel should consider diversification of their set of brands by means of acquisition.
- Department stores are at risk of being defeated by mass merchants like Amazon, which offer every product from any category with one-day delivery.
- Because CVS has been actively acquiring competitors and enlarging its business, there is a risk of a monopoly being established. Competitors should be aware of this situation and need to take appropriate actions.
- General Apparel is facing the same threat as department stores – mass merchants.
- In case Home Improvement and Hardware retailers do not start selling products that are scientifically proven to be safe, retailers may face the risk of going bankrupt because of potential lawsuits.
- While Jewelry and Accessories category is experiencing revenue increase, small businesses are at risk of being acquired or outrun by large chains.
- Amazon’s popularity among consumers has been growing steadily for years. There is a possibility that it will become a single point of purchase for online users.
- Supermarkets need to improve their online presence and start offering home delivery (Blanco, 2018). Otherwise, they are going to be replaced by other online stores that also sell groceries.
- Many stores offer both men’s and women’s apparel, and some of these brands are incorporating virtual reality technology into their websites that allow consumers to try clothes without leaving their houses (Blanco, 2018). Retailers in Women’s Apparel are at risk of becoming obsolete if they do not start offering innovative experiences.
Diversification is an essential strategy in all areas of business, including investing, sales, and marketing. For instance, an investor may minimize risks by buying stocks of different companies from different industries (Hoechlin, 2017). A company may sell different products to reach varying customers and increase its revenue (Kahn, 2018). A firm may also choose to market through different channels to reach a broader range of the population and increase the efficacy of the strategy.
Signet’s mix of retail jewelry chains falls within the scope of diversification. However, instead of diversifying products, Signet chose to broaden its list of brands. This move has the same benefits as diversification in general. Signet is minimizing the risk of loss – if one brand fails, the corporation will still have revenue from other brands (Rajagopal, 2019). There is also a possibility to market brands differently – while Zale may be targeted at wealthy customers, Jared may be used to reach individuals with moderate financial capabilities (Rajagopal, 2019). In addition, having several brands that have their own marketing strategy and physical stores grants a competitive advantage (Rajagopal, 2019). Potential drawbacks of multi branding include increased complexity of the organization, and confusion among consumers, which may lead to a loss of credibility (Rajagopal, 2019). Insufficient differentiation between brands may make these brands compete with each other instead of competing with other companies.
Blanco, L. D. P. P. (2018). Changes in online shopping behavior during the last decade. University of California, Davis.
Hoechlin, N. (2017). Investing in stock market for beginners: Understanding the basics of how to make money with stocks. JNR Publishing Group.
Kahn, B. E. (2018). The shopping revolution: How successful retailers win customers in an era of endless disruption. Wharton School Press
Rajagopal. (2019). Competitive branding strategies: Managing performance in emerging markets. Palgrave Macmillan.