January 20, 2023

Buffalo Wild Wings: Competing for the Future: After carefully reading the case details, answer the following questions: If there is a BWW near you, visit the restaurant or if not take

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Buffalo Wild Wings: Competing for the Future:

After carefully reading the case details, answer the following questions:

If there is a BWW near you, visit the restaurant or if not take a look at them online (www.buffalowildwings.com). Identify what you see as competitors to BWW.
What do you see as the competitive advantage of BWW? Be sure to discuss its value proposition.
Where would you place BWW and restaurants it competes with in terms of the retail life cycle?

Write a minimum 2-page paper answering the above questions

Use APA 7 Format guidelines and list all your references.

Chapter 2

Retail Strategic Planning and Operations Management

Learning Objectives

Explain why strategic planning is important and describe the components of strategic planning

Describe the retail strategic planning and operations management model

Components of Strategic Planning (1 of 2)

Strategic planning: Adapting the resources of the firm to the opportunities and threats of an ever-changing retail environment

Through the proper use of strategic planning, retailers hope to achieve and maintain a balance between resources available and opportunities ahead

L O 1

Components of Strategic Planning (2 of 2)

Development of a mission statement for the firm

Definition of specific goals and objectives for the firm

S W O T analysis

Development of strategies that will enable the firm to reach its objectives and fulfill its mission

L O 1

Mission Statement

Basic description of the fundamental nature, rationale, and direction of the firm

Elements of a mission statement

How the retailer uses or intends to use its resources

How it expects to relate to the ever-changing environment

The kinds of values it intends to provide in order to serve the needs and wants of the consumer

L O 1

Statement of Goals and Objectives (1 of 2)

Provide:

Specific direction and guidance to the firm in the formulation of its strategy

A control mechanism by establishing a standard against which the firm can measure and evaluate its performance

L O 1

Statement of Goals and Objectives (2 of 2)

Dimensions

Market performance

Financial performance

Societal objectives

Personal objectives

L O 1

Market Performance Objectives

Establish the amount of dominance the retailer seeks in the marketplace

Market share: Retailer’s total sales divided by total market sales

High sales growth retailing is directly linked to expanding the size of the retail stores

Disney

L O 1

Exhibit 2.1 – The Market Share-Profitability Relationship

L O 1

Financial Objectives (1 of 2)

Profit-based objectives: Deal directly with the monetary return a retailer desires from its business

Profit – Aggregate total of net profit after taxes

Profit can be expressed as a percentage of net sales

It can also be defined in terms of return on investment (R O I)

Stockouts: Products that are out of stock and unavailable to customers when required

L O 1

Exhibit 2.2 – Elements of Strategic Profit Model

L O 1

Financial Objectives (2 of 2)

Productivity objectives: State the sales objectives that the retailer desires for each unit of resource input

Space productivity – Net sales divided by the total square feet of retail floor space

Labor productivity – Net sales divided by the number of full time-equivalent employees

Merchandise productivity – Net sales divided by the average dollar investment in inventory

L O 1

Societal Objectives (1 of 2)

Reflect the retailer’s desire to help society fulfill some of its needs

Employment objectives – Provision of employment opportunities for the members of the retailer’s community

Payment of taxes – Helping finance societal needs that the government deems appropriate

Consumer choice – Provide the consumer with choices that previously were not available in the trade area

L O 1

Societal Objectives (2 of 2)

Equity – Retailer’s desire to treat the consumer and suppliers fairly

Being a benefactor – Retailer may desire to underwrite certain community activities

L O 1

Personal Objectives

Reflect the retailers’ desire to help individuals employed in retailing fulfill some of their needs

Self-gratification – Focuses on the needs and desires of the owners, managers, or employees of the enterprise

Status and respect – Recognizes that the owners, managers, and employees need status and respect in their community

Power and authority – Need of managers and other employees to be in positions of influence

L O 1

Strategies (1 of 3)

Carefully designed plan for achieving the retailer’s goals and objectives

Retailers can operate with three strategies

Get shoppers into the store

Convert these shoppers into customers by having them purchase merchandise

Implement the above two strategies at the lowest operating cost possible that is consistent with the level of service that customers expect

L O 1

Strategies (2 of 3)

Forms of differentiation for a retailer

Outstanding design of the market offering

The selling process

After-purchase satisfaction

Location

Never being out of stock

L O 1

S W O T Analysis (1 of 4)

Strengths:

What major competitive advantage(s) do we have?

What are we good at?

What do customers perceive as our strong points?

L O 1

S W O T Analysis (2 of 4)

Weaknesses

What major competitive advantage(s) do competitors have over us?

What are competitors better at than we are?

What are our major internal weaknesses?

L O 1

S W O T Analysis (3 of 4)

Opportunities

What favorable environmental trends may benefit our firm?

What is the competition doing in our market?

What areas of business that are closely related to ours are undeveloped?

L O 1

S W O T Analysis (4 of 4)

Threats

What unfortunate environmental trends may hurt our future performance?

What technology is on the horizon that may soon have an impact on our firm?

L O 1

Strategies (3 of 3)

A fully developed marketing strategy should address the following considerations

Target market: Groups of customers that the retailer is seeking to serve

Location

Retail mix: Combination of merchandise, price, advertising and promotion, location, customer service and selling, and store layout and design

Value proposition: Statement of the tangible and intangible results a customer receives from shopping

L O 1

Exhibit 2.8 – Retail Strategic Planning and Operations Management Model

Competitive Environment: Behavior of Consumers, Competition, Supply Chain Members

Social and Legal Environment: Socioeconomic Environment, State of Technology, Legal System, Ethical Behavior

L O 2

The Retail Strategic Planning and Operations Management Model

Operations management: Deals with activities directed at maximizing the efficiency of the retailer’s use of resources

Referred to as day-to-day management

The need to strive for a high profit is tied to the extremely competitive nature of retailing

L O 2

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Chapter 4

Evaluating the Competition in Retailing

Learning Objectives

Explain the various models of retail competition

Distinguish between various types of retail competition

Describe the four theories used to explain the evolution of retail competition

Describe the changes that could effect retail competition

Models of Retail Competition

The competitive marketplace

Market structure

The demand side of retailing

Nonprice decisions

Competitive actions

Suppliers as partners and competitors

L O 1

The Competitive Marketplace

Helps identify primary and secondary competitors

Retailers compete for target customers on five major fronts:

The price for the benefits offered

Service level

Product selection

Location or access

Customer experience

L O 1

Market Structure (1 of 5)

Pure competition

Occurs when a market has:

Homogenous products

Many buyers and sellers, having perfect knowledge of the market

Ease of entry for both buyers and sellers

Each retailer:

Faces a horizontal demand curve

Must sell its products at the going ‘‘market’’ or equilibrium price

It is rare in retailing

L O 1

Market Structure (2 of 5)

Pure monopoly: Occurs when there is only one seller for a product or service

Law of diminishing returns or declining marginal utility

As the retailer seeks to sell more units, it must lower the selling price

L O 1

Market Structure (3 of 5)

Monopolistic competition

Products offered are different, yet viewed as substitutable for each other

Sellers recognize that they compete with sellers of these different products

Retailers attempt to differentiate themselves with the products or services they offer

L O 1

Market Structure (4 of 5)

Oligopolistic competition

Essentially homogeneous products are sold

Relatively few sellers or many small firms who follow the lead of the few large firms

Any action by one seller is expected to be noticed and reacted to by the other sellers

L O 1

Market Structure (5 of 5)

Sellers end up selling at a similar price

Is rare in retailing

Is more common at a local level, especially in smaller communities

Outshopping: Occurs when a household:

Travels outside their community of residence or uses the Internet to shop in another community

L O 1

The Demand Side of Retailing (1 of 2)

Negatively sloping demand curve

Consumers will demand a higher quantity as price is lowered

The true price (or cost) the customer pays actually includes:

The retailer charges

Sales tax on the purchase

Delivery or transportation cost

L O 1

Exhibit 4.1- Demand as a Function of Price

L O 1

The Demand Side of Retailing (2 of 2)

Retailers will need to recognize when:

A drop in a competitor’s prices is temporary and inconsequential to long-term competition

The competitor has set a new permanent pricing standard

L O 1

Nonprice Decisions (1 of 2)

Nonprice variables are directed at:

Enlarging the retailer’s demand by offering customers benefits beyond the lowest price

Price is the easiest variable for competitors to copy

L O 1

Nonprice Decisions (2 of 2)

Using nonprice variables

Store positioning: Identifying a well-defined market segment using:

Demographic or lifestyle variables and appealing to this segment with a clearly differentiated approach

Offering private-label merchandise that has unique features or offers better value than competitors

Providing additional benefits for the customer

Mastering stock keeping with basic merchandise assortment

Becoming a destination store for certain products

L O 1

How to Implement a Store Positioning Program

Assess how shoppers and even competitors view the retailer

Determine the best position for the retailer

Analyze the retailer’s current target customers

Factor in current environmental trends

Implement the new positioning strategy

L O 1

Competitive Actions (1 of 2)

Overstored

Condition in a community where the number of stores in relation to households is so large:

That to engage in retailing is usually unprofitable or marginally profitable

Understored

Condition in a community where the number of stores in relation to households is relatively low:

So that engaging in retailing is an attractive economic endeavor

L O 1

Exhibit 4.5- Economics of Overstoring

Source: U.S. Census Bureau, "E-Stats, 2009 E-commerce Multi-sector Report," May 2011. For more information: http://www.census.gov/eos/www/ebusiness614.htm http://www.census.gov/econ/estats/ Internet release date 9/30/2011; Data after 2009 is projections by authors.

L O 1

Competitive Actions (2 of 2)

Competition is most intense in overstored markets

Many retailers are achieving an inadequate return on investment

L O 1

Suppliers as Partners and Competitors

Retailers must:

Develop a loyal group of patrons that encourages the supplier to accommodate their needs

Determine how they can be most productive for their suppliers yet still maintain profitability

Unique product or promotion by suppliers:

Can provide critical competitive advantage to retailers

L O 1

Types of Competition (1 of 2)

Intratype competition

Two or more retailers of same type compete directly with each other for the same households

Intertype competition

Two or more retailers of different type compete directly by:

Attempting to sell the same merchandise lines to the same households

L O 2

Types of Competition (2 of 2)

Divertive competition: Retailers intercept or divert customers from competing retailers

Can be intertype or intratype

Retailers operate very close to their breakeven point

Pop-up stores

Temporary small scale stores

Set up for a relatively short period of time

Explicitly intercept shoppers

Has escalated due to the Internet

L O 2

Evolution of Retail Competition

The wheel of retailing

The retail accordion

Retail life cycle

Resource-advantage theory

L O 3

Wheel of Retailing Theory

New types of retailers:

Enter the market as low-status, low-margin, and low-price operators

Gradually, enter a trading-up phase and acquire more sophisticated and elaborate facilities thus:

Become vulnerable to new types of low-margin retail competitors who progress through the same pattern

L O 3

Exhibit 4.6 – Wheel of Retailing

L O 3

The Retail Accordion

Describes how retail institutions evolve from:

Outlets that offer wide assortments to specialized stores

Is vague about the competitive importance of providing wide assortments to customers

L O 3

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Buffalo Wild Wings: Competing for the Future: After carefully reading the case details, answer the following questions: If there is a BWW near you, visit the restaurant or if not take

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