The market forces that affect local and international retailers are similar in many aspects. One of the global market forces is the high competition that comes from the retailers that have already been established in the market. The high competition reduces the effectiveness of the activities of the retailers. For the retailers in new markets, it is hard for them to attract and retain new customers and most of the retailers use high advertisement and promotion to get customers. The new retailers have to compete with the companies that are already well-established and accepted by the consumers. The established companies control the process of setting prices and recruiting of the skilled labor. Most of the retailers are forced to use a combination of more than one channels to meet the changing demands in the retail industry by the consumers. Managing the many channels used by the retailers is challenging and costly (Pantano, & Viassone, 2015). The consumers expect to have seamless and high-quality services and sometimes it is difficult for the retailers to get their messages to the target consumers effectively due to the complex marketing infrastructures in the world. The forces of demand and supply also affect the businesses as they determine the prices at which the retailers sell their products. Economic, technological and media forces also affect the retail business.
The global market in this error of increased use of the internet has set new standards for the retailers who compete in the global markets. One of the main challenges is quality standards, whereby the consumers expect the best quality of products and services and they compare the quality with that of other major retailers in the world. If the retailers offer a lower quality than their global competitors, they are likely to lose their consumers. The other one is the environmental awareness which has come with new expectations. The global retailers are expected to operate in ways that are friendly to the environment and to ensure there is a reduced pollution. A failure to observe the environmental protection laws creates a negative reputation for the retailers and this can lead to reduced sales and eventually lead to the closure of the business. The other challenge is that the increased use of online shopping and social media has made it hard for the retailers to meet the increasing demands of the consumers. The costs of running a business also increase the risks of overspending and failing to meet the financial targets set by the business (Wallstrom, Salehi-Sangari, Foster, Styven & Strandberg, 2017). The other risk is the changing legal restrictions and regulations that affect the way the retailers conduct their business. Failure to meet the legal requirements can lead to the closure of the business.
The development chain refers to the activities that are associated with the new product introduction. The chain includes the product design phase, the associated capabilities in the chain, the knowledge required for the retailers to operate internally and the sourcing and production plans to use. One of the main decisions made in the development chain is the products that are to be made internally and the ones to be outsourced. The other one is to choose the right suppliers that meet the quality needs of the retailers and the strategies to ensure the there is a good relationship with the suppliers and other business partners (Ullrich, 2014). Global retailers require adequate planning for the development chain processes to reduce the chances of failure and increase the profit margins.
The development of the supply chain affects the retailers in different ways, depending on the location, size of the retailer and the products they deal with, among other factors. For example, retailers deal with a wide variety of products and services and they procure these products from many different producers. The quality of the supplies has a direct impact on the performance of the retailers and this has forced the retailers to focus heavily on the supply chains as a way of increasing their performance. The focus is mainly on cost reduction, increase in efficiency and quality as a strategy to meet the needs of the consumers. One of the most significant issues in the supply chains is risk management and all retailers need strategies to ensure they minimize the risks associated with the supplies (Brindley, 2017). Some of the developments in the chains include concerns for the environmental impacts of the businesses. Retailers have realized that the emerging developments can be beneficial if the costs and increased service levels are improved (Fernie, & Sparks, 2014). The changes in the supply chain require proactive planning by the retailers and the effective use of the available resources to meet the needs of the market.
The success of the retail business is largely dependent on the strategies that the business uses to achieve its targets. One of the strategies is the location of the business operations and how to reach out to the target population. The retailers also need to have a great-assortment strategy based on the consumer trends. According to da Veiga et al. (2014), the assortment strategy involves choosing on the products to include, reduce or increase in the stock and the benefits of each. Strategies for service delivery and technological changes are also important and require retailers to be proactive.
Brindley, C. (2017). Supply chain risk. Routledge.
da Veiga, C. P., da Veiga, C. R. P., Catapan, A., Tortato, U., Catapan, E. A., & da Costa Junior, E. V. (2014). Assortment planning: Strategic perception of retail owners and managers in Brazil. African Journal of Business Management, 8(19), 903-912.
Fernie, J., & Sparks, L. (2014). Logistics and retail management: emerging issues and new challenges in the retail supply chain. Kogan page publishers.
Pantano, E., & Viassone, M. (2015). Engaging consumers on new integrated multichannel retail settings: Challenges for retailers. Journal of Retailing and Consumer Services, 25, 106-114.
Ullrich, C. A. (2014). Introduction to supply chain management. In Issues in Supply Chain Scheduling and Contracting (pp. 5-15). Springer Gabler, Wiesbaden.
Wallstrom, A., Salehi-Sangari, E., Foster, T., Styven, M. E., & Strandberg, C. (2017). Managing Retail in an Omnichannel Environment-Consumer Behavior, Trends, and Challenges. Creating Marketing Magic and Innovative Future Marketing Trends (pp. 243-244). Springer, Cham.
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