Chapter 06 Retailer financial strategy what is the retailer financial strategy. Retailer financial strategy integrate the retailer financial objective and goal, which retailer develop their strategy to build a sustainable competitive advantage to generate a desirable profit.

Con…. Retailer objective and goal. the first step in retailer strategic planning is to set objective, Goals ‘“goal are long-term aims that you want to accomplish. Objectives ‘“ that can be achieved by following a certain number of steps there are different objective which retailer set it in the planning stage. (1) Financial objective..when assessing financial performance, most business focus to earn profit, what were the retailer profit,such as profit of the last year and what will they be this year and into the future.

(2) Societal objective Societal object of the retailer related to broader issue about providing benefits to society, for example retailer might be concerned about providing job opportunity for people in a particular area. other societal objective might include offering unique merchandise,as well as providing innovative services which improve personal health, such as weight reduction program.

(3) Personal objective. Many retailer particular owner of small, independent businesses, have important personal objective,including self gratification,status,and respect., whereas personal and societal objectives are important but the primary focus of any retailer to achieve our financial object.

Strategic profit model The strategic profit model is a method which summarizing the factor that affect a firm financial performance. these factor are, (1)Net profit margin…… simply how much profit (after tax) a firm earn it. (2)Assets turnover……… assets turnover is the retailer net sales divided by its total assets. this financial arrangement measuring the productivity of a firm. it means how many sales dollar are generated by this total amount of assets.

Con…………. (3) Customer return..customer return represent the value of merchandise that customer return in the form of purchasing merchandise. (4) Gross margin…gross margin also called gross profit.net sales minus cost of good sold.

Assets management path The information used to analyze a retailer assets management path primary comes from the firm balance sheet. Balance sheet represent the retailer financial position at a given point in time. it represent assets liabilities and owner equities. (1) Current assets…..by accounting definition current assets are those assets that can be normally converted into cash within one year. such as account receivable.inventory and so on.

(2) Fixed assets An asset with a long-term useful life that a company uses to make its products or provide its services. Strictly speaking, a fixed asset that business can not want to sell it quickly.assetservices

Setting and measuring performance objectives. Performance measurement helps determine the progression of employees. Performance measurement can be used in a wide variety of industries to measure the progress of employees. By measuring performance, a supervisor can determine whether or not goals are being met. To effectively monitor performance, you must set following certain objectives.

Con…. Quantity/Quality – One of the main objectives in performance management in a retail environment is to determine the ratio of quantity to quality. Managers should establish a short-term selling goal for an employee. This could be a weekly or monthly goal. For a new employee, set the goal low so the employee can take the time to effectively learn selling methods and product knowledge without feeling pressured to sell a vast number of products.

Con….. Timeliness Recording the amount of time it takes an employee to complete a task is a vital performance measurement tool. The objective in recording the timeliness of employees is to help point out potential problem area.

(3) accountability At each level of the business retailer need to accountable the total expenses, per day expenses as well as per year. (4) Store operation measurement….the critical assets controlled by store management are the use by store space that how many merchandise we need it and where we need to place it.