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Wall Stores have been experiencing a decline in sales due to losing customers to their competitors - NSC Business Studies - Question 8 - 2016 - Paper 1
Question 8
Wall Stores have been experiencing a decline in sales due to losing customers to their competitors. The management of Wall Stores decides to conduct a planning sessi... show full transcript
Worked Solution & Example Answer:Wall Stores have been experiencing a decline in sales due to losing customers to their competitors - NSC Business Studies - Question 8 - 2016 - Paper 1
Step 1
Formulate THREE possible strategies that Wall Stores can include in their strategic planning to address the challenges in the scenario.
Answer
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Intensive Advertising Campaign: Wall Stores can launch an extensive advertising campaign to re-engage existing customers and attract new ones. This campaign should focus on highlighting promotions, new products, and the unique value offerings of the store compared to competitors.
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Improving Product Quality: Enhancing the quality of products can differentiate Wall Stores from its competitors. Conducting customer surveys to identify areas of improvement and integrating customer feedback into product offerings can enhance customer satisfaction and loyalty.
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Diversification of Product Range: Wall Stores can diversify its product line by introducing new products that cater to current market trends or customer needs. This could also involve sourcing unique products that are not offered by competitors, thereby attracting a broader customer base.
Step 2
Discuss how Wall Stores can apply the Porter's Five Forces model to analyse their market environment.
Answer
Wall Stores can effectively use Porter's Five Forces model as follows:
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Power of Suppliers: Wall Stores needs to evaluate the supplier landscape to understand the bargaining power they hold. By identifying key suppliers and considering alternative sources, Wall Stores can negotiate better prices and terms, reducing the risk of high input costs.
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Power of Buyers: Analyzing buyer power involves recognizing how easily customers can switch to competitors. Wall Stores should conduct market research to understand customer preferences and price sensitivity, ensuring their offerings are compelling enough to retain customers.
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Threat of New Entrants: Evaluating barriers to entry is crucial. If Wall Stores identifies low barriers, it should strengthen its market position through brand loyalty and customer engagement strategies to deter new competitors.
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Threat of Substitution: Wall Stores should closely monitor products that serve as substitutes for their offerings. A proactive approach includes innovation and adaptation, ensuring the brand remains relevant in a rapidly changing market.
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Rivalry Among Existing Competitors: An assessment of the competitive landscape, focusing on the strengths and weaknesses of direct competitors, enables Wall Stores to better position itself in the market and develop strategies that leverage its unique strengths.