The project selected is the development of a marketing strategy for a fashion and clothing retail store. The essay writer store is required to offer its customers trending garments which are of high quality and at affordable pricing. Also, it is mandatory for the store to offer its clientele accurate and clear advertising with after-sale services that ensures customer happiness is attained. The store has to come up with a marketing strategy that will enable it to amass more customer traffic and also allow it to compete favorably. Besides, the strategy will also entail details on how the store forecasts its main components such as inventory and sale. Moreover, the strategy is important to the retail store as “a marketing strategy is not created solely by a firm’s marketing personnel. Instead, it flows from the company’s overall strategy” (Kotler 31). Thus, by creating a well-segmented marketing strategy, the retail store is capable of keeping afloat and gaining more market share.
To effect and help aid in the development of the marketing strategy for the retail store, an agile methodology will be adopted. This method is most appropriate in that “when change occurs, these methods provide for ways of allowing the change to be introduced in the project in an orderly way that attempts to maximize benefits for the sponsor while controlling the risks that the changes introduce” (Aguanno 21). Since the “fashionmarkets are synonymous with rapid change and, as a result, commercial success or failure is largely determined by the organization’s flexibility and responsiveness” (Christopher et.al 367), adopting an agile method would help cope with the many changes that occur over time. According to Aguanno in his book Managing Agile Methods, he states that agile methods allow for “iterative and incremental developments with short iterations, progress measures via completed features, an open and flexible design together with empowered teams” (23).
“Risk applies to any management decision that could have a good or bad outcome” (Sadgrove 11). By asking questions like what are the worst circumstances that could happen to the store, how likely are they to happen and is the store taking adequate measures to curb them, form the basis of risk management or risk mitigation. The retail store will need to adopt a four-prong risk management strategy to ensure that all the risks involved will be adequately and effectively tackled. Some of the risks will require to be avoided, some will need to be transferred will others will need to be accepted or reduced. Avoiding risk refers to risk mitigation by failure to participate in activities that will cause damage or losses to a firm or an individual. In a business setting, this means that the venture will entirely refrain from participating or undertaking any commercial activities that will lead to losses of income or misuse of the ventures’ resources. Most projects undertaken by firms have to be thoroughly evaluated by project managers to determine the level of risk and ensure that the investment will yield returns.
Transferring risk entails shifting risk burden from one party to another to reduce or curb damage that it will cause to the initial risk bearer. The transfer of risk is best illustrated in insurance policies offered by insurance companies. In this scenario, the insurer requires the insured to pay premiums as compensation for the insurer to take on the risk of providing insurance cover to the insured. In turn, the insurer combines all the insurance policies taken out for the same purpose and creates a pool of insured parties who all pay premiums. The premiums paid by all parties are used to indemnify the insured party suffering actual loss, therefore, the risk is borne by the other insured parties showing the transfer of risk.
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Another method of risk mitigation is the acceptance of risk. This method is mostly applied where the acceptance of risk currently is an opportunity cost to prevent a bigger loss from occurring. Most individuals choose to take out life and health insurance covers to avoid bearing the heavy costs of medical care in case of any emergencies. Risk can also be mitigated by reducing it. In some firms, the risk is controlled by containing it to specific sectors and avoiding its spread to other segments. The firm, therefore, accepts the risk it faces and puts in place policies to ensure it is contained and manageable.
During the development of the marketing strategy, various risk events will be highlighted during the SWOT analysis. The risks that plague the fashion and clothing industry, and in particular the retail store include; theft, data breach, damage to inventory, customer turnover and customer injury and competition. Being in a physical business, the retail store faces the possible risk of shoplifting, burglary, and pilferage. Shoplifting occurs where an individual who poses as a customer tries to steal merchandise from a store and sneak it out. Burglary is forced entry where the premises are accessed illegally using crude methods and the goods are done away with. Pilferage is a situation in which the staff of an establishment engaged in the illegal theft of the goods and products that are used or sold. The retail store, therefore, has to plan for these risks and find ways to curb them as they are avoidable.
Cases of inventory of damage lead to loses to the store, whereby they have to order fresh stock to meet the supply and demand curve. This may come about from Acts of God such as floods and hurricanes. Also, damage can occur from mishandling and mismanagement of the inventory. Over and above, another unavoidable risk event comes about from competition. Being a competitive industry, the store has to cope with the new competition and also from already existing ones. Competition also brings about the risk of customer and employee turnover. The customers can be enticed to try the competition if not satisfied with the services and products provided at the store, in addition, the staff may decide to switch to the competition for better remuneration or better working conditions.
A data breach is a case where a hacker illegally gains entry to the online platform used by an establishment to facilitate business transactions. The breach can affect either the customer where their details are duplicated and used by the hacker, also known as identity theft. This can be done through spoofing attacks and phishing. Spoofing is where the hacker, in this case, an unknown source hides behind and uses a known source to access the user’s data. Phishing is where the hacker sends an email to the user, disguising it as a legitimate source and in-turn gain sensitive information about the user. Likewise, the hacker may directly hack the store’s website if it has a weak firewall or outdated software.
|Risk Category||Description of Risk||Potential Impact on Project|
|External||Competition with other brands carrying similar products with cheaper price||Decrease in sales|
|People||Theft from employees and customers||Shortage in inventory and loss in profit|
|Operational||Data breach due to employee sabotage or customer’s information or weak firewall that allows hacker to retrieve and use customer information to purchase and use corporate information for personal gain||Loss of revenues and loss of customer’s trust that will lead to decrease in customer traffic and loyalty|
|Resource||Damage of merchandise due to employee negligence||Loss of revenues and customer loyalty|
|People||Customer turnover due dissatisfaction of customer service||Loss of customer loyalty, decrease in customer traffic and loss in income on a daily basis|
Qualitative Risk Analysis
|Risk||Probability of Occurrence||Potential Impact|
|Damage of merchandise||1||4|
Quantitative Risk Analysis
|Risk||Numerical Value (dollars, days, etc.)|
|Competition||$1 million, 1 month|
|Data breach||$3 million, 3 months|
|Theft||$1,500, 1 day|
Project Risk Response Strategy
|Risk||Risk Response Strategy||Description of Risk Response|
|Competition||Avoid||Avoid the risk by using social media, creating a website to allow online shopping, and providing incentives|
|Theft||Avoid||The risk is avoided by using security tags on merchandise, surveillance cameras, staff training on theft prevention, smart inventory management tool, and facial recognition technology incorporated in cameras I|
|Data breach||Transfer||The risk is transferred by purchasing a data breach insurance covering expenses including customer notification, investigation, advertising to manage image, and legal defense|
|Damage of merchandise||Avoid||Avoid the risk by training staff on handling, storing, delivering, and receiving merchandise. Make random warehouse and stockroom inspections|
|Customer Turnover||Mitigate||Mitigate the risk by analyzing customer feedback, using a mystery shopper, and training the staff on customer service|
Project Risk Control
Plan for Reviewing Risk Responses
Each type of risk requires its own risk response strategy. Without having a proper risk response, it is not possible to successfully operate the business.
In order to determine whether the company is at risk of failing due to not being able to keep up with the competition, it is important for the company to decide on a market niche in which to perfect its craft. A company needs to ensure that it is competing at a high level in its specific market segment, or in whatever its market differentiator might be. In the case of a company such as Nike, they are largely focused on activewear. They choose to focus on this and attempt to be the best at it, rather than making clothing for businesspeople, for example. Since our brand is mainly concerned with being at the top of minds when it comes to trend setting, it is important that the firm is understanding what the competition is doing, so that it can attempt to be one step ahead.
Regarding theft, it is important for the firm to have security guards on duty at its physical locations, in order to ensure that people are at least deferred from stealing from the company. When it comes to the online segment, it will want to make sure that the website is fully secure from potential hackers, and that the client information is well protected.
Data breaching is a major concern for modern companies, and so it is vitally important that all measures are taken to not only protect the clients, but also that there are steps taken to ensure that the information of the company, particularly its plans and financials, are kept under safeguard with a high level of encryption on all digital media.
Damage to merchandise can be mitigated by ensuring the company is ensuring that there is guarantees on all products that are manufactured elsewhere, as well as a guarantee on all merchandise being delivered. This would mean sections need to be written on contracts with both the factory, and the delivery company.
Customer turnover is something that can certainly be protected by having loyalty programs. By giving customers incentives to stick with the company, such as discounts, and other offers that would keep the customers coming back, the firm can ensure it will secure business through repeat clients and referrals, in addition to its marketing efforts that aims to attract new customers.
Identification of New Risks
As the company proceeds with operations, there will likely be other risks that reveal themselves to the firm. It is important that anything that occurs to management is communicated and documented. It will then be up to the executives to determine whether action needs to be taken to ensure all possibility of that risk is mitigated.
As the business evolves, certain items will become evident that need to be addressed. With the hectic nature of running a business, it is much easier to avoid the issue and take the path of least resistance. But by ignoring potential issues the company could be in jeopardy. On the other hand, if the potential issues are immediately documented and a plan is created to address these issues, the company will be able to ensure that if the problems do come up, the firm can be prepared. For example, if the company is enjoying a positive return on investment from advertising on Facebook for the online division of its store, the company will want to be caution to avoid over relying on Facebook as its sole online marketing platform. Instead, the company might decide to diversify its online marketing efforts by posting ads on Google and Bing. This way, if the popularity of Facebook dwindles, or if Facebook simply decides it does not want to allow the firm to advertise on it anymore, then the company will have a fallback plan, and the revenue of the firm will not depend on a sole source of online marketing.
Aguanno, Kevin, ed. Managing agile projects. Multi-Media Publications Inc., 2005.
Christopher, Martin, Robert Lowson, and Helen Peck. “Creating agile supply chains in the fashion industry.” International Journal of Retail & Distribution Management 32.8 (2004): 367-376.
Kotler, Philip, and Gary Armstrong. Principles of marketing. Pearson Education, 2010.
Sadgrove, Kit. The complete guide to business risk management. Routledge, 2016