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store through the distribution center and number of days storage from receipt to supply in their distribution centers.

Underlying the successful realization of a growth dream is the need to develop a network of responsive network of supply c hain relationships. As a new store starts the scale of operations of the entire supply chain network needs to scale- up without glitches. Performance indicators of each network member need to be in sync. Direct influences on growth Growth s trategies are influenced by direct stimuli, internal and external to the firm, t hose trigger the growth motive. External stimuli include access to prime real estate (construction of new malls), government stimulation measures (boost to tourism, opening the real estate market, liberalization of the business environment, etc.) and th e consequent market opportunities, influence of third-party decisions (either foreign franchi sors who set the growth agenda or understanding, or emulating the successful growth of competitors). Internal stimuli are like a perception of market saturation and ne ed for geographic expansion, or unique organizational resources (people, brands, sourci ng or supply chain capabilities) that can be leveraged. Retail growth strategies are a mix of rational and goal-oriented proactive behav ior where goals are first defined and growth options are derived from research and analysi s, and a more reactive, suck-and-see, more gut feel, less rational and less objective-ori ented behavior. My experience suggests that selection of growth strategies is often a more intuitive behavior, and it is here that cultural factors exert their influence i n setting the direction of growth, particularly when evaluating growth in new geographies. In the midnineties the Caspian Sea CIS countries were on the radar screen of every busines sman in Dubai as virgin markets (a rational perception), and but quickly fell out favor based upon the poor experience (difficult political and cultural conditions). The businessm en never felt at home. India was a closed country till 2004, but suddenly is the focus of glo bal growth opportunity. It is not that it has become any easier to do business in In dia. It is just as difficult to open a retail store. The business sentiment has certainly cha nged but the access to human resources who have an intuitive insight into culture and feel at home is also an important factor. The China growth story was led by the Hong Kong and Taiwanese business persons for whom cultural affinity and returning to the roots w as an unstated underlying variable. Organization resources and capabilities The antecedent conditions, motivations a nd direct and indirect influences, affect the trajectory of growth whereas the organizations access to resources (e.g. strength of brand identity, access to locations, human resources, network of supplier relationship s, etc.) and

capabilities that add tangible value to consumers (e.g. supply chain efficiencie s, IT assets, organization culture, design capabilities, responsiveness, etc.) influence the c hoice of the growth path. Zara, for example, implements its unique business model of rapid responsiveness through company-owned and managed stores, controls nearly all operation details, and bears the inventory risk. Other brand franchises like Cla rks or Calvin Klein sell to franchisees, transfer the inventory risk, and only define o perational details in general. Clarks and Calvin Klein have not developed adequate franchise e management capabilities in-house and depend upon franchisee partners to manage the business outside the home geography. The diversity of growth options like conces sions, franchising, owned stores, licensing, etc. are all influenced by the resources a nd capabilities of the parent organization. If the supply chain efficiencies are a critical factor in the success of a brand, transferring the efficiencies will be integral to exe rcising the growth option. Similarly if design is a critical success factor, adapting produc t to the new market will be essential to successful growth. This can be exemplified through t he apparent lack of success of Wal-Mart in Germany versus in the UK. Wal-Mart has t o an extent being unable to replicate its success factors in Germany e.g. supply chai n management is an outsourced service in Germany but done in-house by ASDA / WalMart. Evaluating and exercising the growth option Sensitizing the growth issues as abo ve does not imply that entrepreneur or ownermanager considers all issues before making a growth choice. Entrepreneurs or man agers reduce most of the above issues into simple workable business rules. Starbucks s ells a commodity, easily replicable, and a product for which an average consumer will n ot do brand-seeking destination search. And therefore if convenience and accessibility are critical to consumption then locate the brand everywhere coffee is consumed (bot h to access consumers and prevent competition), often four locations in a mall or eve n across the road from each other. With the commoditization of other categories (e.g. app arel or the swatchification of the low priced fashion watches etc.), brands searching for increasing volumes often mimic the Starbucks approach and give consumers accessi bility and convenience by placing stores proximate to each other. So how does one make the retail growth choice? Retail is a highly fragmented bus iness where sales from each new location grow rapidly for the first three years and th en start to slow down (the 1000-day rule). Getting double digit growth rates from mature sto res in mature economies (Dubai is an exception) is a challenge and retail growth is bas

ically a decision about locating a new store in the vicinity of or distant from an existi ng store. A new store location is not a straightforward decision. It needs to weigh the posi tive primary effects of increasing sales based upon market opportunity, loyalty effec t, and operational synergies against the negative secondary effects of inter-dependency of the branches in the network and the additional organizational and operating costs as under: Primary effects Increasing sales Pre-emptive strategies to prevent competition Synergy in marketing and promotional costs associated with economies of scale of advertising More outlets are found to lead to more loyalty consumers are forced not to try c ompetition because of convenience and adding a branch may often leads to increase in sales of all outl ets Secondary effects Potential cannibalization of sales from existing stores Costs associated with managing a retail network of branches people and logistics Costs associated with financing fit-out and inventory

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