You are on page 1of 20

SUBJECT: STRATEGIC MANAGEMENT

PROJECT TOPIC: STRATEGIES FOR SHOPPING MALLS

CLASS: SYBMS

DIV: A

NAME: SUPRIYA

ROLL NO.: 14

INDEX NO. 1 2 3 4 5 6 TOPIC


MEANING AND FETURES OF STRATEGIC MANAGEMENT INTRODUCTION

TYPES OF SHOPPING MALLS

STRATEGIES FOR SHOPPING MALLS

CONCLUSION

BIBLIOGRAPHY

STRATEGIC MANAGEMENT

MEANING: Strategy management is concerned with making decisions about organizations future direction and implanting those decisions.

FEATURES: 1.SYSTEMATIC PROCESS: Strategic management is a systematic process. It is basically concerned with making and implementing decision about an organizations future direction. Basically strategic management involves strategic planning or strategy formulation, strategic implementation and strategy evaluation and control. The process of strategic management must embody all general management principles and practices.

2. RELATES TO ENVIRONMENT: Strategic management must relates to the environment. The internal and external environment affects the strategy formulation and implementation. The internal environment relates to mission and objectives of the firm, plans and policies, other facilities and resources of the organization. The external environment relates to competition, customers, channel intermediaries, government policies, and other social, economical and political factors. There must be proper analysis of both internal and external environment. The analysis of internal environment reveals strengths and weaknesses of the firm, and the analysis of external environment reveals

opportunities and threats. Strategic Management, therefore, emphasizes monitoring and evaluation of external opportunities and threats in light of a firms strengths and weaknesses.

3. FOCUS ON OBJECTIVES: The focus of strategic management is the achievement of the objectives of organization. Through proper strategy formulation, implementation and control, the strategic management enables the organization to achieve its objectives.

4. INVOLVES MULTIPLE DECISIONS: Strategic management involves multiple decisions. It involves several decisions such as: A.Scanning of internal and external environment. B. Setting of objectives. C. Formulation of strategies. D. Making arrangement of resources. E. Allocation of resources to various activities or departments. F. Implementation of strategy. G. Strategy evaluation and control.

5. CONTINUOUS PROCESS: Strategic management is a continuous process. As long as the organization exists, there is a need for strategic management in order to accomplish the objectives of the firm.

6. TOP MANAGEMENT FUNCTION: Strategy is basically the top management function. The top management devotes a lot of time and effort in respect of strategy matters rather than the routine matters. The operational management looks after day-to-day operations in the organization. Since the environment in the organization is dynamic in nature, providing new opportunities and spend more time and effort in respect of analysing and monitoring the environment.

7. LONGER TIME HORIZON: Strategic management is concerned with long term planning. Therefore, it considers longer time horizon and not the shorter time horizon. The operation management considers the short term time horizon. However, this does not mean that the top management does not consider the short term position of the organization at all. Short term performance needs to be evaluated to frame long range plans.

8. UNIVERSAL APPLICABILITY: Strategic management has universal applicability. It is applicable to business organizations as well as to non-business organizations. This is because, all organizations need to frame strategies for their growth and survival. The presence of strategies keeps the organization active and alert and the efforts are channelized in the right direction.

INTRODUCTION

Shopping malls :
The latest trend in the corporate universe is of the emergence of the shopping malls.

Shopping malls:
Shopping malls are an emerging trend in the global arena. The first thing that comes in our mind about the shopping malls is that it is a big enclosed building housing a variety of shops or products. According to historical evidences shopping malls came into existence in the middle ages, though it was not called so. The concept of departmental stores came up in the 19th century with the Industrial Revolution.

Consumers:
Consumers wanted a better shopping experience and this demand gave rise to the emergence of shopping malls in India. Originally the first of the shopping malls was opened in Paris. Then the trend followed in the other metros over the world, and there was a spree of shopping malls coming up at various places. In this age of mass production and mass consumption, the concepts of shopping malls is most modern method of attracting consumers. The concept of

Shopping:
Shopping was altered completely with the emergence of these shopping malls. Shopping was no longer limited to a mere buying activity - it has become synonymous with splurging time and money.

People simply go about roaming through the shopping mall in order to peep through the window of the shop and often ending up buying something they like. The consumers desire a combination of comfort and suitability which the

Shopping malls:
shopping cater to, and so this format of shopping has become so popular all over the world, and especially so in India. The inclusion of amenities like restaurants, multiplexes, and car parks attract more and more crowds to shopping malls, that are considered family hangout zones.

Types of Shopping Malls

In general, you will find only regional centers, superregional centers, and fashion/specialty centers on this Web site. Relatively few community centers were chosen, but appear here because the center may have, at one time, been considered original center. Only a few theme/festival centers were listed in heavily urbanized areas, such as San Francisco, because of their particular attractiveness or size. Finally, the new designation, lifestyle center, displays because of their classic-mall type appearance even though they are without a classicmall anchor store.

Fashion/Specialty Centers
Characterized as higher end, fashion oriented centers between 80,000 and 250,000 sq. ft.

Community Centers
Characterized as having between 100,000 and 350,000 sq. ft. Usually two types of anchors, such as a discount department store or large specialty/discount apparel store.

Lifestyle Centers
A new designation that has a loose definition. Generally, it's a center that does not have an anchor tenant in the classic sense (that is, a department store). However, lifestyle centers increasingly have a cinema as a major tenant. Others have just a small collection of exclusive shops.

Outlet Centers
Characterized as manufacturers' outlet centers between 50,000 and 400,000 sq. ft.

Regional Centers
Characterized as having between 400,000 and 800,000 sq. ft. Usually two or more anchors, such as a conventional department store, junior department store, massmer chant, discount department store, or fashion apparel store.

Super Regional Centers


Characterized as having over 800,000 sq. ft. Usually three or more anchors, such as a conventional department store, junior department store, mass merchant, or fashion apparel store.

Theme/Festival Centers
Characterized as tourist-oriented, retail and service centers between 80,000 and 250,000sq. ft.

5 MAIN STRATEGIES FOR SHOPPING MALLS

1. Get the Design and Aesthetics right:


Mall design plays a key role in providing long-term value proposition to customers. Globally, the mall GLA (Gross Leaseable area) ratio varies between 50-60% to total floor area. However mall architects are pressurized to design high GLA (Gross lease-able area) to total floor area malls even as high as 80-90%. This might make sense in a spread sheet, however compromises on mall design parameters like Axial Spaces Ratio and Convex Spaces Ratio. Convex spaces ratio (CPS) measures the degree of openness in a mall and Axial spaces ratio (APS) measures the level of fringing and accessibility of all mall areas. In addition, spatial design of mall core, fringe and anchor spaces is critical to ensuring mall footfalls are evenly distributed. Visual Discontinuity through inconsistent interior design can indirectly cause reduced span of mall visit. Lack of community areas can also restrict timespan of a mall visit restricting browsing capability of high value family shoppers. Research has shown a high correlation

between faulty mall design and high vacancy rates. Mall visitors are less inclined to spend more time in, or develop sustained loyalty to a mall that does not give them the experience of an aesthetically superior public space.

2. Define a clear mall positioning statement:


A mall that caters to high volume and low margin players would have different anchor and tenant strategies as compared to a mall catering to the youth. In the Indian context, apart from some prominent names, most malls are in the range of 50,000-100,000 sq ft of GLA which falls in the Neighborhood mall category. Only a few come even close to the half a million sq ft Super-regional mall sizes. However a lot of the new city malls do not have a clear positioning strategy and attempt multi-anchor strategies without having the GLA to support it. Lack of clear positioning confuses both tenants and shoppers alike. Global Research into consumer shopping behaviour has shown that browser category shoppers tend to spend 15% more unplanned money, however are less likely to develop mall loyalty. So-called destination shoppers visit a mall for a particular good or service and get locked in for longer periods of time and

frequencies. However destination shoppers leave home with a particular destination in mind- a children's play area, a community area, a furniture anchor, a book store, or even a cinema multiplex. In the Indian context there is lack of adequate understanding of regional consumer shopping behaviour such as North Indian target segment versus an Eastern or South Indian target segment and respective shopping or mall visit behaviour. A mall visit is about spending time rather than only money and positioning to your target segment allows you to create a destination through your tenants, public spaces and entertainment mix.

3. Build a sustainable Anchor strategy:


Anchors are the life-blood of a mall whereas the in-line stores are its muscle and bone. These are large format stores which pull in mall footfalls both from immediate as well as excatchments areas. Anchors can take upto 25% of the total mall GLA. Increasing beyond this can compromise having a robust tenant mix strategy which is being discussed later in this article. Choosing a flagship anchor is all about creating both merchandising variety and enduring categoric strength in the mall relevant to the primary target segment. In-line

stores depend on the anchor for sustenance and cluster around it to get a piece of the footfalls. Category Killer anchors can decimate retail competition for that product for miles however require a ruthless blend of range, price and brand in a particular segment or product a rare and difficult expertise. Well known category-killer anchors globally include IKEA for furniture, Toys 'R' Us for toys and Plug-ins for electronics. There are unfortunately few, if any Indian retailers which can come close to being labeled as a category killers both in terms of size and range. This leaves a large gap open for International retailers to occupy. Space availability at sustainable rentals is also an issue for Indian retailers with the capability to develop categoric strength. Malls should realize that Anchor strategies are never about rentals - anchors notoriously pay well below the market price for retail space and most often than not just about pay break even rents. However sustenance of in-line shops requires a robust anchor. To ensure that rents are attractive it is important that malls forms a partnership rather than a rental transaction with key tenants. Many of the new Indian suburban malls are loosing out on high quality Anchors and even key retailers on account of high rents which makes the outlet unprofitable. A last word- placement

of a large anchor within a mall space is dependent on the anchor strategy, the spatial definition of mall core and siting of other in-line shops. More often, wrong anchor placement can result in fringing and inappropriate zoning thus causing in-line stores to loose footfalls and ultimately pull out from a mall.

4. Have a balanced tenant mix:

A well-planned and executed tenant mix can help a mall sustain its destination status even in the face of ferocious competition. The objective of a tenant mix strategy is to maintain the delicate balance between diversified product and service offering and revenue imperatives of the leasing business. Jewelry and food tenants typically pay the highest rentals while occupying the least rental area. Books, Music, Apparel and footwear pay the next highest rentals while anchors such as departmental stores pay 25-30% of the per sq ft rentals of the in-line stores. Maintaining a balance between entertainment, food and retail space is equally important to ensure that lack of sufficient options of any one of these does not become a differentiating factor in a mallvisit decision. International benchmark for entertainment space is at close to 25% of total GLA and for good reason. A

mall visitor would find it excruciatingly painful to spend an entire half day in a mall only browsing shops. An entertainment break can increase the customary two to three hour mall visit to double the time. This can translate to one more visit to the food court or another look at the new jewelry shop. In the Indian context families are a large target segment and absence of an adequate children's play area or a senior citizens resting area can be decisive in a mall visit decision. Malls also need to balance between the relatively modest price and high range option of the food court with specialized and maybe higher priced restaurants. Close to 40% of total GLA of a mall should be occupied by in-line shops with each category not occupying more than 5% of the total GLA. Globally apparel shops occupy the highest GLA after Anchors and Entertainment.

5. Parking:
An often ignored part of long-term mall strategy is parking. Malls that target middle to upper middle class consumers have to provide adequate parking for visitors. Absence of adequate parking can cause visitors to be turned away frequently. This can reduce mall loyalty besides revenue loss.

Global standard benchmark is one slot for every 200-250 sqft of GLA in a mall. Hence for a 50,000 sq ft neighborhood mall, at least 200 parking spaces need to be provided for. This is rarely the case especially in cities such as Mumbai and Delhi. A 200 capacity car park may need anywhere from 15,000 20,000 sq ft of space to be budgeted. In cities such as Mumbai, this can be a difficult proposition to meet and can even make projects financially unviable. However all mall strategies can be laid low if parking is inadequate and customer is turned away from the gate by the security guard. Apart from these key issues, a mall strategy will also include zoning of tenants, mall maintenance strategy, competitive positioning, and a promotion and marketing strategy for the entire mall off and during festival seasons. Mall managements also need to manage mall-wide tenant behaviour. A leading mall in Mumbai has tenants opening and closing shop at varying times. To ensure mall visitors know where they stand in terms of mall timings, malls should have standard opening and closing times for all tenants- with entertainment and food zones being the exception only. Although there are many malls that have mushroomed in the Indian context, the market is still ripe with opportunity. This

is reflected in the famous quote of John Wooden It is not so important who starts the game but who finishes it.

CONCLUSION
After looking at the above data we have come to a conclusion that presently there is a tend of considerable increase of shopping malls in all the metro cities , small towns and a large section of middle class , upper middle class people are coming for shopping because of the following reasons: 1. Customers convenience for shopping. Items from food to clothing, grocery to electronics are available under one roof. 2. Better environment and improved customer service. 3. compitive price with seasonal discount various gift scheme. 4. Various options to the customer for choosing brand and variety. 5. Ample scope of promoting sales and enhance brand image. 6. Availability of parking space for their car. 7. Scope of employment at local area for various segment.

BIBLIOGRAPHY
1. www.slideshare.com 2. www.indiatimes.com 3. www.indianmba.com 4. www.google.com