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THEORIES OF RETAIL DEVELOPMENT

Environmental Theory 2. These are developed to explain the process of retail development: 1.THEORIES OF RETAIL DEVELOPMENT These theories revolve around: • • Importance of competitive pressures The investments in organizational capabilities and • Creation of a sustainable competitive advantage. Cyclical Theory 3. Conflictual Theory .

. Changing Technology Based on Darwin theory of survival of the fittest. Competitors c. Customers b.ENVIORNMENTAL THEORY A change in retail is attributed to the change in the environment in which the retailers operate Retail Environment: a.

CYCLICAL THEORY  Where change follows a pattern and phases can have definite identifiable attributes associated with them .

CYCLICAL THEORY Mature retailer Top Heavy Conservative Declining ROI Innovative retailer Low status and price Minimum service Poor facilities Limited product offering Traditional retailer Elaborate facilities Higher rent More locations Higher prices Extended product offerings Trading up Phase A.described by McNair . Wheel of Retailing.

CYCLICAL THEORY….. ACCORDIAN THEORY Open accordions: general retailers with broad product ranges Closed Accordions: narrowing range. focusing on specific merchandise .

CONFLICTUAL THEORY  The competition or conflict between two opposite types of retailers leads to a new format being developed .

CONFLICTUAL THEORY Anti-thesis Thesis Department Stores Individual retailers Synthesis Hypermarkets and Supermarkets Retailing evolves through blending of two opposites to create a new format. .

This is because retail organization pass through identifiable stages of innovation.Concept of LIFE CYCLE IN RETAIL  The concept of PLC as Philip Kotler is also applicable to retail organizations. This is what is commonly termed as the “RETAIL LIFE CYCLE” . accelerated growth. maturity and decline.

Concept of LIFE CYCLE IN RETAIL     INNOVATION ACCELERATED GROWTH MATURITY DECLINE .