CILT Level 5 Professional Diploma. GLOBLISATION AND THE RETAIL SUPPLY CHAIN Learning outcomes After studying this module you will be able to:- •Be able to evaluate optimal sourcing solutions •Assess the implications of global logistics on just-in-time objectives
4.1 AVAILABLE SOURING SOLUTIONS
Souring in a retail environment is about increasing sales through providing better products, innovation and higher margins by operating a more efficient acquisition and supply chain process. Clearly, the sourcing strategy needs to align with and support the corporate strategy.
We began this Unit by looking at major changes in the retails sector, key elements of this were related to globalisation. This was a mixture of opportunities for UK retailers to open stores in overseas markets, overseas retailer opening and developing their business in the UK and direct sourcing.
4.2 WHAT IS MEANT BY GLOBLISATION?
The previous section discussed the changes in sourcing, this section examines the growth of retailers internationally.
Consolidation and concentration isn’t only a UK phenomenon, recent decades have seen the emergence of multinational retailers, through a combinational of mergers and acquisitions and establishment of operations in new markets. This section provides an introduction to the international picture.
The impact of the three overseas owned grocery discounters (Aldi, Lidl, and Netto – recently purchased by Asda) has been felt by Tesco, Sainsbury and Asda. Since entering the UK market, they have steadily opened stores and gown market share, creating a response from the leading grocers to re-invigorate their leading price point “basic” own brand, reduce prices and undertake extensive, aggressive marketing campaigns.
The maturity and near saturation of the UK Market and intense competition has resulted in a number of UK retailers developing overseas business, some using a franchised model. Nevertheless, a number of overseas retailers have entered and successfully expanded their presence in the UK. It is worth noting that not all these ventures have been successful for example:-
CILT Level 5 Professional Diploma
Describe what is meant by the term ‘globalisation’ in relation to the retail market and discuss the major factors and influences which directly affect this sector. (500-750 words) (4.2.1)
Explain the impact of globalisation on the retail supply chain. Assess the implications of Global logistics on just in time objectives (JIT (4.3.1)