The strategic profit model (SPM) assesses a retailer's ...

[lidoalex]

The strategic profit model (SPM) assesses a retailer's performance and is based on the retailer's net profit margin, rate of asset turnover, financial leverage, and return on net worth.
 
 Indicate whether the statement is true or false

Question 2

Consider the retailer's role as a member of a larger supply chain. Why should the retailer view itself as part of this larger channel?

[bob]

Answer to Question 1

T

Answer to Question 2

In reality, it is the retailer's supply chain, rather than its outlet, that competes against other retailers. If the retailer ignores the supply chain in order to maximize short-run profits, then in the long run the chain will work against the retailer. If the supply chain overlooks the retailer, then profits sufficient for survival and growth will vanish. All channels are affected by five external forces: (1) consumer behavior, (2) competitor behavior, (3) the socioeconomic environment, (4) the technological environment, and (5) the legal and ethical environment. These forces cannot be completely controlled by the retailer or any other institution in the supply chain, but they need to be taken into account when retailers make decisions. Supply-chain or channel structure also depends on the number of tasks or functions each member is willing to perform. Eight marketing functions must be performed by any supply chain or channel: buying, selling, storing, transporting, sorting, financing, information gathering, and risk taking. They cannot be eliminated; however they can be shifted or divided in differing ways among the different institutions and the consumer in the supply chain. All forms of retailing were created by rearranging the marketing functions among institutions and consumers. No member of the channel would want or be able to perform all eight marketing functions entirely. For this reason, the retailer must view itself as being dependent on other supply-chain members.