Planning, performance evalutaion and retail space allocation : a case study

Abstract

PURPOSE: International retailers entering the Maltese market often make for fascinating case studies to examine due to their complex systems, innovative management practices and advanced technologies. This study aims to evaluate the case company’s use of planning tools, strategic KPIs, and strategies for allocating retail space. DESIGN: The dissertation’s research goals were best achieved through the use of qualitative research. Following a thorough review of the available literature, ten interviews with management personnel within the case company were conducted, both locally and overseas. FINDINGS: An integral aspect of the planning process is the budgeting process, which for the case company was found to be a yearly exercise taken up by local top management, in collaboration with the overseas Finance department. This budgeting process demonstrated how budgeting is not purely an accounting exercise for the case company, but rather a strategic-direction exercise. Moreover, both financial and non-financial measures were found to be implemented, throughout all levels of the company’s hierarchy. These metrics included KPIs that were directly tied to the company's goals, along with the subsequent rewards. Lastly, the analysis undertaken to support each retail spatial decision highlighted the significance the company gave to retail space allocation. Furthermore, the process of strategic item placement was found to be an intricate process, based on research, historical information and last but not least, knowing one’s market. CONCLUSIONS: The organisational and operational processes implemented by the company have proved to be largely effective and based on well-thought-out reasoning and research. The planning, performance evaluation and retail space allocation techniques presented will undoubtedly be largely valuable, in the ever growing retail market we present ourselves with today. VALUE: Planning and Performance Evaluation are two very important concepts within the field of Management Accounting. Furthermore, the concept of Retail Space Allocation is one which has not been heavily studied in the past. For this reason, such research would be valuable as it would tackle a new area of research within the University of Malta and serve as a potential model for other similarly structured businesses.