CRA Retail Strategic Analysis 5

Question 1

Which scenario best illustrates 'retail cannibalization'?

Accepted Answer

A store's online sales increase while in-store sales decline by a similar amount

Answer

Retail cannibalization occurs when one channel (e.g., e-commerce) draws sales away from another channel (e.g., physical stores) within the same company.

Question 2

A retailer with a high 'days inventory outstanding' (DIO) relative to peers likely faces:

Accepted Answer

Excess inventory levels and potential markdowns risk

Answer

High DIO means inventory sits longer before selling, signaling potential overstocking, slow-moving merchandise, and future markdown pressure.

Question 3

A retailer's 'net promoter score' (NPS) is most strategically useful for predicting:

Accepted Answer

Long-term customer retention and organic growth

Answer

NPS measures customer loyalty and likelihood to recommend, which correlates with repeat purchase rates and word-of-mouth driven customer acquisition.

Question 4

In a retail strategic planning context, 'white space analysis' identifies:

Accepted Answer

Unmet customer needs or underserved market segments the retailer could enter

Answer

White space analysis uncovers gaps in the market—customer needs or segments that competitors have not adequately addressed—representing growth opportunities.

Question 5

A specialty retailer decides to enter grocery as a new category. According to the Ansoff Matrix, this is:

Accepted Answer

Diversification

Answer

Entering a new product category (grocery) in potentially new customer segments represents diversification—the highest-risk quadrant of the Ansoff Matrix.

(CRA) Certified Retail Analyst Practice Test

(CRA) Certified Retail Analyst Practice Test

CRA Retail Strategic Analysis 5