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Reliance Fresh - The Building of the Brand

Reliance Fresh - The Building of the Brand

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Published by Dinesh G. Mhatre

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Published by: Dinesh G. Mhatre on Nov 20, 2009
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05/24/2013

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Dinesh G. Mhatre. EMBA – III, Roll No. 6
Topic: Reliance Fresh – the building of the brandObjective:
To review the emergence of Reliance Fresh.
To understand the
Farm to Fork
concept.
To understand the product range.
To understand the private label strategy in Kirana Stores.
To review CSR initiative of Reliance by recruiting people from under privileged section.
Philosophy:
Reliance Fresh store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its “farm-to-fork’’ theory. The idea the company spoke about was tosource from farmers and sell directly to the consumer removing middlemen out of the way.
Methodology used:
The relevant data was collected from secondary sources i.e. Internet.
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Dinesh G. Mhatre. EMBA – III, Roll No. 6
Content
We can see many examples of businesses where, first we grow and then think of expanding butReliance is quite different. Reliance has developed such huge amount of resources and capital over theyears that whenever it steps into any segment it is not required to wait for growing signal, that’s whyit always thinks of expanding without any boundaries. Reliance retail is next Step by RIL which will bea pan India project. “Reliance Fresh” is the retail chain division of Reliance Industries of India which isheaded by Mukesh Ambani. Reliance has entered into this segment by opening new retail stores intoalmost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in thenext 4 years in their retail division and plans to begin retail stores in 784 cities across the country. TheReliance Fresh supermarket chain is RIL’s Rs 25,000 crore venture and it plans to add more storesacross different segments, and eventually have a pan-India footprint by year 2011. The super martswill sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also willsport a separate enclosure and supply-chain for non-vegetarian products. Besides, the stores wouldprovide direct employment to 5 lakh young Indians and indirect job opportunities to a million people,according to the company. The company also has plans to train students and housewives in customercare and quality services for part-time jobs. The company is planning on opening new stores withstore-size varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples,FMCG products and dairy products. Each store is said to be within a radius of 1-2 km of each other, inrelation to the concept of a neighbor store. However, this is only the entry roll-out that the companyhas planned. Bangalore is said to have 40 stores. In a dramatic change due circumstances prevailingin UP, West Bengal and Orissa, Reliance Retail has decided to minimize its exposure in the fruit andvegetable business. The company may not stock fruit and vegetables in some states, Orissa being oneof them. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it hasdecided not to compete with local vendors partly due to political reasons, and partly due to its inabilityto create a robust supply chain. This is quite different from what the firm had originally planned. Whenthe first Reliance Fresh store opened in Hyderabad last October, not only did the company said thestore’s main focus would be fresh produce like fruits and vegetables at a much lower price, but alsospoke at length about its “farm-to-fork’’ theory. The idea the company spoke about was to sourcefrom farmers and sell directly to the consumer removing middlemen out of the way. A typical RelianceFresh store is approximately 3000-4000 square Feet and caters to a catchment area of 1-2 km. With avision to generate inclusive growth and prosperity for farmers, vendor partners, small shopkeepersand consumers, Reliance Retail Limited (RRL), a subsidiary of RIL, was set up to lead Reliance Group’sforay into organized retail. RRL launched its first store in November 2006 through its conveniencestore format ‘Reliance Fresh’. Since then RRL has rapidly grown to operate 590 stores across 13 statesat the end of FY 2007-08. During the year, RRL also focused on building strong relationships in theagri-business value chain and has commenced marketing fruits, vegetables and staples that thecompany sources directly to wholesalers and institutional customers. RRL provides its customers withhigh quality produce that has better shelf life and more consistent quality than was available earlier.RRL has made significant progress in establishing state-of-the-art staples processing centers and tomake them operational by May 2008. Through the year, RRL also expanded its supply chaininfrastructure. The Company is fully geared to meet the requirements of its rapidly growing storenetwork in an efficient manner. Recognizing that strategic alliances are going to be a key driver to itsretail business, in FY 2007-08, RRL established key joint ventures with international partners inapparel, optical and office products businesses. Further, RRL will continue to seek synergisticopportunities with other international players as well. This year, RRL will continue its focus on rapidexpansion of the existing and other new formats across India. When the store was launched it hadsome initial problems Post launch, in a dramatic shift in its positioning and mainly due to thecircumstances prevailing in UP, West Bengal and Orissa, it was mentioned recently in news Dailiesthat, Reliance Retail is moving out of stocking fruits and vegetables. Reliance Retail has decided tominimize its exposure in the fruit and vegetable business and position Reliance Fresh as a pure playsuper market focusing on categories like food, FMCG, home, consumer durables, IT and wellness, withfood accounting for the bulk of the business. The company may not stock fruit and vegetables in somestates. Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decidednot to compete with local vendors partly due to political reasons, and partly due to its inability tocreate a robust supply chain. This is quite different from what the firm had originally planned. Whenthe first Reliance Fresh store opened in Hyderabad last October, not only did the company said the
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Dinesh G. Mhatre. EMBA – III, Roll No. 6
store’s main focus would be fresh produce like fruits and vegetables at a much lower price, but alsospoke at length about its “farm-to-fork’’ theory. The idea the company spoke about was to sourcefrom farmers and sell directly to the consumer removing middlemen out of the way.Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trendz, Reliance Footprint, Reliance Wellness,Reliance Jewels, Reliance Timeout and Reliance Super are various formats that Reliance has rolled out.In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of AppleSpecialty Stores branded as iStore, starting with Bangalore.
Farm to Fork Concept
3

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