Note: Each question carries 10 Marks. Answer all the questions.1.Discuss the favorable factors and the challenges of retail penetration in India?Sol.Introduction
Retailing involves all activities incidental to selling to ultimate consumer for their personnelfamily and household use. It does this by organizing their availability on a relatively large scaleand supplying them to a customers on arelatively smallscale. Retailer is any person/organizationinstrumental in reaching the goods or merchandise oer services to the end users.Retailer is a mustand cannot be eliminated.The Indian retailing industry is becoming intensely competitive, as more and more payers areVying for the same set of customers. The major retail players are Pantaloon Retail, ShoppersStop, Reliance,etc..,Retailing is one of the biggest sectors and it is witnessing revolution in India. The new entrant inretailing in India signifies the beginning of retail revolution. India's retail market is expected togrow tremendously in next few years. According to AT Kearney, The Windows of Opportunityshows that Retailing in India was at opening stage in 1995 and now it is in peaking stage in 2006.India's retail market is expected to grow tremendously in next few years. India shows US$330 billion retail market that is expected to grow 10% a year, with modern retailing just beginning.India ranks first in 2005. In fact, in 2005 and 2006, India is the most compelling opportunity for retailers, because now India is in peaking stage.This window of opportunity is useful for executives who plan their market-specific strategies;the four stages or the lifecycle of this industry is as as follows:
An introduction is the opening phase of a market and is one that is just entering the GRDI,Global Retail Development Index This index is based on more than 25 macro-economic andretail –specific variables.for instance ,the country risk includes parameters like politicalrisk,economic performance,debt indicators,credit ratings,access bank finance and businessrisk.The market attractiveness covers reail sales per capita ,urban population ,laws andregulations and business efficiency.Iin this stage all, which are outside the top 30 markets, falls in this stage. At this stage, retailersshould monitor and performing high-level assessments, they should plan for their entrystrategies. India in the late 1990's is a good example in the opening stage, while in 2006,Kazakhstan is the country in introduction stage.Stategy suggested:A rapid penetration strategy is suggested at this stage i>e low price and high promotion.
In growth stage, the market is developing quickly and also ready for modern retailing. Countries,which are in Peaking stage, are India, Ukraine and Vietnam. Retailers entering this stage havethe best chance for long-term success. Retailers at this stage should enter through localrepresentations, sourcing offices and new stores. Wal-Mart success in china in the late 1990's andearly 2000's gives us the importance of committing to a promising high-growth market at righttime.