THE RELIANCE RETAIL LIMITED

A report on the organization study submitted in partial fulfillment of

the requirements for the MBA (Full time) Degree of the
Mahatma Gandhi University

Submitted by
MARIA JOSE M
Reg. No.22434
2010-12 Batch

Focus on Excellence

FISAT BUSINESS SCHOOL

Hormis Nagar, Angamaly, Cochin 683 577.

June 2011
1

ACKNOWLEDGEMENT

I use this opportunity to extend my sincere thanks to Dr. P A

Mathew, Dean and Director of FISAT Business School for providing the opportunity
to undertake this study. I am extremely grateful to Mr. Thejo Jose Lecturer, FISAT
Business School, for his active guidance and support.
I am also thankful to Mr. Nagendra Kumar, Deputy HR Manager,
Reliance Fresh Limited, Bangalore for permitting me to do the study. I wish to
acknowledge, the valuable guidance and supervision offered by Mr. Hemanth
Nagaraj, Manager in F & V section, Reliance Fresh Limited, Bangalore. I am also
thankful to all other Department Heads for their Kind co-operation and assistance.
I express my deep sense of gratitude to my beloved family members
and friends.
Above all, I thank the almighty for his blessings for the completion
of my study.

Maria Jose M

DECLARATION

I hereby declare that the Organizational Study Report entitled RELIANCE RETAIL
LIMITED is a record of bona-fide work done by me in Reliance Retail Limited during
may- June 2011 under the supervision of Mr Nagendra Kumar, Deputy Manager in
HR, Reliance Retail ,Bangalore and Mr Thejo Jose, Faculty Guide, Fisat Business
School, and that no part of this report has formed the basis for award of any degree,
diploma, associate ship, fellowship or any other similar title or recognition in any
other institution.

Hormis Nagar

Maria Jose M

Date:

CONTENTS

Industry Profile
Introduction on Retail Industry

Indian Retail Industry

10

Challenges facing Indian Retail Industry

15

Company Profile
Reliance Group

16

Reliance Retail

21

Reliance Fresh

39

Work Flow Model of Reliance

34

Organizational Structure

35

Functional Departments

Marketing Department

37

Human Resource Department

39

F&V Department

44

Finance Department

47

Operations Department

54

Information technology Department

58

SWOT Analysis

59

Conclusion

62

Bibliography

63

Chapter 1
INTRODUCTION ON RETAIL INDUSTRY

Retail the term which is the buzzword in todays day to day life is not at all a
new concept and was there since the barter trade days. But the fact is that it has
been modified, changed and has been given a new look and thus it has come
under the flood lights i.e., as per the old proverb old wine, new bottle. India
retailing boom is the result of rapid globalization and the recognition of being a
very potential market by big giants and foreign companies making the market
more competitive. This has cause existing retailers to re-tailor their strategies to
suit the new landscape.
Today Indian market is a hot cake in the field of retail and is enticing
enough for every retailer to eye for a bigger piece of it. When we talk about
organized retailing, with economy booming, competition in the market place is
fierce. India is all set to experience the phenomenon of a global village. India
Tops A T Kearneys list of emerging markets for global retailers for the 3rd
consecutive years. It is the 2nd fastest growing economy in the world. India is
the 3rd largest economy in terms of GDP in the next 5 years. India is rated
among top 10 FDI destinations. India is the fastest growing market in AsiaPacific for international tourist spending, according to the latest Visa Asia
Pacific release.
Economy is growing by over 8 per cent a year and Indias growth rate can
actually exceed that of China by 2015. Indian economy is expected to grow
larger than Britains by 2022 and Japans by 2032 to become the third-largest
6

economy in the world after China and US and finally become the second largest
economy after China by 2050. A report by investment banker Goldman Sachs,
credits India with the potential to deliver the fastest growth over the next 50
years. According to Standard & Poors, FDI to India is likely to grow the
fastest in next few years. The targeted FDI has already hit $ 13 billion in 12
months ending March-2010, more than double Indias previous best of $5.5
billion hit in the previous year.
India is investing over US $130 billion in infrastructure by the end of this
decade. The retail industry itself has attracted investment of over INR 200 billion
(over $4 billion) in creating infrastructure, systems & shop-fit. The additional retail
space is expected to add INR 300 billion ($ 6.67 billion) of business to organized
retail. India is having the largest young population in the world over 890 million
people below 45 years of age. It has more English speaking people than in the
whole of Europe taken together. Its 300 million odd middle class, the Real
consumers, is catching the attention of the world. It is estimated that 70 million
Indians earn a salary of over INR 800,000 ($18,000) a year, which will rise to 140
million by 2012.

Over 10,000 small and big existing outlets to undergo complete facelift
Retailing is one of the largest industries in India and one of the biggest sources of
employment in the country. It is the largest employer after agriculture and an
account for about 6 - 7% of population i.e., employs more than 4 crore people. The
organized retail sector is divided into two types In-store retailing and Non-store
retailing. The features of in-store retailing are fixed point-of-sale locations, which
are designed to attract a high volume of walk-in customers. Non-store retailers
7

serve the customers at their doorstep. The in-store retail is more prevalent in India.
As per management philosopher Professor Dr. Phillip Kotler retailing includes all
the activities involved in selling of goods or services directly to the final consumers
for personal, non business uses. A retailer or retail store is any business enterprise
whose sales volume comes primarily from retailing So in the other words,
Retailing is the set of business activities that adds value to the products and services
sold to consumers for their personal or family use.
Retailers satisfy consumer needs by offering the right product at the right
place and at the right price.

Retailers are the final business in a distribution channel that links

manufacturers with consumers. A distribution channel is a set of firms that
facilitate the movement of products from the point of production to the point
of sale to the ultimate consumer.

Manufacturers make products and sell them to retailers or wholesalers.

Wholesalers buy products from manufacturers and resell these products to
retailers, while retailers resell products to consumers. Wholesalers satisfy
retailers' needs, while retailers direct their efforts to satisfying needs of
ultimate consumers.

Types of Retail:
Food products
Soft goods- clothing ,apparel ,and other fabrics
Hard goods (hardliner retailers ) appliances, electronics, furniture,
sporting goods etc

There are the following types of retailers by marketing strategy:

Supermarkets- sell mostly food products
Department stores- very large stores offering a huge assortment of soft and
hard goods
Discount stores- tend to offer a wide array of products and services, but they
compete mainly on price
General merchandise store- a hybrid between a department store and discount
store
Warehouse store low cost, often high quantity goods piled on pallets or
steel shelves; warehouse clubs charge a membership fee
Variety store or dollar store extremely low- cost goods, with limited
selection
Demographic- retailers that aim at one particular segment (eg: high-end
retailers focusing on wealthy individuals)

Some stores take a non frill approach, while others are mid-range or high end,
depending on what income level they target.
General store- a store which sells most goods needed, typically in a
rural area
Convenience store- a small store often with extended hours, stocking
everyday or roadside items
Big-box stores- encompass larger department ,discount, general
merchandise, and warehouse stores

Retail Pricing
The pricing technique used by most retailers is cost- plus pricing. This involves
adding a markup amount (or percentage) to the retailers cost. Another common
technique is suggested by the manufacturer and usually printed on the product by
the manufacturer.

Indian Retail Industry

India is the country having the most unorganized retail market. Traditionally it
is a familys livelihood, with their shop in the front and house at the back, while
they run the retail business. More than 99% retailers function in less than 500
square feet of shopping space. The Indian retail sector is estimated at around Rs
900,000 crore, of which the organized sector accounts for a mere 2 per cent
indicating a huge potential market opportunity that is lying in the waiting for the
consumer-savvy organized retailer.

Purchasing power of Indian urban consumer is growing and branded

merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages,
Food and even Jewelers, are slowly becoming lifestyle products that are widely
accepted by the urban Indian consumer. Indian retailers need to advantage of this
growth and aiming to grow, diversify and introduce new formats have to pay more
attention to the brand building process. The emphasis here is on retail as a brand
10

rather than retailers selling brands. The focus should be on branding the retail
business itself. In their preparation to face fierce competitive pressure, Indian
retailers must come to recognize the value of building their own stores as brands to
reinforce their marketing positioning, to communicate quality as well as value for
money. Sustainable competitive advantage will be dependent on translating core
values combining products, image and reputation into a coherent retail brand
strategy.

There is no doubt that the Indian retail scene is booming. A number of large
corporate houses Reliance, Tatas, Reheats, Piramalss, Goenkas have
already made their foray into this arena, with beauty and health stores,
supermarkets, self-service music stores, new age book stores, every-day-low-price
stores, computers and peripherals stores, office equipment stores and home/building
construction stores. Today the organized players have attacked every retail
category. The Indian retail scene has witnessed too many players in too short a
time, crowding several categories without looking at their core competencies, or
having a well thought out branding strategy.

11

GROWTH OF RETAIL SECTOR IN INDIA

The trends that are driving the growth of the retail sector in India are

Low share of organized retailing

Falling real estate prices

Increase in disposable income and customer aspiration

Increase in expenditure for luxury items (CHART)

(DIAGRAM-1)

Another credible factor in the prospects of the retail sector in India is the increase
in the young working population. In India, hefty pay packets, nuclear families in
urban areas, along with increasing working-women population and emerging
opportunities in the services sector. These key factors have been the growth
drivers of the organized retail sector in India which now boast of retailing almost
all the preferences of life - Apparel & Accessories, Appliances, Electronics,
Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and
many more. With this the retail sector in India is witnessing rejuvenation as
traditional markets make way
stores,

hypermarkets

for

new formats such as departmental

,supermarkets

12

and

specialty

stores.

Organized retailers are the contemporary formats by which shoppers have the
edge of a world class shopping experience. Fine examples of these formats are
Pantaloon, Shoppers Stop and Trent.
Organized retail may broadly be classified into the following formats-

Malls. The largest form of organized retailing today. Malls are located mainly
in metro cities, in proximity to urban outskirts; this format ranges from
approximately 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal
shopping experience with an amalgamation of product, service and
entertainment, all under common roof.

Hypermarkets. They are typically large, starting from 40,000sq. ft plus are
usually located outside the city limits. This format comprises of a multiple
division layout, and usually has an industrial- look interior. Hypermarkets
generally provide daily necessities and grocery like items. Pricing is competitive
and they also offer volume discounts.

MBOs. Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy market
places and Metros.

13

 Super Markets. Large self service outlets, catering to varied shopper needs are
termed as Super markets. These are located in or near residential high streets.
These stores today contribute to 30% of all food & grocery organized retail sales.
Super Markets can further be classified in to mini supermarkets typically 1,000
sq ft to 2,000 sq ft and large supermarkets ranging from a size of 3,500 sq ft to
5,000 sq ft. having a strong focus on food & grocery and personal sales.

Discount Stores. As the name suggests, discount stores or factory outlets, offer
discounts on the MRP through selling in bulk reaching economies of scale or
excess stock left over at the season. The product category can range from a
variety of perishable/ non perishable goods.

Convenience Stores. These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover
convenience products and are usually open for extended periods during the day,
seven days a week. Prices are slightly higher due to the convenience premium.
Departmental Store. Large stores ranging from 20000-50000 sq. ft, catering to
a variety of consumer needs. Further classified into localized departments such as
clothing, toys, home, groceries, etc.

Exclusive Store. Ranging from a size of 500 sq ft to 5,000 sq ft. & above, this
format is owned/ managed by the Company or through its franchise. These can
offer single brand as well as multiple bands.
14

 Specialty Store. These formats focus on a specific product category, Medium

sized layout in strategic location. Specialty stores provide a large variety base for
the consumers to choose from. Despite the presence of the basic ingredients
required for growth of the retail industry in India, it still faces substantial hurdles
that will retard and inhibit its growth in the future. One of the key impediments is
the lack of FDI. This has largely resulted in limited capital investments in supply
chain infrastructure, which is a key for development and growth of retailing and
has also constrained access to world-class retail practices. Lack of proper
infrastructure and relatively high cost of real estate are the other impediments to
the growth of retailing. While the industry and the government are trying to
remove many of these hurdles, some of the roadblocks will remain and will
continue to affect the smooth growth of this industry.

Challenges facing Indian retail industry

The tax structure in India favors small retail business

Lack of adequate infrastructure facilities
High cost of real estate
Dissimilarity in consumer groups
Restrictions in Foreign Direct Investment
Shortage of retail study options
Shortage of trained manpower
Low retail management skill
15

RELIANCE GROUP

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's

largest private sector enterprise, with businesses in the energy and materials value
chain. Group's annual revenues are in excess of US$ 27 billion. The flagship
company, Reliance Industries Limited, is a Fortune Global 500 company and is the
largest private sector company in India. Backward vertical integration has been the
cornerstone of the evolution and growth of Reliance. Starting with textiles in the
late seventies, Reliance pursued a strategy of backward vertical integration - in
polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil
and gas exploration and production - to be fully integrated along the materials and
energy value chain.

The Group's activities span exploration and production of oil and gas, petroleum
refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and
chemicals), textiles and retail. Reliance enjoys global leadership in its businesses,
being the largest polyester yarn and fiber producer in the world and among the top
16

five to ten producers in the world in major petrochemical products. The Group
exports products in excess of US$ 15 billion to more than 100 countries in the
world. Major Group Companies are Reliance Industries Limited (including main
subsidiaries Reliance Petroleum Limited and Reliance Retail limited) and Reliance
Industrial Infrastructure Limited.

Founder Chairman

"Between my past, the present and the future, there is one common factor:
Relationship and Trust. This is the foundation of our growth."

Shri Dhirubhai H. Ambani

Founder Chairman Reliance Group
December 28, 1932 - July 6, 2002

17

Board of Directors of Reliance Industries Limited

Shri Mukesh D. Ambani

Chairman & Managing Director

Shri Nikhil R. Meswani

Shri Hital R. Meswani

Shri PMS Prasad

Executive Director

Executive Director

Executive Director

Shri Ramniklal H. Ambani

Shri Mansingh L. Bhakta

Shri P.K.Kapil
Executive Director

18

Shri Yogendra P. Trivedi

Dr. D. V. Kapur

Shri M. P. Modi

Prof. Ashok Misra

Prof. Dipak C Jain

Dr. RaghunathAnant Mashelkar

PRODUCTS AND BRANDS

The Company expanded into textiles in 1975. Since its initial public offering in
1977, the Company has expanded rapidly and integrated backwards into other
industry sectors, most notably the production of petrochemicals and the refining of
crude oil. The Company now has operations that span from the exploration and
production of oil and gas to the manufacture of petroleum products, polyester
products, polyester intermediates, plastics, polymer intermediates, chemicals and
synthetic textiles and fabrics.
The Company from time to time seeks to further diversify into other industries.
In January 2006, the Company approved a plan to establish a retail business
19

through a subsidiary Reliance Retail Limited that will operate, among other things,
supermarkets, convenience stores and specialty stores across India. The Company
approved initial expenditure of US$ 750 million to fund the initial stages of this
plan. The Company's subsidiary Reliance Jamnagar Infrastructure Limited is
currently establishing infrastructure facilities such as roads and buildings for the
proposed Special Economic Zone (SEZ) at Jamnagar, Gujarat. The Company's
major products and brands, from oil and gas to textiles are tightly integrated and
benefit from synergies across the Company.
Central to the Company's operations is its vertical backward integration
strategy; raw materials such as PTA, MEG, ethylene, propylene and normal
paraffin that were previously imported at a higher cost and subject to import duties
are now sourced from within the Company. This has had a positive effect on the
Company's operating margins and interest costs and decreased the Company's
exposure to the cyclicality of markets and raw material prices. The Company
believes that this strategy is also important in maintaining a domestic market
leadership position in its major product lines and in providing a competitive
advantage.
The Company's operations can be classified into four segments namely:
Petroleum Refining and Marketing business
Petrochemicals business
Oil and Gas Exploration & Production business
Others
The Company's refinery at Jamnagar is the third largest refinery at a single
location in the world. The Company is:

20

 The world's largest producer of Polyester Fiber and Yarn

4th largest producer of Paraxylene (PX) and Purified Terepthalic Acid (PTA)
6th largest producer of Mono Ethylene Glycol (MEG)
7th largest producer of Polypropylene (PP)

FOOD
Food retail in India Food dominates the shopping basket in India. The US$ 6.1
billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is
growing at 9 per cent and has set the growth agenda for modern trade formats. Food
accounts for the largest share of consumer spending. Food and food products
account for about 53 per cent of the value of final private consumption. Reliance
Retail looks forward to be the driver of growth in this industry with a committed
team.
Targets:

Capture dominant market share of Indian Foods retail industry

A Pan-India footprint in more than 800 cities and towns

Cater to both urban and rural populations

Reliance Foods team strives to continuously delight the customers. This is the

first small step in their attempt to build and forge strong and enduring bonds with
21

millions of farmers and transform their relationship with customers to a new

level. The organization believes in giving customers quality food items, fruits
and vegetables at affordable price at Reliance Fresh stores.

FOOTWEAR
Envisioned by a clear goal of becoming a destination store for footwear
Reliance industries plans to Stamp its Presence across 42 cities already opened over
80 independent stores, which will ensure them capturing maximum market share in
the 18,000cr footwear industry. Armed with a mission of creating a destination
Shoe Stop these stores will be stocked with National / International and Private
Label products that will provide Cutting Edge Retail and Shopping experience to
the Individual and Family. Products sourced from Brazil, China, Indonesia,
Malaysia, Vietnam, Thailand to name a few countries will be on display and sold
across all stores.
These products are Value led, meant to create novelty and developed to be
category killers in footwear, accessories and luggage in all segments and for all
occasions. Creating this will be Portland Design Specialists in Design and
Providing Solutions for a meaningful Customer Experience. All this will be
provided though a State of the Art Design Studio which is being created to have an
in-built Design / CAD Room, Product Development Area, Mock Display Room,
Testing Laboratory, Range Presentation Area, Reprographics and Sample Storage
Area.

APPAREL
As the glaring gaps in the market today remain unattended, it gives Reliance the
ideal opportunity to step in and revolutionize the shopping environment in the
22

country. The challenge is to transform the Indian consumers lifestyle and the way
our people shop. By offering exciting, fashionable and extreme value products of
international caliber they want to capture a significant share of consumer spending
more on clothing and luggage. They plan to offer extreme value to the customer
by weaving together competitive prices with an irresistible line, Where the
customer would have the luxury of shopping from a diverse product range in an up
market ambience. They will be focusing at offering affordable fashion with
superior quality fabrics, as demographic figures of a youthful nation (62% are under
30) present an indisputable opportunity. They will also be looking at premium inhouse brands to build a strong business in their departmental and fast fashion
apparel specialty and luggage stores. To be a part of Indias globalization, they plan
to tie up with big International Brands.

MEMBERSHIP FINANCE AND TRAVEL

Membership program:
They plan to have 100 million customers out of which it is expected that 50
million will be membership customers - who will have access to the benefits of the
loyalty program under Reliance One.

Payments:
To improve the customer experience and to enable cashless payments by
customers it is proposed to introduce several payment options that can be used in all
the store formats. The services offered are, Closed Loop Store Cards (Prepaid, Gift
23

& Credit), Credit Cards, Debit Cards, ATM Availability, Mobile and Internet
Payment Options etc.

Lending:
As the Indian consumer becomes increasingly aware and demanding, they will
need access to easy credit to meet their requirements. It is expected that a
significant percentage of Reliance Retail customers will use lending products both
in the Urban and Rural areas. The services offered are Consumer Finance, SME
Finance, and Rural Hub Finance.

Insurance and Investment:

Reliance Retail will play the role of a broker to service the needs of its
customers by distributing a whole range of Insurance and Investment products. The
intention is to give them choice and impartial advice. The services offered are Life
Insurance, General Insurance and various Investment Products.

Travel Services:
Reliance Retail proposes to offer Travel Services to its customers covering a
range of offerings at unbeatable value owning to the scale of distribution envisaged.
Services offered are Travel packages for individuals, corporate clients and family
holidays, FOREX, Other Foreign Travel linked products, Travel Insurance,
Ticketing and Hotel Bookings (both Domestic & International.
24

AUTOMOTIVE
The team aims to participate in the vehicle ownership experience of Reliance
Retail customers & constantly keep on creating value & retaining value. To deliver
this, the organization will be retailing automotive products & accessories and
setting up world class service facilities catering to two wheelers & passenger cars.
India today boasts of a population of 9 million cars & 42 million two wheelers.
Despite the burgeoning vehicle population, service & maintenance for these
vehicles still remains a problem. It is with this underserved market that Reliance
Retail decided to set its foot towards creation of a world class auto care chain, in
sync with the Reliance Retail. The facility would also be retailing auto products
namely- Tyres, tubes, lube, car accessories, e-bikes etc. All these facilities are
coming up in Mumbai and Jamnagar shortly.

LIFESTYLE
At Reliance Retail Lifestyle they promise to offer a world of products and
experiences never seen before. A world of style and class for fun and excitement
with indulgence and pampering of knowledge and entertainment. They recognize
their roles in bringing style, excitement and entertainment to customers lives. So
they are offering categories like jewellery, Books, Music, Cosmetics, Fragrances,
Watches, Sunglasses, Toys, Sporting Goods, Stationery, Gifts, Flowers, Print
Services.
25

CDIT
IT will be a one-stop solution for all technology solutions in the field of
consumer

electronics,

home

appliances,

information

technology

and

telecommunication.

Experience Zones
A showcase for technology, every experience zone will have fully functional
products, for the customer to have a true touch & feel experience. Experts will
guide customers on how to get the best quality experience in their own setups at
home. Zones will be for the following, and will be present in stores as per the
respective business plans:
Home Theatres different zones ranging from entry-level to a very premium
experience.
Car AV installation bays
Photography with a Digital Mini-lab
Designer Kitchen completely operational kitchen with appliances
Gaming area vibrant and happening
A collapsible Classroom space for training & contests

26

Innovation Pillars
It is a technology-snapshot high point in the store. Customers are drawn to
these high points and invited to Discover more". Innovation Pillars will be for
the following, and will be present in stores as per the respective business plans Audio
Video
Imaging
Laptop
Gaming
Mobile, and
Home
The various formats run by Reliance Retail are as follows:1. Reliance Mart.
2. Reliance Trends.
3. Reliance Footprints.
4. Reliance Wellness.
5. Reliance Jewellery.
6. Reliance Time-Out.
7. Reliance Super.
8. Reliance AutoZone.
9. Reliance Fresh.

27

So by this we can see how Reliance Retail is creating a strong base or

foundation in the Indian Retail field. Its trying to make itself available to every
needs and wants of present customers. Reliance retail with its huge and mammoth
brand name has made its presence felt in the retail field already providing tough
competition to the existing big sized retailers. With its Reliance Mart it has come
up with so huge hyper market format to cater the needs of the customers making the
entire product needed available under one roof to the customer
.
For the first time in organized retail, Reliance Trends is introducing a Made to
Measure tailoring service, offering customized fits to all the customers buying
fabrics from the store at prices comparable to their neighborhood tailors.
As we know Reliance Mart is a hyper market format in order to cater the needs.
It is well on track to democratize fashion and make it attainable to the masses as we
know the present trend of consumers are getting used to mall shopping. So this
hyper market is ready to provide them with what they want.

28

Reliance Fresh is the retail chain division of Reliance Industries of India which
is headed by Mukesh Ambani. Reliance has entered into this segment by opening
new retail stores into almost every metropolitan and regional area of India. Reliance
plans to invest Rs 25000 crores in the next 4 years in their retail division and plans
to begin retail stores in 784 cities across the country. The Reliance Fresh
supermarket chain is RILs Rs 25,000 crore venture and it plans to add more stores
across different cities and eventually have a pan-India footprint in this year. The
super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars
and dairy products and also will sport a separate enclosure and supply-chain for
non-vegetarian products. Besides, the stores would provide 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
customer care and quality services for part-time jobs.

According to Deccan Herald, the company is planning on opening new stores

with store-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, in relation to the concept of a neighbor
store. However, this is only the entry roll-out that the company has planned.
Bangalore is said to have 40 stores in all by the end of the year. In a dramatic
change due circumstances prevailing in UP, West Bengal and Orissa, It was
29

mentioned recently in News Dailies that, Reliance Retail is moving out stocking.
Reliance Retail has decided to minimize its exposure in the fruit and vegetable
business and position Reliance Fresh as a pure play super market focusing on
categories like food, FMCG, home, consumer durables, IT, wellness and auto
accessories, with food accounting for the bulk of the business. The company may
not stock fruit and vegetables in some states, Orissa being one of them.

Though Reliance Fresh is not exiting the fruit and vegetable business altogether,
it has decided not to compete with local vendors partly due to political reasons, and
partly due to its inability to create a robust supply chain. This is quite different from
what the firm had originally planned. When the first Reliance Fresh store opened in
Hyderabad some years back, not only did the company said the stores 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 to source from farmers and sell directly to the consumer removing middlemen
out of the way. Reliance may exit some businesses if the business does not increase
by March 2008. Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends,
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
Apple Specialty Stores branded as iStore, starting with Bangalore.

30

ABOUT RELIANCE FRESH

Reliance Fresh
TYPE

Convenient
Stores

Founded

30Th
October,2006

Headquarters

Mumbai,
India

Key people

Mukesh
Ambani,
CEO

Industry

Retail

Website

www.ril.com

31

Vision Of The Company

To be the most admired and successful organized Retail Company in India that
materially enhances the quality of life of every Indian.
We will achieve this by:
Providing unprecedented affordability, quality and choice in global products
and services
Being the partner of choice in creating prosperity for Indian farmers and other
producers of goods and services
Unleashing the power of the Indian workforce through the generation of new &
attractive employment opportunities, & creating an empowered & rewarding
workplace

Mission Of The Company

Leap frog the way an Indian Consumer shops
Be a trusted partner who provide the best products & services the world has to
offer, at the best prices, in the most convenient setting.
Create an efficient and transparent global supply chain by the creation and
optimal utilization of world-class infrastructure and international partnerships,
thus creating more value for our customers, suppliers, partners and stake
holders.
Bring prosperity to millions of Indian producers, especially our farmers, by
providing the most attractive returns for their efforts. Be a capable and

32

dependable partner to them right through their creation process and help them
become more successful.
Unleash the initiative, creativity & energy of Indian workforce through creation
of new jobs, & provide our employees a supportive, rewarding environment to
work and grow.
Financially reward our shareholders on a sustained basis

Core Values
Respecting and valuing employees
Creating a positive work culture and a mutual trust and creating a feeling of
family

33

Work Flow Model of Reliance

The following model explains how RRL procure good from farmer and delivered
to ultimate customer

Procurement of Fruits
and vegetables

Verification

Packaging

Transportation to stores

Labeling
Labelingprice
price

Display at fresh stores

34

Organizational structure

Organizations are economic and social entities in which number of persons

performs multifarious tasks in order to attain common goals. Once a group of people
has established an organization to accomplish shared goals, organizational structure
evolves to increase the effectiveness of the organizations control of the activities
necessary to achieve its goals. Organizational structure is the formal system of task &
authority relationships that control how people co-ordinate their actions & use
resources to achieve organizations goals. The principle purpose of organizational
structure is one of control: to control the means used to motive people to achieve these
goals.
For any organization, an appropriate structure facilitates effective responses to
problem of co-ordination & motivation --- problems that can arise for any number of
environmental, technological or human resources. As organizations grow &
differentiate, the structure likewise evolves. Organizational structure can be managed
& changed through the process of organization design
Organization structures can be designed on the basis of departmentalization &
relationships.
Departmentalization is the process of dividing work of an organization into various
units or departments.
Relationships are the process by which organization brings relationships among
employees at different levels, materials, money & machines.
Reliance Retail Limited is having Hierarchical organizational structure
35

Organizational Structure of Reliance Retail Limited

CEO
EXECUTIVE
Secretary

Admini
stration

Comme
rcial

Operat
ions

HR

Manag
er

Manag
er

Operati
on
Head

HR
Man
ger

Execu
tive

Asst.
Manager

Cluster
manager

Market
ing

SLP

Ma
nag
er

Asst.
mana
ger

D& L

Other
income

Manager

Mana
ger
Manager

Officer

EPC

Executi
ve

Execu
tive

Guard
Executive

Store
Manager

Executive
HR

Inbound
Manager

ASM

Sr. CSA
CSA

Inbound
Executives

C&A
36

Outbound
manager

Outbound
Executive
s

MIS
Manager

MIS
Executive

FUNCTIONAL DEPARTMENTS
Marketing Department
Basic marketing function: In reliance marketing department play a crucial
role. There are three main function of marketing department in reliance, there
are:
1. Communication of promotion: Marketing department is held responsible for
communicating all upcoming promotions like any offer or discount to
customers. This is done through visual merchandising which means displaying
about current offers and communicating it. This is done through various mean
like leaflets, dangles, etc.
2. Customers behavior and their buying pattern: Marketing department is also
responsible for knowing about its customer and thereby their buying pattern
because on the basis of this only further decision regarding promotion is taken
3. Competitive analysis: Beside above two stated the main function of marketing
department is to do competitive analysis i.e. knowing about their competitor
and their strategy and thus taking a prominent step.
Products and services offered: Marketing department people has
responsibility to take care of kind of product and services to be offered. It
generally includes all FMCG good, any electronic goods, staples. When it
comes to serve reliance people are take proper care of customer care and take
guarantee of their product which they offer.
Distribution channel: Marketing people take care of supply of goods to
final destination. Rather than purchasing from any wholesaler reliance purchase

37

all its vegetables from farmer (where production is more) for all other FMCG it
buys directly from producer.
Advertisement: Since communicating all latest offers to customer is primary
duty/ responsibility of marketing department therefore this work is done very
crucially by them, for promoting its products reliance uses various media like
posters, banners, leaflets, danglers, etc.
Sales promotion: Sales promotion is any initiative undertaken by an
organization to promote an increase in sales, usage or trail of a product or
services (i.e. initiatives that are not covered by the other elements of the
marketing communications or promotions mix). For promoting its sales
marketing department offers various offers like buy one get one free, or buy 2ltr
Pepsi at just rupee 15.

Customer loyalty card:

Reliance offers membership cards to their

customers in order to get new customers, retain the existing ones. It is one of
their marketing strategies.

Marketing department structure

Marketing Head (Zonal)

State Head

Executives
38

Human Resource Department

Personal selection and department: HR is considered as core of all
organization thus selection of any personal is the key aspect. Recruitment plays
an important role in HR. Recruitment means selecting the Right candidate, at
the right time, at the right cost.

Education: based upon qualification a candidate is offered for a post for example

Educational qualification

Designation offered

10 th pass

Customer Service Associate

Supervisor

PUC + experience as CSA

B. com
Graduate + experience as supervisor in

C&A (Commercial Associate)

Store Manager

retail

Post Graduate

Administrative job related according to

his qualification

39

 Employee remuneration: HR department is held responsible for deciding

on the pay scale of the employee. This decision is taken after considering things
Minimum Wages Act 1947
Qualification
Experience
Previous earnings

Findings
The recruitment procedure controlling the attrition rate are the most
challenging act at Reliance Fresh
The recruitment procedure is same for every walk- in
The number of walk- ins in a day is around 20.
The number of walk-ins are more for CSA ( Customer Sales Associates)
when compared to the positions like SM ( Store Manager), ASM ( Assistant
Store Manager) , C&A (Commercial & Associate), and MSR ( Membership
Sales Representative) & SUP (Supervisor)
The minimum qualification is SSLC as an eligibility criteria for a CSA
The main reason for walk- ins is the advertisement given by the HR team,
this is by banners, pamphlets & references given by the employee
It was noticed that maximum number of walk-ins happened to be in the age
group 18-22 followed by the age group 22-25 and 25-28 subsequently walkins. The age limit for the employment is between 18-30.
The selected candidates are allotted the stores near to their residence.
There will be separate training for Store managers, Department managers,
Corporate etc

40

 As a motivational aspect, depending on his/ her performance, a CSA or a

Supervisor from each store is rewarded the Star of the Month every
month to boost healthy competition between the stores.

Recruitment Process
Job
Description

Releasing IJP
(Internal Job
Training
Check with Internal
Applicants

Candidate
selected internally

No Suitable candidate
available internally

Sourcing externally
through job frontals,
employee referrals
etc.
41

Interview candidate

Salary Negotiation

Finding for approval

to NHQ

Sending for
requisition &
position code
creation to NHQ

E- Recruitment &
Offer letter
generation

Joining
Formalities

42

Human Resource Management Department Structure

HR Head (Zonal)

Training

Zonal
Training

HR Operations

Recruitment

Recruiters

Payroll and
compliances

State
Training

43

F&V Department
Reliance Foods team strives to continuously delight the customers. This is the first
small step in their attempt to build and forge strong and enduring bonds with millions
of farmers and transform their relationship with customers to a new level. The
organization believes in giving customers quality food items, fruits and vegetables at
affordable price at Reliance Fresh stores. It Capture dominant market share of Indian
Foods retail industries. Around 40% is estimated Reliance Retail Turnover by 2011 to
be from Foods Business.
Main process in F&V
Purchase

Sales

Functions of F&V Section

F&V

Purchase

Category team
Placing the inter purchase
Team
Pricing
Promo configuration
Planogram
44

Business Process Flow For Fresh

Collectio
n Centre

Communi
cates to
CC

Sorting Area

Collective PO
made by category
in SAP,
communicated to
CPC

Individual stores
place STO in
SAP

Association Area
Sales Floor

Staging
Area

Area for empty

Tagged crates

Picking Area

Processing
Area

Stores

45

Stores

F&V Job Chart

National Head

Zonal Head

State Head

Category Manager

State Buyers

CC In chair

46

Finance Department
Source and Application: There are various sources of fund, some of them
are: Initial Public Offering (this method was first introduced by reliance itself),
Equity share Capital, debenture, bank loans, creditors, etc. As far as application
is concern then the main area of application is purchasing all goods from main
suppliers like farmers for all different kinds of fruits and vegetables and from
main producers like Nestle, Maggie, etc.

Profit: The estimated turnover of Reliance Retail in the last financial year was
around Rs. 4500 crores and the estimated loss was very marginal (less than 10%
of sales). Actual data has not been provided by the company.

Sales expenditure trend: The sales expenditure trend of the company can
explained as follows first purchase department places an order for purchase to
operation department which is further placed to vendor. Once conformation
letter is received from vendor side then goods are received from them and then
quality checking process takes place. For all goods received goods receipt note
is generated which is sent to commercial department for payment. This is how
sales trend expenditure takes place in reliance retail.

Cost control: Controlling cost is the prime function of finance department. In

order to control price reliance follows HUB AND SPOKE MODEL which
47

means that it sources its F&V from farmer due to which cost of intermediaries
comes down. Apart from this it buys all of its FMCG from producer only.

Pricing technique: Charging correct price is very important thus before

charging any price finance people do a competitive analysis i.e. they charge
price after seeing their competitor all their profit margin.

Key Result Areas

Cash and Bank Controller
Manage account payable process effectively (payment to vendors)
Manage store commercial operation including cash and card sales monitoring
Manage F&V process for procurement and payment for farmers
Arrange cash for petty payment at various location
Manage farmer & Mandi tax payments
Arrange timely funds for all commercial activities

Inventory controller
Check physical inventory & upload PI in system on regular basis
Analyze the reasons for stock variation
Control dump & shrink at stores

Activities specific for this department

Cash and bank
Inventory control
Tax matters
48

 Income accounting
Support Head Office

Dividend Policy
Dividend per every year and bonus issue is made periodically

Inventory Management Policy

The main purpose of inventory management policy is to continue, control on
stocks to minimize holding cost and dump and shrink accounting

Receivable Management Policy

Bulk of the sales are in cash at stores
Sales through Credit Card - cash received within weeks time
Sales through coupons (Sodexho) cash received within a fortnight
Payments are realized after a fixed cyclic time

Risk Management
Insurance Risk, Currency Risk, Commodity Risk etc are managed and hedged
where necessary with financial & other institutions

49

Cost Innovations and Cost Reductions

Use of Petro card for diesel purchase
E- payment to farmers

Best practices specific to the department

Accounts payable done strictly as per credit limits negotiated with vendor
Enhance capability of commercial staff at stores

Mode of payments
There are various modes of payments in the stores like:
Cash
Credit Card/ Debit Card
Sodexho
Accor
R one vouchers/ Gift vouchers

Among these only cash is collected by CMS security service in banks on a daily
basis, whereas the coupons (Sodexho, Accor) are collected once in a week on Friday.
During the time of cash collection, four copies of each reliance fresh & delight
transactions (with detailed information such as notes particular with denominations)
are prepared. Three copies are taken by CMS representative & one copy of it is kept in
the store, all copies duly signed by the CMS authority & store C&A.
Then its recorded in the system with the representative scroll number, which is
thereby sent to the state corporate office.
50

There is a minimum balance of cash to be maintained in every store which is fixed

by the Commercial Managers.
The total store backend financial operation is co-ordinate by the SAP software,
which enables uninterrupted recording of data. Moreover as different aspects such as
Void transactions, Refund transactions, Electronic journal (a complete detail of the
bill), sales report, hence cross checking in case of any deputes is possible & chances
of fraud is less.
The inventory system in the stores is also well managed. Stock of Goods is
received everyday from the Distribution Centers (DC) , Fasts Moving Consumer
Goods (FMCG) is received directly from the company. The perishable items like
F&V, FMCGs are recorded as & when they are dumped or wasted in the system.
Payment to vendors is also efficiently managed. The average weekly payments is
paid either through Cheque (HDFC Bank), Demand Draft or Net Transfer (Account to
Account Transfer). The goods purchased from the vendors are on certain credit
policies managed by the Mumbai headquarter. Hence the company has a very efficient
Working Capital Management.

Functions of the Finance Department

The financial department as called Commercial Department in Reliance is
responsible for all cash related transactions in the stores. The Commercial Department
has the following functions:-

51

Functions of Commercial Department

Front End

Backend

(Store level)
Account payables &
Receivables
Daily Cash
Pick up

Declaration
of Cash

Segregations

Vendor payment

of mode of

Coins management

Payment (MOP)

MIS & budgeting,

Analysis of stock &

Store
Physical inventory
Analysis (Dump,
Shrink) Cash & Bank
Stocks

Physical Inventory (PI)

Stock Controller

(Store P&L,
Liquidation, GRN, PI
GRN- Goods receipts note

Non F&V)
Tikki Paav
52

Finance Department Structure

Zonal Financial Head

Karnataka

Asst.
Managers (2)

Kerala

Asst.
Managers (2)

53

Tamil Nadu

Asst.
Managers (2)

Operations Department
This department is wholly concerned with the store operations which involve the
following process:-

BUY

BUY-

MOVE

SELL

The company purchases the goods from the Vendors ( Farmers,

Distributers & Wholesalers) which involves the Category, Marketing &

commercial managers

MOVE- This phase is concerned with the Designation & Logistics (D&L) &
Supply Chain Management (SCM). The goods either move from the vendors
directly to the stores or through the Distribution Centre (DC). The distribution
centers are located at Nelmangla & Belgum in Karnataka. This is dealt in by the
Replenishment officials in which the purchased goods move in the following
process

VENDOR

DC

STORE

Or
(DSD) VENDOR

STORE

54

In case of return of goods the opposite process follows i.e.---

STORE

DC

VENDOR

During the movement of goods from the vendors, several checking are undertaken
like the Quality check, Quantity check, Stock check, Cost & Price check. The
Warehousing activities can be classified as the Inward & Outward activities, which
are as follows:--

Inward Activities
Storage locations
Storage bins
First in First out (FIFO)
Stock up

Outward Activities
Picking
Sorting & Grading
Check for damages & dump
Docking, load
Dispatching
Flow through
Transport
o Route plans
o Trucks
o Timeless
SELL The operations related to selling are listed as follows:

55

Planogram A Planogram is the systematic arrangement of different products of

different categories in different sections of the store so that it will be convenient for
the customers to get the products as well as will be beneficial for the store. Planogram
for different stores is different because the store size and shape varies constantly from
place to place. In the planogram there are different arrangements for different
categories of products. So the planogram for non-food items is different from that of
Beverages.

Stocking or replenishment Order the goods when the stock is about to be

finished, so that customers get the things whenever they want.

Cleanliness Maintain good ambience and keep the store clean is another
important process.

Customer Service Customer is the king, so in order to gain more customers the
customer service is made efficient. This gives the company a competitive edge in the
market.

Billing and Checkout - The CSAs are trained to carry on the billing process faster
& with minimum mistakes, which results in low waiting time for customers & greater
customer satisfaction.
After billing the bills are rechecked at the exit by the security & thereby recorded in
the log book, which results in minimizing frauds & future reference.

Manpower management managing all level of employees effectively is also a

complementary process

56

Operations Department Structure

Zonal Chief Executive

Karnataka

Kerala

State Operations
Head

State Operations
Head

Cluster
Managers

Cluster Managers

Store Managers

Asst. Store
Managers
C&As
Store Supervisors
CSAs

Store Managers

Tamil Nadu
State Operations
Head
Cluster Managers

Store Managers

Asst. Store
Managers

Asst. Store
Managers

C&As

C&As

Store Supervisors

CSAs

57

Store Supervisors

CSAs

Information Technology department

SAP (software Application Products) is used as the back end support software
which co-ordinates all the departments together.
ILO (Integrated Light Out) is also used as a supporting software in the
company. This software enables to hold together all the corporate office of
reliance in India with Mumbai.
The usage of MIS (Management Information System) by the managers is also
extensive in various DSS (Decision Support System). There is also a 24 hours
SAP helpdesk which makes the more easy & uninterrupted. This also enhances
the efficiency of the employees.
Each employee is also provided with an individual internet connection
Limited sites to access & an individual telecom service for the purpose of
communication. Hence this facilities the timely completion of works & good
co-ordination among departments.

IT Department Structure

Information Technology Head

Corporate IT Managers

Store IT Managers

58

SWOT ANALYSIS
Strength

Private label sale- RRL sells product multiproduct at low cost . However it
offers various products at private labels like pulses, sugars. This forms a part
of strength for RRL.

Contract Farming- RRL has direct contact with farmers because of which
they directly purchase various fruits and vegetables from them. This helps
them in forming folk and farmer model.

Network-1600 channels in villages- RRL enjoys strength of having huge

networks in village. This helps company to know about new information
pertaining to business.

Good co-ordination among employees- This is a very essential element,as

it provides a good work culture in the store as well as in the office.

24 hours SAP helpdesk- This provides of immediate help incase of system

software problems & to maintain a continuous work flow.

Good ambiance- The stores provide good ambiance which is comfortable

for both customers & employees.

Many services under one roof- All the reliance stores provide insurance
facilities to its customers as an additional benefit which include vehicle
insurance, personal & health insurance. This adds to its competitive
advantage. Free home delivery is also available.

59

Weakness

Poor inventory control- RRL purchase goods directly in bilk from farmer,
thus proper care towards these goods is required by maintaining proper
inventory. RRL fails to achieve this goal and this cause huge amount of
dump.

Lack of knowledge about products- Employees working at stores doesnt

have proper knowledge about many products.

Poor security measures- The closed circuit cameras are only provided at
the billing or till areas. Which cannot detect customer movement all over the
store.

Improper store arrangements- Sections are not made distinct by names

like personal care. Health care, baby care etc.

Offers not clearly visible- There is no usage of attractive colures or fonts to

grab the attention of the customers.

Less promotion for the own products- Reliance own products are not
promoted extensively as comparison to More or Food world where
television is used to promote their own products continuously.

60

Opportunities.

Farm to fork model RRL follows farm to fork model and thus eliminates
involvement of middle men and save its cost. This company fain more to
profit.

1 million farmers next five years RRL is planning to increase its contacts
with more numbers of farmers in next five years. This will help company to
expand its business to its best.

Booming industry RRL has scope to expand in this industry as retail is

booming industry and contributing at high rate to national economy
Threats

International Retail Giant RRL faces tough competition with not only
domestic company but also international company like Carrefour, Metro
AG, Tesco.

Limited products offered RRL offers limited products to its customers,

for example Food world and Nilgiris also provides varity of food and
beverages, pet food along with other products. These do not exist in the
present Reliance retail stores.
Less offers- The discount & offers are less in comparison to its competitors.
Moreover there is less discounts for reliance loyalty card holde

61

Conclusion

As per the observations & data collected now in India the Retail industry is in a
booming stage where the companies are pertaining in semi urban and rural markets.
The change in mind set of the public towards retail has been changed. The companies
in this sector are focusing more on customer perception.
The company is totally concentrating on customer equity by creating hypermarket
and providing satisfactory shopping experience. This report has given me the exposure
to the practical side of retailing like how to interact with customers at the time of
selling, how to arrange products effectively. The most important thing that I learned
was on tactics of gaining new customers & retaining them.
The conclusion from this research is that Reliance Stores lead the retail market in
all the aspects of shopping by providing good quality products and services to
consumers and the consumer perception is good towards Reliance.
Retail as an industry is still in its infancy in India but is fast catching up the
pace. There is still an enormous opportunities in this arena, and companies like
Reliance Retail have fared well in this race. Though there would be tough
competition for Reliance group from the existing big players such as Future Group,
but I believe it would come up with flying colors since it has already drilled into the
right kind of Indian tastes which will make it a superb player in this sector in the
days to come.

62

Bibliography

Primary Source
Interview
Data from Organization
Observation
Secondary Source
Kotler and Keller, Marketing Management, 12th edition
Aswathappa. K.2009. Organizational Behavior
www.ril.com
www.retailindustry.com

63