Introduction to Retail industry in India INTRODUCTION The India Retail Industry is the largest among all the industries

, accounting for o ver 10 per cent of the country¶s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. The total concept and idea of shopping has undergone an attention drawing change in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retailing has entered into the Retail market in India as is observed in the form of bustling shopping centers, multi storied malls and the huge complexes that offer shopping, entertainment and food all under one roof. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key factors in the growth of the organized Retail sector in India. The growth pattern in organized retailing and in the consumption made by the Indian population will follow a rising graph helping the newer businessmen to enter the India Retail Industry. In India the vast middle class and its almost un tapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in In dia could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations. THE INDIAN RETAIL SCENE India is the country having the most unorganized retail market. Traditionally it is a family¶s livelihood, with their shop in the front and house at the back, while they run the retail bus iness. More than 99% retailer¶s function in less than 500 square feet of shopping space. Global retail consultants KSA Technopak have estimated that organized retailing in India is expected to touch Rs 35,000 crore in the year 2005-06. 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 Jewellery, 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 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 t he 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 Tata¶s, Raheja¶s, Piramals¶s, Goenka¶s 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.

effect of globalization 5. The global retail giants who are entering the organized retail sector in India are: y Wal. change in the taste and attitude of the Indians 4. Ludhiana. more nuclear families in urban areas. however the smaller towns are also not lagging behind in this. Gurgaon.4 billion. Global retail giants are also entering the retail industry in India and this is also one of the factors in the growth of the organized retail sector in India. The increase in the purchasing power of the Indian middle classes and the influx of the foreign investments has been encouraging in the Growth of Retail Companies in India. In fact. and others.Mart . Reasons for the fast Growth of Retail Companies in India: The retail companies are found to be rising in India at a remarkable speed with the years and this have brought a revolutionary change in the shopping attitude of the Indian customers. Apart from t he retail company like Nilgiri's of Bangalore. In 2003. By 2010. most of the retail companies are sections of other industries that have stepped in the retail sector for a better business. Pune. Such huge investments is also a factor in the growth of the organized retail sector in India. Chandigarh. The retail companies are not only targeting the four metros in India but also is considering the second graded upcoming cities like Ahmedabad. Growth of Retail Companies in India : Overview Growth of Retail Companies in India is still not yet in a matured stage with great potentials within this sector still to be explored. pay. Many Indian companies have entered the retail industry in India and this is also a factor in the growth of Indian organized retail sector. Baroda. ft of space absorption by malls. Simla. The Growth of Retail Companies in India is facilitated by certain factors like 1. Cochin.packets which are hefty.5 million sq. western influences and growth in expenditure for luxury items. Also. In 2006.GROWTH OF RETAIL COMPANIES IN INDIA. more disposable income and customer aspiration. Coimbatore. the rise in the working population which is young. rise in the number of women working. Trivandrum. The Growth of Retail Companies in India is most pronounced in the metro cities of Ind ia. All these are the factors for the growth in Indian organized retail sector. Reliance Industries Limited is planning to invest US$ 6 billion in the organized retail sector in India by opening 1500 supermarkets and 1000 hypermarkets. The South Indian zone have adopted the process of shopping in the supermarkets for their daily requirements and this has also been influencing other cities as well where many hypermarkets are coming up day to day. the Indian organized retail sector is expected to rise to US$ 23 billion. Pantaloons is planning to invest US$ 1 billion in order to increase its retail space to 30 million square feet. the organized retail sector in India amounted to US$ 6. Bharti Telecoms is planning a joint venture worth £ 750 million with Tesco a global retail giant. rise of upcoming business sectors like the IT and engineering firms 3. Growth of Retail Companies in India exhibits the boom in the retail industry in India over the years. the retail industry in India amounted to US$ 200 billion and out of this. heavy influx of FDI in the retail sectors in India Growth Factors in Indian Organized Retail sector The growth factors in Indian organized sector are various but it is mainly due to the fact that India's economy is booming. existing Indian middle classes with an increased purchasing power 2. India retail industry is the fastest growing industry in India and it accounts for 10% of the country's GDP. the Indian organized retailing sector accounted for more than 4.

In the western countries. These are leading to various changes and are providing further boost to the growth of the Indian Retail Sector.2016. The Indian retail sector would then witness the setting up of retail parks that are flourishing in Europe. Salesman 2. in 2006 to US$ 590 billion. by 2011. If all these areas are given immediate attention then the growth phase of Indian retail sector would continue at a very fast pace. by 2012.and. Further. This exceptional growth is expected to take place in the retail sector due to large amounts of investment which is estimated to be about US$ 35 billion in the next five years. These markets would be mostly supermarkets and hypermarkets. in 2006 to US$ 493 billion. But for this to continue both the Indian retailers and the government will have to work together. The traditional retail sector is expected to increase from US$ 324 billion. The maximum amount of growth in the Indian Retail Sector will be registered in the topmost 50 to 60 markets that are located in the urban areas. Haats Mandies Company/Multi Brand store etc Established Formats : . Further.carry" activities are expected to receive the majority of investments. rising land prices and effective trend forecasting. 3. RETAILING FORMAT IN INDIA (MAJOR RETAIL FORMATS) Traditional Format : 1. by 2011. Also another area that requires attention is manpower f or it is estimated that the Sector of Indian Retail will suffer from shortage of manpower by about a million people. 4. The "cash. the retail sector has a highly developed system of supply chain. Other areas that need attention for the growth of the Indian retail sector to continue includes duty and tax structures. the growth of t he Indian retail sector would help in making the country ready for big retailers by 2015.y y y Tesco Carrefour SA Metro AG The factors for growth in Indian organized retail sector are many and thats the reason behind its massive growth. the convenient stores that are located in the local neighborhood will continue to survive. infrastructure. Trend forecasting needs to be done in the country especially in the segments of cosmetics. The share of the modern retail in the Indian Retail Sector is also estimated to increase from 4% in 2008. However developments in supply chain in Indian retail sector has been quite slow. these supermarkets and hypermarkets will also witness fast erosions in their margins. A major focus area in the Indian retail sector is the supply chain management. The Indian Retail Sector that includes the traditional retail and the modern retail is estimated to grow at a very fast pace from US$ 336 billion. Growth Phase of Indian Retail Sector to Continue The phase of high growth of Indian retail sector is expected to Continue due to huge amounts of investments and breaking up of traditional concepts in this sector. apparel and footwear for this will help the retail companies to curtail their expenses substantially. However. to 16% in the next five years. it is estimated that in the longer run. The chains in the Indian retail sector need to frequently change their stocks and also adopt concepts like home delivery.

technology incentives and the rate of technological change. 2. PEST analysis of any industry sector investigates the important factors that are affecting the industry and influencing the companies operating in that sector. tax policies. 2. Low access to banking facilities ECONOMIC 1. Taxation policy ± VAT. Strong opposition to FDI in India¶s retail sector. 3.Foreign Investments. trade restrictions and tariffs etc. 4.1.GDP Growth.Ease of shopping. Kirana stores The Indian Commerce Association 27-29 December. TECHNOLOGY 1. Synergyst's PEST Analysis is a perfect tool for managers and policy makers. 3. 3.Online Shopping. population growth rate. 5. economic. exchange rates and inflation rate. etc. social and technological analysis. The economic factors relate to changes in the wider economy such as economic growth. 4. POLITICAL 1. automation.Inflation. Hyderabad Convenience/Departmental Store Pan/Beedi Shop Malls/Special Malls Company/Multi Brand Store Emerging Format : 1. 2007. SOCIAL 1. PEST is an acronym f or political. 2. Social factors often look at the cultural aspects and include health consciousness. 3.Retail media networks(RMN). laws and regulations. Hypermarket International Retailer Malls/Special Malls Multiplexes PESTEL ANALYSIS. 2. 3. Our product also presents a brief profile of the industry comprising of current market. age distribution. 2. 3.ERP System. competition in it and future prospects of that sector.Money Supply. 4.Corporate Social Responsibility. etc. The technological factors relate to the application of new inventions and ideas such as R&D activity. helping them in analyzing the forces that are driving their industry and how these factors will influence their businesses and the whole industry in general. interest rates. 5. Political factors include government policies relating to the industry. . changes in tastes and buying patterns.Environmental Safety. 6. Exclusive Retail Outlet 2.

thereby leaving a huge untapped opportunity. would most likely switch to a hybrid ownership structure. Damro (knock-down furniture). The migration of population to higher income segments with increasing per capita incomes 2.1 FDI Policy in the Retail Sector India has kept the retail sector largely closed to outsiders to safeguard the livelihood of nearly 15 million small storeowners and only allows 51 per cent foreign investment in single brand retail with prior Government permission. textiles ready-to wear). Foreign direct investment (FDI) in retail space. in terms of the competitive landscape. unlimited opportunities. the market share of organised modern retail is just over 4 per cent of the total retail industry. catapulting modern retail in the country to $175-200 billion by 2016. Argenterie Greggio (silverware. Home Improvement and Consumer Durables: Over 20 per cent p. 4. Fendi.a. Nike and Toyota can operate now on their own. Apparel and Eating Out: 13 per cent p.Media. Changing consumer attitudes especially the increasing use of credit cards 4. sports goods. SUPPORTIVE SECTORS 1. Food and Grocery: The largest category.a. travel accessories. Metro is already operating through the cash-and-carry wholesale\ mode. huge markets and availability of quality raw materials at cheaper costs is expected to make India overtake the world's best retail economies by 2042. according to experts. A 12-billion euro French luxury industry is also eyeing the domestic luxury segment to make a presence through retailing directly.Real Estate. CAGR projected over 10 years Opportunities for investment in supply chain infrastructure: Cold chain and logistics 8. Carrefour.CRM System. Tesco and Casino would take advantage of the more favourable FDI rules that are likely in India and enter the country through partnerships with local retailers. The retail industry in India. The growth of the population in the 20 to 49 years age band There is retail opportunity in most product categories and for all types of formats 5. cutlery. Currently.To u r i s m . The policy of permitting 51 per cent FDI in single-brand product retailing has led to the entry of only a few global brands such as Nike (footwear). The policy makers continue to explore areas where FDI can be invited without hurting the interest of local retail community. 2. 3. who operate through a franchisee model. INVESTMENT POLICY AND INITIATIVES 3. The Potential of the Indian Retail Sector The high growth projected in domestic retail demand will be fuelled by: 1. will be a major employment generator in the future. Government is considering opening up of the retail \ trading for select sectors such as electronic goods. India also has significant potential to emerge as a sourcing base for a wide variety of goods for international retail companies . CAGR estimated in the next 10 years 7.I T. An increase in urbanisation 3. into retail trading. according to industry players. This implies that there are significantly low entry barriers for players trying to setup base in India. Other retailers such as Marks & Spencer and the Benetton Group. The Government has to walk a tight rope to ensure a `level playing field' for everyone.4. LLadro.\ traditional home accessories and gift items) and Toyota (retail trading of cars). according to Technopak estimates. The sector is expected to see an investment of over $30 billion within the next 4-5 years. specialized goods retailing like sports goods. largely unorganised today 6. Louis Vuitton (shoes. stationery. Single-brand retailers such as Louis Vuitton. electronics and stationery is also being contemplated. and building equipment. A good talent pool. OPPORTUNITIES AND CHALLENGES 1 Investment Opportunities in the Retail Sector India is the least competitive as well as least saturated of all major global markets. ties. Lladro (porcelain goods). watches. The global retailers such as Wal-Mart. FDI is also allowed in the wholesale business. Fendi (luxury products).

The Indian retailers have difficultly in finding trained person and also have to pay more in order to retain them. Many Indian companies seeing the various opportunities in organized retail sector in India have entered it. GAP. The biggest challenge facing the Indian organized retail sector is the lack of retail space. and 1500 supermarkets are being built which shows the tremendous opportunities in the organized retail sector in India. 300 new malls. The behaviour pattern of the Indian consumer has undergone a major change. and more disposable income have opened a lot of opportunities in Indian organized retail sector. Now the Indian consumer gets more hefty pay. The opportunities in the organized retail sector in India have also increased with the desire of many global retail giants to set up shop here.914 billion and forms about 15 per cent of the country's retail market of Rs 12. Reliance Industries Limited is targeting for annual sales of US$ 25 billion by 2011. Total fashion sector was estimated at Rs 1. All these have lead the Indian organized retail sector to give more in order to satisfy the Indian customer. and get entertained under the same roof. are already procuring from India. The opportunities in India organized retail sector can be judged from the fact that by 2010 it is expected to rise to US$ 23 billion. Bharti Telecoms is planning a joint venture with Telco a global retail giant worth £ 750 million. western influences.Many international retailers including Wal-Mart.500 supermarkets and 1000 hypermarkets. desire for luxury items and better quality. He now wants to eat. JC Penney etc.Mart Metro AG Carrefour SA The opportunities in Indian organized retail sector are varied and it must be fully exploited by the Indian retailers. The various opportunities in the organized retail sector in India are mainly there for the Indian consumers behavior pattern has changed. women working force is increasing. The opportunities in Indian organized retail sector are many for this sector is witnessing a boom. Pantaloons have decided to increase its retail space to 30 million square feet with an investment of US$ 1 billion. which translates into nearly 55 per cent of the organised retail segment in the country. is younger.000 billion. Commanding such a large chunk of the organised retail business in India. . The Indian government in 2005 allowed foreign direct investment (FDI) in single brand retail to 51%. western influences. fashion retailing has indeed been responsible for single-handedly driving the business of retail in India. The Indian consumer wants to shop.2 Challenges in Retailing The challenges facing the Indian organized retail sector are various and these are stopping the Indian retail industry from reaching its full potential. Trained manpower shortage is a challenge facing the organized retail sector in India. The retail industry in India amounted to US$ 200 billion in 2006. 4. Corporate Catalyst India A report on Indian Retail Industry Of the total organised retail market of Rs 550 billion. This have opened up a lot of opportunities in India organized retail sector.packages. eat and get entertainment in one place and is have also given Indian organized retail sector an opportunity to grow. it is p osing a challenge to its growth. 9.4 billion. This again brings down the Indian retailers profit levels. It is planning to invest US$ 6 billion in order to open 1. The global retail giants who are entering the Indian organized retail sector are: y y y y Tesco Wal.80 billion. the business of fashion accounts for Rs 300. With real estate prices escalating due to increase in demand from the Indian organized retail sector. shop. With Indian retailers having to shell out more for retail space it is effecting there overall profitability in retail. In fact 325 departmental stores. and out of this amount the Indian organized retail sector amounted to US$ 6. a large number of women are working. This has happened for the Indian consumer is earning more now.

each endeavor to offer experiential shopping. raising costs and prices. All these are posing as challenges facing the Indian organized retail sector. In addition to fragmented supply chain. Thus challenges like retail differentiation. The existing supply chain has too many intermediaries: Typical supply chain looks like: Manufacturer . The available talent pool does not back retail sector as the sector has only recently emerged from its nascent phase. the system is currently plagued with differential tax rates for various states leading to increased costs and complexities in establishing an effective distribution network. One of the key observations by customers is that it is very difficult to find the uniqueness of retail stores. The retail sector does not have µindustry¶ status yet making it difficult for retailers t o raise finance from banks to fund their expansion plans. Further. The problem:retail differentiation. thereby.Non-availability of Government land and zonal restrictions has made it difficult to find a good real estate in terms of location and size. Lack of adequate infrastructure with respect to roads. and Bharti Telecoms. giving them such a satiable experience that they would like to enjoy again and again. . As a result discounting is becoming an accepted practice. is a combination of customer insight. Also lack of clear ownership titles and high stamp duty has resulted in disorganized nature of transactions The Hidden Challenges Modern retailing is all about directly having "first hand experience" with customers. Many Indian companies are also entering the Indian organized retail sector like Reliance Industries Limited.Regional distributor . In India. India lacks a strong supply chain when compared to Europe or the USA. multiple clearances are required by the same company for opening new outlets adding to the costs incurred and time taken to expand presence in the country. Stringent labor laws govern the number of hours worked and minimum wages to be paid leading to limited flexibility of operations and employment of part-time employees. But they are facing stiff competition from these global retail giants. allocation and assortment techniques. This too brings down the profit of the Indian retailers. automated warehousing is yet to take root i n India. Further.The Indian government have allowed 51% foreign direct investment (FDI) in the India retail sector to one brand shops only. retail chains have to resort to multiple vendors for their requirements. Wal-Mart. Even though the Government is attempting to implement a uniform value-added tax across states. merchandising mix. retailing is yet to become a preferred career option for most of India¶s educated class that has chosen sectors like IT. BPO and financial services. The concept of container trucks. Corporate Catalyst India A report on Indian Retail Industry .National distributor . as we are moving to the next phase of retail development.Retailer Consumer. Providing great experience to customers can easily be said than done. supply chain management and competition from supplier's brands are the talk of the day. Government restrictions on the FDI are leading to an absence of foreign players resulting into limited exposure to best practices. the trucking and transportation system is antiquated. This has made the entry of global retail giants to organized retail sector in India difficult. and Metro AG are entering the organized retail sector in India indirectly through franchisee agreement and cash and carry wholesale trading. Long intermediation chains would increase the costs by 15 per cent. The challenges facing the Indian organized retail sector are there but it will have to be dealt with and only then this sector can prosper. Getting the right mix of product. The industry is facing a severe shortage of talented professionals. The result: significant losses/damages during shipping . cold chains and ports has further led to the impediment of a pan-India network of suppliers. Most Indian retail players are under serious pressure to make their supply chains more efficient in order to deliver the levels of quality and service that consumers are demanding. This is a challenge being faced by the Indian organized retail sector. This might run foul with the existing supply chain operators. Pantaloons. which is store specific across organization. Due to these constraints. The next problem in setting up organized retail operations is that of supply chain logistics. This implies that global retail chains will have to build a supply chai n network from scratch. electricity. But the global retail giants like Tesco.Local wholesaler . especially at the middle-management level. Merchandising planning is one of the biggest challenges that any multi store retailer faces.

the mall developer must add a personal touch to his message by carrying out a door-to-door campaign in order to reinforce the message. The mall developer can create awareness about the offering among the target customers in a number of ways. Various communication tools available to the mall developer for this purpose may include advertising. accessibility of supplier's brand. New product development. The core purpose is to inform the target customers about the offering of the mall. This implies that the message conveyed to the target customers must be effective enough in differentiating the mall's offering from that of its competitors without even naming them. 4. lighting. Retailer has to provide more assortments for private level brands to compete with supplier's brand. The merchandise presentation ought to be very creative and displays are often on non-standard fixtures and forms to generate interest and add on attitude to the merchandise. frequent sales operation management. lean systems and staff should help retailers to get advantage over competitors. 4. which are based on a season or an event. press releases and viral marketing . Innovative solutions like performance management.Once the message is being conveyed through these channels. Theme or lifestyle displays using stylized mannequins and props.3: Strong Supply Chain Critical components of supply chain planning applications can help manufacturers meet retailers' service levels and maintain profit margins. demand planning. value vs. Retailer has to develop innovative solution for managing the supply chain problems. persuade them to visit the mall and remind them about the mall. signages and specialized props.1: Right Positioning The effectiveness of the mall developer's communication of the offering to the target customers determines how well the mall gets positioned in their minds. So supplier's brand wiil take their own way because they have a established brand image from last decades and the reasons can be attributed to better customer experience. 5. use of print media. 4.The private label will continue to compete with brand leaders. The message should also clearly convey to the target audience that the mall offers them exactly what they call the complete shopping-cum-entertainment point that meets all their expectations.0 Conclusion: . production planning.4: Changing the Perception Retailers benefit only if consumers perceive their store brands to have consistent and comparable quality and availability in relation to branded products. aspiration.2: Effective Visual Communication Retailer has to give more emphasis on display visual merchandising.0 Strategies 4. At this stage. price. aggressive retail mix as well as everyday low pricing strategy can be the strategy to get edge over supplier's brand. the communication has to be more of relative nature. are used to promote collections and have to change to keep touch with the trend. innovation. inventory planning. celebrity endorsement. 4. buzz marketing (WoM). The visual communication strategy might be planned and also be brand positioned.

malls offers customers a mix of all types of products and services including entertainment and food under a single roof. image and reputation into a coherent retail brand strategy. Retailing includes retail formats like Pantaloons. 1000 stores in 71 cities with employee strength of 30. in the retail sector. Departmental stores: are general retail merchandisers offering quality products and services. They are known as category killers as they focus on specific categories. and Top 10. Company head quarters located in Mumbai. they are individually handled retail outlets and have a personal touch. y y y y y y y y Mom-and-pop stores: they are family owned business catering to small sections. Indian retailers must come to recognize the value of building their own stores as brands to reinforce t heir marketing Positioning. Specialty stores: are retail chains dealing in specific categories and provide deep assortment. This is also known as Multi Brand Outlets or MBO's. Mumbai's Crossword Book Store and RPG's Music World are a couple of examples. Discount stores: these are factory outlets that give discount on the MRP. As on Feb 2009 Company operates over 12 million square feet of retail space. Vending: it is a relatively new entry. snacks and other small items can be bought via vending machine. Category killers: small specialty stores that offer a variety of categories. Star & sitar and e zone. It operates on multiple platforms like Value and life style segment in the Indian consumers market. Shopping malls: the biggest form of retail in India. such as electronics and sporting goods.000 people. Convenience stores: are located in residential areas with slightly higher prices goods due to the convenience offered. E-trailers: are retailers providing online buying and selling of products and services. Food bazaar. to communicate quality as well as value for money. Blue sky. Big bazaar. IN SHORT THE CHALLENGES FACING INDIAN RETAIL INDUSTRY y y y y y y y y 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 Retail formats in India Hypermarts/supermarkets: large self-servicing outlets offering products from a variety of categories.In their preparation to face fierce competitive pressure. The company also operates on online y . Here beverages. brand factory. The company is in aspect of giving retailing a modern looks with reachable for middle and middle lower class people. Sustainable competitive advantage will be dependent on translating core values combining products. STRATEGIES USED BY SOME COMPANIES IN THAT INDUSTRY TO CONVERT THEIR THREATS INTO OPPORTUNITIES: Back ground Pantaloon Retail (India) Limited is India¶s largest leading retailers.

Company is very conscious about culture andregional consumption pattern. is one of India s leading business houses with multiple businesses spanningacross the consumption space. 1.brand development. Organizationis customer driven opposed to product driven . Butcompany did not forget ripe its strategy and values in the diversified company. The statement express the need of continues learning process to form the strategies. leisure and entertainment.group subsidiaries are present in consumer finance. The company in latter stage organized to support each other by physical material flow if required. To set andconcentrate on one stratum is main objective of this strategy.The continues of learning. retail media and logistics. Home Town a large-format home solutions store.2 Strategies The company observes retail customer trend and changing consumption tastes. Diversification is done in two main categoriesRETAIL FORMATS and SPECIALIZED BUSINESs. unlearning and relearning is applied to update the quick changingstrategies across the organization.com for upper class that can get internet connectivity. Pantaloon Retail is the flagship company of Future Group. capital.The company diversified and acquired a large business in organic and inorganic way. They are Diversification strategy Classes destination strategy Maximum market shares strategy Diversification strategy The company started its business as textile manufactures but growth in modernorganized retailing attracted the company to switch diversify to the next consumption pattern. Based on analysis its business strategies can be categorized in 3 major groups. a business group catering tothe entire Indian consumption space.Kishore Biyani. Each business is set to operate ondefined strata. Classes destination strategy Future group has diversified its business keeping the retiling as common goal. While retail forms the core business activity of Future Group. In every new business company started to rewrite the rules by retaining values. In uphill if you stop pedaling you will slide down´. Company has   . Strategies change frequently due to orient to the customers needs. insurance. Mr. Future Group led by its founder and Group CEO.futurebazzar. retail real estate development. As Kishore Biyani MD Pantaloon retail India LTD says³Retail is like riding bicycle.

E zone. Pricing strategies Pricing is strategy used by Pantaloon retail chain to attain maximum market shares. office peonetc. INDIA ONE. The need of the segment is local as they are finding it cheaper. INDIATHREE has seen 10 % decline. Food bazaar. Home town and starGalaxy entertainment. Futuremoney and other retail formats are presented. Central. The present business modelis not addressing this class. The population of this class is morethan 30%. INDIA TWO has not changed it conception level. This is the people who make service INDIA ONE class. The company¶s schemes are categorized in following groups ¡ ¡ ¡ 1. According Maslow s theory ofhierarchy the 14% people are in self actualization and Esteem needs in the pyramid. The business will sell at marginalprofit some times to attract the new customer who will prove potential customers in future. Each has different values. INDIA THREE or struggling class. The class led life on hand to mouth existence.INDIA TWO. For this class as the big bazaar. products and quality requirements. This segment doesn t contribute much in the contributioncycle. In the needs hierarchy they are located in for Social and security .Till recenttimes the modern retiling formats is offered for this class. Theycan t afford for beater living style. INDIA THREE. Thecompany offers numerous schemes to attract the new customer as well as to retain the present customers. For thisclass pantaloon patterned Future bazaar.The Company does not bothers about short termprofit or loss by a strategy. As ambiance is factor and other pleasuring nonvalue added services are necessary. INDIA TWO or the serving class it includes people like house hold helpers.VALUE PRICING This approach is used where external factors such as recession or increasedcompetition force companies to provide 'value' products and services to retain sales. Maximum market shares strategy The retail chain by pantaloon in all business patterns tries to achieve maximum marketshare in all the products or service it provides . This are considered as learning.The population of this constitutes only 14%.Earning capacity ofthis class is 60% lesser than INDIA ONE. INDIA ONE or consuming class . Figure 3 shows change in consumption patter by different class in 2001-02 and 2007-08.divided Indian customers in three different groups.INDIAONE has changed from 25% to 35% normally the total profit in this segment will comparatively20% more than they are sold in next segment. . Theproduct value will be associated with external factors. Thestrategy achieved by focusing pricing factors in INDAI TWO and on service and quality inINDIA ONE. brand factory.

With such experience crowded management is essential so to divert potential customers ³Wednesday bazaar´ where it will offer less profit margin sales. Devolved internally. Empowered individuals. Self production facilities with small number of suppliers. Organization utilizes thisapproach when product has emotional value rather than rational value.The entrepreneurial culture and spirit prevails in the company. No rigid organizational structure. Short term contracts (based on lowest bid) Process Modern hard technology.BUNDLING Bundling is marketing tool sell two or more complementary product as a package with attractive price. Use scenario planning as a tool for quick decision making. Appetite for taking risks is encouraged. 3.2. Appearance. Balanced Score card approach Retail control Semi Centralized. 5. organization design approach. BTGO (Buy Two Get One Free) etc. Example: A Person needs one soap for a period of time But bundling with attractive price with more than 3 soaps can attract them. Reduces cost. Example a productis priced for 99 instead of 100. Complex Sourcing E-touch with supplier. Capital driven. The price is will lesser then individual selling price. Reduction of profit margin with lot ofadvertisement will invite new customers. Placed in major cities. . Large. 6.PHYSIOLOGICAL DISCOUNTING In India this approach is called as Bata rating system. The company has learnt it from strategy madeon public holiday 26-Feb. new strategies and process innovations Facilities Special propose.3 Levers issues Human resource Well trained staff. The application of this done by BOGO (Buy one Get One). 4.TIME PRICING The innovative way of attract the customer is Timely pricing it is known thatduring holidays rate of customer is more.LOW INTEREST RATE FINANCING Future money helps in asset purchase at 0% interest. When the turnover of the day reached 30 cores where averageis 5 cores.When board shows price reduction from 100 to 99.PROMOTIONAL PRICING Pricing to promote a product is a very common application.Consumer looks at 3 digits to 2 digits rather than exact value. Brand ambassador Organization structure & controls . learning while doing. 1.

Apart from having so many advantages company had no focused on this pattern. Sustainable competitive advantage will be dependent on translating core values combining product s. Thechanging emotions of customers are tracked and they are linked with the power of modernretailing environment. image and reputation into a coherent retail brand strategy. to communicate quality as well as value for money. Who are away from internet services Supplier base and support was not so strong Absence of good software support in supplier management E business threat of cash jams in initial days Face to face communication is tradition of Indian retailing from many years The threat or cyber crime 2. . . . Targeted on INDIA ONE initially . . . .The organization deploys the cultural and regional strategies to attract the customers.0 Conclusion: In their preparation to face fierce competitive pressure.Why not e-retailing The organization focused on mall base selling rather than e business in initial stages.8 Conclusion Pantaloon retail India evolved its business strategy based on under studying customers. But still the company has introduce modern retailing malls to the socialclass people of India it has fear of threat of business decline from the competitors like Reliancefresh and Aditya birla moreWho are potential competitor 5. The reasons fornot selecting this system is probably 1 2 3 4 5 6 . . Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing Positioning.

Sign up to vote on this title
UsefulNot useful