INTRODUCTION TO METRO METRO Cash & Carry – this name stands for one of the great success stories in modern

commerce. The unique wholesale business-to-business model of METRO Cash & Carry is focused only towards professional customers such as hotels, restaurant, and caterers as well as small and mid-sized retailers. METRO Cash & Carry offers this target group a greater efficiency than the multilayered supply chain thus helping them to improve their business: By offering them a one-stop solution for their purchases, by helping them to improve their assortment, by offering them high quality products at reasonable and transparent prices and by offering them a consistent supply source. What does METRO offer? METRO Cash & Carry is a reliable partner for more than 20 million professional customers worldwide. It gives them a clear competitive advantage in their own markets. Professionals can purchase everything they need to run their business: A restaurant owner, for example, can buy food like fish or vegetables as well as kitchen equipment and office supplies. METRO Cash & Carry offers an exceptionally wide range of highquality products under one roof. Depending on the size and type of wholesale center, the assortment includes up to 20,000 items in the food range and 30,000 items in the nonfood sector. As the name implies, METRO Cash & Carry customers select their own items and take them with them to their restaurants and shops. With this unique business-to-business concept, the company has grown to become a leading international player in self-service wholesale. Company History METRO Cash & Carry is a leading international company in selfservice wholesale and operates more than 600 outlets in 29 countries. With over 100,000 employees worldwide, the company achieved sales of € 31.7 billion in 2007. By generating almost 50 percent of the total sales, METRO Cash & Carry is the top-selling sales brand of the METRO Group. Assortment and service of METRO Cash & Carry’s unique business-to-business model are targeted only towards professional customers such as hotels and restaurants as well as small and mid-sized retailers or institutions. The company offers these special groups a high level of assortment competency both in food and nonfood as well as attractive wholesale prices. An efficient and internationally conferrable concept ensures success in entering new markets. METRO Cash & Carry – A story of expansion The self-service wholesale trade came to Europe in the year 1964 when METRO SB-Großmärkte GmbH & Co. KG was founded in Mülheim/Ruhr. The initiator and driving force behind this concept was

Prof. Dr. Otto Beisheim. In 1967 the Franz Haniel & Cie. company became a partner in the new venture. Prof. Dr. Otto Beisheim, the Franz Haniel & Cie. GmbH company and the Schmidt-Ruthenbeck family then each held one third of the shares in the German METRO activities and thus constituted the “original group of partners”. As from the year 1968 the concept was extended beyond the German borders, with the Dutch company Steenkolen Handelsvereeniging N.V. (SHV) as a new partner. The two sides jointly established Makro Zelfbedienigsgroothandel C.V. with the original group of partners holding 40 percent of the shares in this activity. Within the framework of a first major expansion drive METRO/MAKRO Cash & Carry entered the market in nine Western European countries by 1972. In the nineties, METRO Cash & Carry expanded its activities to Portugal, Turkey, Morocco and to Eastern Europe.

In July 1996 METRO Cash & Carry merged with Kaufhof Holding AG and Asko Deutsche Kaufhaus AG and the METRO Group was founded. That year also saw the group’s going public. The Metro stock is the only retail stock listed in the German blue-chip index “DAX 30“. The first step into Asia was taken when METRO Cash & Carry moved into China in 1996. Today the company is present in 5 Asian countries: China, India, Japan, Pakistan and Vietnam. The METRO Cash & Carry business is going to be further internationalized and expanded with the focus on Eastern Europe and Asia. Already by today, more than 80 percent of the staff is working outside of Germany. In many countries the company is on of the major employers. METRO in Pakistan METRO Cash & Carry announced its operations in Pakistan in January 2006. Since then, it has established itself as a potential market leader in wholesale. Under the supervision of Managing Director Mr. Giovanni Soranzo, METRO Cash & Carry Pakistan has opened its first store in the city

of Lahore in October 2007. The company’s country head office is also based in Lahore and currently employs over 400 people in two offices. . METRO Cash & Carry’s commitment to Pakistan is also echoed in its donations to the President’s Earthquake Relief Fund. – The company donated €100 000 in January 2006 towards President's Earthquake Relief Fund. It also has plans to fund development activities in the country in association with the German Investment and Development Company. Such activities have

successfully been carried out in other countries. A recent example in Vietnam and a similar program for fishermen and sheep farmers in India where more than 900 fishing crew and 18,500 sheep farmers were trained about the best practices. METRO Cash & Carry plans to invest in Pakistan on a sustained and reliable basis in the years to come. The company’s unique business model offers potential for a decrease in market prices and promotion of local goods and personnel. 10 METRO Cash & Carry principles The success of the company is based on the following principles: • Focus on professional customers • One-stop shopping • Efficient store concept designed for professional needs • Advanced customer service

• Enhanced customers’ competitiveness • Excellence in supply chain and quality management • Strengthening of local suppliers • Development of national infrastructures • Career opportunities • Internationally transferable concept SERVICE & QUALITY The goal of METRO is to efficiently handle thousands of orders. Supply Chain Management plays an important role in our highperformance logistics system and enhances our capacity to supply food and non-food products on a daily basis with consistent high quality. Quality and freshness can only be assured if the . diversity and freshness. shipments and deliveries and ensure that goods arrive at the right place at the right time. The distribution of products that are temperature-sensitive is a huge challenge.

At METRO Cash & Carry Pakistan. both during transportation truck and in cold storage. temperature-controlled. METRO Cash & Carry offers a platform for Fruit & Vegetables equipped with modern accessories for product processing. clean and . according to product requirement. the warehousing and transport for frozen and chilled products is ensured at a constant temperature (in minus or plus degrees). A) Fruits & Vegetables: For the first time in Pakistan. This ensures hygienic.goods are constantly kept under a temperature controlled environment. Temperature monitoring is done manually and by computerized mechanisms. right from the time they leave the producer till they reach the customer.

Special attention is given to the storage of high quality grocery items such as rice. fish. sweets. A separate area has been designated for spices and nuts for the ease and comfort of customers. to maintain their colour. and aroma.Hygiene&Sanitation . storage and maintaining freshness of products throughout their shelf life. 2. lentils. confectionery. spices. Food Fresh 1.DryFood The Dry Food department comprises edible grocery. fruit and vegetables and dairy section. The Fresh department comprises fresh meat. Freshness of food products is checked on a daily basis to make sure that no product is left on the shelf that does not fulfill standard requirements of quality and freshness. 3.. Special care is taken in handling. Now you can choose live fish of your choice and enjoy the taste of freshness. as well as detergents and toiletries. beverages. texture. They have their Halal certificate for verification. canned goods. etc.packed fruit and vegetables as per international standards of Hazard Analysis of Critical Control Points (HACCP). B) Live Fish: METRO Cash & Carry Pakistan offers live fish at Metro centers. pulses.

” This definition of layout planning is clearly visible in Metro Store. we also apply strict hygiene and sanitation requirements in the day-to-day operations of our stores. “Internal Analysis of Metro” Environmental LAYOUT PLANNING “Layout planning is determining the best physical arrangement of resources within a facility. As they have proper segmented each and every department and people can freely move between from one place to another and products can easily be located from a far distance. All products are placed in a systematic manner as there is no wastage of resources. We ensure that sanitation measures are a key part of their production and processing procedures. Not only that we ask our suppliers to follow the quality standards.Metro is extra cautious about the hygiene and sanitation conditions to be ensured by theirr suppliers especially for fresh food items. Landscaping was done professionally LAYOUT OF DEPARTMENTS Metro has designed their departments in such a way that all the . We only buy products that are hygienically prepared and properly handled at source by suppliers.

are grouped together. For the convenience of the customers currently they have 16 departments and they are: • Fruits & Vegetables • Spices & Pickles • Fish • Dairy • Meat • Grill • Bakery • Tobacco • Beverages • Beauty Solutions • Office. non-food & dry-food etc. Detergents • Edible Grocery . Media • Home Electronics • Toiletries.products of the same kind like fresh food.

one has to group similar resources together • Any new brand introduced in the market is placed in front of the existing Brand. This kind of a department layout shows that customers can move between food & non food items easily. based on their unique needs. • Any pair of work centers that has a large number of goods . They are following the “Merchandizing Principle” i.e. LAYOUT PLANNING IN METRO The pattern of layout Metro is the same for all Metro Stores over the world. it is in the form of blocks and is vertical. We have observed two types of layouts in Metro which are the: • Process Layout • Fixed-Position Layout PROCESS LAYOUT In this kind of layout.• Household/Clothing • Sports & Seasonal High volumes of food items generate greater profit and to balance them Detergents are considered a part of Food Department.

TYPES OF STORES • Classic • Junior .moved between them should be placed in close proximity to each other (like food items and non food items). Higher labor intensity(Shelf placement) 3. Material handling costs are higher(They have to replace the defective one) 6. Processing rates are slower(everything is manual) 5. Resources have greater flexibility 4. • Their main challenge is to arrange resources to maximize efficiency and minimize the waste of movement 1. Space requirements are higher(Due to inventory but in vertical way) FIXED POSITION LAYOUT • Racks on which products are being placed is not moveable and building is also a fixed layout • The challenge is scheduling different work crews and jobs and managing the project. Scheduling resources & work flow is more complex(More than 300 Employees) 7. Lower capital intensity & automation 2.

e 120 kanals ECHO This layout is between 5000-6000 sqm TYPE OF LAYOUT BEING USED IN PAKISTAN Metro Pakistan is using the “junior” Layout Advantages of Proper Layout Planning • Proper Layout is it self Marketing of products. • Critical in building good working relationships • Increasing the flow of information • Improving communication • Promoting the visibility of key items in retail business • Contributing to customer satisfaction • Customer convenience WAREHOUSE LAYOUT • Metro has its warehouse at Sharakpur which is known as the “Metro Platform” .000 sqm i.• Echo CLASSIC This kind of layout is above 10.000 sqm JUNIOR This kind of layout is equal to 10.

• They use the “Proactive approach” • Metro itself is a of kind ware house • To locate the inventory & order placement. most of the work is being done by the labor. access to utilities. . Metro has a software known as GMS Suppliers Metro is outsourcing this service by hiring “Logistic Company” for transportation services Metro has its own suppliers who supply directly to its warehouse from all over the world & local suppliers supply both to Metro & its warehouse Customers Metro is catering not only for the customers of Lahore but also outside areas like Gujranwala. So it is important for Metro to choose such a location in which labor supply is adequate Site considerations Metro also considers the following factors while choosing the location. they have local zoning & taxes. Sheikupura & Sargodha Labor In metro.

adequate drainage. soil conditions. Psychological It has a good ambience. staff is friendly & responsive. climate. approach roads. Support services Metro gives warranty depending on the type of product purchased. Example it gives warranty on its electronics.utility cost. parking and etc. METRO DEFINING QUALITY Value for price paid People who purchase products from Metro feel that they charge the right amount for goods that they usually buy. “Continuous Improvement & Metro” Proper shelf placement & training of staff Metro trains its staff by two process: o Process o System It has its own in-house training organization called HOT (House of Training) They also send their staff abroad for proper training They use “train the trainer” approach Team Approach They have a team of more than 300 employees working as a team Quality Awards and Standards Metro maintains their quality by the standard of ISO 9000 “COMPARATIVE ANALYSIS .

while • .Regarding competition” There is one major competitor in pakistan’s wholesale industry and that is Makro. • Both use News papers. pamphlets and book lets because it contains detailed introduction about the business and its products. • Both Metro and Makro are in a wholesale business • Both Spent not much on Marketing campaigns • Metro believes in the concept of insource while Makro outsources its food production • They both have teams for customer service • Metro has trained staff while Makro has just hired sales person • Metro has proper shelf placement of products whereas Makro does not • Metro follows the same layout all over the world and Makro does not Metro places its inventory in its store and warehouse. internet.

Metro don’t spend money on advertisements through electronic media. Inflation 3. people prefer to go the place where they can find maximum variety under one roof.Makro places inventory only in store it does not has any warehouse • Metro hire logistics for transportation • Metro focus on proper shelf placement of products while Makro has not practicing this. People are coming more towards hygienic food. Changing trend of shopping. SWOT Analysis of Metro Opportunities: 1. . Launch of Wal-Mart in Pakistan. 2. 3. Government instability 4. 3. 4. Largest whole seller platform. 2. Company name itself is an opportunity as “Metro” itself is a very popular name and they can expand business with any company they like to. Terrorism Strength: 1. Threats: 1. Metro is planning to open new stores at different locations. 2. They are selling few products with their own brand name.

Relatively poor security check and balance on few items. 2. Only deals in wholesales. 4 P’s at Metro Product: They give more attention on Fast moving consumer goods but they don’t give service after sale because they follow such standards which cause 0. 3. Metro is operating their business according to the buying pattern of the customers. Metro Values its Employees and Customers.4. Location of the store is quite far away. 6. Defined format adapted to local market needs 7. Promotion: when we observe their Promotion strategy then we see that most of the time .they give quantity discount to their customer most of the time and which is their core competency with respect to Industry of whole sellers. 5. 4.2 % error occurrence ratio regarding defected products Price: if we observe the prices of Metro then we come to know that they are providing unique prices as compare to their competition . 5. Efficient and low-cost operations Weakness 1. Not providing goods on credit bases. High priced imported items.

• News Papers • Magazines • Bill board • Pamphlets • Catalogs Place or Placement: When metro came in Pakistan it observe that Makro its major competitor was operating in that area where people face so much traffic problem so they chose the place in Lahore near Thokar Niaz baig road which was less traffic area customer have motorway (highway) to reach here even from other cities.they promote their name with the following promotions. Tactical issues & queues Metro faces many tactical issues because they have to change their inventory after every 14 days on Thursdays. Positioning or segmentation Issue . And they place some products to customers at their desired place but it requires specific amount and distance regarding shopping. On the cash counter they face problem of queues. They need very active workforce which shifts inventory from the top into the shelf space for this.

according to our analysis and their advertisement the target only businesses and they should position their brand also for ordinary customers who use products in their homes. -. Competition’s Prices issues If we analyze the prices of makro and other whole sale markets then we can see that metro prices are almost less than all so in order to maintain prices metro face problem during setting customer prices because customer select those whole sale markets who offer maximum discounts on quantity and transportation.-------- .Metro position it self as a wholesaler brand in Pakistan but people who don’t have retail stores they also come here and do shopping .

diversity and freshness. Quality and freshness can only be assured if the goods are constantly kept under a temperature controlled environment. Supply Chain Management plays an important role in our highperformance logistics system and enhances our capacity to supply food and non-food products on a daily basis with consistent high quality. shipments and deliveries and ensure that goods arrive at the right place at the right time. The distribution of products that are temperature-sensitive is a huge challenge. right from the time they leave the producer till they reach the .SERVICE & QUALITY The goal of METRO is to efficiently handle thousands of orders.

temperature-controlled.customer. the warehousing and transport for frozen and chilled products is ensured at a constant temperature (in minus or plus degrees). A) Fruits & Vegetables: For the first time in Pakistan. METRO Cash & Carry offers a platform for Fruit & Vegetables equipped with modern accessories for product processing. clean and packed fruit and vegetables as per international standards of Hazard Analysis of Critical Control Points (HACCP). This ensures hygienic. both during transportation truck and in cold storage. according to product requirement. B) Live Fish: . Temperature monitoring is done manually and by computerized mechanisms. At METRO Cash & Carry Pakistan.

we . The Fresh department comprises fresh meat. lentils. 2. and aroma. as well as detergents and toiletries. Freshness of food products is checked on a daily basis to make sure that no product is left on the shelf that does not fulfill standard requirements of quality and freshness.DryFood The Dry Food department comprises edible grocery.. storage and maintaining freshness of products throughout their shelf life. Special attention is given to the storage of high quality grocery items such as rice.METRO Cash & Carry Pakistan offers live fish at Metro centers. They have their Halal certificate for verification. A separate area has been designated for spices and nuts for the ease and comfort of customers. fruit and vegetables and dairy section. spices. etc. confectionery. sweets. to maintain their colour. texture. canned goods. Now you can choose live fish of your choice and enjoy the taste of freshness.Hygiene&Sanitation Metro is extra cautious about the hygiene and sanitation conditions to be ensured by theirr suppliers especially for fresh food items. 3. Not only that we ask our suppliers to follow the quality standards. fish. Special care is taken in handling. Food Fresh 1. pulses. beverages.

” This definition of layout planning is clearly visible in Metro Store. All products are placed in a systematic manner as there is no wastage of resources. We ensure that sanitation measures are a key part of their production and processing procedures. “Internal Analysis of Metro” Environmental LAYOUT PLANNING “Layout planning is determining the best physical arrangement of resources within a facility. non-food & dry-food etc. We only buy products that are hygienically prepared and properly handled at source by suppliers. Landscaping was done professionally LAYOUT OF DEPARTMENTS Metro has designed their departments in such a way that all the products of the same kind like fresh food. As they have proper segmented each and every department and people can freely move between from one place to another and products can easily be located from a far distance. are grouped together. For the convenience of the customers .also apply strict hygiene and sanitation requirements in the day-to-day operations of our stores.

Detergents • Edible Grocery • Household/Clothing • Sports & Seasonal .currently they have 16 departments and they are: • Fruits & Vegetables • Spices & Pickles • Fish • Dairy • Meat • Grill • Bakery • Tobacco • Beverages • Beauty Solutions • Office. Media • Home Electronics • Toiletries.

• Their main challenge is to arrange resources to . LAYOUT PLANNING IN METRO The pattern of layout Metro is the same for all Metro Stores over the world. it is in the form of blocks and is vertical.e. one has to group similar resources together • Any new brand introduced in the market is placed in front of the existing Brand. They are following the “Merchandizing Principle” i. based on their unique needs. We have observed two types of layouts in Metro which are the: • Process Layout • Fixed-Position Layout PROCESS LAYOUT In this kind of layout. • Any pair of work centers that has a large number of goods moved between them should be placed in close proximity to each other (like food items and non food items).High volumes of food items generate greater profit and to balance them Detergents are considered a part of Food Department. This kind of a department layout shows that customers can move between food & non food items easily.

Material handling costs are higher(They have to replace the defective one) 6. Space requirements are higher(Due to inventory but in vertical way) FIXED POSITION LAYOUT • Racks on which products are being placed is not moveable and building is also a fixed layout • The challenge is scheduling different work crews and jobs and managing the project.000 sqm .maximize efficiency and minimize the waste of movement 1. Resources have greater flexibility 4. Higher labor intensity(Shelf placement) 3. TYPES OF STORES • Classic • Junior • Echo CLASSIC This kind of layout is above 10. Scheduling resources & work flow is more complex(More than 300 Employees) 7. Lower capital intensity & automation 2. Processing rates are slower(everything is manual) 5.

e 120 kanals ECHO This layout is between 5000-6000 sqm TYPE OF LAYOUT BEING USED IN PAKISTAN Metro Pakistan is using the “junior” Layout Advantages of Proper Layout Planning • Proper Layout is it self Marketing of products.000 sqm i.JUNIOR This kind of layout is equal to 10. • Critical in building good working relationships • Increasing the flow of information • Improving communication • Promoting the visibility of key items in retail business • Contributing to customer satisfaction • Customer convenience WAREHOUSE LAYOUT • Metro has its warehouse at Sharakpur which is known as the “Metro Platform” • They use the “Proactive approach” • Metro itself is a of kind ware house .

Metro has a software known as GMS Suppliers Metro is outsourcing this service by hiring “Logistic Company” for transportation services Metro has its own suppliers who supply directly to its warehouse from all over the world & local suppliers supply both to Metro & its warehouse Customers Metro is catering not only for the customers of Lahore but also outside areas like Gujranwala. . approach roads. So it is important for Metro to choose such a location in which labor supply is adequate Site considerations Metro also considers the following factors while choosing the location. soil conditions.• To locate the inventory & order placement. utility cost. most of the work is being done by the labor. access to utilities. Sheikupura & Sargodha Labor In metro. climate. adequate drainage. parking and etc. they have local zoning & taxes.

“Continuous Improvement & Metro” Proper shelf placement & training of staff Metro trains its staff by two process: o Process o System It has its own in-house training organization called HOT (House of Training) They also send their staff abroad for proper training They use “train the trainer” approach Team Approach They have a team of more than 300 employees working as a team Quality Awards and Standards Metro maintains their quality by the standard of ISO 9000 “COMPARATIVE ANALYSIS Regarding competition” There is one pakistan’s whole major competitor in . staff is friendly & responsive. Psychological It has a good ambience. Example it gives warranty on its electronics. Support services Metro gives warranty depending on the type of product purchased.METRO DEFINING QUALITY Value for price paid People who purchase products from Metro feel that they charge the right amount for goods that they usually buy.

internet. pamphlets and book lets because it contains detailed introduction about the business and its products. • Both Metro and Makro are in a wholesale business • Both Spent not much on Marketing campaigns • Metro believes in the concept of insource while Makro outsources its food production • They both have teams for customer service • Metro has trained staff while Makro has just hired sales person • Metro has proper shelf placement of products whereas Makro does not • Metro follows the same layout all over the world and Makro does not Metro places its inventory in its store and warehouse. • Both use News papers. while • Makro places inventory only in store it does not has any warehouse • .sale industry and that is Makro.

Largest whole seller platform. Changing trend of shopping. Metro is operating their business according to the buying pattern of the customers. Company name itself is an opportunity as “Metro” itself is a very popular name and they can expand business with any company they like to. Metro is planning to open new stores at different locations. Metro Values its Employees and Customers. Threats: 1. 4. Government instability 4. People are coming more towards hygienic food. 2. 4. Metro don’t spend money on advertisements through electronic media. They are selling few products with their own brand name.Metro hire logistics for transportation • Metro focus on proper shelf placement of products while Makro has not practicing this. Inflation 3. 5. Launch of Wal-Mart in Pakistan. SWOT Analysis of Metro Opportunities: 1. people prefer to go the place where they can find maximum variety under one roof. Terrorism Strength: 1. 2. . 3. 3. 2.

Defined format adapted to local market needs 7. • News Papers • . Promotion: when we observe their Promotion strategy then we see that most of the time they promote their name with the following promotions. 4. 4 P’s at Metro Product: They give more attention on Fast moving consumer goods but they don’t give service after sale because they follow such standards which cause 0. Location of the store is quite far away. High priced imported items.they give quantity discount to their customer most of the time and which is their core competency with respect to Industry of whole sellers. 5. 2. Relatively poor security check and balance on few items. Not providing goods on credit bases. 3. Only deals in wholesales.6. Efficient and low-cost operations Weakness 1.2 % error occurrence ratio regarding defected products Price: if we observe the prices of Metro then we come to know that they are providing unique prices as compare to their competition .

They need very active workforce which shifts inventory from the top into the shelf space for this. On the cash counter they face problem of queues. Positioning or segmentation Issue Metro position it self as a wholesaler brand in Pakistan but people who don’t have retail stores they also come here . And they place some products to customers at their desired place but it requires specific amount and distance regarding shopping. Tactical issues & queues Metro faces many tactical issues because they have to change their inventory after every 14 days on Thursdays.Magazines • Bill board • Pamphlets • Catalogs Place or Placement: When metro came in Pakistan it observe that Makro its major competitor was operating in that area where people face so much traffic problem so they chose the place in Lahore near Thokar Niaz baig road which was less traffic area customer have motorway (highway) to reach here even from other cities.

-------- . -.and do shopping . Competition’s Prices issues If we analyze the prices of makro and other whole sale markets then we can see that metro prices are almost less than all so in order to maintain prices metro face problem during setting customer prices because customer select those whole sale markets who offer maximum discounts on quantity and transportation.according to our analysis and their advertisement the target only businesses and they should position their brand also for ordinary customers who use products in their homes.