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Introduction Resources Analysis – Porter's Five Forces Model – PEST – SWOT Capabilities Analysis Strategy Analysis Resource Gap Analysis Recommendations
Scope of our study..
Though the firms chosen are Future group & Reliance Group for comparing and contrasting the Resources, Capabilities & Competencies our study shall be limited to Big Bazaar & Reliance Mart of Future Group & Reliance group respectively.
The term “Retailing” refers to any activity that involves a sale to an individual customer. It is the interface between the producer and the individual consumer buying for personal consumption.
The size of India's retail sector is currently estimated at around $450 billion and organised retail accounts for around 5% of the total market share.Indian Retail Market The retail sector in India is growing at a phenomenal pace. It is estimated that the retail sector would continue to grow at 10-12 % per annum. India ranks fifth among the top 30 emerging markets for retail. . According to the Global Retail Development Index 2012.
Brief Introduction about the Firms .
Corporate Profile • Future Group is India’s largest retailer and one of the leading business houses. • Future Group’s retail network touches the lives of more than 200 million Indians in 73 cities and 65 rural locations across the country.000 stores spread over 16 million square feet of retail space.Kishore Biyani . • Its founder and Group CEO is Mr. . • Currently operates around 1.
launch of supermarket chain 2007 Future Group achieved milestone of $1 billion turnover . ‘Is se sasta aur accha kahi nahin’ .How it grew… • • • • • • • 1987 incorporated as Manz Wear Private Limited. launch of Pantaloons trouser (India’s first formal trouser brand) 1992 launch of Initial public offer (IPO) 1994 establishment of Future Group India 1997 Pantaloons – India’s family store launched 2001 Big Bazaar.India’s first hypermarket chain launched 2002 Food Bazaar.
LIMITED . FUTURE BRANDS LIMITED FUTURE MEDIA (INDIA) LIMITED FUTURE SUPPLY CHAIN SOLUTIONS LIMITED FUTURE AXIOM TELECOM LIMITED Future Group FUTURE VALUE RETAIL LIMITED PANTALOON FOOD PRODUCTS (INDIA) LIMITED FUTURE KNOWLEDGE SERVICES LIMITED FUTURE CAPITAL HOLDINGS LIMITED FUTURE GENERALI INSURANCE COMPANY LIMITED FUTURE BAZAAR INDIA LIMITED STAPLES FUTURE OFFICE PRODUCTS PVT.PANTALOON RETAIL INDIA LTD. HOME SOLUTIONS RETAIL INDIA LTD.
.Future Group Vision: Future Group shall deliver Everything. Every time for Every Indian Consumer in the most profitable manner. Everywhere. Mission: We share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development.
. Bangalore and Hyderabad in 22 days. 2001 with the opening of its first four stores in Calcutta. there are now 161 Big Bazaar stores in 90 cities and towns across India. the Group CEO and Managing Director of Pantaloon Retail India.• Big Bazaar was started by Kishore Biyani. • Within a span of ten years. • Big Bazaar was launched in September. Indore.
Big Bazaar is popularly known as the "Indian Walmart". Electronic Bazaar and Furniture Bazaar.• Though Big Bazaar was launched purely as a fashion format including apparel. Food Bazaar. over the years it has included wide range of products and services. • The current formats includes Big Bazaar. accessory and general merchandise. • As the modern Indian family's favorite retail store. . cosmetics.
. fruits.Corporate Profile • Reliance Retail. groceries. Ltd. lifestyle and home improvement products. and farm implements and inputs. • Its retail outlets offer foods. Founded by Mukesh Ambani in 2006 based in Mumbai • It is the second largest retailer in India. electronic goods. and flowers. • The company’s outlets also provide vegetables. is a subsidiary company of Reliance Industries. apparel and footwear.
Vision: With a vision to generate inclusive growth and prosperity for farmers. Reliance Retail Limited (RRL). a subsidiary of RIL.. was set up to lead Reliance Group’s foray into organized retail.How it grew. RRL has now expanded its presence in more than 85 cities across 14 states in India. • The firm has expanded to more than 1. small shopkeepers and consumers.000 retail stores across all formats. vendor partners. • More than 5 years into operation. .
RELIANCE FRESH LIMITED RELIANCE DIGITAL LIMITED RELIANCE JEWELS LIMITED Reliance Retail Ltd. RELIANCE TIME OUT LIMITED RELIANCE TRENDS LIMITED RELIANCE MART LMITED RELIANCE FOOTPRINTS LIMITED RELIANCE WELLNESS LIMITED Other businesses .
kitchen utensil.• Part of Reliance Retail Ltd headed by Mr. Mukesh Ambani • First store in August 2006 at Ahmedabad • It is designed to be an all under one roof supermarket that caters to household needs like Food article . apparel. electronics goods. furniture etc .
furniture. .• The hypermarket is selling the products on EDLP (every day low price) basis at prices15-20 percent lower than market prices. it has focused largely on local brands instead of national brands. • Reliance is also selling clothes . food article with private labels. • In order to grow faster and better in local markets with higher margins.
Resource Based Approach for Strategy Analysis of the Two Firms .
Domestic conglomerates looking to start retail chain Bargaining power of the Supplier The retail chain are using it own brand in apparel as well in food segment.Porter’s five forces analysis Threat of new entrant FDI policy now made favorable for international players but still some states are not willing to allow them in retailing. they are also big B2B consumer and they are in better position to bargain with the supplier. There are few suppliers who have a slight advantage over others on account of being established players and enjoying brand distinction ..
.Contd. . Spencers Vishal Retail Bharti & Walmart etc. Wills Lifestyle. Bargaining power of Buyer Consumers are price sensitive Availability of more choice Threat of Substitute Unorganized retail Rivalry among competitors Shoppers Stop.
Threat of new Entrant (Moderate) Bargaining power of buyers (High) Competitive Rivalry within Industry (High) Bargaining power of Suppliers (Low) Threat of Substitutes (High) .
store management and CRM Electronic billing Use ERP module for handling inventory and finance. .POLITICAL A stable govt at the center will facilitate speedy economic recovery and create an encouraging investment climate Problems of getting proper protection from local government. ECONOMIC India one of the fastest growing economies increasing income of people Increase in percentage of service contribution to GDP SOCIAL CULTURAL Increase in nuclear families Preference to shop in nearby local store with credit facility Increase in working women proposition Life style changes Shift in product and service preferences Increase in young population P Stable even during recessionbut high Growth stage: High revenue E expenditure on promotion S TECHNOLOGICAL T Technological development for faster service Better application of IT in the modern retail industry. like in supply chain management . .
which attract customers • Network – 1600 channels in villages .Strengths Big Bazaar • High brand equity enjoyed by Big Reliance Mart • First to enter into this Bazaar unorganized sector of •Low Price/Different Discount Scheme vegetables and fruits • State of the art infrastructure – Huge •Private label sale – own Display area products (Reliance Select) • Product Diversity .A vast variety of stuff available under one roof • Everyday low prices. which attract customers • Maximum percent of footfalls converted in sales • Huge investment capacity • Biggest value retail chain in India •Available facilities such as online booking and delivery of goods • Contract Farming •Everyday low prices.
. Van heusen.g.Weakness Big Bazaar • Unable to meet store opening targets on time • Falling revenue per sq ft • General perception: ‘Low price Low quality’ • Overcrowded during offers • Long lines at billing counters which are time consuming • Limited only to value offering low price products. Jockey. Reliance Mart •Limited consumer insight • lack of detailed region specific customer data. A no of branded products are still missing from Big Bazaar’s line of products. • Inadequate human resources • lack of trained personnel at all level • Underdeveloped supply chain and underdeveloped logistics infrastructure. E.
Retail chain influence the people due to lower price. easy availability and value to money • Potential for investment and high growth due to increasing number of youth • Fastest growing formats • Rural retail • E-retailing • Retail franchising • Increasing mall culture in India • More people these days prefer to visit big stores where they can find large variety under one roof .Opportunities • A lot of scope in Indian organized retail as it stands at approximately 4%.
• Social issues as large number of small kirana store will be effected • Competitors.Government policies are not well-defined in emerging markets like India – stringent employment and industry laws – Taxation hurdle. global big players planning to foray into Market • Poor inventory turns and stock availability • Transportation system in rural India is week resulting in lower realization of value chain system • Policy related issues • Numerous license . .Threats • Political issues . permits and registration • Farmer and retailer unfriendly APMC act.
. Music world) Wills Lifestyle Globus Piramals ( Pyramid & Crosswords) Ebony Retail Holdings Ltd.Major competitors of Big Baazar & Reliance Mart • • • • • • • • Shoppers' Stop Westside (Trent) Lifestyle RPG Retail (Food world.
quality. convenience.Capabilities Big Bazaar • Effective and efficient Inventory control • Diverse Industries • Volumes / Economies Reliance Mart • Forge strong & Lasting bond with millions of farmers • Offer unmatched affordability. service and choice • Consistent quality and unbeatable freshness .
Performance of Future Group .
.Performance of RRL….
• A choice of more than 20.000 products • Fast deliveries – tie ups with world leaders in logistics & transportation services • Special emphasis on apparels and life style products Providing interesting discounts Reliance Mart •Ability to understand the needs of the middle class Indian customers and their unflinching service orientation. .Competencies Biz Bazaar • Best pricing throughout the year.
real estate cost should be lesser than 5% of total sales of store in order to provide maximum benefits to customer • The strategic decisions to secure spaces before other retailers join in have resulted in cost saving. Whoever works with Future Group.Strategy: Big Bazaar Real-estate game: • According to kishore biyani. . either leaves in initial deals or continues forever. Nurturing relationship: • Kishore Biyani follows the strategy to develop trust and nurture relationship with suppliers.
Big Bazaar’s Chaos Theory evolved to cater to the Indian Mindset .
Strategy: Reliance Mart Growth through Value Creation • With a vision to generate inclusive growth and prosperity for farmers. small shopkeepers and consumers. •Employed Farm to fork in Reliance Fresh. RRL has made rapid progress towards building an entire value chain starting from the farmers to the end consumers. Farmers – Customer . it was set up to lead Reliance Group’s foray into organized retail. vendor partners. No middlemen. • Based on its core growth strategy of backward integration.
Reliance Fresh .Farm To Fork Model .
Gaps in the resources of the two retail firms • Scope for improvement in Supply chain management and weak support infrastructure – Poor infrastructure-Underdeveloped supply chains. poor warehousing facilities. – Absence of a mature Third Party Logistics (3PL) industry – Fragmented supply base • Rentals – skyrocketing to all time high • Mistakes by retailers have also added to external troubles – Crowding in unattractive locations – Inability to compete with traditional retail – Over reliance on debt funding . etc. lack of strong cold chains. bad roads.
Recommendations (contd..) .
Recommendations (contd.) • Build a competent SCM system – – – – – – Strengthen support infrastructure Warehouses Cold Chain Third Party Logistics (3PL) Backward integration Optimize Processes • Build a competent CRM system – Service and quality can be improved by integrating customer feedback with back-end systems and partners and. – Growth of CRM facilitated by the help of IT in the organization will earn a lot of reputation for the retail chain ..
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