Aggarwal Book Store

Chetan Khanna

Question 1) Analyze the data provided in the case study to decide on an appropriate store location for Aakash Book Store. Which method would you use and why? .

Step 1 – Market Identification • Ahemdabad was chosen because of higher Average purchase (Rs per annum) for 3 groups of customers with 3317 as average and 7862 for A . 2804 for B and 1087 for C • Ahemdabad has higher percentage of cohorts amongst customers .

e.Step 2 – Determining the market potential • Demographic features of the population i.e higher percentage of people in the age bracket of Rs 1020. Graduate>MBA>Professionals . more number of people in the bracket of 30-40 followed by 20-30 • Characteristics of households in the area i.000 per month • Total Trade Analysis ( Books>Stationary>Magazine and Music) • Education Profile i.e.

Step 3 and 4 – Identification of Alternate Sets and Selection of the sites • Traffic ( Bopal < Satellite<Gurukul) • Accessibility to Markets S and G = 10 Number of Stores and the type of markets existing in the area = • Branded Retailers (S<G<B) • Other book retailers ( S<G=B) Amenities Available • Within the complex ( B<G<S) • Outside the Complex ( G<S=B) Rent ( B<G<S) Advance Payment (B<G<S) Refurbishment Cost(B<G=S) Lease Tenure ( S<G<B) Proposed Space Description – S is Left . G is Right and B is front .

Furthermore according to the formula we have  Satellite = 0.051  Bopal = 0.04  Gurukul = 0.Step 3 and 4 – Identification of Alternate Sets and Selection of the sites (Contd) • Reilly's Law of Retail Gravitation will be used because it means that people will have to travel to the largest place as it is the most accessible.022 • Therefore . the store should be located at Satellite keeping in mind all the above factors .

Question 2) Which of the three locations would be profitable for the store? .

33% Net Sales 36000 • Measures profitability of the enterprise • Helps to plan the capital structure and helps in evaluation of investment decisions .Profitability Analysis for the 1st year for Satellite • In relation to sales  Gross Profit Ratio = Net Sales – COGS = Rs 10.800 * 100 = 30% 36000 • Efficiency with which operations can be carried out • In relation to investment • Return on investment • ROI = NPBIT * 100 = 840 * 100 = 2.800  GPR = 10.