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AMITY INTERNATIONAL BUSINESS SCHOOL

UK COUNTRY REPORT ANALYSIS AND COMPARISION OF TWO MAJOR HYPERMARKETS TESCO IN UK AND BIG BAZAAR IN INDIA

RESEARCH TO BE SUBMITTED BY ANKIT KUMAR AGRAWAL A1808711024 MBA-3C, 2011-2013

INDEX
CHAPTER 1: INTRODUCTION ……………………………………..………………………………………3 CHAPTER 2: REVIEW OF LITERATURE ...…………………………………………………………….4 CHAPTER 3: OBJECTIVES AND METHODOLOGY………………………………………………….5 3.1: OBJECTIVIES………………………………………………………………………………………………….5 3.2: RESEARCH METHODOLOGY………………………………………………………….……………….5 CHAPTER 4: BRIEF ABOUT TESCO AND BIG BAZAAR………………………………………….6 4.1: TESCO…………………………………………………………………………………………………………….6 4.2: BIG BAZAAR…………………………………………………………………………………………………..6 CHAPTER 5: COMPARISION OF UK AND INDIA RETAIL INDUSTRY…………………….7 CHAPTER 6: SWOT ANALYSIS …………………………………..………………………………………..8 6.1: SWOT ANALYSIS OF TESCO………………………………………………………………………..8 6.2: SWOT ANALYSIS OF BIG BAZAAR……………………………………………………………….9 CHAPTER 7: MARKTING 4P’S OF TESCO AND BIG BAZAAR………………………………10 CHAPTER 8: PORTER’S FIVE FORCE MODEL………………………………………………………11 8.1: TESCO PORTER’S FIVE FORCE MODEL……………………………………………………….11 8.2 BIG BAZAAR PORTER’S FIVE FORCE MODEL……………………………………..……..12 CHAPTER 9: ANALYSIS……………………………………………………………………………….…13-15 CHAPTER 10: FINDINGS AND RECOMMENDATION……………………………………..16-17 10.1: FINDINGS…………………………………………………………………………………………………..16 10.2 RECOMMENDATIONS FOR TESCO AND BIG BAZAAR..……………………………..17 CHAPTER 11: CONCLUSION………………………………………………………………………………..18 CHAPTER 12: BIBLIOGRAPHY AND REFERENCE………………………………………………..19 CHAPTER 13: ANNEXURE………………………………………………………………………………20-21

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Indian retail industry environment is totally different from UK. there is no MRP restrictions. The research is being done in the area of marketing. the price decided by Tesco itself. Carrefour.CHAPTER. the large players of retail industry like Wal-Mart. And I also have done this research according to my objectives. I compared the UK and Indian Retail industry which is totally different from each other. and Tesco etc keep an eye on Indian retail business and they are ready to enter into Indian retail business. and being a student of marketing and international business so that I took 2 major player of retail industry Tesco and Big Bazaar of UK and India. It’s very clear that in UK and India the retail sectors operate differently. every item is with MRP by the marketer of the particular product but in UK customer aren’t very much price conscious and on the product there is no MRP by the marketer or manufacturer of any product. Now day’s retail industry is into spotlight because there are two reasons behind of this. In the world almost all the customers are very price conscious. in this report I have research on customer’s perception about the Tesco and I did a primary research for this. PESTLE analysis and porter’s 5 force model of Tesco and Big Bazaar. In India. I asked 13 questions about the Tesco to the 30 peoples of London.1 INTRODUCTION Tesco is the world’s 3rd largest and UK’s no. In this research I also have done SWOT analysis. Earlier FDI in retail industry have been permitted by the Indian government so that large numbers of international retailers interested to enter into Indian retail industry because the retail business of India is more than 450 US$ and one of the top 5 retail market in the world and 84% of India’s retail industry is unorganized. So I tried to analyze and comparison of UK and India Retail Industry and customer’s perception about Tesco and according to my objectives. 3 . Retail industries play a major and very important role in virtually all economies the world over. The main difference I found is in India customer are very price conscious. increasing in the disposable income of middle class people and increasing the purchasing power of the people and conditions for growth of organized retail. The main motive of all the hypermarkets is to provide products and services at very low price than the others hypermarkets. liberalization of the world economy and large players of the industry have entered into the retail business. 1 hypermarket and big bazaar India’s 1st hypermarket.

Retail means to sale of goods and services from businesses or individuals to end users. unorganized like small shop. consumables goods (clothing. one is organized retail and other unorganized retail. unorganized like small shop. Retailing can be done by door to door. Retailers purchased goods in large quantities from manufacturers or directly to wholesalers.CHAPTER.000.000. online or fixed locations like markets and stores.000 Share of organized retail (%) 85% 70% 16% Share of unorganized retail (USD) 2012 15% 30% 84% USA UK INDIA 4 . Country Total Retail Sales (USD) 2012 $2.000. Online business etc. Retail can be identified into two forms. The retail market is forecast to reach an estimated $20. Organized retail is like which are registered. mall. street shop. supermarkets. general stores etc. hypermarkets. and increasing consumer purchasing power are combining to drive the Global Retail industry and opportunities for retail segment players. street shop.000 $450. Retailers are part of an integrated system that is called Supply chain. Organized retail is like supermarkets.000.983.000.002 billion in 2017 with a CAGR of 3. one is organized retail and other unorganized retail. and hypermarkets. general stores etc.9% over the next six years (2012–2017).000 $515. fabrics apparels etc) and types of retailers by marketing strategy is department stores. licensed like supermarkets. increasing in disposable income. warehouses stores. Retail can be identified into two forms. malls. Retail is classified by type of products like Food products. general stores. mall. durable goods (electronics. Rising in GDP growth. sporting goods appliances etc).2 REVIEW OF LITRATURE Role of Retail in the worldRetail play a very important and major role worldwide in increasing productivity across a wide range of consumer goods and services. and hypermarkets.000. increasing population.

And the retail industry is a very huge market of both the nations. books. Ch. and also and qualitative research is being done both using primary and secondary information that is gathered and assembled specifically for this study. if strategies are in line. their culture impact on hypermarkets and various aspects that influence consumer decisions in both the countries. 4. 2. and is meant to provide the basic information required by research objectives. online journals. Tesco Website.2 METHODOLOGY: In order to achieve my objectives I used this longitudinal exploratory study took into account both qualitative and quantitative research strategies.3. 3. India and United Kingdom both are huge nations with a lot of available resources. Comparison of marketing strategies adopted by Tesco and Big Bazaar.  The research is to achieve the objectives is qualitative and as well as exploratory in nature.3 OBJECTIVES AND METHODOLOGY Ch.  Quantitative is being done. 5. 5 .  Primary data has been collected for the customer’s perception about Tesco by making a questionnaire and visit in Tesco stores. To study the different marketing strategies used in the organized sector in both the countries & the kind of clients they serve. To analyze the 2 major player of retail industry of UK and India by keeping an eye on strategies used by Big Bazaar in India & Tesco in London.  The Study is done in the area of marketing.  Qualitative secondary information from a variety of sources is gathered like Tesco Case Studies. To study the UK and India retail industry. To study the perception of customer about Tesco.3. There is a huge scope for hypermarkets to establish a big feet in market share. Newspaper and Magazine (The Grocer) Articles.CHAPTER. Tesco Brochures. In the report I will try to analyze UK and India’s hypermarkets.1 OBJECTIVES: It is very clear that being in two different countries the retail sectors operate differently. 1.

4. Tesco and Home plus. Big Bazaar works on the same economy model as Wal-Mart. Big Bazaar with its range of products and services offering reflects the aspirations of millions of Indian.000 people and serve tens of millions of customers every week. Big bazaar is the fastest growing hypermarket of India. United Kingdom. Superstore. Over the years Tesco’s business has grown and Tesco now operate in 14 countries around the world. Tesco Metro. Today they continue to focus on doing the right thing for their customers.2 BIG BAZAAR: Big Bazaar was founded in October 2001 by Kishore Biyani the Chairman Pantaloon retail India limited. a modern and innovative co. Big Bazaar is situated near transportation hubs to attract maximum customers. The tagline of Big Bazaar “isse sasta aur kuch nahi!” which itself shows that Big Bazaar focus only those customers who are very price conscious and they believe in low price. The vision of Tesco is to be the most highly valued by the customers they serve and the community in which they operate and their staff and the shareholders. 6 . colleagues and the communities they serve. Tesco segments its store portfolio six four different store formats. future group. Metro. Tesco stores are the subsidiary of Tesco PLC in UK. 2012. headquarter of Tesco in Cheshaunt. Ch. One-stop.4 BRIEF ABOUT TESCO AND BIG BAZAAR Ch. Tesco superstores etc.1 TESCO: Tesco was founded in 1919 by Jack Cohen from a market stall in London’s East End.CHAPTER.4. In India Tesco is a joint venture with TATA group and the stores named as ‘Star Bazaar’. Tesco Is a UK’s grocery and merchandise retailer and the biggest hypermarket of UK. The main vision of the Big Bazaar is ‘Everything at every place at every time for each Indian customer at a very profitable manner. They provide best product at the best price. employ over 500. Extra. Tesco stores are divided in 6 formats like Tesco express. Big Bazaar is India’s number 1 hypermarket and there are 214 stores in 90 cities of India till June 2. and applying their skills globally. They have always been committed to providing the best shopping experience. And Big Bazaar had considerable success in many Indian cities and small towns. Express.

UK is the most international retail market with the highest proportion of international retailers trading. 7 . Hypermarkets dominate the UK food retail market. 6. The retail industry of UK gives employment of 2. 3. And organized retail is 70% and 30% is unorganized or traditional. 5.5 COMPARISION OF RETAIL INDUSTRY OVERVIEW OF UK AND INDIA 1. In November 2011. It is more than half of people who work part time in the retail sector and it’s compared to less than a 3rd across the whole economy.brand stores and single-brand stores. 2. 6. 3. India 1. The retail industry of UK generates almost 8% of the GDP. It’s poised to become $1. In UK 11% of all VAT-registered business are retailers. 4. The UK retail sector makes up approximately 10% of its all employment. The Indian retail market is US$ 450 billion and comes one of the top five retail markets in the world. India's central government announced retail reforms for both multi. UK 1. The retail industry of India generates almost 14 to 15% of its GDP.9 million people. 5. 2. In India only 16% retail industry is organized and rest 84% is unorganized.3 trillion opportunity by 2020. with 56.CHAPTER. The Indian government recently took a decision to allow up to 100% FDI in multi-brand retail and raise the limit for overseas investment in single-brand retail to 100%. 4.0% of its sales.

2. Tesco should also try in Health & Beauty. Tesco’s opportunity is in strategic alliance with other companies. 4. Opportunities 1.CHAPTER. The competition is very high from Asda & Wal-Mart. 2. Innovation by other super markets is a highly threat.6 SWOT ANALYSIS Ch. Tesco is world’s Third largest retailer. 3. 2. Weakness 1. 4. Presence of Tesco is internationally. Financial power is very strong. Threats 1. Lowest price war between hypermarkets is main threat. Tesco is the number 1 supermarket chain in UK. 3. The main opportunity is to open new stores. 5. 3. 3. Tesco is more dependent on UK market. Tesco has strong brand name.6. In UK transport costs is very high. 4. 8 . 5. The strategy is single point to serial acquisitions. Raw material cost is rising day by day. 5. Asian market has huge retail industry and in growing stage so Tesco must enter into Asian markets. The main threat is International expansion of the business. 4.1 SWOT ANALYSIS OF TESCO: Strengths 1. Tesco should try into non-food retail because they’ve strong financial power. The main difficulty is Increasing geographical spread makes focus on specific markets. 2.

6. Big Bazaar has high brand equity. 3. The competition of Big Bazaar is now with Wal-Mart and other international stores so that the threat is competitor’s global presence. 3. India is developing country and their policies change randomly so changing in government policies is threat for Big Bazaar. Big Bazaar is restricted to Indian market only it isn’t globally. 2. 2.Ch. They’ve opportunity to expand globally by tie–ups other multinational companies. Big Bazaar keep very thin margin. 4. Mall culture is increasing in India so they’ve chance to expand their retail business widely. The strategy of Big Bazaar is low price guarantee which attract customers.2 SWOT ANALYSIS OF BIG BAZAAR: Strengths 1. 3. Big Bazaar offers a wide range of products and services. 5. 3. Opportunities 1. 4. 9 . 2. In the rural area the whole retail business are unorganized so they’ve a chance to enter into rural markets of India 5. Big Bazaar is affordable for middle class & upper middle class. After the FDI in retail industry the main player of retail industry like Wal-Mart. 4. Big Bazaar provides attractive Promotional offers. Threats 1. Weakness 1. Tesco have entered into Indian retail industry. 4. High competition. There are long lines at billing counters of Big Bazaar which is very time consuming. 2. Because they believe in low price guarantee so that high branded products are still missing from big bazaar’s line of products. They must enter into high premium segment. Indian organized business is only 16% so that there is a lot of scope in Indian retail industry.

10 . telecom. Big Bazaar use 2 types of promotional strategies of Big Bazaar One is the holistic advertisement promotion like ‘Sabse Sasta Din” are a very successful strategy to get footfall and the second is the particular store oriented promotion like buy 2 get 1 free etc. the supplier care and social issues. BIG BAZAAR Big Bazaar offers maximum variety of each product it also include own product of Big Bazaar. PLACE Tesco has a store of every Pin code of London they have 6 multi format stores to have a better geographic cover of market. personal finance. Big Bazaar with its range of products and services offering reflects the aspirations of millions of Indian. PRICE Tesco sell best quality product at a low price in order to have a large audience to target. online services. There are loyalty schemes which reward customers. Tesco also provide their customers loyalty scheme as club card to reward their customers. and also include Tesco’s own brand product. major brands. Nonfood.CHAPTER. Big Bazaar believes in low cost guarantee. Big Bazaar targets semi-urban population. Tesco promotes their store “every little help” the tagline of Tesco. Big Bazaar strategy is to find out a cheap location Big Bazaar is situated near transportation hubs to attract maximum customers. PROMOTION Tesco emphasize on the ethical things like green. Big Bazaar considers its discounted price it’s USP. Price of product is low and they give average 7-8% discount on all items on their MRP.7 MARKETING 4 P’S OF TESCO AND BIG BAZAAR 4 P’S PRODUCT TESCO Tesco provides a wide range of quality products like Food.

1 Tesco’s Porter’s five force model Threat of New Entrants (Medium) Bargaining power of suppliers (Low) Competitors Rivalry Among Bargaining power of buyers (Medium) (High) Threats of Substitute products (Low) 11 .8.8 PORTER’S FIVE FORCE MODEL Ch.CHAPTER.

8.Ch.2 Big Bazaar Porter’s five force model Threat of New Entrants (High) Bargaining power of suppliers (Low) Competito rs Rivalry Among Bargaining power of buyers (Medium) (High) Threats of Substitute products (High) 12 .

2:.3:.1:.9 ANALYSIS According to the questionnaire I found this result.Range of products available in Tesco satisfactory? Product available in tesco satisfactory? Yes 23% 77% No 13 .How often do you visit Tesco? How often visit to tesco? Daily Twice in a week Once in a week 3% 47% 17% Twice in a month 33% Q. Q.CHAPTER.Are you satisfied with Tesco’s services (in store)? Satisfied with Tesco Services (in stores) No 20% Yes 80% Q.

Customer Service Excellent 10% 10% 77% Good 3% Average Poor Q.6:.5:.Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Locations easily accessible? Yes 17% 83% No 14 .Rate the customer service according to your experience.4: Does the Tesco provide quality standard products? Quality standard product? Yes 17% No 83% Q.Q.

9:.8:.Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Price Reasonables? Yes 30% 70% No Q.Q.How much would you rate Tesco? Rate Tesco Excellent 23% 67% Good 10% 0% Average poor 15 .Are you a loyalty program (Club card) member of Tesco? Clubcard Member? Yes No 47% 53% Q.7:.

Indian retail industry comes in top 5 of the world. no one can sell a product more than the MRP decided by the manufacturer but in UK things are totally different price of any product decided by the seller. Indian customers are more price conscious than the UK. retail industry of UK generates 8% GDP and in India its 14 to 15% of its GDP. so Tesco has right to sell a product as he want but Big Bazaar can’t sell any product of maximum of the MRP. 16 . So that people find Tesco very easily. Tesco has its store at every pin code of UK. And during my personal observation when I saw in India (Though it was for 3-4 hours which is a short period of time).it was noted by me that few customers who had little to purchase. left their trolleys due to long queue at the counter. and Indian government allows 100% FDI in retail business and there are so many reasons so that we can say Indian retail industry will grow faster than the UK retail industry.  At Big Bazaar waiting time in terms of Billing is a concern and more so during the weekends. 10.CHAPTER. Main difference is that UK’s retail industry is 70% organized and Indian retail industry is only 16% organized which makes a huge difference. so t hat Tesco’s strategy’s is different for different countries. In India price of any product decided by the manufacturer or marketer of the particular product. and the chances of growing of this retail business is very high in India because mall culture is growing in India. Retail industry play a very important role in both countries. Tesco has huge network.10 FINDINGS AND RECOMMENDATION Ch.1 FINDINGS: After all the research work I’ve done I found some interesting facts about Tesco and Big Bazaar.      Opposite of this Tesco has a competitive benefit. If we talk about Tesco and Big Bazaar marketing strategies than these are different in many ways:  Tesco operates globally but Big Bazaar is in India only. Tesco has more than 5000 stores in UK but Big Bazaar has only 300 stores in India.

Recommendation for Big Bazaar:  At Big Bazaar they should they should be increased billing counters and employees so that customers do not face any problem regarding their purchase goods and waiting long queues which force them to leave their purchased goods.2 RECOMMENDATION Recommendation for Tesco:  More dependency on UK market isn’t good for Tesco.  They need to focus their CRM. new innovations and different offers.  Competition is very high so they should get competitive advantage because of their network. must bring technologies.  Big Bazaar must do something new than others.10.  Tesco needs to focus on his club card loyalty program so that customer can get benefit of that and they can retain the customer again and again.Ch. 17 .

Tesco has its strength is very constructive and competitive against his competitors Asda and Sainsbury’s etc. price war has been begun between all the hypermarkets and the profit of this getting to the customers directly.11 CONCLUSION Tesco and Big Bazaar is no. There are the many government policies which affects these stores different from each others. the strategy of both the stores to give best product at best price. marketing strategy are different. and retail industry play a very important role for the growth of economy of any country. Tesco stores were developed at different locations which was a serving advantage to different consumer demands. the smaller in town stores offer top up shopping facilities. competition is going to very high for the Big Bazaar. And Big Bazaar is situated near transportation hubs of India to attract maximum customers. My conclusion after all my research work is Tesco and Big Bazaar is big player of retail industry of UK and India. In India after the 100% FDI investment in retail industry. Big Bazaar’s strategy is only for the middle class customers of India by giving those attractive offers and low price guarantee.1 hypermarkets of UK and India.CHAPTER. Thus the Tesco’s portfolio was complemented. These out of town. The main weakness of both the stores is that Tesco’s dependency only on UK markets and as well as Big Bazaar is depends only on India market. 18 . And low price war between all the hypermarkets is benefited to the customer ultimately. because the big players like Wal-Mart. Big Bazaar is limited to India while Tesco is globally and world’s 3rd largest hypermarket so that the working style. edge of town super stores offer one-stop shopping services for weekly outings. Carrefour is ready to enter into Indian retail industry.

2013. [ONLINE] Available at:http://economictimes.the UK’s largest retailer | Analysis | Retail Week. 19 . Web 4: Future Group's key managers moving out: D Mall joins Reliance Retail Economic Times.com/home/profile-tesco-the-uks-largestretailer/5046179.html.com/index.3 trillion by 2020: FICCI Economic Times. 2013.tescoplc.the UK’s largest retailer | Analysis | Retail Week. Million Square Feet Retail Space – Pantaloon.cms. India’s Hypermarket Chain: Can its Ambitious Future Plans Succeed? Case Study | Vision. (may 2011). [Accessed 20 March 2013] Web 5: India Leading Retailer. [ONLINE] Available at: http://www.retail-week.com/news/news-by-company/corporatetrends/future-groups-key-managers-moving-out-d-mall-joins-relianceretail/articleshow/18823192. 2013. Web 6: Big Bazaar.pantaloonretail.economictimes. Last accessed 27th feb 2012.Our history.article.%20Mission%20and%20Goals/V MG0015IRC.asp?pageid=11. India's retail industry to grow to $1.12 BIBLIOGRAPHY AND REFERENCE Websites: Web1: philip clarke.in/about-us/overviewretail.India Leading Retailer. Web 2:Tesco PLC .org/Case_Studies/Strategy/Vision.tescoplc. 2013. Available: http://www.researchandmarkets. Web 7: The Indian Retail Industry 2012 . Tesco strategy. [Accessed 20 March 2013]. Million Square Feet Retail Space – Pantaloon. The Indian Retail Industry 2012 . [Accessed 20 March 2013]. Tesco PLC . India’s Hypermarket Chain: Can its Ambitious Future Plans Succeed? Case Study | Vision.Economic Times.About us .3 trillion by 2020: FICCI . 2013. Web 3: India's retail industry to grow to $1. 2013. 2013.Our history. [ONLINE] Available at: http://www.htm.com/reports/2126249/the_indian_retail_industr y_2012. Big Bazaar.CHAPTER. Mission and Goals Case Studies. [ONLINE] Available at: http://www.Economic Times. Web 8: Profile: Tesco . Future Group's key managers moving out: D Mall joins Reliance Retail .com/2012-1118/news/35185252_1_back-end-infrastructure-retail-industry-fdi. [ONLINE] Available at:http://articles.indiatimes.Research and Markets. [Accessed 20 March 2013]. [Accessed 20 March 2013]. [ONLINE] Available at:http://www.Research and Markets.About us . [Accessed 20 March 2013].com/index. Mission and Goals Case Studies.asp?pageid=12. [ONLINE] Available at:http://ibscdc. Profile: Tesco .indiatimes. [Accessed 19 March 2013].

Range of products available in Tesco satisfactory? Yes No Q.1:.Are you satisfied with Tesco’s services (in store)? Yes No Q.:________________ Age: _____________ Q. May I kindly take few minutes of your time and ask you to fill out this? Your answers will be kept confidential and would be used only for my educational purpose.13 ANNEXURE Questionnaire: I'm making a country specific research report for Master of Business Administration in International business and I am interested in analyzing your thoughts and opinion about Tesco. Name: ____________________________Contact Gender: _________________ no.Does the Tesco provide quality standard products? Yes Q.Why do you prefer Tesco over the other retail store? Q.5:.6:.Are the locations easily accessible? Yes No No 20 .2:.4:.How often do you visit Tesco? Daily Once in a week Twice in a week Twice in a month Q.3:.CHAPTER. I must appreciate your participation and honest answer for the survey.

Excellent Average Good poor Q.Any recommendation or comment.Are you aware about all the product line offered by Tesco? Yes No Q.  21 .12:.Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Yes No Q.8:.11:.10:.13:.7:.9:.How much would you rate Tesco? Excellent Average Good Poor No No Q.Rate the customer service according to your experience.Are the staff friendly & helpful of Tesco? Yes Q.Q.Are you a loyalty program (Club card) member of Tesco? Yes Q.