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1. INDUSTRY PROFILE


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1.Industry Profile

Indian Retailing:

Retailing in India is one of the pillars of its economy and accounts for about 15% of its GDP.
The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets
in the world by economic value. India is one of the fastest growing retail markets in the world,
with 1.2 billion people.
India's retailing industry is essentially owner manned small shops. In 2010, larger format
convenience stores and supermarkets accounted for about 4 percent of the industry, and these
were present only in large urban centers. India's retail and logistics industry employs about 40
million Indians (3.3% of Indian population).
Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand
retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any
retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process.
In November 2011, India's central government announced retail reforms for both multi-brand
stores and single-brand stores. These market reforms paved the way for retail innovation and
competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single
brand majors such as IKEA, Nike, and Apple The announcement sparked intense activism, both
in opposition and in support of the reforms. In December 2011, under pressure from the
opposition, Indian government placed the retail reforms on hold till it reaches a consensus.
In January 2012, India approved reforms for single-brand stores welcoming anyone in the world
to innovate in Indian retail market with 100% ownership. Indian government continues the hold
on retail reforms for multi-brand stores.
Organized retailing, in India, refers to trading activities undertaken by licensed retailers, that is,
those who are registered for sales tax, income tax, e t c .
These include the publicly- traded supermarkets, corporate-backed hypermarkets and retail
chains, and also the privately owned large retail businesses.
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Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing,
for example, the local mom and pop store, owner manned general stores, paan/beedi shops,
convenience stores, hand cart and pavement vendors, etc.
Organized retailing was absent in most rural and small towns of India in 2010. Supermarkets and
similar organized retail accounted for just 4% of the market.
Background of Indian retailing:

Most Indian shopping takes place in open markets or millions of small, independent grocery and
retail shops. Shoppers typically stand outside the retail shop, ask for what they want, and cannot
pick or examine a product from the shelf. Access to the shelf or product storage area is limited.
Once the shopper requests the food staple or household product they are looking for, the
shopkeeper goes to the container or shelf or to the back of the store, brings it out and offers it for
sale to the shopper. Often the shopkeeper may substitute the product, claiming that it is similar or
equivalent to the product the consumer is asking for. The product typically has no price label in
these small retail shops; although some products do have a manufactured suggested retail price
(MSRP) pre-printed on the packaging. The shopkeeper prices the food staple and household
products arbitrarily, and two consumers may pay different prices for the same product on the
same day. Price is sometimes negotiated between the shopper and shopkeeper. The shoppers do
not have time to examine the product label, and do not have a choice to make an informed
decision between competitive products.
India's retail and logistics industry, organized and unorganized in combination, employs about 40
million Indians (3.3% of Indian population). The typical Indian retail shops are very small. Over
14 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m
2
)
in size. India has about 11 shop outlets for every 1000 people. Vast majority of the unorganized
retail shops in India employ family members, do not have the scale to procure or transport
products at high volume wholesale level, have limited to no quality control or fake-versus-
authentic product screening technology and have no training on safe and hygienic storage,
packaging or logistics. The unorganized retail shops source their products from a chain of
Middlemen who mark up the product as it moves from farmer or producer to the consumer. The
unorganized retail shops typically offer no after-sales support or service. Finally, most
transactions at unorganized retail shops are done with cash, with all sales being final.
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Until the 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Some
retails faced complying with over thirty regulations such as "signboard licenses" and "anti-
hoarding measures" before they could open doors. There are taxes for moving goods to states,
from states, and even within states in some cases. Farmers and producers had to go through
middlemen monopolies. The logistics and infrastructure was very poor, with losses exceeding 30
percent.
Through the 1990s, India introduced widespread free market reforms, including some related to
retail. Between 2000 to 2010, consumers in select Indian cities have gradually begun to
experience the quality, choice, convenience and benefits of organized retail industry.



Growth of Indian retailing:

Growth over 1997-2010

India in 1997 allowed foreign direct investment (FDI) in cash and carry wholesale. Then, it
required government approval. The approval requirement was relaxed, and automatic permission
was granted in 2006. Between 2000 to 2010, Indian retail attracted about $1.8 billion in foreign
direct investment, representing a very small 1.5% of total investment flow into India.
Single brand retailing attracted 94 proposals between 2006 and 2010, of which 57 were approved
and implemented. For a country of 1.2 billion people, this is a very small number. Some claim
one of the primary restraints inhibiting better participation was that India required single brand
retailers to limit their ownership in Indian outlets to 51%. China in contrast allows 100%
ownership by foreign companies in both single brand and multi-brand retail presence.
Indian retail has experienced limited growth, and its spoilage of food harvest is amongst the
highest in the world, because of very limited integrated cold-chain and other infrastructure. India
has only 5386 stand-alone cold storages, having a total capacity of 23.6 million metric tons.
However, 80 percent of this storage is used only for potatoes. The remaining infrastructure
capacity is less than 1% of the annual farm output of India, and grossly inadequate during peak
harvest seasons. This leads to about 30% losses in certain perishable agricultural output in India,
on average, every year.
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Indian laws already allow foreign direct investment in cold-chain infrastructure to the extent of
100 percent. There has been no interest in foreign direct investment in cold storage infrastructure
build out. Experts claim that cold storage infrastructure will become economically viable only
when there is strong and contractually-binding demand from organized retail. The risk of cold
storing perishable food, without an assured way to move and sell it, puts the economic viability
of expensive cold storage in doubt. In the absence of organized retail competition and with a ban
on foreign direct investment in multi-brand retailers, foreign direct investments are unlikely to
begin in cold storage and farm logistics infrastructure.
Until 2010, intermediaries and middlemen in India have dominated the value chain. Due to a
number of intermediaries involved in the traditional Indian retail chain, norms are flouted and
pricing lacks transparency. Small Indian farmers realize only 1/3rd of the total price paid by the
final Indian consumer, as against 2/3rd by farmers in nations with a higher share of organized
retail. The 60%+ margins for middlemen and traditional retail shops have limited growth and
prevented innovation in Indian retail industry.
Growth after 2011

Before 2011, India had prevented innovation and organized competition in its consumer retail
industry. Several studies claim that the lack of infrastructure and competitive retail industry is a
key cause of India's persistently high inflation. Furthermore, because of unorganized retail, in a
nation where malnutrition remains a serious problem, food waste is rife. Well over 30% of food
staples and perishable goods produced in India spoil because poor infrastructure and small retail
outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.
One report estimates the 2011 Indian retail market as generating sales of about $470 billion a
year, of which a miniscule $27 billion comes from organized retail such as supermarkets, chain
stores with centralized operations and shops in malls. The opening of retail industry to free
market competition, some claim will enable rapid growth in retail sector of Indian economy.
Others believe the growth of Indian retail industry will take time, with organized retail possibly
needing a decade to grow to a 25% share. A 25% market share, given the expected growth of
Indian retail industry through 2021, is estimated to be over $250 billion a year: a revenue equal
to the 2009 revenue share from Japan for the world's 250 largest retailers.
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The Economist forecasts that Indian retail will nearly double in economic value, expanding by
About $400 billion by 2020. The projected increase alone is equivalent to
market size of France.



The Indian Retail Market:
The current retail

Indian market has high complexities in terms of a wide geographic spread and distinct consumer
preferences varying by each region necessitating a need for localization Even within the
Geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail
Space per capita at 2 sq ft
(0.1 percent is highest in the
world. 45 lakh (US$85,500).
Delving further into consumer
m
2
)/ person is lowest in the world Indian retail density of 6
.8 million households in India have an annual income of over



buying habits, purchase decisions can be separated into two
categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing
machines, dishwashers, micro ave ovens and DVD players fall in the status category.
Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods,
high-end digital cameras, camcorders, and gaming consoles. Consumers in the status category
buy because they need to maintain a position in their social group. Indulgenc -oriented buying
happens with those who want to enjoy life better with products that meet their requirements.
When it comes to the festival shopping season, it is primarily the status-oriented segment that
contributes largely to the retailers cash register.
While India presents a large market opportunity given the number and increasing purchasing
power of consumers, there are Significant challenges as well given that over 90% of trade is
conducted through independent local stores. Challenges include: Geographically dispersed
population, small ticket sizes, complex distribution network, and little use of IT systems,
limitations of mass media and existence of counterfeit goods.
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1.1 Major Indian Retailers:


REI AGRO LTD Retail: 6TEN and 6TEN kirana stores
Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station,
Brand Factory, Depot, aLL, E-Zone etc.
Raymond Ltd.: Textiles, The Raymond Shop, Park Avenue, Park Avenue Woman, Parx,
Colourplus, Neck Ties & More, Shirts & More etc.
Fabindia: Textiles, Home furnishings, handloom apparel, jewellery
RP-Sanjiv Goenka Group Retail-Formats: Spencers Hyper, Spencer's Daily, Music World,
Au Bon Pain (Internaional bakery cafeteria), Beverly Hills Polo Club
The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan
Industries with World of Titans showrooms, Tanishq outlets, Croma.
Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance
Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance
Autozone, iStore
Reliance ADAG Retail-Format: Reliance World
K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall
Nilgiris-Formats: Nilgiris supermarket chain
Marks & Spencer: Clothing, lifestyle products, etc.
Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise
brand stores.
Pyramid Retail-Formats: Pyramid Megastore, TruMart
Next retail India Ltd (Consumer Electronics)(www.next.co.in)
Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe
Deposit Lockers
PGC Retail -T-Mart India [1], Switcher, Respect India, Grand India Bazaar,etc.,
Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.
Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain
Vishal Retail Group-Formats: Vishal Mega Mart
BPCL-Formats: In & Out
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German Metro Cash & Carry
Shoprite Holdings-Formats: Shoprite Hyper
Paritala stores bazar: honey shine stores
Aditya Birla Group - "More" Outlets
Kapas- Cotton garment outlets
Nmart Retails with 71 operating Stores till now and total 153 Stores in India and 1 to open in
Dubai Shortly. (Expected to be 150 by the end of Aug-2012)



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2. COMPANY PROFILE


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2.Company Profile

Background and inception of the company:

About Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private
sector enterprise, with businesses in the energy and materials value chain. Group's annual
revenues are in excess of US$ 58 billion. The flagship company, Reliance Industries Limited, is
a Fortune Global 500 company and is the largest private sector company in India.



Dhirajlal Hirachand Ambani (1932-2002)
Founder of Reliance Group

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.
Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical
integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil
and gas exploration and production - to be fully integrated along the materials and energy value
chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and
marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail,
infotel and special economic zones.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre
producer in the world and among the top five to ten producers in the world in major
petrochemical products.

Major Group Companies are Reliance Industries Limited, including its subsidiaries and Reliance
Industrial Infrastructure Limited.
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About Reliance Retail Limited

Reliance Retail Limited is an organized retail arm of the Reliance Industries Limited. Reliance
industry is the largest conglomerate in India. It has an annual turnover of US$35.9 Billion. It is
also listed on 206th position in the Fortune Global 500 companies.
Reliance Retail is actually the retail group of Reliance Industries Limited. It has a number of
brands like Reliance Time Out, Reliance Digital, Reliance Wellness, Reliance Autozone,
Reliance Super, Reliance Mart, Reliance iStore, Reliance fresh, Reliance footprint, Reliance
Jewels, Reliance trends, and Reliance living.



Reliance Group was established in 1970's. The Reliance Retail was found in the year 2006 as an
operating subsidiary. It has its head office in Mumbai, India.

Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, Reliance
is aggressively working on introducing a pan-India network of retail outlets in multiple formats.

A world class shopping environment, state of art technology, a seamless supply chain
infrastructure, a host of unique value-added services and above all, unmatched customer
experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in size and spread and make India
proud. Ensuring better returns to Indian farmers and manufacturers and greater value for the
Indian consumer, both in quality and quantity, will be an integral feature of this project. By
creating value at all levels, we will actively endeavor to contribute to India's growth.

The project will boast of a seamless supply chain infrastructure, unprecedented even by world
standards. Through multiple formats and a wide range of categories, Reliance is aiming to touch
almost every Indian customer and supplier.
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About Reliance Digital
Reliance Digital is a Consumer Electronics, Durables, IT & Telecom retail arm of Reliance
Retail Group, a subsidiary of Reliance Industries Limited hosts over 150 national and
international brands of electronic products. Reliance Digital Stores offer more than 4000 types of
electronic products.
After a successful launch of Reliance Fresh stores across several towns and cities in India,
Reliance Retail Limited unveiled Reliance Digital in the year 2007, its pilot consumer
electronics concept mega store. The new destination for the latest in technology and
entertainment products & services, and currently 58 Reliance Digital stores are operating in
India.



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Nature of the business carried:

Reliance Digital Store is a one stop shop for different electronic needs of all customers. May it
be household appliances, computers, laptops, games or telecom products; customers can find
every gadget, for every budget at Reliance Digital. It has over 4000 products at reasonable prices
for its valued customers.


Vision, Purpose, Values and Promises:


Vision
Reliance Digital seeks to fulfill the dream of every Indian, be it through its nationwide network
of conveniently located stores or through its presence on the web, by providing a delightful
shopping experience of products & solutions and helping them bring home the latest & best in
technology from the widest selection at the lowest assured price with complete peace of mind
through lifelong support.
Or more simply
We bring Technology to life for you


Purpose
Growth is Life

Bettering the lives of Indian everyday



Values

We believe in people

We believe in and follow the customer

We believe in the good of the community

We believe in each other
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Promises

A delightful shopping experience

A delighted community

A delightful place to work



Products/ Services Profile:

Reliance Digital The Merchandise Mix
Complete range of
Consumer electronics
Home appliances
Kitchen appliances
Computing & gaming
Personal audio
Mobile communications
High-end audio & home theaters
High definition flat panel televisions
Music and movies
Digital photography & photo printing
Accessories to enhance product usage & experience
And lots more!
More than 150 brands, 4000 products and countless solution bundles individually
recommended to best suit the customers needs.



Services

Reliance Digital reviews all its products to provide the best to its customers. It has a specially
designed Experience Zones to get the real feel of the product before purchasing it.
Reliance Digital provides financial assistance through easy EMI Schemes; Company has
appointed Bajaj Capital to provide financial assistance to its consumers. Consumers have to
make 40% down payment and the remaining amount is distributed into 8 EMIs and interest rate
varies from brand to brand products.
Reliance Digital has a ResQ facility, which serves the purpose of a technical support team. It
comes to rescue to provide solutions for problems that customers may face with products from
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all leading brands. This facility is available 7 days a week; 365 days a year from 10 a.m. to 10
p.m. They have qualified engineers to deal with installation and to guide you with the usage of
the appliances.



ResQ services are -


Product installation: ResQ help to set up customers product for optimum
performance




Specialised customer training:
Specialised training to customers on products and related applications by an industry
trained personnel




Authorised Service Station for diagnosis and repairs (Caters to all brands)
One stop solution for repairs for all brands products
Repairs covering both pre and post manufacturer warranty periods
On-site service for select products for the rest, our engineers shall transport products to
and fro from the service station


Demonstrate Product Usage:
Live demonstration of all features of the product
Provide handy care tips
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Health check-up plan: Preventive Maintenance


To ensure that products do not malfunction, resQ offer periodic services and
maintenance check-ups
Tips on upkeep of products for optimal performance
Also covers products not purchased from Reliance Digital




Enhanced Utility: ResQ Accessories
ResQ offer a host of utility products and accessories that are compatible with products &
help customers get more of them!




Extended Warranty Service- ResQ Care Plan
Free repairs, including both parts and labour
Free preventive maintenance visits during plan period




Area of operation National:

Reliance Digital is a Consumer Electronics, Durables, IT & Telecom retail arm of
Reliance Retail Group, a subsidiary of Reliance Industries Limited, and currently 58
Reliance Digital stores are operating in India and 9 stores are operating in Bangalore.
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Ownership pattern:



Reliance Industries Limited




Refining Textiles Retail Petrochemicals -
Polyester &
Fibre
Intermediates
Petrochemicals
- Polymers
Reliance
Gas
&
Reliance
Aviation
Vimal
Vimal Gifting
&
V2 Vimal
Reliance Digital
Reliance fresh
Reliance footprint
Reliance Jewels
Reliance trends
Reliance
Petroleum Retail
Roxy
Office Depot
GAPCO
And many more





Recron Stretch
Recron Cotluk
Recron Dyefast
Recron 3s
Recron LP
Relpet
And many
more

Repol
Relene
Reon
Cisamer
&
Relab




Reliance industry is the largest conglomerate in India, having number of brands with the
different businesses. The ownership pattern of Reliance Digital can be explained as - Reliance
Industries Limited has different subsidies; Reliance Retail Limited is one among the subsidies
and under which Reliance Digital is one of the Retail Business of Reliance retail.
Reliance Digital or the Reliance Retail Limited has not listed in stock market individually but
Reliance Industries Limited (RIL) as whole listed under stock market where all the subsidies of
RIL is considered to be a group and listed in the stock market. Hence Reliance Digital is a Public
Limited Company and Mr. Mukesh D. Ambani is the Chairman and Managing Director of
Reliance Industries Limited.


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3. COMPETITORS


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Competitors Information:


Croma
Croma is Indias first national, large format, specialist retail chain for consumer electronics and
durables.
Croma is promoted by Infiniti Retail Ltd, a 100% subsidiary of Tata Sons. Woolworths, one of
the worlds leading retailers, provides technical and strategic sourcing support, ensuring that you
buy nothing but the best.
Croma's first store opened on October 9, 2006 at Juhu in Mumbai, and it's rolling out many more
stores across India.


Brand Philosophy
If service wasn't important.
If technology wasn't complex.
If variety wasn't confusing.
We would have no reason to be in business.
We help you buy.


eZone
eZone is an experience-led lifestyle format that brings together the best in national and
international consumer electronic and durables brands in a family-centric environment. Typically
covering 12,000 square feet, an eZone store truly enables you to experience electronics through
three dedicated zones - Liberation Zone, Experience Zone and Home Zone.
The Liberation Zone offers personal products like computers, laptops, handy cams, MP 3 players
and mobile phones. Entertainment products such as Plasma / LCD, Flat TVs, Home Theatre
systems, DVD players, and Stereo systems are displayed in the Experience Zone. In the Home
Zone segment, one gets to pick electronic goods of his or her choice including Refrigerators, Air-
Conditioners, Washing Machines and Microwave ovens among other kitchen-related appliances.
eZone also offers an unparalleled service and support through the special E-Care customer
support centre. E-Care is a special, dedicated support system designed to offer the best customer
service after purchase of any product at eZone.
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Others
There are other unorganized consumers electronic and durables brands such as Pai International,
Girias and Harsha Electronics are operating in Karnataka and some other states of the country
and these can be called as local market competitors but these brands are not to be considered as
competitors for Reliance Digital Retail Limited.
















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4. INFRASTRUCTURE FACILITIES


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Infrastructural facilities:
Planogram
Also known as plano-gram, plan-o-gram, and POG, planogram is a visual representation of a
store's products or services considered as a tool of visual merchandising in retail store.


Signage
Signage is kind of visual graphics created to display information about products to customers.


Experience Zones
Experience zones take consumers through a delightful and interactive voyage in the world of
electronics and durable goods. Crafted with the latest signage, audio and merchandising where
customers can experience the products before purchasing.


Home theater experience zone
It is an exclusive experience zone in reliance digital store. It is a small room arranged well
furnished with sound systems where consumers can experience the home theaters before
purchasing.


Play station
Play station is advanced video gaming station where customers who visit the store can play and
have delightful shopping experience with reliance digital.
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e
e
d
u
Learning Center
Learning center is training center that is located within the reliance digital store where employees
are trained on the products thos
in the store.
arrived in the store and usually this center is sed for meetings




Work flow model:
The nature of the business is r


tailing hence the manufacturing of goods is not involved with
reliance digital instead goods are ordered and brought into stores for the retail sales. The
numbers of products from the ifferent brands with different product ranges are recruited into
stores and further sales is made so the work flow model could be Operating Model and Stock
Ordering Process.







Operating Model
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Operating Model Explanation
1. The operating model begins with Pre installation Counseling & queries of customers
basically this happens though telephonic queries by customers or approach to know about
product available in reliance digital and this step will supported by resQ team. Usually
this will not be the initial step in most of the cases, customers directly approach store to
know about the products.
2. The second step could begin the actual operating model because most of the customers
first approach store and get to know details about their required product, when customers
walk in to the store employees counsel the customers, attend their queries and also
understanding their requirements they provide consultative solution to customers and this
can be considered as beginning step of operating model.
3. After counseling and consultation when customer make the purchase of goods, delivery
of goods will be supported by Reliance D&L Team, team also help customer in exchange
and product pick-up in case of any replacements after sale of goods as post sales service.
4. When goods are delivered to customers by D&L team, reliance resQ team helps
customers by Demonstration and Installation of product at customers place.
5. And after sales services such as extended warranty/maintenance and repairs will be
supported by resQ team in the company.
6. And also replacement and up gradation of products will be supported by resQ team and
further queries regarding products etc will handled by resQ team, with this again
operating model may continues as discussed above.
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g
a
o
g
e
Stock Ordering Process


Reliance Digital has classified electronics and consumer durable goods into four departments as
1. Consumer Electronics
2. Home Appliances
3. Information Technology
4. Telecommunication


When the goods in the departments need to be ordered; each department follow the following
procedure for ordering the stock.




















Stock Ordering Process


Stock Ordering Process Explanation
1. Stock report of every product is verified regularly by all the departments.
2. In case there is no stock or less quantity in the stock for the products, st
has to be sent to the category department of respective section requestin




ck ordering mail
the list of goods
required in the department with the complete details such as Product, Brand Name,
Article code and Quantity, and ordering mail should have store code.
3. Category department is central body present in the Mumbai
corporate
office, category
department place the order to respective Brands to deliver the goods
house of the state.
to central ware
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4. Brand people deliver ordered goods to respective central ware house, central ware house
become the distribution center for the stores.
5. Distribution center sends the goods to the stores those are ordered.
6. When the goods arrive to the store goods are received by material department of store.
7. And finally goods are sent to the respective departments.
8. Each department has to update its stock report every day for the stock reference and keep
follow up on stock level.




Future Growth and Prospectus:
At a time when inflation and high input costs are putting pressure on margins of retail
companies, Mukesh Ambani-led Reliance Retail expects its specialty and value formats driving
the firms next stage of growth.
Reliance Retails value formats include Reliance Fresh, a neighborhood retail concept, Reliance
Mart, an all-under-one-roof supermarket concept, and Reliance Super, a mini-mart concept. The
value formats offer a wide range and assortment of products required for daily household needs.
Its specialty formats include Reliance Digital, consumer durables and information technology
concept, Reliance Trends, apparel and accessories concept, and iStore by Reliance Digital, an
exclusive Apple products stores. Other specialty formats include Reliance Footprint for
footwear, Reliance Jewels, and Reliance Living, a home wear, furniture, modular kitchens and
furnishings concept. Reliance Retail plans to double its stores across all formats within next five
years. At present, it has more than 1,050 stores and a pan-India presence.
Reliance Digital Retail Limited will have 100 stores by the year 2014 in pan India. And also
company planning to provide financial assistance to the reliance digital customers by the reliance
group as of now it has appointed Bajaj Capital for the financial assistance to Reliance Digital
customers.


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5. STRATEGIES USED IN THE ORGANISATION


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o
The McKensys 7S Framework






The McKinsey 7S model
The McKinsey 7S model was


named after a consulting company, McKinsey and Company,
which has conducted applied research in business and industry. The McKinsey 7S Framework
was created as a recognizable and easily remembered model in business. The seven variables,
which the authors term "levers", all begin with the letter "S":
These seven variables include structure, strategy, systems, skills, style, staff and shared values.
Structure is defined as the skeleton of the organization or the organizational chart. The authors
describe strategy as the plan or course of action in allocating resources to achieve identified
goals over time. The systems are the routine processes and procedures followed within the
organization. Staff are described in terms of personnel categories within the rganization (e.g.
engineers), whereas the skills variable refers to the capabilities of the staff within the
organization as a whole. The way in which key managers behave in achieving organizational
goals is considered to be the style variable; this variable is thought to encompass the cultural
style of the organization. The shared values variable, originally termed super ordinate goals,
refers to the significant meanings or guiding concepts that organizational members share.
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From above 7, three are called Hard S these are such as
Strategy
System
Structure


And other four are called Soft S, namely
Skills
Staff
Shared value
Style


McKinseys 7s at Reliance Digital


Strategy
Strategy is the plan of action an organization prepares in response to, or anticipation of, changes
in its external environment. Strategy is differentiated by tactics or operational actions by its
nature of being premeditated, well thought through and often practically rehearsed.


Reliance Digital routinely have different campaigning strategies for their new products and to
move stock which offer exciting sales promotion offers for the customers to persuade them to
know the product and purchase it. For e.g. During Christmas and New Year sale they had up to
50% discount on products.
Reliance Digital uses display fixtures to communicate and educate customer about the sales
promotion and they decorate the window areas with the products related to their promotion.


System
The system that Reliance Digital has for its sale of goods is friendlier and assists customer in
purchase of products. The procedure that they follow in Reliance Digital for sale of product is
initially when customers walk in to store junior sales associate welcome customer in to store by
greeting them and ask them how he can assist them, when customer ask him about his required
product junior sales associate takes customer to that particular department and leaves customer to
Senior sales associate or Team leader to attend the customers, here the person attend customer
queries and explain about product features and benefits. And also consult them to go for
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Particular product. When customer makes purchasing decision the same person takes customer to
cash counter to make bill of the purchased product and when customer reaches cash counter
cashier at counter greet the customer and makes billing and keep the product in Reliance Digital
carry bag and hand over to customer in case goods are heavy to carry there are store boys who
help customer taking them out of store and keep the products in their vehicle and if the products
are huge in size they make delivery arrangement through D&L Team.


Structure
The design of organizational structure is a critical task of the top management of an organization.
It is the skeleton of the whole organization. It prescribes the formal relationship among various
positions and activities.

























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6. STRUCTURE OF THE ORGANISATION


32

Organization Structure


33

Store Hierarchy





CMO Commercial Operations Manager
VM Visual Merchandiser
DM Department Manager
CE Consumer Electronics
Telecom Telecommunication
HA Home Appliances
IT Information Technology
TL Team Leader
SSA Senior Sales Associate
JSA Junior Sales Associate
MOO Material Operational Officer
MOE Material Operational Executive
CRM Customer Relationship Manager
SHE Senior Helpdesk Executive
JHE Junior Helpdesk Executive
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Skills
Employees must have products knowledge and they should have skills to persuade customer to
purchase product. At Reliance Digital Company provide training to the employees on products
which help employees to make sale of product with their best knowledge of product and skill. In
successive intervals the company sends mystery shoppers to stores to evaluate the performance
of the employees and they rate the performance of employees in the store and report to the
company if the training is required company arranges for it. And whenever new product has
arrived to store they provide training on that particular product in the store learning center.
During the training conducted by the company they make sure that the employees are aware
about the products information and also sales associates are given proper selling skill tips and
training on selling procedure.
Employees are also trained on how to greet and groomed to their best ability and they are trained
to handle all minor issues encountered in the store.



Staff
Organizations are made up of humans and it's the people who make the real difference to the
success of the organization in the increasingly knowledge-based society. The importance of
human resources has thus got the central position in the strategy of the organization, away from
the traditional model of capital and land.
Reliance Digital has 58 stores in pan India and has got more than 1000 employees working for
the company.


Shared value
We believe in people

We believe in and follow the customer

We believe in the good of the community

We believe in each other
35

Style
Reliance Digital has a very friendly environment for all the employees .The management follows
top/down and bottom/up approach. Where in top management transfers the information from the
higher level to the lower level. The target and objectives are set by the top level managers and
are delegated to the lower level managers those in turn transfer to Team leader and sales
associates in the store level, hence all the major decision are taken by the higher authority and
shared to the lower level.
The lower level employees i.e., Team leader and sales associates revert back to the daily reports
to the Department manager who in turn reports to the store manager and further store manager to
his higher authority and it continues.
Every employee has a participative approach towards the business. Every employee is concerned
with his Duties, Responsibilities and accountability for the happening of the event and
employees have to report to their higher authority at regular intervals.


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7. SWOT ANALYSIS


37

SWOT Analysis

Strength:

Brand Name Reliance - Reliance Industries Limited, is a Fortune Global 500 company
and is the largest private sector company in India.
resQ Services - The dedicated service arm that is available for support all 365 days of a
year, from 10 a.m. to 10 p.m.
Network - Over150 international and national brands.
Private label sale Some of own products (Reliance Reconnect).
Product mix - One-stop shops for all technological solutions, it has over 4000 products at
reasonable prices.


Weakness:
Poor inventory control.
Inadequate human resources.
Operating costs are too high.


Opportunity:
Potential for investment.
High growth potential.
E-retailing.
Retail franchising.
Wholesale trading.


Threat:
Increasing competitors market share.
Price war with competitors.
Inflation.
Competition offered by Chinese products.
38

Analysis of Financial Statements
Reliance Digital Retail Limited Balance Sheet as at 31st March, 2010


39

Analysis:
Long term funds increase in 2010 compare to the year 2009. Share capital remains
unchanged where Reliance Digital Retail Limited borrowed more funds in the form of
secured and unsecured loans.
The investment in fixed assets is increased to 10448.63 lakhs in 2010 from 8509.70 lakhs
in 2009.
The investment on current asset increased from 3989.34 lakhs in 20009 to 6790.10 lakhs
in 2010.


Interpretation:
The Reliance Digital Retail Limited investing more money in the form of fixed assets.
The current liabilities are not sufficient to meet the regular requirements and also company is
using long term funds to finance current assets.
40

Profit and Loss Account for the year ended 31
st
March, 2010



The sale is increased from 31628.01 lakhs in 2009 to 41186.78 lakhs in 2010. Though sales
has increased when comparative to last year the loss margin increased in 2010 because of
increased in the operating expenses.
Reliance Digital Retail Limited should take measures to reduce operating expenses.


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8. CONCLUSION


42

Conclusion


Opting for internship at reliance digital was an opportunity for to understand the retail
industry and its nature of business. Understanding Retail management difference in organized
retail and unorganized retail was a huge scope for learning, the process and operation in
organized and unorganized retails has a lot of difference that could able to compare in my
learning.
Using knowledge of Marketing and Retail Management that can be found how practically the
strategies are implementing in organized retail and also it could be find some areas of
improvement that can be done in the company.
Learning about merchandising and stocking in retail for the sale and motivating sales team was a
good exposure. That could find the level of difficulty in convincing customers and the pain that
sales team undergoes to make a sale of product.
Also it could be known that merchandising plays a vital role in attracting customers and
stimulate them to buy the product.
The flow of work and the organizational hierarchy from top level management to the store level
can be understand easily. And also it could understand the motivational factors that make
employees to have job satisfaction in the organization.
Customers mentality towards promotional sales programme also led to understand that
people look for price prior to the quality or the actual product. Overall exposure to Retail
Management was an eye opener to me as how business is carried out and what all should be
considered for making sales and to have effective retail management.