PROJECT ON

UNDERSTANDING OF PROSPECTS AND SALES IN HARDWARE

RETAIL SECTOR BY USING DIFFERENT STRATEGIES

SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF

MASTER OF MANAGEMENT STUDIES (MMS)

(UNDER UNIVERSITY OF MUMBAI)

SUBMITTED BY

DIVYA RAKESH JAIN

(ROLL NO. 181012)

UNDER THE GUIDANCE OF

DR. SATISH NAIR

2018-20

PILLAI INSTITUTE OF MANAGEMENT STUDIES AND RESEARCH

 CERTIFICATE

This is to certify UNDERSTANDING OF PROSPECTS AND SALES IN

RETAIL SECTOR BY USING DIFFERENT STRATEGIES project titled is
successfully completed by Ms. DIVYA JAIN during the III Semester, in partial fulfillment
of Master’s Degree in Management Studies recognized by the University of Mumbai for the
academic year 2018-2020 through Pillai Institute of Management Studies and Research.

This project work is original and not submitted earlier for the award of any degree / diploma or
associates of any other University / Institution.

Name: ______________________

Date: ______________________ (Signature of the Guide)

 DECLARATION

I Divya Jain, studying in Pillai Institution of Management Studies & Research, New Panvel
Hereby declare that the project entitled for me UNDERSTANDING OF PROSPECTS AND

SALES IN RETAIL SECTOR BY USING DIFFERENT STRATEGIES has been personally

done by me as per the guidance of Dr. Satish Nair in partial fulfillment of Post Graduation
Program –during the academic year 2018-2020.

All the data represented under this project is true and correct to the best of my knowledge and
brief. And no work has been carried or given to any other college or elsewhere for study purpose.

Name: Ms. Divya R. Jain

Place: Mumbai

Roll No. :181012 Signature of the student

 ACKNOWLEDGEMENT

With immense pleasure I am taking this opportunity to express my gratitude to everyone who
supported me for this project. The study cannot be completed without guidance, assistance,
inspiration and co-operation.

First of all I would like to thank our Director, Dr. Satish Nair, who gave me the opportunity to do
this project work. He conveyed me the important instructions from the university from time to
time.

I would also like to express my special gratitude and thanks my project guide Dr. Satish Nair. for
his guidance and valuable feedback which help me in completion of this project. His
recommendations and suggestions have been invaluable for the success of this project.

Special thanks to all my professors for their valuable inputs & time which helped to me to put to
practice what I had learnt from throughout the past year
 TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE

NO.

1. Introduction to Project
2. Brief company profile

2.1 Organization History in brief.

2.2 Brief details of the Top Management – Board, CEO.

2.3 Size of the organization (turnover, employees, geographical spread, etc.).

2.4 Vision and Mission of the organization.

3. Industry Analysis

3.1 PESTEL Analysis

3.2 Porter’s Five Forces Analysis

3.3 Porter’s Generic Strategies

4. Company Analysis

4.1 SWOT

4.2 BCG Matrix

5. Experience based Observation

5.1 General observation

5.2 Observation about Organizational training

 TABLE OF CONTENTS

SR. NO. PARTICULARS PAGE

NO.
1. Introduction to Project (1)

Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill
market needs and reach marketing objectives. Plans and objectives are generally tested for
measurable results. Commonly, marketing strategies are developed as multi-year plans, with a
tactical plan detailing specific actions to be accomplished in the current year. Time horizons
covered by the marketing plan vary by company, by industry, and by nation, however, time
horizons are becoming shorter as the speed of change in the environment increases. Marketing
strategies are dynamic and interactive. They are partially planned and partially unplanned.

Environmental factors include the marketing mix, plus performance analysis and strategic
constraints. External environmental factors include customer analysis, competitor analysis, target
market analysis, as well as evaluation of any elements of the technological, economic, cultural or
political/legal environment likely to impact success.

A key component of marketing strategy is often to keep marketing in line with a company's
overarching mission statement. The term "marketing mix" was coined in 1953 by Neil Borden in
his American Marketing Association presidential address. The marketing mix is a business tool
used in marketing products. The marketing mix is often crucial when determining a product or
brand's unique selling point (the unique quality that differentiates a product from its
competitors), and is often synonymous with the 'four Ps': 'price', 'product', 'promotion', and
'place'. However, in recent times, the 'four Ps' have been expanded to the 'seven Ps' with the
addition of 'process', 'physical evidence' and 'people'. Recently, 'four Cs' theory is also in the
limelight.

The scarcity of capital in India severely limits the number of non-farm jobs that can be created
because investment costs per job are high in large and medium industries. An effective
development policy has to attempt to increase the use of labor, relative to capital to the extent
that it is economically efficient. As a matter of fact, small scale sector has now emerged as a
dynamic and vibrant sector for the Indian economy in recent years. It has attracted so much
attention not only from industrial planners and economists but also from sociologists,
administrators and politician.
Marketing strategies serve as the fundamental underpinning of marketing plans designed to fill
market needs and reach marketing objectives. Plans and objectives are generally tested for
measurable results. Commonly, marketing strategies are developed as multi-year plans, with a
tactical plan detailing specific actions be accomplished in the current year. This study reveals
following findings that small scale industries not using appropriate marketing strategies in the
highly competitive environment. Small scale industries are weak in differentiation strategy. As
small scale industries are following low cost pricing strategies, so it is also essential to follow
product differentiation for product development. The small manufactures need to use selective
Product positioning strategies for different products because same product positioning strategies
for all products are not beneficial.

Further, Welcome Electricals needs to be very careful about price decision because of highly
competitive environment. Product should be offered at highly competitive price after doing
comparative market analysis. The finding of the study shows that small scale industries are
highly satisfied regarding their product’s price and pricing method. But Welcome Electricals
should concentrate on pricing strategies because it affects their overall marketing strategies.
Customer also highly satisfied from pricing of the small scale industries products. Welcome
electrical should focus on cutting the product cost at the operational and marketing level with use
of latest management approaches.

Small scale industries are not satisfied their distribution channel or place so small industries need
to improve their distribution channel for maximum coverage of the buyer. For maximum
coverage of the market latest technology e- marketing or web marketing may help the small
manufacturer to place the product to large number of buyer.

Customers also highly dissatisfied from the distribution channel and current method of
convenience of the small scale industries. Small manufacturer should adopt new methods of the
convenience to the customers. It is not possible to carry out all strategies simultaneously but a set
of strategies that can serve as a skeletal framework for customized approach is necessary to
contact more customers towards the small scale industries products.
2. Brief of company Profile (1)

Welcome Electricals, incorporated on 1988, is hardware and electricals retail shop. The company
sells an assortment of industrial materials, home improvement products, and hardware products.
Welcome electricals stores averaged approximately 24,000 SKUs. Welcome Electricals stores
serve two primary customer groups: individual customers & business professionals/corporate.
The Company has approximately 3 sub stores located throughout the sub-urban areas in Navi
Mumbai as of January, 2019.

The Company's DIY customers are home owners purchasing products and completing their own
projects and installations. The Company assists these customers with specific product and
installation questions through resources and other hardware retails designed to provide product
and project knowledge.
Through the Company's Eco-friendly products from eco-friendly brands, it has created product
categories that allow consumers to identify products that meet specifications for energy
efficiency, water conservation, healthy home, clean air and sustainable forestry. It sells energy
saving certified appliances, light-emitting diode (LED) light bulbs, tank less water heaters and
other products.

Market Segmentation: Hardware focus on four significant customer groups:

Professionals in related fields: Many business owners perform their own project repairs and
home improvement projects. Welcome Electricals is uniquely designed to be responsive to the
shopping environment that will attract and retain this important customer group. For Example:
Interior designers, Architects, Plumbers, Electricians, etc.

B2B: Welcome Electricals provides bulk products to business that requires these hardware and
Electrical items for their internal or external consumption. For Example: Hotels, Hospitals,
Showrooms, etc.

Customers who need assistance in planning a project/repair: This customer group can have
the most frustrating experience in the hardware stores. If they can't make the scheduled demos or
trainings, they are left to sort thing out with whoever they can flag down in the store help them.
Welcome Electricals is set-up to provide resources and assistance as soon as they walk into the
store.

Local repair and home improvement professionals: The Navi Mumbai area supports a
good number of repair and home improvement professionals. Currently, the hardware stores
have their business but Welcome Electricals can win an increasing share of this customer
group through aggressive marketing.
2. Brief of company Profile (2)

Hindustan Times is an Indian English-language daily newspaper founded in 1924 with roots in
the Indian independence movement of the period ("Hindustan" being a historical name for
India).The newspaper is owned by Rajya Sabha M.P. Shobhana Bhartia who was nominated by
Congress and hence the newspaper has pro Congress tone.

It is the flagship publication of HT Media. Hindustan Times is one of the largest newspapers in
India, by circulation. According to the Audit Bureau of Circulations, it has a circulation of 1.16
million copies as of November 2015.The Indian Readership Survey 2014 revealed that HT is the
second most widely read English newspaper in India after The Times of India. It is popular in
North India, with simultaneous editions from New Delhi, Mumbai, Kolkata, Lucknow, Patna,
Ranchi, Bhopal, and Chandigarh. In The Brand Trust Report 2012, Hindustan Times was ranked
291st among India's most trusted brands and subsequently, according to the Brand Trust Report
2013, Hindustan Times was ranked 434th among India's most trusted brands. In 2014 however,

Hindustan Times was ranked 360th among India's most trusted brands according to the Brand
Trust Report 2014,a study conducted by Trust Research Advisory, a brand analytics company.
Other sister publications of Hindustan Times are Mint (English business daily).Hindustan Times
is owned by the KK Birla branch of the Birla family.
2.1 Organization History in brief.(1)

1988

In July 1998, Welcome Electricals Pvt Ltd. was born in Janta Market, one of the busiest markets
in Turbhe, Navi Mumbai. The main suppliers were Bombay Loharchal, Kurla Nagrik Store and
Sion Koliwadi Rajesh Trading Company. They were the pillars of this newly started business.
The shop was first rented and only owned when it gave assurance of sales. This careful step
acted as an acid test to check whether the market would give a positive response. This also
became a vital Standard Operating Procedure for further acquisitions. The business kicked off
from here on.

1998

Once the business was firm and a loyal list of customers was earned, Welcome decided to buy
a shop opposite to the previous spot and started with a firm step ahead.

2003

One of the challenges of the existing shop was that customers lacked the willingness to spend
extra 10 minutes to the shop and settled on going to the immediately near shops. This led to the
expansion of shop. For this very reason, Welcome opened a rental shop on the roadside to
analyze the exact challenge other than the previously mentioned problem.

A vital step was taken during this expansion, dividing the categories into Pure electrical
materials and industrial materials. The pure electrical materials were shifted to the new shop and
the latter was left with the old shop.

2005

Opened a sister firm named Modern Electricals in Vashi, Navi Mumbai to check the response in
a new or rather, developing area. Due to the existence to APMC Wholesale market competitors,
the sales weren’t impressive in the residential area as well. Later in 2008, this was partnered
with Mr. Aviral Jain in with profit sharing ratio 51:49 where we own 49% of the profits.
2007

Another sister firm named Tip Top Electricals was opened in Old Panvel. And soon after its
success, it was expanded in size as well. One shop was expanded into two shops due to the
success of one.

2008

Due to floods, Welcome Electricals suffered huge losses. The inventory was lost in this
mishap due to which we had to sell products at a compromising rate for about 1.5 years.

2009

Welcome was about to purchase the second rental shop (rented in 2003) but before that a
golden opportunity was grabbed by purchasing a huge empty plot in partnership with Vishal
Steel Pvt. Ltd and shared the plot in 1:1

2013

A fire broke out in Welcome Electricals and hence, lost most of our stock in this. Welcome did
not have any fire insurance then. This aggravated the losses even more so. However, this incident
made sure that all shops were covered under insurance after this.

2019

Today, Welcome operates fully owned in Welcome, Turbhe and Tip Top Old Panvel and
partially owned Modern Electricals Vashi. And now deals with the companies directly for
the supply of branded products.
2.1 Organization History in brief (2)

Hindustan Times was inaugurated by Mahatma Gandhi in 1924. Since then, the newspaper has
established its presence as a newspaper with editorial excellence and integrity. One of India's
leading and most respected English dailies, HT have always prided itself in spotting emerging
trends and reflecting the same through its unmatched editorial prowess. Today, Hindustan
Times-Delhi edition has the unique distinction of being the largest selling single edition English
newspaper in India.

QUICK OVERVIEW OF HISTORY

The Hindustan Times was the brainchild of the Akalis who felt that a newspaper in English
would enable them to reach an audience other than the Punjabi-reading one. This was in the year
1922.

From the outset the newspaper was set up to oppose the British. The Hindustan Times finally
came into being on September 1924 and was inaugurated by Mahatma Gandhi. The newspaper
was to become a premier nationalist newspaper of the capital in the turbulent years preceding
independence.

From a humble beginning in a three-storey building, the company has expanded its operations
from print to other media channels like radio, internet, events and marketing, and strategic
partnerships, as part of its endeavor to establish itself as a giant media conglomerate in the
present times.

September 26, 1924

This date marked the august beginnings of Hindustan Times with Mahatma Gandhi, the Father of
the Nation inaugurating the newspaper.

1927

Hindustan Times was reborn as Hindustan Times Ltd., a limited liability company.

1936

The Hindi daily Hindustan was launched, which remains the dominant newspaper in the Core
Hindi belt of northern India.

1937

Devdas Gandhi was appointed the Managing Editor of the newspaper and remained the
managing editor till his death in 1957.Institute of Technology & Science.
1942

The Hindustan Times was one of the few newspapers that stopped publishing the newspaper for
four and a half months as it refused to accept the British imposition of censorship on all
newspapers.

1947

The year India gained its freedom was also the year Hindustan Times attained the status of being
the dominant newspaper in Delhi.

1957

The newspaper circulation grew from 58,693 copies to 144,287 in 1970 after KK Birla took over
the mantle from GD Birla.

1960

The Hindi literary magazine Kadambini was launched.

1964

The group started actively targeting the youth of India and launched the Nandan magazine.

1991

At the start of liberalization of India, Hindustan Times moved to becoming an autonomous

power centre in a mature democracy.

1999

The Hindustan Times celebrated its platinum anniversary.

2001

With a focus on localization, five new editions for Calcutta, Bhopal, Ranchi, Chandigarh and
Jaipur were launched.

2003

The media business of was de-merged and incorporated under HT Media Ltd.
2004

HT Media Ltd was listed as a public company and attracted external funding.

2005

Hindustan Times successfully entered the Mumbai market with a refreshingly new product and
content mix.

2006

Fever 104 FM is launched, in technical collaboration with the Virgin Group. Hindustan was
relaunched re-establishing the company's prominent presence in the regional news space.

2007

Mint, the business paper in partnership with The Wall Street Journal was launched in Delhi and
Mumbai. In the internet space, Hindustantimes.com was relaunched and Livemint.com was
introduced.

2008

Firefly e-Ventures, an HT Media Company launched its first portal for job seekers, Shine.com
2.2Brief details of the Top Management – Board, CEO. (1)

Key Management
1. Chairperson and Founder: Mr. Narayan Kumar Jain

He founded this company in Mumbai in the year 1988 right after his working stint in the same
field in Udaipur. He worked in many different areas in Udaipur. Later on, he discovered his
interest in this area. Due to the sudden death of his parents, he could only complete his schooling
till 8th grade in Udaipur. He’s an efficient leader and a great manager. Being the most
experienced person in the business, he paved the way for growth and success.
He is Accountable for signing checks and documents on behalf of the company.
Evaluates the success of the organization.
Accountable for providing direction for the business.

2. Vice-Chairman & Co-Founder: Mr. Rakesh Kumar Jain

Mr. Rakesh Kumar Jain is the man behind the vision of the business. He is the co-founder and
the pillar of success for Welcome Electricals and its subsidiaries. He started learning at a very
early stage which made him understand the market of demand and supply very well. His
spectacular thinking for the future of business and his risk taking abilities resulted in innovative
success of Welcome Electricals.
Grows management’s effectiveness by employing, selecting, orientating, preparation, coaching,
counseling, and disciplining managers; communicating values, strategies, and objectives;
assigning accountabilities; planning, monitoring, and appraising job results; developing
incentives; developing a climate for offering information and opinions; providing educational
opportunities.

3. Managing Director: Mr. Mahaveer Kumar Jain

Mr. Mahaveer Kumar Jain travelled to different cities and understood the retail business and the
4P’s of marketing in detail. This made him the chief influencer for Pricing and promoting the
products.
He oversees the operations of Welcome Electricals and Tip Top Electricals.
He is Accountable for fixing prices and signing business deals Builds, interconnects, and
implements the organization’s vision, mission, and overall direction – i.e. leading the
development and implementation of the overall organization’s strategy.
4. Executive Director & President: Mr. Pritam Narayan Jain
He Graduated from Mumbai University in Bachelors of Commerce. Started working with
Welcome Electricals at the age of 12 years. He is the eldest in the second generation and the
future Chairperson of the business.

 Develops, executes and evaluates new plans for expanding sales

 Document all customer contact and information
 Represents the company in strategic meetings
 Helps to increase sales and growth for the company

5. Executive Director & COO: Mr. Rahul Narayan Jain

Mr. Rahul Jain graduated from the University of Mumbai with a Bachelor’s degree in
Commerce. He handles the business of Tip Top Electricals along with Mr. Rakesh Jain.

 Manages vendor relations, market visits, and the ongoing education and development of
the organizations’ buying teams
 Helps to ensure consistent quality of hardware, tools, plumbing and electrical
supplies,etc., from different manufacturers are purchased and retailed in good price that
will ensure we make good profit
 Accountable for planning sales, monitoring inventory, selecting the merchandise, and
writing and pricing orders to vendors

6. Executive Director: Mr. Harsh Rakesh Jain

Mr. Harsh Rakesh Jain graduated from the University of Mumbai with the core specialization in
Business Management Studies. He is the youngest from the millennial generation. With his new
ideas, he visions this company in a modified manner. He constantly looks out for new
opportunities for the business. He also envisions taking the business to the online world.

 Consistently stays abreast of any new information on the organizations’ products,

promotional campaigns etc. to ensure accurate and helpful information is supplied to
customers when they make enquiries
 Finds out the customer’s needs, recommend, select and help locate the right merchandise,
describe a product’s features and benefits.
 make suggestions and encourage purchase of products
 Provides information about warranties, manufacturing specifications, care and
maintenance of merchandise and delivery options
2.2Brief details of the Top Management – Board, CEO. (2)

The Board of Directors and Management of HT Media Limited comprises eminent persons from
diverse professional fields, who bring with them vast professional experience to the company.

A rich mix of veterans in media and top leaders from non-media sectors, from both India and
abroad, HT Media Limited Management team reflects the company's desire to be the best by
leveraging diverse strengths. The management team comprises people from varied verticals such
as media, FMCG, telecom, automobiles, each of whom add fresh perspective to the rich
experience of media industry stalwarts. This rich talent pool is ably assisted by our Global Think
Tank.

Board of Directors:-

 Chairperson - Shobhna Bhartiya

 Chief Executive Officer - Rajiv Verma
 Directors - KN Memani, NK Singh, Ajay Relan, Mukesh Aghi
 Whole time Directors - Priyavrat Singh, Shamit Bhartiya

CHAIRPERSON

SHOBHANA BHARTIA

 Mrs. Shobhana Bhartia, who has been associated with the company since its inception, has
taken over as the
 Chairperson on September 18, 2008. She has spearheaded the company's long-term vision
and strategy. Mrs.
 Bhartia is in charge of formulating and directing the editorial policies of the company and
has more than 20
 years of experience in the newspaper industry
 Mrs. Bhartia is a graduate from Calcutta University and is a recipient of the Padma Shri
Award by the
 Government of India in 2005. Mrs. Bhartia has received several other awards, including the
Outstanding
 Business Woman of the Year (2001) by PHD Chamber of Commerce & Industry, the Global
Leader for Tomorrow
 (1996) by the World Economic Forum, Davos and the National Press India Award (1992).
She has been on the
 Board of Indian Airlines Limited and on the North Regional Board of the Reserve Bank of
India.
2.3Size of the organization (turnover, employees, geographical spread, etc.).(1)

Welcome electrical pvt.ltd company itself has eight employees. According to the financial
year 2017-2018, its turnover was 834000p.a.

Subsidiaries of Welcome Electricals

1. Modern electrical:
o Vashi, sector-14.
o With three employees present there
o Turnover goes up to fifteen lakhs p.a. (according to financial year 2017-2018)

2. Tip Top electrical;

 Old panvel, Gulshan Apartment, Plot no.278
 There are in total six employees
 Turnover up to fourteen point five lakhs p.a. (according to financial year 2017-
18)

EMPLOYEES

Welcome Electricals has an all rounder staff and are pervasive in performing their duties.
They also act as delivery boys.

● They give after sales service to the customers on behalf of the store
● On an average there are three to four employees work at each store

● Apart from the salary paid: all the basic necessities (food, clothing and shelter) of the
employees are provided

● Also keeping their extra expenses such as festivals and medical issues in mind, it is
headed on the company’s take ups

● The staff is given accommodation and other perks like holidays, gifts and bonuses.

This helps company to make it sure that they give their best in which so ever role
they are performance.
2.3Size of the organization (turnover, employees, geographical spread, etc.).(2)
2.4Vision and Mission of the organization.(1)

MISSION

“The mission is to offer quality hardware products in a customer-friendly shopping environment.

Our customers will get assistance quickly and will leave the store prepared to get the job done
right the first time. We also focus on anticipating the seasonal needs of customers and providing
the best products at competitive prices. "

VISION

“Our vision is to create a better every-day life for many people.”

CORPORATE GOALS

Continue to distribute products in accordance with our mission statement, adding new products
each year.

VALUES

The core values on which welcome electrical works and incorporates in their governance
and business are:

 Dependability

 Reliability

 Loyalty

 Commitment
2.4Vision and Mission of the organization.(2)

VISION
1. To stand at a respectful position in this competitive marathon and also to keep up the pace of
the changing needs of their value readers.

2. To win more and more readers to their cause.

MISSION

1. The mission is to create space for the market share of MINT by tapping uncovered market and
by taking bites from competitor’s bit from market share.

2. Getting the benefits of the paper to be known to the market.

3. They endeavor to improve the quality of people’s lives by empowering them through
information entertainment & education.

The values personified by HT Media are:

Courage

To encourage the ability that meets opposition with skill, competence and fortitude.

Responsibility

Be accountable for results in line with the company’s objectives, Strategies and values.

Empowerment

Support our people and give them the freedom to perform and to provide our readers with
information to influence their environment.

Continuous Self Renewal

Determination to constantly re-examine and re-invent ourselves for further innovation and
creativity.
3. Industry Analysis (1)

Home improvement shops (in various nations, "shops"), once in a while known as DIY stores,
sell family unit equipment for home improvement including: latches, building materials, hand
apparatuses, control instruments, keys, locks, pivots, chains, plumbing supplies, electrical
supplies, cleaning items, house wares, devices, utensils, paint, and yard and nursery items
legitimately to buyers for use at home or for business. Numerous home improvement shops have
claim to fame offices novel to its locale or its proprietor's advantages. These offices incorporate
chasing and angling supplies, plants and nursery items, marine and drifting supplies, pet
sustenance and supplies, homestead and farm supplies including creature feed, pool synthetic
substances, home preparing supplies and canning supplies.
In India, hardware stores are for the most part kept running by people, and thus, there are
no huge brand stores that arrangement in all equipment items. In Urban and country India, stores
used to enormous with brimming with things and articles. Indian tool shops are like home
improvement shops far and wide, conveying supplies for an assortment of purposes. Among
these are: plumbing, apparatus, family unit, cultivating, producing, shoemaker, woodworker, and
electrical. Explicit things regularly conveyed include: PVC funnels, taps, paints, hand siphon,
nut, fasteners, pots, floor brush, wiper, lock, bulb and lights, wires, shading, drums, blade, bottle,
containers, plastic, elastic, string, rope, pail, container, glass, tub, screw, hammer, holder, net,
and confines. A nearby tool shop can give a sensible choice in the most significant item
territories, be focused in evaluating, and offer the client a shopping domain that will guarantee
repeat business.

Market trends

Recent trends in the hardware industry show that external competition has slightly dampened
both industry revenue and profit growth. Hardware stores have shifted business models to deal
with heightened external competition and they will continue to be pressured by online retailers
and larger home improvement stores. Experts projected that in 2017, the hardware stores
industry is expected to profit from growing global economic conditions.
The hardware retail stores landscape has seen tremendous changes in the last 20 years; it has
grown from the smaller outlets to a more organized and far reaching venture. The introduction of
franchise and online store makes it easier for a hardware retailer to reach out to a larger market
far beyond the areas where his physical store is located.
3. Industry Analysis (2)

Print media is one of the oldest and basic forms of mass communication and also it is most
powerful cost effective medium to transfer information and knowledge. It includes newspapers,
weeklies, magazines, monthlies and other forms of printed journals. The print media industry in
India is more than a century old (179yr).

Also it is well established industry. India has the second largest population and one of the fastest
growing economies in the world. Along with these the increasing level of income of peoples and
the robust competition in this industry help print media in its growth. A recent survey says a
majority of nearly 50cr Smartphone users in India spend most of their time (72 percent) surfing
the net on their mobile phones. News and entertainment are two sectors most consumers tap into.
No wonder, digital media platforms have witnessed exponential growth in the last few years. But
have digital news platforms replaced the good old newspapers, like they have done elsewhere in
the world? The answer is an emphatic no.

“According to the latest Indian Readership Survey (IRS), just 4% readers of the overall
readership base read news online. This proves that there is still scope of growth,” said NP
Sathyamurthy, executive director, DDB Mudra Group, and chairman of the technical committee
at the Readership Studies Council of India.

As per IRS 2017, newspapers added more than 110 million new readers since the last survey
conducted in 2014. The total readership in the last three years grew 40% to reach 407 million in
2017. The total readership base stood at 295 million in 2014.

In sum, India‘s print media is likely to continue to register robust growth compared to other
major democracies because its population is growing and it has not yet achieved universal
literacy

The media and entertainment industry consists of film, print, radio, and television. These
segments include movies, TV shows, radio shows, news, music, newspapers, magazines, and
books. The top 10 media and entertainment companies are The Walt Disney Company, 21st
Century Fox, Direct Group Holdings (DIRECTV), Time Warner Inc., NBC Universal, National
Amusements Inc., CBS Corporation, Viacom Inc., News Corporation, and TEGNA Inc.

The Print industry consists of publishing companies that produce newspapers, magazines,
books, journals, and periodicals, their online versions, and directories, mailing lists, software
publishing, and video games.

In general, media and entertainment jobs include reporters, correspondents, and broadcast news
analysts; writers and authors; editors; photographers; graphic designers; translators; film and
video editors and camera operators; broadcast and sound engineering technicians; announcers;
producers and directors; and performers—from actors to musicians and composers. The workers
who are behind the scenes and focused on the business side are public relations people, talent
agents and representatives, marketing managers, entertainment lawyers, and distribution
workers, among others.

The Indian Media and Entertainment (M&E) industry is a sunrise sector for the economy and is
making high growth strides. Proving its resilience to the world, the Indian M&E industry is on
the cusp of a strong phase of growth, backed by rising consumer demand and improving
advertising revenues. The industry has been largely driven by increasing digitisation and higher
internet usage over the last decade. Internet has almost become a mainstream media for
entertainment for most of the people.

Figure 1
The Indian advertising industry is projected to be the second fastest growing advertising market
in Asia after China. At present, advertising revenue accounts for around 0.38 per cent of India’s
gross domestic product.

Indian media and entertainment (M&E) industry grew at a CAGR of 18.55 per cent from 2011-
2017; and is expected to grow at a CAGR of 13.9 per cent to touch US$ 37.55 billion by 2021
from US$ 22.75 billion in 2017.The industry provides employment to 3.5-4 million people,
including both direct and indirect employment in CY 2017.

The newspaper industry was, in many ways, was the news sector hit first and hardest by the
advent of the digital age. As readers began to move online, papers were still producing strong
profit margins with the vast majority of revenues tied to their legacy product. So, for the
newspaper industry—culturally more tied to content creation than to engineering, change came
very slowly—if at all.
Within a few years, the industry found itself far behind the technology giants—and behind their
Readers’ changing news habits—in shaping the future of news. Since then, the pace of change
has only accelerated. . While the industry has finally begun to experiment with new revenue
streams as well as new ways of creating content and engaging with audiences, the numbers are
far from reassuring.
 Top 10 English Dailies Top 10 Hindi Dailies Top 10 Regional Dailies
1. The Times of India 1.Patrika 1.Malayala Manorama
(Malayalam)
2. Dainik Jagran 2.Dainik Jagran 2.Daily Thanthi (Tamil)
3. Malayala Manorama 3.Hindustan 3.Mathrubhumi
(Malayalam)
4. The Hindu 4.Dainik Bhaskar 4.Lokmat (Marathi)
5. Deccan Chronicle 5.Rajasthan Patrika 5.Anandabazar Patrika
(Bengali)
6. Ananda Bazar 6.Amar Ujala 6.Eenadu (Telugu)
Patrika
7. Amar Ujala 7.Prabhat Khabar 7.Gujarat Samachar
(Gujarati)
8. Dainik Bhaskar 8.Navbharat Times 8.Sakal (Marathi)
9. Hindustan Times 9.Hari Bhoomi
10.Punjab Kesari

Table 1

The revenue of the newspaper consists of subscription sale, trade sale and mainly from
advertising. More than 70% of the total revenue comes from advertising

India is the world's largest democracy. Its mass media culture, a system that has evolved over
centuries, is comprised of a complex framework. Modernization has transformed this into a
communications network that sustains the pulse of a democracy of about 1.1 billion people.
India's newspaper evolution is nearly unmatched in world press history. India's newspaper
industry and its Westernization—or modernization as French would call it—go hand in hand.
India's press is a metaphor for its advancement in the globalized world.

James Augustus Hickey is considered as the "father of Indian press" as he started the first Indian
newspaper from Calcutta, the Calcutta General Advertise or the Bengal Gazette in January, 1780.
In 1789, the first newspaper from Bombay, the Bombay €Herald appeared, followed by the
Bombay Courier next year (this newspaper was later amalgamated with the Times of India in
1861).

The first newspaper in an Indian language was the Samachar Darpan in Bengali. The first issue
of this daily was published from the Serampore Mission Press on May 23, 1818. In the same
year, Ganga Kishore Bhattacharya started publishing another newspaper in Bengali, the Bengal
Gazetti. On July 1, 1822 the first Gujarati newspaper the Bombay Samachar was published from
Bombay, which is still extant. The first Hindi newspaper, the Samachar Sudha Varshan began in
1854. Since then, the prominent Indian languages in which papers have grown over the years are
Hindi, Marathi, Malayalam, Tamil, Telugu, Urdu and Bengali.

The Indian language papers have taken over the English press as per the latest NRS survey of
newspapers. The main reasons being the marketing strategy followed by the regional papers,
beginning with Eenadu, a telegu daily started by Ramoji Rao. The second reason being the
growing literacy rate. Increase in the literacy rate has direct positive effect on the rise of
circulation of the regional papers.

The people are first educated in their mother tongue as per their state in which they live for e.g.
students in Maharashtra are compulsory taught Marathi language and hence they are educated in
their state language and the first thing a literate person does is read papers and gain knowledge
and hence higher the literacy rate in a state the sales of the dominating regional paper in that state
rises. The next reason being localisation of news.
India is the world's largest democracy. Its mass media culture, a system that has evolved over
centuries, is comprised of a complex framework. Modernization has transformed this into a
communications network that sustains the pulse of a democracy of about 1.1 billion people.
India's newspaper evolution is nearly unmatched in world press history. India's newspaper
industry and its Westernization—or modernisation as French would call it—go hand in hand.
India's press is a metaphor for its advancement in the globalized world.

James Augustus Hickey is considered as the "father of Indian press" as he started the first Indian
newspaper from Calcutta, the Calcutta General Advertise or the Bengal Gazette in January, 1780.
In 1789, the first newspaper from Bombay, the Bombay €Herald appeared, followed by the
Bombay Courier next year (this newspaper was later amalgamated with the Times of India in
1861).

The first newspaper in an Indian language was the Samachar Darpan in Bengali. The first issue
of this daily was published from the Serampore Mission Press on May 23, 1818. In the same
year, Ganga Kishore Bhattacharya started publishing another newspaper in Bengali, the Bengal
Gazetti. On July 1, 1822 the first Gujarati newspaper the Bombay Samachar was published from
Bombay, which is still extant. The first Hindi newspaper, the Samachar Sudha Varshan began in
1854. Since then, the prominent Indian languages in which papers have grown over the years are
Hindi, Marathi, Malayalam, Tamil, Telugu, Urdu and Bengali.

The Indian language papers have taken over the English press as per the latest NRS survey of
newspapers. The main reasons being the marketing strategy followed by the regional papers,
beginning with Eenadu, a Taegu daily started by Ramoji Rao. The second reason being the
growing literacy rate. Increase in the literacy rate has direct positive effect on the rise of
circulation of the regional papers.

The people are first educated in their mother tongue as per their state in which they live for e.g.
students in Maharashtra are compulsory taught Marathi language and hence they are educated in
their state language and the first thing a literate person does is read papers and gain knowledge
and hence higher the literacy rate in a state the sales of the dominating regional paper in that state
rises. The next reason being localization of news.

Indian regional papers have several editions for a particular State for complete localization of
news for the reader to connect with the paper. Malayala Manorama has about 10 editions in
Kerala itself and six others outside Kerala. Thus regional papers aim at providing localized news
for their readers. Even Advertisers saw the huge potential of the regional paper market, partly
 due to their own research and more due to the efforts of the regional papers to make the
advertisers aware of the huge market.

During the 1950s 214 daily newspapers were published in the country. Out of these, 44 were
English language dailies while the rest were published in various regional languages. This
number rose to 2,856 dailies in 1990 with 209 English dailies. The total number of newspapers
published in the country reached 35,595 newspapers by 1993 (3,805 dailies).

The main regional newspapers of India include the Malayalam language Malayala Manorama
(published from: Kerala, daily circulation: 673,000), the Hindi-language Dainik Jagran
(published from: Uttar Pradesh, daily circulation in 2006: 580,000), and the Anandabazar Patrika
(published from: Kolkata, daily circulation in 2006: 435,000). The Times of India Group, the
Indian regional papers have several editions for a particular State for complete localization of
news for the reader to connect with the paper. Malayala Manorama has about 10 editions in
Kerala itself and six others outside Kerala. Thus regional papers aim at providing localized news
for their readers. Even Advertisers saw the huge potential of the regional paper market, partly
due to their own research and more due to the efforts of the regional papers to make the
advertisers aware of the huge market.

During the 1950s 214 daily newspapers were published in the country. Out of these, 44 were
English language dailies while the rest were published in various regional languages. This
number rose to 2,856 dailies in 1990 with 209 English dailies. The total number of newspapers
published in the country reached 35,595 newspapers by 1993 (3,805 dailies).

The main regional newspapers of India include the Malayalam language Malayala Manorama
(published from: Kerala, daily circulation: 673,000), the Hindi-language Dainik Jagran
(published from: Uttar Pradesh, daily circulation in 2006: 580,000), and the Anandabazar Patrika
(published from: Kolkata, daily circulation in 2006: 435,000). The Times of India Group, the
Indian Express Group, the Hindustan Times Group, and the Anandabazar Patrika Group are the
main print media houses of the country.

Newspaper sale in the country increased by 11.22% in 2007. By 2007, 62 of the world's best
selling newspaper dailies were published in China, Japan, and India. India consumed 99 million
newspaper copies as of 2007—making it the second largest market in the world for newspapers.

 The Nature Of Audience

While a majority of the poor working people in rural and urban areas still remain oppressed and
even illiterate, a significant proportion of people— roughly about 52 percent of the population
over 15 years of age were recorded as being able to read and write. That breaks down to 65.5%
of males and an estimate of 37.7% of females.

After the liberalization of the economy, the growth of industry, and a rise in literacy, the post-
Emergency boom rekindled the world's largest middle class in news, politics, and consumerism.
Since private enterprise began to sustain and pay off, mass communications picked up as a
growth industry.
 Newspapers did not expand simply because the technology was available to make Indian scripts
live as they had not been able to live before. Nor did newspaper grow simply because more
people knew how to read and write.

They grew because entrepreneurs detected a growing hunger for information among ever-
widening sections of India's people, who were potential consumers as well as newspaper readers.
A race began to reach this audience advertising avenues were the prizes and these would come
largely to newspapers that could convince advertisers that they had more readers than their
rivals. Readers, meanwhile, were saying implicitly: 'We will read newspapers that tell us about
ourselves and reflect our concerns.

 Historical Traditions

Newspaper history in India is inextricably tangled with political history. James Augustus Hicky
was the founder of India's first newspaper, the Calcutta General Advertiser also known as
Hicky's Bengal Gazette, in 1780. Soon other newspapers came into existence in Calcutta and
Madras: the Calcutta Gazette, the Bengal Journal, the Oriental Magazine, the Madras Courier
and the Indian Gazette. While the India Gazette enjoyed governmental patronage including free
postal circulation and advertisements, Hicky's Bengal Gazette earned the rulers' wrath due to its
criticism of the government.

In November 1780 its circulation was halted by government decree. Hicky protested against this
arbitrary harassment without avail, and was imprisoned. The Bengal Gazette and the India
Gazette were followed by the Calcutta Gazette which subsequently became the government's
"medium for making its general orders".

The Bombay Herald, The Statesmen in Calcutta and the Madras Mail and The Hindu, along with
many other rivals in Madras represented the metropolitan voice of India and its people. While
Statesman voiced the English rulers' voice, The Hindu became the beacon of patriotism in the
South. The Hindu was founded in Madras as a counter to the Madras Mail.

Patriotic movements grew in proportion with the colonial ruthlessness, and a vehicle of
information dissemination became a tool for freedom struggle. In the struggle for freedom,
journalists in the twentieth century performed a dual role as professionals and nationalists.
Indeed many national leaders, from Gandhi to Vajpayee, were journalists as well. Calcutta,
Madras, Bombay and Delhi were four main centers of urban renaissance which nourished news
in India. It was only during and after the seventies, especially after Indira Gandhi's defeat in
1977, that regional language newspapers became prevalent.

There were nationalist echoes from other linguistic regional provinces. Bengal, Gujarat, Tamil,
Karalla, Punjab and Uttar Pradesh produced dailies in regional languages. Hindi and Urdu were
largely instrumental in voicing the viewpoints and aspirations of both Hindus and Muslims of the
Northern provinces.
 As communalism and religious intolerance increased before and after partition, Urdu remained
primarily the language of Muslims, as Pakistan chose
this language as its lingua franca. After partition, the cause of Urdu and its newspapers, suffered
a setback as Hindu reactionaries began to recognize the association of Urdu with Islam and
Pakistan.

 Readership is estimated by two different surveys, The Indian Readership Survey (IRS) and
the National Readership Survey (NRS).

Top 10 Hindi magazines Top 10 English magazines

1. Pratiyogita Darpan 1. India Today
2. India Today 2. Pratiyogita Darpan
3. Saras Salil 3. General Knowledge Today
4. Samanya Gyan Darpan 4. The Sportstar
5. Grihshobha 5. Competition Success Review
6. Jagran Josh Plus 6. Outlook
7. Cricket Samrat 7. Reader's Digest
8. Diamond Cricket Today 8. Filmfare
9. Meri Saheli 9. Diamond Cricket Today
10. Sarita 10. Femina

Table 2

 Marketing
Market segmentation, marketing strategies, marketing practices and marketing concepts specific
to the industry, the print media industry has low entry and exit barriers. However, there is intense
competition for market share in the industry.

Many players are well established in their respective regions and it is difficult for new players to
penetrate the market. The market for print media can be segmented based on geography,
demographics and psychographics.

Many players used technology and marketing strategies to emerge as global giants. In India, the
print media industry is in the growth phase. There are a few well-established players in the
industry, with each player constantly trying to increase its market dominance.

The decision of the Indian government to allow 26% FDI in Indian print media has received
mixed response from media houses. Some players strongly opposed the move while others
welcomed it. Promoting, advertising, and marketing products or services are the most basic ways
to drum up new business. But it should come as no surprise that the vast proliferation of media
seen since circa. 2000 has been wreaking havoc with traditional approaches to marketing and
marketing and promotion.
A partial list of the media available to marketers includes, but is not limited to:
 computer desktop “wallpaper”
 advertising on mobile phones/other portable devices
 ring tones for mobile phones
 blogs
 social networking sites (like MySpace)
 online video (like You Tube)
 in-game advertising (for videogames)

Part of the marketing problem is that, thanks to inexpensive electronics and display technologies,
almost any surface can be a marketing vehicle. After all, consumers area wash in advertising and
marketing messages, which all intermingles to create a dense wall of background noise. The
Industry Measure has conducted extensive research into media channels and the ways in which
those channels are changing.

In a recent survey of ad agencies, for example, it was found that:

 70% of ad agencies currently use print direct mail (not variable) to market and promote
their and their clients’ services or products;
 52% currently use Web advertising (banners, rich media, etc.);
 45% currently use outdoor/display advertising (signs, posters, fleet graphics); and
promotion.
3.1PESTEL Analysis (1)
POLITICAL FACTORS: ANTI-TRUST ISSUES

The revenue and profitability of any retail store are affected by government policies. These
regulations impact the economy, consumer buying habits, and international trade laws. The only
thing left for the company to do about these changes is abide by them.
The regulations affect which products can be imported, exported, and sold in stores.

It’s not only physical retail stores under scrutiny. We’ve seen shifts in how e-commerce retail
leaders operate over the last few years. Antitrust issues and data breaches are causing the
government to look into how data is stored, used, and shared.
When retail stores branch into other countries, they need to abide by the policies in that country
too. In some cases, this can be beneficial. But if the country’s political parties are fickle, it can
easily turn into a problem.

ECONOMIC FACTORS:

A stronger economy allows consumers to buy products they want. Rather than just buying
products they only need. It also means more investors are becoming interested in the profitability
offered by retail stores. This is only possible when the economy is on the rise.
When it’s on the decline, the opposite is true. People save their money for products of necessity.
They’ll spend the bare minimum on food while the rest goes towards unpaid bills. This can
happen when unemployment rates spike. Or when a certain industry is hit harder than others.

The retail industry was able to hold itself up even during the recession. It’s one of the few
industries who managed to scrape through. Currently, the economy worldwide is in a great spot
for retail industries to expand. Customers have more disposable income to spend on frivolous
products.
However, if the economy is poor, it doesn’t matter how many products are offered. Because no
one can afford or justify the purchases. Unless the retail corporations react accordingly (cutting
prices), they’ll suffer profit loss.

SOCIAL FACTORS:

Consumer preferences are the main social factors affecting the retail industry. For instance,
people enjoy buying products in bulk. This is the exact premise behind CostCo, a Canadian
retailer. Here you can find food products, clothing, and electronics, in large quantities. Stores
other than CostCo now mass stock various products to avoid running out quickly.
These products aren’t bought by retailers on a whim. They use market research to identify
buying trends and shifts in consumer behavior. Understanding these two things helps to find
items more likely to boost profits.
Retailers who offer products online can collect data provided by their customers. They can easily
see which products people are buying, leaning towards, or completely ignoring. Then, they shape
their offerings based on this data. It’s a never-ending process.
Companies set targeted ads to customers most likely to visit their stores and buy from them.
Larger retailers can achieve this easier than mom and pop shops. But even smaller shops can
benefit from offering discounts and sales on products. All consumers love a good deal.

TECHNOLOGICAL FACTORS: A DIGITAL CATALOGUE FOR EASY BROWSING

Retail stores use a variety of technology every day. Like a point of sales system. As well as cash
registers to manage money after a sale. It’s standard for any store. As technology advances,
stores are adopting new systems, software, and hardware. For instance, smaller stores are making
the shift to computers or iPads at the register. It’s fast and easy to use.
The retail industry has greatly benefited because of the internet. Not only to streamline services,
but also to reach audiences worldwide. Most companies have a business website. It’s basically a
digital catalogue for their products. Big name companies are able to offer a selection online. The
products are either shipped to the customers’ home or the closest store for pickup.

Each company offers retail products online, to be sold and shipped. Other small name companies
can’t compete on the same scale. That doesn’t mean they should avoid having a business website
or showcase their products online. It just means they don’t have the means to meet the same
demands as the bigger retailers.

ENVIRONMENTAL FACTORS:
We also can’t forget about our environment either. All retail stores need to meet the
environmental requirements for consumer and employee safety. This is set by the government.
It’s non-negotiable.

LEGAL FACTORS:

A retail store needs to meet legislative conditions before opening the shop. These conditions are
often standard. It includes abiding by taxation laws, labor laws, and more. Legal factors become
trickier once the company expands overseas or offers products online. Then the international
laws come into play. As does data and copyright laws.

Not following these laws exactly as outlined will lead to legal troubles like bankruptcy and
foreclosure. It’s important to understand the laws long before the store is open for business.
3.1PESTEL Analysis (2)
3.2. Porter’s Five Forces Analysis (1)

The five forces which one must consider to analyze any industry are the rivalry between the
firms within the industry being analyzed, the bargaining power of buyers, and the bargaining
power of suppliers, the threat of substitute products or services, and the threat of new entrants
(also known as barriers to entry). They are also shown in the diagram below. Initially
propounded by Harvard Business School Professor Michael Porter, the Five Forces framework
has been accepted as a strategic framework which one can apply to analyze any industry. Let's
consider rivalry within the industry first. It is common sense to assume that if the rivalry is
intense, average profitability will reduce. In other words, to increase profitability, firms within
an industry may have to coordinate for collective good. For example, if the firms want to avoid
costly price wars which will ultimately reduce profits for all firms, firms need to coordinate.
However, this is easier said than done. Frequently, in an industry comprising of firms large and
small, smaller firms tend to lower prices to increase market share, and ultimately larger firms
follow. Bargaining power of suppliers and customers always needs to be considered, while
analyzing any industry. The threat of substitutes is important while analyzing an industry.

The five forces which one must consider to analyze any industry are the rivalry between the
firms within the industry being analyzed, the bargaining power of buyers, the bargaining
power of suppliers, the threat of substitute products or services, and the threat of new entrants
(also known as barriers to entry). They are also shown in the diagram below. Initially
propounded by Harvard Business School Professor Michael Porter, the Five Forces framework
has been accepted as a strategic framework which one can apply to analyze any industry.
The success as the leading home improvement retail store chain is linked to its ability to address
the Five Forces of external factors in the industry environment. Michael Porter introduced the
Five Forces analysis model to identify the primary external factors that affect businesses. Retail
strategies are directly related to the issues shown in this Five Forces analysis. The company
implements reforms over the years to improve leadership and management to address such
issues. Thus, retail case shows that the firm’s current condition is the outcome of effectively
addressing the issues outlined in this Five Forces analysis.

This Five Forces analysis identifies the strengths or intensities of the external factors in the
home improvement retail industry environment. The contributors to these five forces are also
analyzed based on Welcome Electricals’ performance and market situation.

Overview: Five Forces Analysis

Employees and other stakeholders can gain insights regarding the business position of Welcome
Electricals based on the Five Forces analysis model. The following are the intensities or
strengths of the five forces representing the external factors in retail industry:
Competitive rivalry or competition (strong force)

Bargaining power of buyers or customers (strong force)

Bargaining power of suppliers (weak force)

Threat of substitutes or substitution (strong force)

Threat of new entrants or new entry (moderate force)

The results of this Five Forces analysis indicate that Welcome Electricals’s most important
concerns are competition, the bargaining power of customers, and the threat of substitution.
Thus, its strategies effectively address these external factors. The force of suppliers and new
entrants are less significant, although they also influence market position.

Competitive Rivalry or Competition (Strong Force)

It is subject to the strong force of competitive rivalry. This part of the Five Forces
analysis determines the effect of competitors. the following external factors are the most
notable in contributing to the strong force of competition:

High number of firms (strong force)

Low switching costs (strong force)

Moderate exit barriers (moderate force)

Also, the low switching costs make it easy for customers move to other firms that sell similar
home improvement products. In addition, the moderate exit barriers mean that competitors are
unlikely to readily exit the market and would rather continue competing against this industry. In
this part of the Five Forces analysis, this sector must ensure competitive advantage to address the
strong force of competition in the home improvement retail industry.
Bargaining Power of Customers/Buyers (Strong Force)

It also faces the strong force or bargaining power of buyers. This part of the Five Forces analysis
shows the effect of customers on business. The following external factors are the most important
contributors to the strong force or bargaining power of customers:

Low switching costs (strong force)

High availability of substitutes (strong force)

Large population of buyers (weak force)

Buyers can choose from many substitutes, such as home improvement contractors and general
merchandise retailers which also sell some home improvement products. However, because of
the large population of customers, it expects high demand even when some buyers shift to other
firms. Nonetheless, this part of the Five Forces analysis indicates that customers have a
significant influence on retail business

Bargaining Power of Suppliers (Weak Force)

Suppliers can affect the company, although this influence is weak. This part of the Five Forces
analysis determines how suppliers impose their demands. The following external factors are the
most notable contributors to the weak force or bargaining power of suppliers:

Large population of suppliers (weak force)

Exclusivity with retailers (weak force)

Moderate size of individual suppliers (moderate force)

Because of their large population, suppliers have a weak individual effect. Also, retail business
and its competitors maintain exclusive and semi-exclusive business relationships with suppliers.
As a result, some suppliers do business but not with its competitors, and vice versa. This
situation weakens the impact of suppliers on Electricals and the home improvement retail
industry. This condition also holds true even though most of Welcome Electricals’ suppliers are
of moderate size. In this part of the Five Forces analysis of Welcome Electricals, suppliers’
bargaining power is minimally significant.
Threat of Substitutes or Substitution (Strong Force)

Substitutes impose a considerable threat against electric retailers. This part of the Five Forces
analysis shows the potential of substitution of business outputs. In the case of Welcome
Electricals, the following notable external factors contribute to the strong threat of substitution:

High availability of substitutes (strong force)

Low switching costs (strong force)

High performance-to-price ratio of substitutes (strong force)

There are many substitutes home improvement retail goods and services. For example, general
merchandise stores also offer similar goods. Home improvement contractors are also a
substitute to products and expert advice. The ease of using substitutes (low switching costs) and
the satisfactory performance of these substitutes lead to the strong threat of substitution against
products. Thus, this part of the Five Forces analysis shows that the threat of substitution is
among the most important issues facing Welcome Electricals.

Threat of New Entrants or New Entry (Moderate Force)

New entrants can have a significant impact on Welcome Electricals. This part of the Five
Forces analysis determines the potential impact of new firms. the following external factors
contribute to the moderate force or threat of new entry:

Low switching costs (strong force)

Moderate cost of doing business (moderate force)

High cost of brand development (weak force)

The cost of doing business in the home improvement retail market is moderate, as even small
firms can compete against retailer. The low switching costs (ease of moving from one to other
providers) strengthen the threat of new entrants. However, the high costs of brand development
weaken the effects of new entry. In this part of the Five Forces analysis of retail electricals, new
entrants are a moderate threat and a significant consideration in the company’s strategic
formulation process.
3.2. Porter’s Five Forces Analysis (2)
3.3. Porter’s Generic Strategies (1)

Generic strategies were used initially in the early 1980s, and seem to be even more popular
today. They outline the three main strategic options open to organization that wish to achieve a
sustainable competitive advantage.

The generic strategies are: 1. Cost leadership, 2. Differentiation, and 3. Focus

1. Cost leadership: This means they should be offered at a price lower than their competitors’ but
with as good benefits, or, the unique benefits the products offer can over-offset the premium.

2. Differentiation refers to when an organization provides unique benefits to the users through
product innovation. This is to increase the probability of the users to choose the product. An
organization with a target user loyalty can concentrate more on how to fully meet the target
user’s needs rather than on product cost saving.

3. Focus strategy is also known as a 'niche' strategy. The clutter of options has now spilled out on
the number of options availability due to which people are spoilt for choice. Thus Niche products
are the only way to maintain viewer loyalty. Some premium-branded electricals, a bit like
SYSKA is more niche-orientated.
3.3. Porter’s Generic Strategies (2)
4. Company Analysis (1)

Company analysis is a meticulous study of a company based on certain parameters that gives the
status-quo of the company’s performance. It explains the value of the company, giving a
comprehensive picture of where the company stands in the market and amongst its competitors
throughout the industry it operates. Analysis of a company is done by applying various analytical
tools which gives the overview and in-depth understanding of a company’s position in a
particular industry and also explains the further scope of the firm. Let us analyze ‘WELCOME
ELECTRICAL PVT.LTD.’ company on the basis of following analytical tool:

 SWOT analysis
 BCG Matrix

SWOT

All retailers face day-today challenges, yet despite today’s challenging climate; there are still plenty of
opportunities to be had. By conducting a detailed retail SWOT (strengths, weaknesses, opportunities and
threats) analysis, actionable insights can be gained to help retailers understand the future of their own
organization

SWOT ANALYSIS OF THE COMPANY

Strengths

Identify your strengths first, as these will form the foundation of your opportunities. Look at
areas such as brand authenticity, unique selling points and product range, then break these
strengths into subsections such as customer service, store design, pricing, technology and so on.

The strength of a retailer is what sets apart the leaders from the competition, with many having
considerable financial backing, which adds security of more capital and easier access to bank
loans.

Weaknesses

Using market research, retailers should be able to compare the business against those that are
similar. In order to find key areas that needs attention and improvement. During this process you
may find that you have a weaker brand image than your competitors, or a limited presence in the
market. If your brand sells a selection of items that range from cheap products, through to more
expensive goods, you may find that your store is difficult to define and therefore loses its edge.
For retail, a lack of digital innovation is a common weakness, and one that requires significant
investment to overcome. Many retailers invest in digital technology, bringing together both the
online and in-store experience to utilize the growing trend in e-commerce and mobile efficiency.
Opportunities
Opportunities highlight the key short, medium and long-term objectives of a brand, based on a
review of a company’s sales force, market research and performance. Industry insights, the
relationships between you and your suppliers, and seasonal events such as a royal wedding, for
example, are all powerful sales drivers and form the basis for growth.
Technology is a key to identifying fresh opportunities in specific sectors. With the help of AI, for
instance, retailers can use data collected from their customers to deliver a personalized
experience and service. These insights enable them to generate accurate predictions of what
customers want to see and display to them via emails, app notifications or targeted social
hardware retails ads.
Heat maps also allow the monitoring of exactly where customers walking in store and which
promotions increase dwell time. Installing virtual assistants for popular areas in store will help
make this process more efficient, and can even add a touch of personalization if it responds to
customers’ needs, based on the demographic information collected.

Threats

Threats can be both internal and external, and are classified as anything that might have an
adverse effect on the revenue growth in store. For retailers, this could be a general decline in
consumer demand, price wars with competitors, or a new business that disrupts the market.
However, bigger external factors, such as an economic downturn or political uncertainty, could
also play a major role in this. These factors could affect the local economy, bringing down
exchange rates and impact the cost of both imports and exports.
Internal threats can be a s simple as not having enough staff to meet the demand of your
customers, or the breakdown of a supply chain due to late deliveries.

SWOT OF WELCOME ELECTRICALS:

STRENGHTS OF WELCOME ELECTRICALS

Seasonal Products: Each season has its own unique demand on a homeowner. Welcome
Electricals will focus on this pattern and bring in local customers by marketing these
items at competitive prices.

Repair/Project Resource Area: The first section customers will find when they enter the store is a
repair/project resource area that they can use to plan repairs or projects. There will be a
repair/project resource person there to answer their questions and direct them to the
section of store where the needed products are.

In-Store Expertise: Store employees will be knowledgeable in home repairs/projects. In

addition, the repair/project resource area will be used to conduct short trainings and
demonstrations in home repair and home projects.

Sales Strategy
 The sales strategy is simple. First, create a shopping environment that will create
confidence in the customer that he or she will get the needed material, part, or
instructions to get the job done right the first time. Second, make the store easy to
navigate, so customer can get in and out as quickly as possible. Third, know your
customer's seasonal hardware needs and offer it at competitive prices.

WE buys most of its inventory directly from the manufacturers, but it does buy some items from
distributors. Most items are shipped to one its three warehouses, but some items are shipped
directly to the store locations.

Every environmental change is fueled by their “green” movement and their promise to conduct
business as environmentally responsible.

Expanding the stores

Welcome’s plan of expanding the business is such a good idea. This certain strategy will
definitely allow of reaching the customers who are even far from their stores in new locations.
Good thing with it is that through this, customers will find it easy to know their available
products even in their locations. That is indeed no hassle for most of their valued customers.

Delivery Profile

(Welcome Electricals) has a good profile on delivery performances. This has become one of
their edges to promote a good quality service. With this alone, it will put up a good relationship
to customers in terms of trust. Upon providing best performance on deliveries will generate a
continuous profit for them.

Reputation as a Chain of Friendly Neighborhood stores

Another advantage of Welcome Electricals is that they have already an excellent reputation as a
chain of friendly neighborhood stores. For instance, in recent years, they support local charities.
Their salespeople take up training that includes skill training in the areas of the store in which
they will work (plumbing, electrical, power tools, flooring, and so on), and they are trained in
customer service skills. And as a result of Welcome Electricals’s focus on service, their stores
have got a good reputation.
 Inventory Control System

Welcome Electricals has an inventory control system that will monitor inventories at real time.
When a new stock arrives at an Welcome Electricals store, it is entered automatically into the
system on the receiving stock. It is good investment because Welcome Electricals could sell
inventory from its existing warehouses and stores.

Weakness
Limited Inventory Items

Since Welcome Electricals though they provide a good service on delivery, it would be hard for
them to include all products like electronic products. Most of the chinese goods are not
promoted for the purpose of promotion of Indian manufacturers. Limitations to some of
inventories may cause a decline on the profit of the company.
.
B

Matching the Large Competitors’ Prices

There is a serious competition that Welcome Electricals may face from national hardware chains.
The national chains buy lumber in such large quantities that they can offer far lower prices. With
this, Welcome Electricals was unable to earn a profit when matching the large competitors’
prices. And this sort of problem leads to lower profits.

Opportunity

Online Expansion

There is a huge untapped market of online customers who will be happy to purchase from
Welcome Electricals via sites like IndiaMart, Amazon, Flipkart, etc. An official Web site that
will allow online shopping, consultations, and feedbacks will also help company to grow.
Through this, the company will be able to monitor the trend of business to meet the needs of
their valued customers.

Installation services
Aside of providing a good delivery, Welcome Electricals plans to generate a good profit out
from their new strategies and provide services of installation. With this, Welcome Electricals
must have a tool demonstration area that is always staffed with salespeople who are experts in
power tool operation.

Threats

Competition from National hardware chains

Since Welcome Electricals is planning to expand of reaching their valued customers, it will be a
threat for them to compete with big time manufacturers. Because, nowadays, these big
manufacturing companies have already put up an alliance to some of the well-known Web sites
to promote its products.

Direct selling through Web sites of Tool Manufacturing companies

From the time when the Welcome Electricals will sell some of its product through online, they
cannot compete with some other manufacturers who actually do the “direct selling” through
Web sites. And again, this would be risky for the Welcome Electricals to gain a big profit.

Recommendations:

Expanding Partnership

There is a need for expanding partnership with other manufacturers. This is to be able to
bid for lower prices of products from business partners, and eventually sell these products to
consumers at a lower cost.

Promos, Freebies, and Discounts

To gain more customers is through giving promos, freebies or discounts for regular costumers.
This is just to catch number of customers to consume lots of products at a very low price.
CONCLUSION

Base on the given case of Welcome Electricals, they were strong on putting up a good
relationship with their valued customers which is a good foundation. But the problem is that
they cannot provide a cheaper price for some products because of the competition between
manufacturers. Therefore they must take the given SWOT analysis and do some research so that
they will come up into a better guideline solution and have an idea on what to do to make the
company last for years.