Professional Documents
Culture Documents
Class Notes
Class Notes
Agenda
Change of contents
Actual reporting of financials is based on “posted figures“.
Central Accounting and controlling subjects are summarized in a “Group chart of
items“.
Controlling details of consolidation are adjusted to Central
Accounting details of consolidation.
Change of processes / organization
Functions of data validation (technical), collection and processing is standardized.
Controlling and Central Accounting receive data at the same time.
A the level of the reporting unit reconciliation between controlling and central
accounting is required; as a consequence ,responsibility for reporting is in one hand.
Reduction of reconciliation between Central Accounting and Controlling at METRO
AG level.
The Management Board will propose a dividend of € 1.02 per common share and € 1.122
per preferred share for fiscal 2004 at the annual general meeting on May 18, 2005. Seven
consecutive years of attractive dividend payouts highlight that the METRO Group remains
true to its strategy of continuous dividend payouts and continues to offer its stockholders
an above-average dividend yield.
Market capitalization
A market capitalization of € 13.3 billion at the end of 2004 made the METRO Group one
of Germany’s biggest companies with an unchanged No. 15 ranking in the Dax. Metro
stock remains one of the 20 most frequently traded Dax stocks in terms of turnover volume.
In Germany, the Metro stock is registered for official trading on the stock exchanges in
Frankfurt and Düsseldorf and participates in the Extra electronic trading system and
warrant trading on Eurex.
Investor relations
The capital market communication policy at the METRO Group rests on the principles of
fair disclosure: timeliness, continuity, credibility and equal treatment. It takes a long-term
view in line with the group strategy of sustainable value creation. Aside from its annual
analysts’ meeting, the METRO Group also presented itself to investors and analysts in all
major financial centers in Europe, the United States and Asia in fiscal 2004. Participation
in nine conferences served as a platform for a further extension of the management board’s
regular contact with more than 1,300 institutional investors. Private investors, in turn,
received center stage at the investor fair organized by Hamburger Börsenverein. The group
provided information on its strategy and business expectations in the context of
presentations, conference calls, individual meetings and visits at domestic and foreign
locations. The number of investor relations activities rose again to about 270 events in 2004
from 250 a year earlier. The Internet continued to gain importance for the capital market
communications of the METRO Group in 2004. It offers an ideal basis for the provision of
transparent and simultaneous information to all market participants. The METRO Group
Investor Relations page on the Internet obtained consistently strong ratings in key rankings
of external institutes. The online information and service offer for investors and analysts
will be improved further in 2005. The investor relations activities of the METRO Group
will continue to focus on systematic and persistently intensive capital markets
communications to strengthen investor faith in the company and its stock.
Accounts audit
It has been agreed with the auditor of the annual accounts for fiscal 2004 that the chairman
of the Supervisory Board shall be immediately notified of any potential causes of exclusion
or partiality emerging in the course of the audit unless they are promptly eliminated. It was
also agreed that the auditor should immediately report any findings and events material to
the functions of the Supervisory Board that may arise in connection with the accounts audit.
Finally, the accounts auditor was instructed to inform the Supervisory Board and/or include
a note in the auditor’s opinion if facts were found in the course of the accounts audit
indicating a deviation from the Management and Supervisory Boards’ statement
concerning the German Corporate Governance Code
It includes diverse disciplines like sales, public relations, pricing, packaging and
distribution.
In short buying and selling and delivering products to people and fulfilling the
needs of people.
Market Analysis
The wholesale channel helps the manufacturers achieve sales from markets where they are
not directly able to handle retail sales and their shipments. In a country like India, where
95% of the retail environment is unorganized and spanning across millions of small stores,
it is impossible to reach all the stores directly through your distributors.
Most companies will have strong direct distribution in cities like Mumbai, but as you go
deep into India, the dependence on wholesale indirect channels increases. Most top selling
brands and categories have a good amount of wholesale component. For example, a brand
which is selling in Pan-India (across the regions in India) may have a wholesale component
ranging from 20% to as high as 50-70% depending on the category/brand’s dependence on
Rural India. It is obvious that most of the sales in Rural India happen through whole-sellers.
In Rural India, you will have strong whole sellers for every group of villages or in the
nearby town, where retailers go and replenish their stocks.
Manufacturers would always like to have a higher contribution of retail sales to their overall
shipments, as this helps them directly to control the nuts and bolts in the operations such as
trade promotions and schemes, in-store visibility, relationship with retailers, pushing and
increasing their assortment within the stores, maximizing profitability, increased visibility
of their sales, etc.
1. Product
2. Price
3. Place
4. Promotion
5. People
6. Process
7. Physical evidence
Some of the factors that are said to have promoted the growth of the industry are:
Changed lifestyle
Higher disposable income
Changed taste
Affordable prices
Boom in housing and real estate industry
Festivals deals and discounts
Growth drivers
Increasing urbanization
Key challenges
Increasing competition
Increase in fuel prices which is leading to increase in the transport cost indirectly
affecting the consumable goods
Changes in technology where small scale industries finding hard to survive in the market
As far as the bargaining power of Metro Buyers is concerned ,Metro is not in a strong
position .They have low power against the customer because customer influence in pricing
and shift towards other seller if he/she is not satisfied with quality or price of the product
or services.
hypercity has many options to buy products from any supplier, So suppliers try to make
possible their store. So we can say that hyper city has high bargaining power with respect
to the suppliers.
Threats of Substitutes
The major threat to hypercity is the local vendors in the market and other competitors like
super market and specialty stores etc. If the customer is not satisfied with any factor they
can easily switch to other because they have almost exact or the same kind of substitutes.
Since it is not a kind of special product or service owed by hypercity any one can enter and
it attracts more entrepreneurs Although initial investment for this industry is much high but
for such kind of chains like Wal-Mart and others have no problem in that. So hyper city
also has a high threat of new entrants.
The main customers of hypercity is PIKU (women) restaurants and other customers who
do not buy goods for their own use but to serve their further conzumers. Hyper city is
expecting the variety seeking and convenience shopping behavior from their customers.
Because it is such kind of product that the customer can change its mind just on a factor of
pricing and shift on the other exactly direct competitor’s .Customer has full knowledge
with choices
PEST ANALYSIS
Political Environment
The following are the factors regarding the Indian government which influences
the workings of hypercity.
The political instability is the major factor of low investment in the India. Same is
the case withhypercity. The management always keep in mind the threat of change
in government. They analyzed several times before entering this field and before
doing further expansion in this market.
The tax rebate and certain other favours’ given by the previous government can be
set a side by the change in the government.
The ineffective control of every government regarding the prices of products and
inflation creates certain problems because customers’ demands product at the
same and low price while in such conditions prices changes rapidly.
Economical Environment
Now the evaluation of money and decreasing exchange rate encouraging the investors
across the India.
Switching cost matters a lot in the buying decision behaviour of customer. The switching
can be higher in terms of time and the distance competitively the other specialized whole
sale markets.
Policies of state bank can be influenced by the existing political party and government
and every person either business or a separate citizen entity holder has to follow this rules
govern by state bank.
The distribution of wealth is the key factor of purchasing and also the major
characteristics of the country. A person’s spending only shifts from necessaries to
luxuries with the increase in money it does not increase the spending.
Socio-Cultural Environment
First of all society and culture of India and its market is adopting changes at a very steep
speed. Now the citizens are adopting all the new products which are coming into market.
Foreign investors are investing in India in almost every sector. People in India change
their product and services according to their taste and preferences. Brand image of
company’s product plays a major role in influencing the market condition.
Technological Environment
Hyper city, is a huge hyper market store chain operating in many cities of India is already
using the up to date and high tech mechanism for the shifting of products and for other
purpose. They have not too much threat of any technological changes. Precautionary
measures like cameras are installed for safety reasons and modern equipment’s are used
in almost all working fields.
OPERATIONS
SUPPORT FUNCTIONS
Challenges:
Objectives:
• Create a Talent Pool (trained employees) to support the expansion and growth of
hypercity.
• Make hyper city an “Employer of Choice”.
• Enhance growth opportunities of employees
• Provide aspirants a rewarding career path in hyper city operations as against a mere
job opportunity
• Make available threshold skill sets for frontline operations in minimum lead time
Since the basic training is only provided to the permanent members of the organization
such as the senior managers and managers who then later on train their subordinates. After
each component of the training plan and program is complete, outsourced trainers of
hypercity meet with the managers from domestic division and review all business
development personnel
External Training
As part of its continuous learning philosophy, Training via Analysis seeks to support
employee training so that employees can fully contribute their talents to achieve TVA's
vision and business objectives. In keeping with this objective, TVA encourages employees
to participate in training activities so they may perform at their highest potential. This
practice establishes the process for all employees who participate in External Training.
Leave Policy
Objective
This Policy encourages the employees to take break from work as this provides for a healthy
and efficient staff. The leave policy sets out the various types of leaves that an employee is
eligible for and outlines the procedure for taking leave.
Leave Year & Applicability
Leave year is from 1st April – 31st March
The different types of leaves covered under this policy are:
• Privilege Leave
• Casual Leave
• Sick Leave
Privilege Leave/ Earned Leave
• All permanent employees are eligible to avail privilege leave. Privilege leave is
calculated for a period of one calendar year (April- March)
Casual Leave:
• All permanent employees are eligible to avail Casual leave. Casual leave is calculated
for a period of one calendar year (April- March)
Sick Leave:
All permanent employees are eligible for 1-day sick leave at the rate of 4 months served.
An employee is eligible for a maximum of 3 days sick leave in a calendar year.
Performance Appraisal
Performance appraisals are a regular review of employee performance within hypercity
Generally, the aims are:
Give feedback on performance to employees.
Identify employee training needs.
Document criteria used to allocate organizational rewards.
Form a basis for personnel decisions: salary increases, promotions, disciplinary
actions, etc.
Provide the opportunity for organizational diagnosis and development.
Facilitate communication between employee and administrator.
Validate selection techniques and human resource policies to meet federal Equal
Employment Opportunity requirements.
Employee Relations
Employee Relations at hypercity involves the body of work concerned with maintaining
employer-employee relationships that contribute to satisfactory productivity, motivation,
and morale. Essentially, Employee Relations is concerned with preventing and resolving
problems involving individuals who arise out of or affect work situations.
Advice is provided to supervisors on how to correct poor performance and employee
misconduct. In such instances, progressive discipline and regulatory and other requirements
must be considered in effecting disciplinary actions and in resolving employee grievances and
appeals. Information is provided to employees to promote a better understanding of
management's goals and policies. Information is also provided to employees to assist them in
correcting poor performance, on or off duty misconduct, and/or to address personal issues that
affect them in the workplace. Employees are advised about applicable regulations, legislation,
and bargaining agreements. Employees are also advised about their grievance and appeal rights
and discrimination and whistleblower protections.
Hypercity offer their very own brands across categories. They have developed
a suite of exclusive brands such as Fresh Basket, Good Living and Terzo in
Food, Grocery and Home & personal care, Avorio, Ebano and Maxit in General
Merchandise and RiverInc, City Life, Joojoobs, Iktara and Masala Chai in
Apparel and Accessories among other brands available only at our stores.
SUPPLIER
Department of BBA MAY-JUNE 2017 Page 21
Hyper city-something fresh every day
CONSUMER
SUPPLY
CHAIN
PROCESS MANUFACTURER
RETAILER
The above diagram shows the cycle of movement of goods and services from the
initial point of suppliers to the end consumer. The suppliers supply raw materials to the
manufacturers who in turn pass on the finished products to the distributor. Here is when
the wholesaler like Metro comes into play. Metro not only serves the retailer and resellers
and provides products at low process but also serves a small chunk of end consumers who
have membership. The cycle gives a picture that the presence of the wholesaler can
minimize the supply chain time, levels and also maximize efficiency of movement of
goods to end consumers.
The Wholesale retailing is a small section of the retail industry which is increasing rapidly
today. This form will reduce the total number of levels before the goods reach the end
consumer and will make the process simpler. The cost related to a diversified supply chain
will also reduce considerably as there will be no need of transporting goods for the
customers who enter the store. The commercial customers will also be benefited in the
sense that they will enjoy higher profits and greater margins and thus economies of scale.
In all these the end consumer will gain enormous advantage.
The wholesale business is divided into two types:
a) Modern trade format like Metro Cash and Carry
b) General trade like wholesale yard for bidding
Strengths
Metro has the basic strength of low Less awareness in India regarding
prices with high quality. cash and carry business.
Serving the customers with the Although location for a big store is
wide variety of products. suitable but outside the city and
Covering all business solutions not suit for all customers.
under one roof named Metro. No proper transportation for
Best location for such kind of big customers to carry their products
store and also covering many far away.
years. Limit of 3 person on a single
Having t the strong cash and carry membership card.
business background. Restriction of shopping minimum
Efficiently using the place and Rs 1000.
excellent layout. Shopping from Metro is much
Sufficient parking and safety and time consuming because the
security measures ensure the travelling and in store visiting.
quality in every sector.
Friendly and co-operative staff.
Computerized data base system
which helps both customer and
Metro.
Cafeteria in the building for the
refreshment of customers.
Opportunities Threats
Upcoming stores like Wal-Mart
Growing market of cash and carry. and many others.
Expansion in major cities. Complex government laws and
Online shopping is much better restriction.
option to save time. High inflation rate.
Instability of the country.
Findings:
During 2013, Metro India plans to focus on consolidating its operations, besides opening
new stores in Bangalore and other cities across India. And the new store in near binny mill
The retailers want to focus exclusively on the cash and carry segment in the country,
unlike other retailers such as Wal-Mart, Tesco and Carrefour who are keen to enter the
multi-brand retail segment.
The retailer who plans to better engage its business partners such as the local mom and
pops stores by continuing to provide value added services and knowledge sharing
sessions.
Learning Outcome
Conclusions:
Metro cash and carry which is a very well organized structure which enhances its
efficiency and helps it to grow exponentially.
Metro has a very large growth prospective because it deals with the food and non food
products mostly which are in daily use so this is the reason why demand is growing day to
day.
Metro has taught me how to bargain with the customers and finally convinced them to buy
the product at the price being quoted at Metro. Metro has expose me to wide variety of
products and helped me gain knowledge.
Metro has contributed equally to the environment as much as it has taken from the same.
Metro has contributed to the economy greatly with its strong infrastructure by eradicating
various economic issues like unemployment and poverty etc.