Competitive scenario – identify leading players

and their strengths and Weakness in brief.

DMart has faced severe competition, mainly from Mahindra Retail Pvt. Ltd, HyperCity Retail
Ltd., Aditya Birla Retail Limited, Big Bazaar.

Mahindra Retail Pvt. Ltd.:- Mahindra Retail Private Limited operates as retails
store. The firm offers maternity wear, baby products, mother care product, kids toys and
games, and kids apparel and accessories. It started its operation in 2009 with
headquarter in Mumbai.

Strength:
1) It manufactures good quality products for Mother & Child under its private label.
2) It is now one of the largest master franchises for FirstCry.com.
3) Mahindra Group, evaluated at the US $17.8 billion being the mother brand, helped Mahindra
Retail reach out to maximum people.

Weakness:
1) Mahindra Retail Pvt. Ltd, focused mainly on kids' and mothers' products, resulting in
a narrow customer range.
2) Its market share expansion gets affected mainly due to competition faced by other
brands.

HyperCITY Retail Ltd.: - In 2017, Future Group acquired HyperCity (founded by K.

Raheja Corp in 2006). It inaugurated its first store in Malad, Mumbai, which offers 44,000
products.

Strength:
1) HyperCITY is a hypermarket that provides an international shopping experience,
where customers can shop in comfort in a giant and modern excitement place.
2) It has more than 40000 variants available.

Weakness:
1) Infrastructure costs involved in HyperCITY are Huge.
2) The success rate is too low for this format in tier-2 and tier -3 cities.
Aditya Birla Retail Limited: - In 2007, Aditya Birla moved into the retails segment
with the Trinethra Super Retail's acquisition. Subsequently, he expanded its presence
nationally under the brand "more" across supermarkets & Hypermarkets.

Strength:
1) Aditya Birla Retail Limited had won many prestigious awards.
2) It is a Zero Promoter Pledge.

Weakness:
1) Annual net profit for Aditya Birla Retail Limited is declining for the last two years.
2) Piotroski's score for the firm is low consistently.

Big Bazaar: - Kishore Biyani founded Big Bazaar in 2001 by Kishore Biyani. Reliance
Retail acquired Big Bazaar in 2020. Big Bazaar is one of the biggest Indian retail chains of
hypermarkets, discount department stores, and grocery stores.

Strength:
1) It has the most significant value retail chain in India.
2) It offers a family shopping experience, where the entire family can visit together.

Weakness:
1) Billing times are higher than usual during the season sale, and also the billing
executives also take time as they keep explaining Future Pay cards to every customer.
2) Big Bazaar has not made any presence in the international market.
PESTEL
POLITICAL
Dangers of any conflict – from current political scenario we can assume that no two states are in
disharmony which can lead to a conflict, which can ultimately harm or hamper the prospects of
Dmart

Role of Local Government – Currently Dmart has its stores in eleven states in India ex- Maharashtra,
Gujarat, and Karnataka, so local government plays a crucial role in acting as a catalysis which can
speed up or smoothen process of Dmart establishing its stores in various states.

Role of Central Government – A stable and strong government will play a crucial role in stability of
Dmart business across states, moreover, there has been stability in government policies regarding
retail sector for both economic as well as foreign policies.

Policy support –

1) 100% FDI (Foreign Direct Investment) in single brand retail under automatic route

2) Goods and Services Tax (GST) for single unified system

3) 51% FDI in multi brand retail.

These policies have helped Dmart in their objective of expansion, by raising more capital, increasing
volume of products, increasing brands at their various stores at cheap prices.

ECONOMICAL
Present situation - Corona Pandemic has changed the economic situation of the country and
similarly impacted retail sector as well, due to surge in covid cases and strict lockdown in
various states retail sector suffered significantly (In March Dmart faced negative growth rate
of 9.4%)
From June onwards situation started to improve with states lifting lockdowns and easing
restrictions subsequently Dmart showed good performance
In Q4 Dmart increased its revenue by 18% which is greater than entire 9MFY21.
So, there is a perfectly strong negative correlation between Dmart’ performance and covid
cases.
Role of government – Government has increased its spending on infrastructure
development and steps have been taken to increase ease of doing business which can
facilitate retail sector to increase their presence and improve market penetration in tier 2
and tier 3 cities.
Foreign Exchange – Forex can play a crucial role in boosting the investments for Dmart and
volatile forex can impact the investment plans not only in short term but also in long term.
Consumer spending – From 2020 to 2021 disposable income of the consumers have
increased because of lockdown many people lost their jobs thus it increased pressure on
consumer spending. With relaxation of covid rules consumers have started to spend more.
Moreover, the growing economic disparity between consumers can impact consumer
spending negatively which could impact Dmart sales.

SOCIAL
Demographic trend – Whenever company decides to launch a particular product demography plays
a significant role, if the trend suggest that the location consist of population in a particular age group
products will be designed and launched to cater to that majority age group.

Lifestyle changes – Dmart needs to analysis the shift in income or change in lifestyle of the
consumers for insights which will help them in innovation and choosing the right promotional
activities and various marketing campaign.

Savings – In country like India which has culture of saving therefore consumer demand and spending
does get effected Ex – China and USA have fewer saving rates as compared to India, so their
spending power is more.

Gender ratio, cultural diversity, birth rates, age, sex, income all these social factors will influence
consumer demands and will affect consumers expectations from a particular brand.

Technological
Digital Payments – With the rise in Digital payments and the advancement of UPI has made digital
transaction extremely easy and smooth less which encourages consumers to buy more frequently

Billing system – Advancement in technologies have made to possible to complete the billing in short
span of time thus reducing consumer wait time, shortening long queues and ensuring smooth
process.

Level of acceptance of technology – Dmart needs to gauge at what level society is ready to accept
the technological integration as Dmart does want to make shopping too complex.

Integration of Technology in Supply chain – Dmart need to analysis how much automation can be
done in its supply chain which can increase its transparency make it more flexible.

Environmental
Consumer activism - Dmart should analyse what level of consumer awareness and activism takes
place in the region they present and if promoting eco-friendly products increases their sales.

Renewable energy - To reduce carbon emission, it is important to use solar energy as a power source
and should encourage eco - friendly products and adapting renewable technology

Environmental Agencies – Its important to open Dmart store at a location which doesn’t violate any
environment law thus environmental agencies plays a crucial role in ensuring the same but In our
country where corruption is rampant, agencies often gives the clearance only after taking bribes so
Dmart should be aware of such practices.
LEGAL
Consumer protection law – Dmart should develop a consumer redressal system in order to
safeguard customer rights and consumer grievances are listened and acted upon

Employment laws – The business model a company follows should align itself with the local and
central laws of employment

Transparency in judiciary – Before opening at a new location company should investigate the legal
framework of the state to make sure that a fair and transparent decision making will take place in
case of a dispute.

Porter’s five forces

Threats of new
entrants

Bargaining power Bargaining power

PORTOR’S
of suppliers of buyers
FIVE
FORCES

Threats of Rivalry among

substitutes existing
competitors

Threats of new entrants

Dmart will face low threat from new entrants if the policy framework discourages any new firm who
is interested to enter retail sector.

currently in unorganised retail sector there is very less barriers to entry which hardly discourages
any new player who is interested whereas entry in organised retail sector is comparatively poses a
huge challenge to any new player since it requires: -

1) large capital investment

2) substantial risk
3) brand promotions and marketing
4) low margins
new retail players in unorganised sector can pose a threat to Dmart with respect to convenience
location and availability.

Threats of substitute
Demand would face threat of substitution if any retail store were able to offer services or prices on
respective products similar or less than Dmart.

current business model of low margin and high volume with minimal debt and low credit line and
focusing growth over long term allows Dmart to provide lots of discounts on its various products
which is one of the selling points of Dmart.

Thus, Dmart have low threat of substitution because, having large volume, variety of products at low
cost is exceedingly difficult to offer something Dmart is doing for a very long time.

Bargaining power of buyers

The number of buyers for a product or service decides the bargaining power of buyers, if a company
has limited number of customers, it allows buyers who have high bargaining power whereas a
company having large number of buyers will not give any bargaining power to the buyers.

Dmart along with most of the big players in retail industry has large number of customer base
therefore buyers are not able to influence the prices of the products offered to them.

Bargaining power of suppliers

Number of suppliers available in the market decides the bargaining power of suppliers having lots of
suppliers and enough choices reduces their power whereas a strong and limited number of suppliers
can increase the cost and can affect company’s profit.

Bargaining power of suppliers is very weak in retail industry there are lots of suppliers in the retail
sector so therefore supplier does not affect Dmart.

Rivalry among existing competitors

The intensity of competition in retail sector is high, Dmart faces tough competition from various big
players like big bazaar, reliance retail and more. With large investment reliance retail has a greater
number of stores than Dmart thus more reach and market presence whereas big bazaar’s brand
presence due to high promotion and marketing is more than Dmart thus these competitors give
tough competition to Dmart which does not allow Dmart to increase its prices.

Forces Analysis Reason

Threats of new entrants HIGH Barrier to entry is less which allows new
players to enter the retail un-organized
sector easily and compete with Dmart in
terms of convenience, location etc

Threats of substitute LOW Large volume and variety at low cost

requires huge investment backing and high
risk which is not offered by many substitutes
Bargaining power of buyers LOW Due to presence of large number of buyers
their bargaining power is very low

Bargaining power of suppliers LOW Large number of suppliers are present in the
market thus they have weak bargaining
power

Rivalry among existing HIGH Reliance retail and Big Bazar moreover
competitors online retail stores like Amazon, Flipcart
gives tough competition to Dmart