kushal final

8/7/2019 Kushal Final

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Analysis of Retail sector

Submitted to: Submitted to:

Prof Ranjana patel Akash SoniKushal Shah

Manish Khandekar

Pankaj RaiSaurabh Jain


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What is Retailing

y Its a final connection in the marketing channel that

brings goods from manufacturer to consumers.

y Retailing is the combination of activities involved in

selling consumer goods and services directly toconsumers for their personal or household use

y It is vibrant part of our changing society and a major

source of employment


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INDIAN RETAIL MARKET

y Fifth largest retail destination globally.

y Most attractive emerging market for investment.

y 13-15% share in GDP (2009) and expected to touch

22% by the end 2010.

y Only 6% is organized retail market.


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Organized


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organized


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SWOT analysis ofretail sector

STRENGTH

yThe governments of states like Delhi and National Capital Region (NCR) are very upbeat aboutpermitting the use of land for commercial development thus increase

ythe availability of land for retail space.

yThe growth of sachet revolution emerges for reaching to the bottom of the pyramid.

yThe annual growth of departmental stores is estimated at 24%.

yT

he size ofI

ndian organized retail industry reached at Rs.1,30,000 crore in 2006

yA large young working population with median age of 24 years, nuclear families in urban areas,along with increasing working women population and emerging opportunities in the service sectorare going to be the key growth drivers of the organized retail sector in India.


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OPPORTUNITIES

y Rural retailing is still unexploited Indian market.

y It can become one of the largest industries in terms ofnumbers of employees and establishments.

y Indian retail industry has come forth as one of the mostdynamic and fast paced industry with several players enteringthe market.


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THREATS

y The unorganized sector has dominance over the organized sector inIndia because of low investment needs.

y Labour rules and regulation are also not followed in the organizedretails.

y T

he sector is unable to employ retail staff on contract basis.y Problem of car parking in urban areas is serious concern.

y Difficult to target all segments of society.


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Environment threat and opportunity profile

(ETOP)for a Retail industry in India :

ENVIRONMENTAL

SECTORS

NATURE OF IMPACT IMPACT OF EACH

SECTOR

ECONOMIC FAVOURABLE

The Indian consumers behavior

pattern has changed. Now the

Indian consumer gets more hefty

pay- packages, is younger, alarge number of women are

working, western influences,

and more disposable income

have opened a lot of

opportunities in Indian

organized retail sector.The

Indian consumer wants to shop,eat and get entertainment in one

place and is have given Indian

organized retail sector an

opportunity to grow.


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POLITICAL FAVOURABLE

The Indian government

in 2005 allowed foreign

direct investment (FDI)

in single brand retail to

51%. This have opened

up a lot of opportunitiesin India organized retail

sector. In fact 325

departmental stores, 300

new malls, and 1500

supermarkets are being

built which shows the

tremendous

opportunities in the

organized retail sector

in India.


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POLITICAL UNFAVOURABLE


have allowed 51%

foreign direct

investment (FDI) in theIndia retail sector to one

brand shops only. This

have made the entry of

global retail giants to

organized retail sector

in India difficult. This isa challenge being faced

by the Indian organized

retail sector.


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REGULATORY UNFAVOURABLE

The biggest challenge

facing the Indian

organized retail sector is

the lack of retail space.

With real estate prices

escalating due to

increase in demand from

the Indian organized

retail sector, it is posing

a challenge to itsgrowth. With Indian

retailers having to shell

out more for retail space

it is effecting there

overall profitability in

retail.


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MARKET FAVOURABLE

Growth of Retail

Companies in India is still

not yet in a matured stagewith great potentials

within this sector still to

be explored. The

organized retailing sector

in India is only 3% and is

expected to rise to 25-

30% by the year 2010. The

Growth of Retail

Companies in India is

most pronounced in the

metro cities of India,

however the smaller towns

are also not laggingbehind in this.


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TECHNOLOGICAL

FAVOURABLE

The availability of

supply chain

management, customerrelationship

management &

merchandising software

can help much while

performing activities

such as ordering &

tracking inventory

items, warehousing,

transportation &

customer profiling. IT is

a tool that has been used

by retailers ranging

from Amazon.com to

eBay to radically change

buying behavior across

the globe.


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SUPPLIER UNFAVOURABLE

The supplier

environment offers the

biggest constraint on

the growth of retailing

industry in India.

Reaching Indiasconsumers cost

effectively is a

distribution nightmare,

owing to the sheer

geographical size of the

country and the

presence of traditional,

fragmented distribution

& retailing networks &

erratic logistics.


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ETOPfor Wal-Mart :y 'Wal-Mart Stores, Inc. is the world's largest

retailer, with $256.3 billion in sales in the fiscalyear ending Jan. 31, 2004. The company

employs 1.6 million associates worldwidethrough more than 3,600 facilities in theUnited States and more than 1,570 units.


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Environment threat and opportunity

profile (ETOP)forWal-Mart :ENIRONMENTAL

SECTORS

NATURE OF IMPACT IMPACT OF EACH SECTOR

ECONOMIC FAVOURABLE

The Indian consumers behavior

pattern has changed. Now the Indian

consumer gets more hefty pay-

packages, is younger, a large numberof women are working, western

influences, and more disposable

income have opened a lot of

opportunities in Indian organized

retail sector.The Indian consumer

wants to shop, eat and getentertainment in one place and is

have given Wal-Mart an

opportunity to grow.


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POLITICAL UNFAVOURABLE


have allowed 51% foreign

direct investment (FDI) in

the India retail sector toone brand shops only. This

have made the entry of

global retail giants to

organized retail sector in

India difficult. This is achallenge being faced by

the Wal-Mart in Indian

retail sector. Being a global

retailer means that you are

exposed to political

problems in the countriesthat you operate in.


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MARKET UNFAVOURABLE

FAVOURABLE

Being number one means

that you are the target of

competition, locally and

globally. Cut-throat

competition from the 12

million mom-and-pop

stores. These are easily

accessible and provide

services like free home

delivery and goods at

credit.

To take over, merge with, orform strategic alliances

with other global retailers,

focusing on specific

markets such as Europe or

the Greater China Region


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REGULATORY

UNFAVOURABLE

The biggest challenge

facing Wal-Mart in India

is the lack of retail space.

With real estate prices

escalating due to increase

in demand from the

Indian organized retail

sector, it is posing a

challenge to its growth.


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SocialUNFAVOURABLE

Small retailers of manydeveloping countries do

not want the big retail

players like wall mart to

enter in their countries

To protect domestic

unorganized market


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Estimates and predictions for retail sector:

y At present, the industry is estimated to be at more than

US$ 400 billion by a study of McKinsey.

y The Economist Intelligence Unit (EIU) estimates the

retail market in India will increase to US$608.9 billion in

2009 from US$394 billion in 2005.

y KPMG Report says that the organized retail would grow

at a higher rate than the GDP in the next five years.

y The retail sector would generate employment for more

than 2.5 million people by the year 2010, predicts ananalysis by Ma Foi Management Consultants Ltd.


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Strengths:

y Highbrand equity enjoyed by Big Bazaar

y State of the art infrastructure

y

A vast variety of stuff available under one roofy Everyday low prices, which attract customers

y Maximum percent of footfalls converted in sales

y Huge investment capacity

y Biggest value retail chain in India

y It offers a family shopping experience, where entire family can visit together.

y Available facilities such as online booking and delivery of goods

Weakness:

y Unable to meet store opening targets on time

y Falling revenue per sq ft

y General perception: Low price = Low quality

y Overcrowded during offersy Long lines at billing counters which are time consuming

y Limited only to value offering low price products. A no of branded products arestill missing from Big Bazaars line of products. E.g. Jockey, Van heusen,


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Opportunity:

y A lot of scope in Indian organized retail as it stands at approximately

4%.

y Increasing mall culture in India.

y More people these days prefer to visit big stores where they can find

large variety under one roof

Threats:y Competition from other value retail chains such as Shoprite, Reliance

(Fresh and trends), Hypercity and D mart.

y Unorganized retail also appears to be a threat to Big Bazaars business. A

large population still prefers to visit local convenient stores for daily

purchases

y Changing Government policies

y International players looking to foray India


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y Some of the players present in the industry:

Archies, Bata India Ltd, Big Bazaar, Crossword, Ebony

Retail Holdings Ltd., Fabmall, Food Bazaar, GlobusStores Pvt. Ltd.,Health and Glow, Liberty Shoes Ltd.,

MTR Foods Ltd., Music World Entertainment Ltd.,

Pantaloon Retail India Ltd., Shoppers Stop, Style SPA

Furniture Ltd, Subhiksha,Titan Industries, Lifestyle, etc.

y New entrants entering the market soon will be:

Reliance Retail Ltd, Wal-Mart Stores, Carrefour,Tesco,

Boots Group, etc.


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BIGBAZAAR

y Big Bazaar is a chain ofhypermarkets in India, with more

than 134 stores in operation. It is a subsidiary ofFuture

Group Limited, and follows the business model ofUnited

States-basedWal-Mart.

y The worldwide country chain, Big Bazaar, is formed by CEO

ofFuture Group, Mr. Kishore Biyani.The group do not

promises more than what it delivers.Their basic attraction

associated with reasonable prices is their Unique Selling

Price.


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Socio Economic FAVOURABLE

A lot of scope in Indian

organized retail as it stands

at approximately 5%.

family shopping experience,where entire family can visit

together.

More people these days

prefer to visit big stores

where they can find large

variety of quality andcheaper products under one

roof


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Culture FAVOURABLE

increasing mall culture

in India.

T

echnologyAvailable facilities such

as online booking and

delivery of goods

Facility of Plastic

Money


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Competitors UNFAVOURABLE

competition from other

value retail chains such

as Shoprite, Reliance

(F

resh and trends),Hypercity and D mart.

International players looking

to foray India.

Unorganized retail also

appears to be a threat to

Big Bazaars business. A

large population still

prefers to visit local

convenient stores for

daily purchases

Biggest value retail chain inIndia


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Government

FAVOURABLE

UNFAVOURABLE

FDI is allowed for

single brand retailing in

India

FDI is allowed only for

single brand retailing in

India


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Supplier FAVOURABLE

maximum suppliers to Big

Bazaar are very big

players of their industries

so very less chances oflow supply of products.

+ can have advantage of

Co-operative marketing

with the suppliers


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CUSTOMER FAVOURABLE

Large crowd during

weekends due to which

customers have to wait a

long at POS, this maychange the perception of

consumer about the

timely services

Huge potential market as

only 5% of Retail sector iscaptured by Organized

retailers

Highbrand equity

enjoyed by Big Bazaar

(customer perception)


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Thank you

kushal final

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