Metro Group: Understanding where the company stands and how to possibly overcome challenges. 1. What is the Value Proposition of MCC? 2. Who is their TG and what needs do they have? 3. How does MCC satisfy these needs of the TG? 4. What are the Key learnings from MCC experience in Russia, China and Other countries? 5. Who are all the Stakeholders for MCC in India? 6. What were the challenges faced by MCC in India & why? 7. What possible solutions to these challenges? 8. What learnings from the case?

1. Sept 4, 2023
Managing Retailing
Session 3
Understanding
where the
company stands
and how to
possible
overcome
challenges?
CASE ANALYSIS
Metro Cash
& Carry
GROUP 15

2. Case
Questions
1. What is the Value Proposition of MCC?
2. Who is their TG and what needs do they have?
3. How does MCC satisfy these needs of the TG?
4. What are the Key learnings from MCC
experience in Russia, China and Other countries?
5. Who are all the Stakeholders for MCC in India?
6. What were the challenges faced by MCC in
India & why?
7. What possible solutions to these challenges?
8. What learnings from the case?

3. Introduction
Metro AG, commonly known as Metro, is a German
multinational retail and wholesale corporation.
Founded in 1964.
Started as a wholesale retail supplier (B2B),
expanded to hypermarkets, supermarkets, and
cash and carry stores.
Three key markets: China, Russia, and India
Competitors: Both local & and international
(Carrefour and Wal-Mart)
Adopted different market entry strategies based
on the local dynamics and government policies.
Challenges: Cultural differences, competition,
unique market conditions
Metro Cash & Carry

4. Value
Proposition
Soft Value Propositions
Hard Values Propositions
Wide Product Assortment: Including
food, beverages, electronics, clothing,
and household goods, all in one place.
Business Solutions: assistance with
supply chain management, product
sourcing, etc.
Delivery Services: Allowing
businesses to deliver their orders
directly to their locations. (esp. Bulk &
frequent orders)
Competitive Pricing
Bulk Purchasing
Convenience
Customer Service
Sustainability &
Community Engagement
Quality & Freshness

5. Target
Group
Business
Customers
Hotels and
Restaurants
Retailers
Event
Planners &
Catering
Companies
Wholesalers
&
Distributors
Institutions &
Organizations
Fresh
ingredients,
beverages,
kitchen
equipment, &
other supplies
Consistent
supply of
products to
stock their
shelves,
depends on
dealings
Bulk
purchasing of
food items,
beverages,
tableware, and
catering
equipment
Goods to resell
to other
businesses or
consumers
Schools,
hospitals,
government
agencies, etc.
require food,
supplies, & equip.
to support their
daily operations.

6. Needs of MCC ‘s Target group
Product Sourcing Customized
Solutions
Sustainability
Supply Chain
Support
Quality
Assurance
Cost Savings
Customer
Support
Convenience
Delivery
Services

7. How does MCC satisfy these needs of
the target group?
Extensive Product Range
Quality Assurance: MCC works closely with suppliers to ensure products meet stringent quality standards.
Competitive Pricing: MCC leverages its bulk purchasing power to negotiate competitive prices.
Convenient Store Layout: MCC designed business customers’ centric stores.
Customer Support: Knowledgeable staff can offer guidance on product selection, suggest cost-saving
alternatives, and help customers find solutions tailored to their needs.
Customised Solutions: Offers tailored product assortments or delivery schedules
Supply Chain Support: Helps businesses manage their inventory efficiently and ensures a consistent flow.
Delivery Services
Sustainability Initiatives: Offer responsibly sourced and environmentally friendly products to support
businesses with sustainability goals.
Training and Workshops: Helping them improve operations, food safety practices, and customer service.
Digital Solutions: MCC offers online platforms & mobile apps for convenient ordering & inventory
management.
Promotional Programs: MCC often runs promotional programs and discounts, allowing business customers to
reduce their procurement costs further.

8. Learnings
Adaptability
MCC used different store formats
and modes of expansion for different
markets
Adapted product offerings and
supply chain to local tastes and
availability.
Consumer Education
Localize consumer education
strategies.
Invest in educating customers about
the benefits of the Cash & Carry
model.
Form local partnerships and alliances
to navigate complex markets.
Collaborate with state-owned
enterprises or established
corporations when needed.
Leverage local relationships for market
insights.
Local Partnerships

9. Establish positive government
relations and adapt to local
regulatory environments.
Building positive relationships with
government officials and agencies
can facilitate smoother market entry
and mitigate regulatory hurdles.
Actively engaging in policy advocacy
and industry dialogues can influence
regulatory changes in favor of the
cash-and-carry model.
Government Relations
Streamline local supply chains by
collaborating with farmers and
producers.
Invest in logistics, storage and
transportation infrastructure
Adapting supply chain strategies to
accommodate regional preferences
and market regulations
Embracing innovative supply chain
solutions, such as temperature-
controlled warehouses and precooling
centers, improves product quality and
extends shelf life.
Supply Chain

10. Stakeholders of MCC in India
Customers
Government &
Regulators
Trade partners
Shareholders
Suppliers
Local
Authorities
Local
Communities
Employees

11. Challenges faced by MCC in India
Political & Bureaucratic
Hurdles
Regulatory Challenges Public Perception &
Opposition
High Real Estate Costs
The APMC Act
mandated sales in
government-owned
mandis, leading to
inefficiencies, waste,
and preventing
MCC from selling
agricultural
commodities.
Unpredictable
political shifts and a
slow bureaucratic
system. For
instance, finding a
store site took at
least two years in
India compared to
one year in other
countries like Russia
and China.
Local groups
questioned Metro's
value proposition for
India, leading to
protests and
challenges in
operations.
Soaring land prices,
especially in cities
like Mumbai and
Bangalore, required
innovative
approaches to store
formats.

12. Innovative Store Formats
Due to high land prices, consider
vertical (multistory) stores or other
flexible formats to offset real estate
costs.
Customer Education and
Engagement
Emphasizing the distinction
between MCC's wholesale model
and typical hypermarkets to
address public perception and
opposition.
Engage with the Government
Leverage reforms like the Model
Law to encourage private-sector
participation and work around the
restrictions of the APMC Act.
Expansion to Multiple Locations
Considering expanding to multiple
locations within the country, such
as Kolkata and Hyderabad, to tap
into different markets and diversify
the customer base.
Solutions

13. Learnings from the case

14. MCC Company
Thank
you!