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Daya retail Daya retail Presentation Transcript

  • RETAIL INDUSTRY IN INDIA
  • PRESENTED BY …..
    • DAYANAND KESHRI
    • SUJEET KUMAR RAJWAR
    • DIPAK KAKATI
    • RANJIT KUMAR
  • PLAN OF PRESENTATION
    • Introduction
    • Industry revolution
    • Unorganised vs organised
    • Segment analysis
    • PESTEL Environment
    • PORTER’S five force
    • Opportunity of Retail Sector
    • THREAT OF Retail Sect
  • INTRODUCTION
    • Retailing , the last link in the chain of production,
    • which begins at the stages, moves through
    • manufacturing, and ends in the distribution
    • of goods and services to the final consumer.
    • Retailer: A retailer is a person, agent ,agency, company, or
    • organization which is instrumental in reaching the
    • goods, merchandise, or services to the ultimate
    • consumer.
  • INTRODUCTION
    • THE MARKET SHARE OF INDIAN RETAIL INDUSTRY IS ABOUT US $312 BILLION
    • Retail Industry in india contribute 10% to countries GDP and around 8% of the employment
    • the Organised Retail sector expected to grow US $ 70 billion by 2010.
  • Industry Evolution
    • Traditionally retailing in India can be traced to
      • The emergence of the neighborhood ‘Kirana’ stores catering to the convenience of the consumers
      • Era of government support for rural retail: Indigenous franchise model of store chains run by Khadi & Village Industries Commission
    • 1980s experienced slow change as India began to open up economy.
    • Textiles sector with companies like Bombay Dyeing, Raymond's, S Kumar's and Grasim first saw the emergence of retail chains
    • Later Titan successfully created an organized retailing concept and established a series of showrooms for its premium watches
    • The latter half of the 1990s saw a fresh wave of entrants with a shift from Manufactures to Pure Retailers.
    • For e.g. Food World, Subhiksha and Nilgiris in food and FMCG; Planet M and Music World in music; Crossword and Fountainhead in books.
    • Post 1995 onwards saw an emergence of shopping centers,
      • mainly in urban areas, with facilities like car parking
      • targeted to provide a complete destination experience for all segments of society
    • Emergence of hyper and super markets trying to provide customer with 3 V’s - Value, Variety and Volume
    • Expanding target consumer segment: The Sachet revolution - example of reaching to the bottom of the pyramid.
    • At year end of 2000 the size of the Indian organized retail industry is estimated at Rs. 13,000 crore
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  • Unorganized Retail Vs Organized Retail
    • Unorganized Store
    • Characteristics: Small store, household business generally employing family member
    • Driving factors: Unplanned purchases, round the corner location, consumers purchase perishable goods like milk and curd, home-delivery, monthly accounts, discounts to regular customers, familiarity with the store for years
  • ORGANISED VS UNORGANISED RETAIL CONTINUE…….
    • Discounted Small-stores( Organized Retail)
    • Characteristics: Comparatively large, shelving branded products, approximately 15 employees per 2,000 sq ft
    • Driving factors: Planned purchase, availability of several brands of a particular product, discounts, deals, ambience, visual merchandising
  • Segment analysis of retail sector
    • Food and grocery retail
    • Apparel retail
    • Music retail
    • BOOK RETAIL
    • Consumer durable retails
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  • PESTEL Environment
    • Political environment
    • Economical environment
    • socio-cultural environment
    • Technological environment
    • Ecological environment
    • Legal environment
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  • POLITICAL ENVIROMENT
    • CURRENT GOVERNMENT IN INDIA
    • GOVERNMENT POLICY
    • TAXATION POLICY :
    • 100% deduction of profits and gains for ten years is available in respect of the following:
    • Any undertaking which develops, operates, maintains an Industrial Park or Special Economic Zone before 31.3.2006.
    • Notified Industrial Undertakings set up in the North Eastern region including seven north-eastern states and the state of Sikkim.
    • 100% deduction from income for first five years and 30% for persons other than companies: 25% in subsequent five years is available in respect of the following:
  • POLITICAL ENVIROMENT
    • Undertakings which begin to operate cold chain facilities for agricultural produce before 31.3.2003.
    • Undertakings engaged in the business of handling, storage, transportation of food grains.
    • 50% deduction for a period of five years is available to undertakings engaged in the business of building, owning and operating multiplex theatres or convention centres constructed before 31.3.2005.
    • EXCISE DUTY:
    • Excise duty on most commodities ranges between 0 to 16%. Only on seven items duty is imposed at 32%, viz., motor cars, tyres, aerated soft drinks, air conditioners, polyesters filament yarn, pan masala and chewing tobacco. Duty is charged at 30% on petrol with additional excise duty at Rs. 7 per litre. The said rates are subject to exemptions and deductions thereon as may be notified from time to time. Central VAT (CENVAT) is applicable to practically all manufactured goods, so as to avoid cascading effect on duty.
    • CUSTOM DUTY : R&D imports - 5% customs duty
  • POLITICAL ENVIROMENT
    • Contravention of provisions of this Act, Rules, Orders and Export and Import Policy: (1) No export or import shall be made by any person except in accordance with the provisions of this Act, the rules and orders made thereunder and the Export and Import Policy for the time being in force. (2) Where any person makes or abets or attempts to make any export or import in contravention of any provision of this Act or any rules or orders made thereunder or the Export and Import Policy, he shall be liable to a penalty not exceeding one thousand rupees or five times the value of the goods in respect of which any contravention is made or attempted to be made, whichever is more. (3) Where any person, on a notice to him by the Adjudicating Authority, admits any contravention, the Adjudicating Authority may, in such class or classes of cases and in such manner as may be prescribed, determine, by way of settlement, an amount to be paid by that person.
  • POLITICAL ENVIROMENT (4) A penalty imposed under this Act may, if it is not paid, be recovered as an arrear of land revenue and the Importer-Exporter Code Number of the person concerned, may, on failure to pay the penalty by him, be suspended by the Adjudicating Authority till the penalty is paid. (5) Where any contravention of an provision of this Act or any rules or orders made thereunder or the Export and Import Policy has been, is being, or is attempted to be made, the goods together with any package, covering or receptacle and any conveyances shall, subject to such requirements and conditions as may be prescribed, be liable to confiscation by the Adjudicating Authority. (6) The goods or the conveyance confiscated under sub-section (5) may be released by the Adjudicating Authority, in such manner and subject to such conditions as may be prescribed, on payment by the person concerned of the redemption charges equivalent to the market value of the goods or conveyance, as the case may be.
  • POLITICAL ENVIROMENT
    • FDI(FOREIGN DIRECT INVESTMENT):
    • 100 per cent FDI is allowed in cash-and-carry wholesale formats. Franchisee arrangements are also permitted in retail trade.
    • 51 per cent FDI is allowed in single-brand retailing.
    • Export and Import Policy:
    • Importer-Exporter Code Number: No person shall make any import or export except under an Importer-Exporter Code Number granted by the Director General or the officer authorised by the Director General in this behalf, in accordance with the procedure specified in this behalf by the Director General.
  • FDI INFLOWS Sourse : business standard 21 jan 2010
  • FDI INFLOWS
    • According to the current norms, any FDI infusion, irrespective of its size, into projects worth above Rs 600 crore requires a formal clearance from CCEA after it passes through FIPB under the Ministry of Finance. This is mandated in Press Note 7.
  • POLITICAL ENVIROMENT
    • Giving of opportunity to the owner of the goods, etc:
    • No order imposing a penalty or of adjudication or of confiscation shall be made unless the owner of the goods or conveyance or other person concerned, has been given a notice in writing:- (a) informing him of the grounds on which it is proposed to impose a penalty or to confiscate such goods or conveyance; and (b) to make a representation in writing within such reasonable time as may be specified in the notice against the imposition of penalty or confiscation mentioned therein, and if he so desires, of being heard in the matter .
    • Protection of action taken in good faith: No order made or deemed to have been made under this Act shall be called in question in any court, and no Suit, prosecution or other legal proceeding shall lie against any person for anything in good faith done or intended to be done under this Act or any order made or deemed to have been made there under
    • The Imports and Exports (Control) Act, 1947 ( 18 of 1947 ) and the Foreign Trade (Development and Regulation) Ordinance 1992 are hereby repealed.
  • POLITICAL ENVIROMENT
    • The repeal of the Imports and Exports (Control) Act, 1947 shall, however, not affect, - (a) the previous operation of the Act so repealed or anything duly done or suffered thereunder; or (b) any right, privilege, obligation or liability acquired, accrued or incurred under the Act so repealed; or (c) any penalty, confiscation or punishment incurred in respect of any contravention under the Act so repealed; or (d) any proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, confiscation or punishment as aforesaid, And any such proceeding or remedy may be instituted, continued or enforced, and any such penalty, confiscation or punishment may be imposed or made as if that Act had not been repealed.
  • ECONOMIC ENVIRONMENT
    • Output
    • Employment
    • Price level stability
    • Monetary policy
    • Fiscal policy
  • Economic Environment
    • Fiscal Scenario : Net market borrowings of Government of Iidia reached Rs.2.98 lakh crore, in the first half of 2009-10 against Rs1.09 lakh crore in the same months of 2008-09. The RBI’s open market operations amounted toRs 57,487 during Apr-Sep 2009, less than the expected Rs80000 crore due to favorable liquidity conditions. Market Stabilisation Scheme unwinding was carried out to the tune of Rs.42,000 crore by Sep 30, 2009 .
  • Economic Environment
    • Retail trade contributes around 10-11% of India’s GDP and currently employs over 4 crore people. Within this, unorganized retailing accounts for 97% of the total retail trade
    • Retail trade, which has been a relatively easy business to enter with low capital and infrastructure needs, has acted as a refuge source of income for the unemployed.
    • India has the highest shop density in the world with 11 shops per 1000 persons, much higher than the European or Asian countries
    Interest Rate Growth Rate Inflation Rate Jobless Rate Current Account Exchange Rate 13.25% 7.90% 13.51% 7.32% -13 45.7750
  • Economic Environment Indicators Oct, 2008 Jul, 2009 Oct, 2009 Money Supply growth 20.9 20.0 18.9 Money Base growth 28.8 1.3 -4.0 Money Multiplier 4.44 5.4 5.5 Statutory Liquidity Ratio (SLR) 25.0 24.0 25.0 Cash Reserve Ratio (CRR) 9.0 5.0 5.0 LAF Repo rate 9.0 4.75 4.75 LAF Reverse Repo rate 6.0 3.25 3.25 Sectoral flow of credit (growth) Agriculture 18.6 24.5 25.6 Industry 32.9 21.2 17.9 Real 43.1 52.0 41.5 Housing 12.4 5.0 5.4 NBFCs 51.8 31.5 30.8 Overall 26.5 17.6 13.3
  • Economic Environment Major Items of India's Balance of Payments ( US$ million )     (2007-08) (PR) (2008-09) (P) April-June (2008-09) (PR) April-June (2009-10) (P) Exports 166163 175184 49120 38789 Imports 257789 294587 80545 64775 Trade Balance -91626 -119403 -31425 -25986 Invisibles, net 74592 89587 22406 20179 Current Account Balance -17034 -29817 -9019 -5808 Capital Account* 109198 9737 11254 5923 Change in Reserves# (+ indicates increase;- indicates decrease) -92164 20080 -2235 -115 Including errors & omissions; # On BoP basis excluding valuation; P: Preliminary, PR: Partially revised. R: revised SOURCE: Reserve Bank of India Report
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  • SOCIO-CULTURAL ENVIROMENT
    • QUICK FACTS ON INDIA DEMOGRAPHICS 1.POPULATION :102,86,10,328 2.POPULATION DENSITY :324 prsn/sq km 3.BIRTH RATE :2.2% 4.DEATH RATE :0.65% 5.TOTAL FERTILITY RATE :2.81/woman 6.LITERACY RATE :65.38 7.LIFE EXPECTANCY :68.59 8.SEX RATIO :933 9.UNEMPLOYMENT RATE :7.8%
    • REFERENCE(CENSUS REPORT)
  • SOCIO-CULTURAL ENVIROMENT.
    • Increasing urbanization
    • Life style changes
    • Indian clothing
    • Fairs and festivals of India
    • Indian wedding
  • SOCIO-CULTURAL ENVIRONMENT .
    • Population Demography :
    • 1.15 billion Indians to join consuming age by 2010
    • 55% of the Indian population will be under 20 years of age by 2015
    • 32% rise in urbanization by 2008
    • 10% annual growth in Retail market since 2000
    • 7% of the population is engaged in retailing
    • A booming US$ 300 billion retail market in India
    Source: www.factfile.aspx.htm
  • SOCIO-CULTURAL ENVIRONMENT
    • 5.5 retail outlets per 1000 population, highest in the world
    • 25-30% annual growth in retail loans and credit cards
    • Organized Retail is predicted to capture 15 - 20% market share by 2010. Though it is one of the least developed sectors, the Retail industry accounts for 10% of the GDP .
  • SOCIO-CULTURAL ENVIRONMENT Lifestyle indicators Source: www.factfile.aspx.htm
  • SOCIO-CULTURAL ENVIRONMENT Demographic and economic indicators Source www.factfile.aspx.htm
  • SOCIO-CULTURAL ENVIRONMENT Demographic and economic indicators Source www.factfile.aspx.htm
  • SOCIO-CULTURAL ENVIRONMENT Demographic and economic indicators Source www.factfile.aspx.htm
  • SOCIO-CULTURAL ENVIRONMENT Demographic and economic indicators Source www.factfile.aspx.htm
  • TECHNOLOGICAL ENVIRONMENT
    • Computer Systems Create a consolidated, scalable network that can be rolled out company-wide to reduce complicated upgrades
    • Multiplatform Storage Optimize the reliability, manageability, accessibility and performance of critical inventory and transactional data across all locations.
    • Identity & Access Management Create a centralized source for authentication and authorization to securely manage new hires and exits, headquarters and store personnel, as well as reduce opportunities for identity theft.
    • Enterprise Security. Create and implement technology to control access to all entry and exit points of your network.
    • New Technologies – RFID, GPS revolutionizing tracking and
    • controlling of movement of products.
  • TECHNOLOGICAL ENVIRONMENT
    • LITERACY RATE : 65.38%
    • Ecommerce, Customer Relationship Management (CRM) software, Enterprise Resource Planning (ERP) and Point of Sale (POS) systems are all vital to retail businesses.
    • Bar code reader ,Barcode, Automatic billing ,ATM Card ,Inventory management, Mail order .
    • SUPPLY CHAIN MANAGEMENT
    • INTERNET CONNECTION
    • Satellite/cable receiver
  • TECHNOLOGY
    • Technology has played a key role in retailers' efforts to compete in this volatile market. With e-tailing channels making its presence felt in India companies are using either their own web portal or are tying up with horizontal players like Rediff.com and Indiatimes.com to offer their products on the web 15 (www.alexa.com). IT has been used by retailers ranging from Amazon.com to eBay, in order to radically change the buying behavior across the globe 16 .
    • Retailers worldwide are looking forward to increase their IT spending by almost 15% in 2006, allocating almost half of this increase to application software with a particular focus on tools that facilitate multi-channel customer relationships, point of sale systems, strategic merchandising and supply chain management 17
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  • TECHNOLOGY
    • The last 2-3 years have seen several retailers ranging from F&B operations to discount clothing implementing supply chain management (SCM) solutions to improve core business processes such as global sourcing, distribution, logistics, innovations, transparency and visibility in financials and inventory, compliance and management of point of sale (POS) data. However, organized retailers have not taken well to the concept of 3PL (third party logistics) due to their apprehensions of losing control over the supply chain. Currently, the transportation is carried out partly by organized service providers and partly by truckers and local transporters
    • .In conclusion, it can be said that in order to deliver the levels of quality and service that consumers are demanding; the organized retailers are in a pressing need for a single enterprise wide IT platform to manage operations, which will become increasingly complex once the market expands.
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  • Legal
    • Shops & Establishment Act:
    • Municipal Corporation Act
    • . Drugs & Cosmetic Act,1940
    • Prevention of Food Adulteration Act
    • Agricultural Produce Marketing Committee Act
    • . Essential Commodities Act
    • Liquor License
    • Standards of Weights and Measures Act, 1976
    • The Copyright Act, 1957
  • LEGAL
    • .
    • 1. Shops & Establishment Act:
    • All retail outlets, shops and commercial establishments, carrying on any business or profession or rendering any service, are required to be registered under the Shops and Establishments Act.
    • .2 Municipal Corporation Act:
    • Any person, carrying on any trade, should obtain trade licenses from the State Muncipal Corporation Act. A separate trade license is prescribed for different range of products. In Karnataka, a food retailer is required to obtain nearly 7-8 licenses each, for installation and running of power driven machinery, like refrigerator etc, for sale of confectionery and bakery items, dairy products, chicken, fish and meat as well as the sale of edible oils, insecticides etc. It is, thus, absolutely necessary for the concerned authorities to take necessary steps to simplify and issue a single consolidated license for various ranges of products. Further, permission for display of hoardings, signage etc. is also required to be obtained under the Act and this is vastly different in each state.
  • LEGAL Drugs & Cosmetic Act,1940 The above Act specifies prohibitions on the sale of certain drugs, unless there is a valid prescription. Thus, all the drugs, which are not specified in the list of 'prescription drugs,' must be considered as non-prescription drugs
    • .
    • Prevention of Food Adulteration Act
    • The Prevention of Food Adulteration Act, 1954 and Rules specify food adulteration/contamination norms and permissible ingredients, keeping consumer health and safety in mind.
    • Agricultural Produce Marketing Committee Act
    • In many states, the state government is empowered to notify any agricultural produce, under the provisions of the State Agriculture Produce Marketing (Regulation) Act for the purpose of regulation of marketing activities
  • LEGAL
    • Essential Commodities Act
    • Retailers, dealing with private label products, should comply with the number of quality control orders, issued under Essential Commodities Act that are mandatory and primarily meant for regulating the hygienic conditions.
    • Liquor License:
    • States vary as to their treatment of liquor and there are restrictions on the sale of alcoholic beverages. The alcoholic beverages sector under the Constitution is a State subject and accordingly, States/UTs frame their own policies/taxation regime.
    • . Standards of Weights and Measures Act, 1976,
    • Packaging laws and regulations are mainly covered under this Act, specifying the quantity and package-labeling regulations for all products
  • LEGAL
    • . The Copyright Act, 1957
    • The retail outlets that play pre-recorded music in the form of Gramophone Records, Music Cassettes or CDs are required to obtain a license from the Phonographic Performance Limited (PPL) Also, the Indian Performing Right Society 's (IPRS) license is necessary for any public performance of the copyright music under its control, regardless of the nature of the entertainment or the kind of premises at which the performance takes place and irrespective of whether a charge for admission is made.
  • LEGAL ENVIRONMENT
    • The Health and Safety at Work Act
    • Provide and maintain plant and systems of work that are safe and without risks to health. Plant covers any machinery, equipment or appliances including portable power tools and hand tools.
    • ) Provide such information, instruction, training and supervision to ensure that employees can carry out their jobs safely.
    • Ensure that any workshop under his control is safe and healthy and that proper means of access and egress are maintained, particularly in respect of high standards of housekeeping, cleanliness, disposal of rubbish and the stacking of goods in the proper place.
  • LEGAL ENVIRONMENT Under Section 8 of the Act the employer:
    • Provide and maintain a safe workplace which uses safe plant and equipment
    • Prevent risks from use of any article or substance and from exposure to physical agents, noise and vibration
    • Prevent any improper conduct or behavior likely to put the safety, health and welfare of employees at risk
    • Provide instruction and training to employees on health and safety
    • Provide protective clothing and equipment to employees
    • Appointing a competent person as the organization's Safety Officer
  • LEGAL ENVIRONMENT Employees’ duties:
    • To take reasonable care to protect the health and safety of themselves and of other people in the workplace
    • Not to engage in improper behavior that will endanger themselves or others
    • Not to be under the influence of drink or drugs in the workplace
    • To undergo any reasonable medical or other assessment if requested to do so by the employer
    • To report any defects in the place of work or equipment which might be a danger to health and safety
  • LEGAL ENVIRONMENT Health and safety leave:
    • Under Section 18 of the Maternity Protection Act 1994 if neither of these options is possible, the employee should be given health and safety leave from work, which may continue up the beginning of maternity leave. If a doctor certifies that night work would be unsuitable for a pregnant employee, the employee must be given alternative work or health and safety leave.
    • Violence in the workplace
    • The possibility of violence towards employees should be addressed in the safety statement. For example, factors like the isolation of employees and the presence of cash on the premises need to be taken into account. Proper safeguards should be put into place to eliminate the risk of violence as far as possible and the employee should be provided with appropriate means of minimising the remaining risk, for example, security glass.
  • LEGAL ENVIRONMENT
    • Harassment
    • The Employment Equality Acts 1998-2008 place an obligation on all employers in Ireland to prevent harassment in the workplace . Under this law, you are entitled to bring a claim to the Equality Tribunal and your employer may be obliged to pay you compensation if you are harassed by reason of your gender, marital status, family status, sexual orientation, age, disability, race, religious belief or membership of the Traveler community.
    • Victimization
    • Under the Safety, Health and Welfare at Work Act 2005 the employee may not be victimized for exercising his or her rights under safety and health legislation such as making a complaint
  • LEGAL ENVIRONMENT
    • Regulations and Management of Foreign Exchange
    • Without the permission of Reserve Bank of India no person can:
    • Deal or transfer any foreign exchange or foreign security to any unauthorized person
    • Make any payment in any manner to any person who resides outside India. No payments can even be made for the credit of the particular person.
    • Receive any payment on behalf of a person residing outside India through an authorized person.
    • Enter into any sort of financial transaction in India to acquire any asset outside India by any person.
    • Acquire, hold, own, possess or transfer any foreign exchange, foreign security or any immovable property situated outside India.
  • LEGAL ENVIRONMENT
    • Powers of Reserve Bank Of India
    • Transfer or issue of any foreign security by a person resident in India;
    • Transfer or issue of any security by a person resident outside India;
    • Transfer or issue of any security or foreign security by any branch, office or agency in India of a person resident outside India;
    • Any borrowing or lending in foreign exchange in whatever form
    • Any borrowing or tending in rupees in whatever form or by whatever name called between a person resident in India and a person resident outside India;
    • Deposits between persons resident in India and persons resident outside India;
    • Export, import or holding of currency or currency notes;
    • Transfer of immovable property outside India, other than a lease not exceeding five years, by a person resident in India;
    • Acquisition or transfer of immovable property in India, other than a lease not exceeding five years, by a person resident outside India;
  • LEGAL ENVIRONMENT
    • Export of Goods and Services
    • Exporter should furnish to the Reserve Bank or to such other authority a declaration in such form and in such manner as may be specified, containing true and correct material particulars.
    • RBI ensures the realization of the export proceeds by exporters, so the exporters shoals furnish to the bank all the relevant information required.
    • Every exporter of services shall furnish to the Reserve Bank or to such other authorities a declaration in such form and in such manner as may be specified, containing the true and correct material particulars in relation to payment for such services.
  • Environmental Policy In India
    • MI Builders Pvt. Ltd. v. Radhey Shyam Sahu, AIR 1996 SC 2468: a city development authority was asked to dismantle an underground market built beneath a garden of historical importance.
    • CFC,CH4,CO2,PLASTIC BAG
    • PILs & Supreme Court judgments eg CNG   State or City Rules : Plastic carry-bags
    • banned in Sikkim, parts of West Bengal,
    • Nilgiris Dt, Shimla, all of Bangla Desh  
    • It has excellent environmental laws, but politics and / or corruption prevent their effective implementation.
  • Ecologicl environment Legislative Framework
    • Water (Prevention and Control of Pollution) Act, 1974
    • Water (Prevention and Control of Pollution) Cess Act, 1977
    • Air (Prevention and Control of Pollution) Act, 1981
    • Atomic Energy Act of 1982
    • Motor Vehicles Act ,1988
    • The Wildlife (Protection) Act, 1972
    • The Forest (Conservation) Act, 1980
    • Environment (Protection) Act, 1986 (EPA)
    • The National Environment Appellate Authority Act, 1997
    • Public Liability Insurance Act (PLIA), 19
  • PORTERS
  • PORTERS
    • Threat of New Entrants.   One trend that started over a decade ago has been a decreasing number of independent retailers. Walk through any mall and you'll notice that a majority of them are chain stores. While the barriers to start up a store are not impossible to overcome, the ability to establish favorable supply contracts, leases and be competitive is becoming virtually impossible. Their vertical structure and centralized buying gives chain stores a competitive advantage over independent retailers.
    • Bargaining Power of Suppliers .  Historically, retailers have tried to exploit relationships with suppliers. A great example was in the 1970s, when Sears sought to dominate the household appliance market. Sears set very high standards for quality; suppliers that didn't meet these standards were dropped from the Sears line. You could also liken this to the strict control that Wal-Mart places on its suppliers. A contract with a large retailer such as Wal-Mart can make or break a small supplier. In the retail industry, suppliers tend to have very little power.
  • PORTERS
    • Bargaining Power of Buyers.   Individually, customers have very little bargaining power with retail stores. It is very difficult to bargain with the clerk at Safeway for a better price on grapes. But as a whole, if customers demand high-quality products at bargain prices, it helps keep retailers honest.
    • Availability of Substitutes . The tendency in retail is not to specialize in one good or service, but to deal in a wide range of products and services. This means that what one store offers you will likely find at another store. Retailers offering products that are unique have a distinct or absolute advantage over their competitors.
    • Competitive Rivalry.   Retailers always face stiff competition. The slow market growth for the retail market means that firms must fight each other for market share. More recently, they have tried to reduce the cutthroat pricing competition by offering frequent flier points, memberships and other special services to try and gain the customer's loyalty
  • PORTERS
    • BARGAINING POWER OF SUPLIER :-Large Indian players like Reliance, Ambanis, K Rahejas, Bharti AirTel, ITC and many others are making significant investments in this sector leading to emergence of big retailers who can bargain with suppliers to reap economies of scale. Hence, discounting is becoming an accepted practice.
    • DEMANDING OF CUSTOMER :-Indians have grown richer and thus spending more on vehicles, phones and eating out in restaurants. The spending is focused more outside the homes, unlike in other Asian countries where consumers have tended to spend more on personal items as they grow richer 7 . Spending on luxury goods have increased twice as fast with 2/3 of India's population is under 35, consumer demand is clearly growing.
    • FACTOR CONDITION: Land,Labour,Capital Management, Technology
  • RIVALARY
    • Birla Retail Limited Arvind Brands Ltd. Avenue Supermarts Pvt. Ltd. (D-Mart) Bharat Petroleum Corporation Ltd. Classic Fashions Damas Goldfields Jewellery Pvt. Ltd. Ebony Retail Holdings Ltd. G R Thanga Maligai Gini; Jony Globus Stores Guardian Lifecare Ltd. Heritage Foods (India) Ltd. Infiniti Retail Ltd. ITC Ltd – LRBD Kalanjali Arts & Crafts Kewal Kiran Clothing Pvt. Ltd. Kirtilal Kalidas & Co. Koutons Retail India Ltd. Lakewood Malls Pvt. Ltd. (Haiko) Levi Strauss (India) Pvt. Ltd. McDonald's India (West & South) MnM Marketing Private Ltd. (MnM)
    Cafe Coffee Day Barista Pantaloon Group Provogue Trent (Westside) Shoppers Stop Murjani Group Escada Group Arvind Brands Life Style Group McDonalds Titan Tanishq
  • OPPOTUNITIES
    • Retail industry in INDIA accounting 10% of the country’s GDP.
    • INDIA’S population is the 2 nd largest with the youngest demographic .
    • INDIA’S GDP is around 8.
    • Successive Indian government have steadily Liberalize policies related to investment, banking, trading etc.
    • URBANISATION caused more concentration of middle income and high income people.
    • .Hypermarket is emerging as the most favorable format for the time being in India
    • Increasing workforce of women: .
    • India is the world’s 4th largest economy in terms of Purchasing Power Parity
    • Ready availability of real estate for large-scale development of retail
    • India is rated ahead of China on the Foreign Direct Investment Confidence Index (FDICI) making it an attractive retail market in the world.
  • OPPORTUNITY
    • Low share of organized retailing
    • Falling real estate prices
    • Increase in disposable income and customer aspiration
    • Increase in expenditure for luxury items
  • OPPORTUNITY
  • THREATS
    • Automatic approval is not allowed for foreign investment in retail.
    • Regulations restricting real estate purchases, and cumbersome local laws.
    • Taxation, which favours small retail businesses.
    • Absence of developed supply chain and integrated IT management.
    • Lack of trained work force.
    • Low skill level for retailing management.
    • Lack of Retailing Courses and study options
    • Intrinsic complexity of retailing – rapid price changes, constant threat of product obsolescence and low margins.
  • CONCLUSION
    • Retail sector creating lots of opportunity for the indian people
    • As per the opportunity increasing threat is also affecting this opportunity
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