vis-à-vis
CULTURE,VALUES as key forces in shaping STRATEGY
and developing
COMPETENCIES …
Paras Deshpande

AGENDA
• Look out for differences and similarities in
WAL MART and Big Bazaar.
• Look if strategy was shaped because of Value
and necessity.
• Appreciate the unique Indian-ness Kishore
Biyani has employed in retail chain buisness.

WALMART
• Sam Walton started as a
specialty store owner of Ben
Franklin franchise stores.
• He was forty‐four when we
opened first Wal‐Mart in
1962.

Opening the first WalMart
• We really had only two choices left: stay in the
variety store business; or open a discount store.
•Many of our best opportunities
were created out of necessity.
The things that we were forced
to learn and do, because we
started out in these remote,
small communities.

EarlyTimes
• In the early days of Wal‐Mart the emphasis on item
promotion helped us to make up for a lot of
shortcomings we had—an unsophisticated buying
program, a less than ideal merchandise assortment,
and practically no back‐office support.
• Early periods were marked by extensive benchmarking
to such a level that managers lived half of the time in
competitors stores.

StrategicNotes
• I think that misunderstanding worked to our advantage
for a long time, and enabled Wal‐Mart to fly under
everybody's radar until we were too far along to catch.
• But while the big guys were leapfrogging from large
city to large city, they became so spread out that they
left huge pockets of business out there for us.
• Our growth strategy was born out of necessity, but at
least we recognized it as a strategy pretty early on. We
figured we had to build our stores so that our
distribution centers, or warehouses, could take care of
them, but also so those stores could be controlled

OperationsManagement
Getting an early start on all
these systems, building a
foundation for our
distribution centres
development, starting to put
data processing into the
stores, really saved our bacon
later on.

CreatingCulture
• Wal‐Mart is not a big success merely because we
grew up out here in the country, where people
are just naturally friendly and therefore make
great retail employees. It's true that we have
many fine associates from the country, but they
have had to enter our culture and learn retailing
just like anybody else, and we have spent a good
deal of time teaching many of them to overcome
their natural shyness and learn to speak up and
help our customers.

NEXT THE INDIAN CONTEXT

Raja of Indian Retail
• Born in a middle class trading
family, Kishore Biyani started
his career selling stone wash
fabric as trader.
• His objective is to capture
every rupee in the wallet of
Indian consumer.
• He is concentrating not just on
retail but his ambitions span
over full consumer space.
• With the launch of Pantaloons,
Big Bazaar, Food Bazaar,
Central he has redefined the
retailing business in India

Kishore Biyani KB
Views, Value and Vision.
• There are three kinds of entrepreneurs - Creators,
preservers and destroyers.
• He considers himself as both creator and destroyer at the
same time. Preserving the status-quo has never been the
cup of his tea.
• He strongly believes none of his business will ever cater to
the elitist class.
• In the current era of knowledge economy Ideas will be the
greatest assets of a company. Organizations that allow
insights and information to flow freely will be the ones to
come out as winners.

Indian Consumer and 3C’s
• The changing demographic profiles, globalization,
increasing income levels, urbanization,
technology, and a free flow of ideas from within
and outside is bringing about dramatic shift in
consumer tastes and preferences.
• Underlying these trends there are tow
undercurrents that are sweeping through young
India – CONFIDENCE & CHANGE.
• These two have the potential to tweak an
unprecedented era of CONSUMPTION.

Indian Consumer
• The younger India is expected to embrce the
values of family and continue and live the Indian
way.
• Therefore it is imperative to attract and deliver
the consumer understanding and interpreting
the ‘Indian-ness’ quotient of the consumer.

Indian Consumer Space
Consuming class [ 14% ] – High disposable income
Serving class [ 50%] – Drivers, cleaners etc. They
serve the consuming class.
Struggling Class – Live a hand to mouth existence.
•Also the consumer class and serving class never shop at the same
stores.
•Serving class feels comfortable in crowds and chaos and hesitates
even to enter the specialty stores.

Indian Consumer Space continued
• By 2010, almost half of our citizens will be working
age group of twenty to fifty four years . A youthful,
exuberant generation, bred on success will not only
drive productivity but also set a spiraling effect on
consumption and income generation
• As retailers, we have not only to acknowledge this
change but remain ahead of evolution curve, not to
mention be an agent of change.

Catering the Indian Consumer
• Indian consumer needs indigenous solutions to her
shopping needs –that give her best value for money
in an environment she is comfortable with..
While designing our Big Bazaar
the core idea was to merge the
look and feel of ‘mandis’ with
modern retail’s features like
quality, choice and convenience.

Catering the Indian Consumer
• The Indian consumer has her
peculiar preferences when it
comes to staple food. She
would like to touch, feel the
grains for herself before she
would buy them. It is hence
at Food Bazaar staples are
sold loose.

Catering the Indian Consumer
• Abroad hypermarkets are typically designed on box
type formats, shoppers abroad usually shop alone
and it isn't considered an exciting activity.
• For Indians shopping is entertainment, they come
with entire family and move in groups.
The U shaped sections
proved to be more
appropriate than the long
aisles of western
hypermarket.

Catering the Indian Consumer
• Shopping in India is a local experience and
habit. It is therefore imperative to understand
each and every community and make the
decisions on the grass root insights acquired.
• Also it has set up Big Bazaar in key real estate
location in heart of important cities, which can
be leveraged in the long run.

Modus Operandi
• Retail stores need to drive sales and not be sales
driven.
• KB is of a strong philosophy that the retailers job is to
create demand and the supply chain will follow out
of necessity.
• By focusing on customers we have managed to keep
our business simple and agile.
• Local sourcing has been adopted as centralized
processes may not be viable of a diverse country as
India.

Modus Operandi
• Although because of the value proposition and
scarcity of organized retail might have given Big
Bazaar the luxury to sideline operations, it is
expected to take the center stage as the format
scales up.

New Formats
• Central
A mall with virtually no walls to
separate different store. The
brands pay a percentage of their
sale to proprietor and the owner
gets to decide which brands to
keep.
• Specialty retail stores.
• KB’s Wholesale Market.

Allied ventures

Five Force Analysis : Competitors
• Buyer’s switching
cost is low
• Firm can adjust
prices quickly
• Price elasticity of
demand demand

Five Force Analysis : Entrants
• Use strong cash flows
• FDI from other sectors.
• Big Business houses • Have network capabilities.
• Sourcing capabilities.

Five Force Analysis : Suppliers
•Locally sourced suppliers. • Local Supplies
•Big companies like P&G &
provide flexibility.
HUL.
• Contracts with large
•Home grown brands like
firms provides
D&G John Miller.
efficiency.

Five Force Analysis : Customers
• Low switching cost
• Transportation cost
• Because of wider product offering the customer will not
have options in every segment.

SWOT Analysis
STRENGHT WEEKNESS
• High Brand Equity • Falling Revenue/ Sq Ft.
• Every Day Low price [ EDLP ] • Unable To Meet Store Opening
• Real estate and Infrastructure Target
•Understanding Consumer • Perception Amongst Consumers
Preferences
OPPORTUNITIES THREATS
•Targeting Area More Prone To • Competitors domestic and foreign
• Economic Conditions
Development
•In Store Experience Improvements
•New formats and consumption
space

References
• IT Happened In India : Kishore Biyani.
• Made In America : Sam Walton.
• Flowingdata.com .
• Google Image Search.

TAG CLOUD
Change is no more incremental its TRANSFORMATIONAL