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18687956 retail-sector-in-india-a-case-of-big-bazaar

  1. 1. An FINAL REPORT OF MANAGEMENT THESIS- II On “To study the growth of Retail sector in India: A Case of Big Bazaar” -: SUBMITTED BY:- Mr. Avinash Chandrakant Silimkar INC VASHI 7NBMN002 IN THE PARTIAL FULFILLMENT OF THE “MASTER OF BUSINESS ADMINISTRATION’’ -: UNDER GUIDANCE OF:- Dr. MEENA VAZIRANI -: SUBMITTED TO:- ICFAI NATIONAL COLLEGE, VASHI 2007-09 INRERIM REPORT Page 1
  2. 2. DECLARATION I hereby declare that the Initial Report entitled “An Analytical Study of the Development of Retail Marketing in India : A Case of Big Bazaar” submitted for Management Thesis-II , under the supervision & guidance of Dr. Meena Vazirani, in partial fulfillment of MBA, ICFAI National College, Vashi. Place: Vashi Name: Mr. Jayesh Parte Date: 18/12/2008 INRERIM REPORT Page 2
  3. 3. CERTIFICATE This is to certify that the Management Thesis titled ___________________________________ ______________________________________________________________________submitted by_____________________________________ Enroll No: _____________________________ during Semester _________ of the MBA Program (The Class of 2009) embodies original work done by him. Signature of the Faculty Supervisor Name (in Capitals) : ____________________________________________ Designation : ____________________________________________ Campus : ____________________________________________ INRERIM REPORT Page 3
  4. 4. TABLE OF CONTENTS PAgE SR.NO PARTICULARS NO 1 ACKNOWLDgEMENT 5 2 LIST OF TABLES & ILLUSTRATIONS 6 3 ABBREVIATIONS 7 4 INTRODUCTION 8 5 OBJECTIVE 12 6 RESEARCH METHODOLOgY 14 9 FINDINg & SUggESTIONS 19 10 COMPANY PROFILE 33 11 SUMMARY 42 12 CONCLUSION 43 13 REFERANCES 44 INRERIM REPORT Page 4
  5. 5. ACKNOWLEDgEMENT I took this opportunity to express my gratitude to all those who have helped me to make this project a success. I would like to thankful my Dr. Meena Vazirani who helped and guided me throughout the development of the project, He provided me all kind of information, and inspired me to complete the project successfully. I am also thankful to Principal for his valuable support & guidance. I would like to thank everyone who contributed for the success of this project. I must thank them whose valuable guidance makes it so simple and support me during the project development directly or indirectly. INRERIM REPORT Page 5
  6. 6. LIST OF TABLES & ILLUSTRATIONS Sr. no PARTICULARS PAGE NO Pie chart 08 1 2 Tables 23 & 24 3 Picture 19 & 21 INRERIM REPORT Page 6
  7. 7. ABBREVIATIONS  SWOT: strength weakness opportunities threats  Porters 5 force model  1 threat of new entrant  2 the bargaining power of buyers  3 the bargaining power of suppliers  4 the rivalry among existing players  5 the threat of substitute products  GDP: gross domestic product  FMCG: Fast moving consumer goods  PRIL: Pantaloon Retail India Limited INRERIM REPORT Page 7
  8. 8. INTRODUCTION The Indian Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centers, multi- storied malls and huge complexes offer shopping, entertainment and food all under one roof. The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. Retail and real estate are the two booming sectors of India in the present times. And if industry experts are to be believed, the prospects of both the sectors are mutually dependent on each other. Retail, one of India’s largest industries, has presently emerged INRERIM REPORT Page 8
  9. 9. as one of the most dynamic and fast paced industries of our times with several players entering the market. Accounting for over 10 per cent of the country’s GDP and around eight per cent of the employment retailing in India is gradually inching its way toward becoming the next boom industry. As the contemporary retail sector in India is reflected in sprawling shopping centers, multiplex- malls and huge complexes offer shopping, entertainment and food all under one roof, the concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. This has also contributed to large-scale investments in the real estate sector with major national and global players investing in developing the infrastructure and construction of the retailing business. The trends that are driving the growth of the retail sector in India are • Low share of organized retailing • Falling real estate prices • Increase in disposable income and customer aspiration • Increase in expenditure for luxury items (CHART) INRERIM REPORT Page 9
  10. 10. Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. INRERIM REPORT Page 10
  11. 11. 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 INRERIM REPORT Page 11
  12. 12. • 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. OBJECTIVE To perform a Management Thesis there must be certain objectives in front of the student, which will show a specific way to work on Management Thesis. In reality objectives is nothing but a part of future planning and effective planning is half work done, when we see objectives for working on Management Thesis we can effectively utilize our strength, time and tem management. For the betterment of Management Thesis I also set some objectives in front of me, this proved very helpful in Management Thesis. I have performed work according these objectives. The objectives, which we have selected, are as bellow. 1. To identify and understand the significance of retailing in the current business environment 2. To develop guidelines to build a retailing business 3. To identify the competition in the market and develop strategies for retailing business accordingly 4. To identify significant characteristics of the end consumer, understand its significance for the retailing business and develop strategies accordingly INRERIM REPORT Page 12
  13. 13. 5. To identify the paradigm shifts in retailing business with increasing scope of technology / e-business and develop strategies accordingly 6. To know the growth of retail industry with respect to big bazaar. 7. To know the factors affecting for retail industry. 8. To find the factors which are behind the change of Indian Retailing Industry? 9. To understand the benefits to customers, manufactures, wholesalers, and the economy from Retail sector. 10. To know about Big Bazaar. 11. To know about its competitors. 12. To know about its customers 13. To know about its Promoters & Organizational structure. 14. To know about its strengths, weaknesses, opportunities & threats. 15. To earn practical knowledge. 16. To analyze problems which I am facing while working on field. 17. To know about marketing strategies. 18. Last but not the least to know about retail business INRERIM REPORT Page 13
  14. 14. RESEARCH METHODOLOgY Research Plan obtain pioneer place while working on any project. So we go through the research plan. The research plan is as follows:- While working on our Management Thesis, the participation of manager, sales manager, marketing manager, auditor, employees, etc. & our professors enlighten the use of theoretical concepts in actual business world. Their views & suggestions proved very useful in the successful completion of our Management Thesis. We developed the research plan into various components:- A] Data sources B] Research instruments C] Sampling methods INRERIM REPORT Page 14
  15. 15. A] Data Sources 1) Primary data:- Primary data is collected from the locality of the coverage area. We have taken in to consideration the views of manager, sales manager, marketing manager, auditor, employees, etc. & our professors about the relevant subject & also pay attention towards their suggestions. Their suggestions are incorporated in the report. This data prepared the basis for the Management Thesis report. Beside of all this, some data is also collected by we ourselves. 2) Secondary data:- Same as above some data is collected from the media also. i) Newspapers ii) Magazines iii) Books on Management iv) Text books INRERIM REPORT Page 15
  16. 16. B] Research Instruments To collect the primary data for the Management Thesis, we have selected some questions in concern with the organization i.e. Big Bazaar. We used these questions as a research instruments for knowing the facts. These questions are as follows:- 1) Questions related to their marketing management. 2) Questions related to their capital. 3) Questions related to their investment. 4) Questions related to their turn over. 5) Questions related to their advertise expenditure. 6) Questions related to their interpersonal relations with Customers 7) Questions related to their competitors. 8) Questions related to their organizational structure. 9) Questions related to training & development of employers 10) Questions related to motivation. INRERIM REPORT Page 16
  17. 17. 11) Questions related to role of personal manager in the organization. C] Sampling Plan A sampling plan is most important to do Management Thesis successfully. The points considered in the sampling plan are as following:- I) Sampling Unit:- The staff of the organization including the managers of different departments and the employees was targeted for the Management Thesis. II) Sampling Quantity:- The sampling quantity was 24 & all are related with Big Bazaar. Apart from this we also considered some customers of Big Bazaar. iii) Coverage:- The coverage of the survey was whole organization i.e. Big Bazaar. INRERIM REPORT Page 17
  18. 18. INRERIM REPORT Page 18
  19. 19. LIMITATION Collection of data related to marketing strategy of Big Bazzar is a difficult task because this information is very rarely available with secondary resources therefore it requires more time and lot of efforts. INRERIM REPORT Page 19
  20. 20. FINDINgS AND SUggESTIONS Big Bazaar is planning to position itself as a value retailer after being hived off as an independent company within the Future Group. While a new company has been floated under the name of Future Hypermarket, the retailer is now considering a new name to represent its discount format. Speaking to Business Line, Mr. Rajan Malhotra, Chief Executive Officer, Big Bazaar, said, “Although we have registered a new company under the name of Future Hypermarket, we intend changing its name. Big Bazaar is not a hypermarket and is more of a value-for-money format and that is what the new company would stand for.” Currently, Big Bazaar contributes 64 per cent of the Future Group’s total turnover of Rs 7,000 crore. With its standalone status as a company, Big Bazaar is expecting to drive greater efficiencies in its back-end operations. As Mr. Malhotra says, “There would be clarity for the concept as we become a separate company. There would be back-end efficiency in our operations.” With amalgamation of formats under various heads ranging from Food Bazaar to Furniture Bazaar, Big Bazaar is looking at distinguishing itself as a ‘value’ retailer in its segment rather than being clubbed with the rest of the existing hypermarkets in the country. Besides, it is looking forward to re-launching its private label, DJ & C, as a national brand by giving the brand rights to Future Brands (the group vertical handling brands in the group). Targeting the youth segment, DJ&C is today worth Rs 200 crore in Bazaar’s kitty. “We intend re-launching it as a national brand through other retail outlets by the end of this month. We believe Big Bazaar has moved into a mature phase and that is a compelling reason to launch our youth brand at a national level. The DJ&C brand has crossed a turnover of Rs 200 crore and now has enough pull to take it to its next level,” states Mr. Malhotra. INRERIM REPORT Page 20
  21. 21. Having forged long-term relationships with a host of FMCG players through MoUs, Big Bazaar is open to new categories being tested through its formats. “We are open to the highest selling brands such as Pears and Dove opening the new age categories at our stores,” says Mr. Malhotra. Meanwhile, Big Bazaar has roped in cricketer and India ODI captain Mahendra Singh Dhoni as the brand ambassador for its extensive collection of fashion apparel. Pantaloon Retail (India) Limited, is India's leading retailer that operates multiple retail formats in both the value and lifestyle segment of the Indian consumer marker. Headquartered in Mumbai (Bombay), the company operates over 7 million square feet of retail space, has over 1000 stores across 51 cities in India and employs over 24,000 people. The company's leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and Central, a chain of seamless destination malls. Some of its other formats include, Depot, Shoe Factory, Brand Factory, Blue Sky, Fashion Station, all, Top 10, bazaar and Star and Sitara. The company also operates an online portal, futurebazaar.com. A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-format home solutions store, Collection i, selling home furniture products and E-Zone focused on catering to the consumer electronics segment. Pantaloon Retail was recently awarded the International Retailer of the Year 2007 by the US-based National Retail Federation (NRF) and the Emerging Market Retailer of the Year 2007 at the World Retail Congress held in Barcelona. Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire Indian consumption space. Future Group is one of the country's leading business groups present in retail, asset management, consumer finance, insurance, retail media, retail spaces and logistics. The group's flagship company, Pantaloon Retail (India) Limited operates over 7 million square feet of retail space, has over 1000 stores across 51 cities in India and INRERIM REPORT Page 21
  22. 22. employs over 24,000 people. Some of its leading retail formats include, Pantaloons, Big Bazaar, Central, Food Bazaar... INRERIM REPORT Page 22
  23. 23. Indian Retail Market and Growth of SMEs Source: Technopak Advisors The retail market in India is estimated at about US$ 410 billion and constitutes about 60% of private consumption and about 35% of India's GDP. With Indian GDP expected to grow at 7-8 % in the next coming years, the retail market is expected to touch US $860 billion by 2018. In recent years, this sector has witnessed a lot of interest from both domestic and global players, who have committed investments worth US $30 billion, which will lead to increase in the share of modern retail from the current 4.5% to almost 25% of the total retail market by 2018. INRERIM REPORT Page 23
  24. 24. The Indian retail market is the fifth largest retail destination globally. The current size of the Indian retail industry stands at $511 billion in 2008. Simultaneously, modern retail is likely to increase its share in the total retail market to 22 per cent by 2010. Organized retail in India raked in US$ 25.44 billion turnover in 2007-08 as against US$ 16.99 billion in 2006-07, a whopping growth rate of 49.73 per cent (according to the Credit Rating and Information Services of India). Organized retail has increased its share from 5 per cent of total retail sales in 2006 to 8 per cent in 2007. It is currently around 12 per cent. India has one of the largest numbers of retail outlets in the world. Of the 12 million retail outlets present in the country, nearly 5 million sell food and related products. Though the market has been dominated by unorganized players, the entry of domestic and international organized players is set to change the scenario. Per capita retailing space is about 2 sq. ft (compared to 16 sq. ft in the U S). India's per capita retailing space is thus the lowest in the world. Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA. Statistically, the global retail industry is witnessing a CAGR of 5.5% is slated to grow at the same rate till 2009. The following graph shows an overall trend of the global retail revenues. INRERIM REPORT Page 24
  25. 25. ANALYSIS OF THE SITUATION India is standing in the threshold of a retail revolution. The Indian consumer class consists of a 300 million strong bourgeoning middle-class, expected to grow to 600 million by 2010. Overall economic growth and increasing disposable incomes have boosted double-digit growth in consumer spending, enabling retail sales o grow by 50-100% in 2006. According to the India Retail Report 2007, total private consumption reached INR 20,000 billion at current prices in 2006. The share of organized retail stood at 4.6 per cent of the total Indian Retail Value of INR 12,000 billion ($270 billion). However, the organized sector is expected to grow at 35-40% in the next few years as compared to overall retail growth of 7-8%. The potential for introducing international brands, ability to make huge capital investment and ease of setting shop in India is luring foreign players to the industry. Thus, the retail sector will experience an influx of international retail models and quality outlets in the coming few years. Description of the concept Manufacturers can look at the following alternatives to increase sales volume: 1) Sales promotion and advertising in malls Most supermarkets and hypermarkets promote in-house offers to attract customers. They also spend a lot on visual display of promotions. These costs can be shared by the company, thus increasing their stake in the sales of the mall. a) Retail outlets will be supportive of sales promotion and advertising by companies inside malls for two reasons: - it increases sales of the entire category as such - it reduces burden on malls to attract/educate consumers towards particular products. INRERIM REPORT Page 25
  26. 26. For the FMCG companies, return on advertising in terms of increased sales (or market share) will be more pronounced due to point-of-purchase promotion. b) Manufacturers can share costs of advertising and make sections of the store more attractive in return for slightly lower margins to the retailers. They can set up small kiosks or shelves to display their own products. This involvement of the company in the operation of the mall will also help build a strategic relationship between the two. 2) Use malls to target niche segments Malls and supermarkets typically attract the middle and upper-middle class consumers who have considerable spending power as well as brand awareness. Thus manufacturers can use this channel effectively to launch specific variants of existing products or niche products for which they are able to Concept Paper Indian Institute of Management Ahmadabad attract a premium from such consumers. These products should be launched exclusively in the malls and not through Kirana stores. The presence of a larger product range will increase the attractiveness of shopping at a mall for the consumer, making it a win-win situation for both. INDIA’S RETAIL MARKET IS AT ITS PINNACLE AND IS DRAWINg HUgE ATTENTION FROM BOTH gLOBAL AND LOCAL RETAILERS. Reasons for India’s high growth rate in the retail sector are: • High growth rates- India’s GDP is projected to grow by more than 8 percent in fiscal year 2008; projections for 2009 are a more modest at about 7 percent • Untapped growth potential- Organized retail, which still accounts for less than 5 percent of the market is expected to grow at a compound annual growth rate (CAGR) INRERIM REPORT Page 26
  27. 27. of 40 percent to $107 billion by 2013. India’s overall retail sector is expected to rise to $833 billion by 2013 and to $1.3 trillion by 2018, at a CAGR of 10 percent. • Growing Purchasing Power- Consumer spending is on a sharp rise. In the last four years the consumer spending has grew by astounding 75 percent. This can be attributed to the significant rise in the disposable incomes of India’s young population. It has to be noted that more than 33 percent of Indian population is below the age of 15. BENEFITS OF RETAILINg Retailers play a major role in the transfer of goods and services from the manufactures to the end users. In this process retailer delivers many benefits to customers, manufactures, wholesalers, and the economy. Benefits to customers Retailers act as a buying agent for consumers. They perform various business activities that increase the value of the goods and the service they sell to the end users. As buying agents a retailer performs various activities to satisfy the end consumers. These activities include 19. Breaking bulk 20. Providing assortment 21. Holding inventory 22. Providing after sales services 23. Providing information INRERIM REPORT Page 27
  28. 28. Benefits to Manufactures and wholesalers Manufactures and wholesalers consider retailing as a channel for delivering their product /services to the end consumer. By selling services retailers provide the manufactures great revenue, which could be reinvested in production. Thus retailers play major role in smoothing out the variation between the production and sales of the manufactures product. Benefits to the economy The retailing business is the largest privet industry in the world with turnover of US $6.6 trillion. Retailing plays a crucial role in the management of world economy and retailers constitute a tenth of the fortune 500 companies. In INDIA retailing accounts for over 10% GDP and around 8% of the employment only next to the agriculture industry. INRERIM REPORT Page 28
  29. 29. AN ANALYTICAL STUDY OF THE DEVELOPMENT OF RETAIL MARKETINg IN INDIA: A CASE OF BIg BAzAAR THE PROCESS OF STRATEGIC MANAGEMENT A process in management is defined as a perceptible flow of information through interrelated stages of analysis directed towards the achievement of an aim. There are four basic elements in the process of strategic management; • Environmental scanning • Strategy formulation • Strategy implementation • Evaluation & control Environmental scanning: It involves monitoring the environment, & evaluating & disseminating information obtained from the internal & external environments. The aim of this is to identify the strategic factors that may determine the future of the firm. An organization derive several benefits from environmental scanning including the development of a common perception, identification of strengths & weaknesses, an understanding of trends & conditions, & optimum utilization of internal & external information. SWOT analysis is the most commonly used technique for environmental scanning. SWOT is an acronym for the strengths, weaknesses, opportunities & threats faced by a firm. Strengths & weaknesses are within the control of the top management in the long run. Opportunities & threats are external factors that are outside the control of the organization. The key strengths of the firm become the core competencies that the organization can use to gain competitive advantage. INRERIM REPORT Page 29
  30. 30. ENVIRONMENTAL SCANNINg FOR BIg BAzAAR INTERNAL SCANNING The SWOT analysis of Big Bazaar is as follows: Strengths:  The strengths of Big Bazaar are it is leading and growing at the faster pace.  It has many outlets all over India. It has a good customer base.  They launched Big-Bazaar a hypermarket with over 1, 70,000 products as the first offering in value retailing segment. Products are cheaper than the market price by as much as 5 to 60%.  Apparels are cheaper by 25 to 60% while the price difference on the other products varies between 5 to 20%.  The Big-Bazaar has been positioned to the customer as a place where the customer can shop for each & everything for which if goes to a market. Weakness:  Big Bazaar has not yet trapped the whole market.  Facing problems due to political environment Opportunities  Huge untapped market Threats  Competition from organized retail players which are in market and emerging like Reliance, shopper’s stop, Wal-Mart  Competition from local retailers. INRERIM REPORT Page 30
  31. 31. EXTERNAL ENVIRONMENTAL SCANNING Before Big Bazaar coming to India their strategy was to scan the environment & find the location where the Mall should be situated. It will also use various tools such as surveys for getting the preferences of big bazaar. We got the opinion that Big Bazaar sustain in the market or not, where it is situated. For gaining the opinions from the local people they will prepare the questionnaire and get it filled from the people. Then they will form a focus group for getting more and more of information. They can also adopt open forum strategy for environmental scanning. For that purpose we have prepared a questionnaire and collected the data. Analysis of political and legal factors: In India there is a political triangle this consist of the municipal corporation which belongs to Indira congress, the other is MLA which belongs to Shivsena and BJP and MP which belongs to the national congress. The congress political people are having contacts with common people and not much concerned with merchants but contradictory to this that the BJP and Shivsena they are having more concern about merchants of the city. As Municipal Corporation is in the hands of congress party and they are ready to have big bazaar in India that is the reason they are ready to provide some kind of perks to big bazaar they are as follows: • Subsidy from octroi, different taxes like land tax and water tax • Help in taking over properties and real estate • Some concessions from labor laws Socio-cultural factors: Now a days in India also proportion of working women’s is increasing and the literacy rate has also increased this will lead into increase in standard of living of INRERIM REPORT Page 31
  32. 32. people. As people are aware about western culture through various Medias they are very much eager to follow the western culture. People from talukas are coming to India as it is a district place for shopping, taking education, for working etc. this also creates demand. There is a majority of middleclass people in India and it is a most populated district consisting 13 talukas. The major communities in India city are Hindus, Muslims, Christians, Jain, Sindhi and Punjabi. Economic environment: As this district is having 13 talukas and most of them are having good agricultural base which ultimately leads to higher seasonal income. Another one is that most of the people who are residing in India they are engaged in various jobs and businesses they is the part of regular income group. So this will lead to higher purchasing power and a huge potential market. One more advantage to big bazaar coming to India is availability of cheap labor. From the external analysis we came to know that the people residing the India city are in the favor of Big Bazaar coming to India. The location preferred by them is Savedi as it is highly developed and accessible area to all the people. Strategy formulation: It refers to the development of long term plans for managing opportunities & threats in the external environment, & for utilizing the strengths & overcoming the weaknesses within the firm. A strategist takes into consideration components of strategic management like company mission, company profile, external environment strategic analysis & choice, long term objectives, grand strategy while formulating the strategy. Strategy formulation helps an organization to; INRERIM REPORT Page 32
  33. 33. • Capitalize on available opportunities. • Address the challenges faced by the organization. • Provide leadership that understands & masters change. • Incorporate an in-depth planning model that involves the community. STRATEGIC FORMULATION FOR BIG BAZAAR: Big Bazaar will form some strategies for the long-term goals. First of all it will find out what are the opportunities present in the market so that they can grab it so as to expand their business, trap a particular segment of people, and establish a good client base and to generate good revenues. They will also keep in mind the threats that they have from their competitors and also form the small grocery shops. They will find out some strategies to overcome the threat and to sustain in the market for a longer period of time. They will also try to utilize their strengths and overcome the weaknesses. INRERIM REPORT Page 33
  34. 34. COMPANY PROFILE Big Bazaar comes under the Pantaloon Retail India Limited (PRIL). PRIL was early to realize the potential of the huge middle-class population in India. We started the operations with a trouser brand, Pantaloon. In the initial stages we had small format outlets branded Pantaloon Shopee, which were franchise operations realizing the problems associated with franchise model, we decided to have our own retail outlets. They launched the own retail store, “Pantaloon’s”. In 1997, they launched Big-Bazaar a hypermarket with over 1, 70,000 products as the first offering in value retailing segment. They have introduced the concept of seamless malls in India through the new format Central. We have wide network of Pantaloons stores spread across the country. Hence, apart from retailing lifestyle products, it ventured into value retailing by launching the hypermarket chain. Big Bazaar is a chain that stocks all home need products under one roof; spread over 30,000 square feet of land, across different cities in India. It has been positioned as ‘Is se sasta aur acha kahin nahi,’ (Nothing cheaper and better anywhere) indicating the value of stores. Big Bazaar stocks over 200,000 products that include apparel, food products, home appliances and cosmetics. Products INRERIM REPORT Page 34
  35. 35. are cheaper than the market price by as much as 5 to 60%. Apparels are cheaper by 25 to 60%while the price difference on the other products varies between 5 to 20%. On Oct. 12, 2001, we launched ‘Big-Bazaar’ as offering in the value retailing segment. By removing inefficiencies from the distribution chain we are able to unleash attractive savings, which are passed on to the consumer. Big-Bazaar is India’s first hypermarket in the discount store format. Big-Bazaar provides more than 2,00,000 items- food, grocery, utensils, kitchen needs, home needs, bath needs, toys, stationary, electronics & white goods which are sold at a discount to the maximum retail price. Price is the principal value proposition at these stores. A big driver of the Big Bazaar is the product variety. This is achieved by selling wide range of products & through the “Shop-in-Shop” format. As a result, a typical Big- Bazaar comprises shops that stocks medicines, optical accessories, camera rolls, bakery products, dry fruits, crockery, glassware, health & beauty products, ladies accessories, electronics infant necessities, watches, clocks, computer accessories, food & beverages, stationary, readymade garments, household appliances, home furnishings, baggage We believe this is a win-win situation as the customer is assured of product availability, the shop owner can benefit of the in structure & we enjoy assured income without needing to stock inventory. Also the shop-in-shop offering is able to increase the customer traffic in to the stores. The Big-Bazaar has been positioned to the customer as a place where the customer can shop for each & everything for which if goes to a market. The number of Big-Bazaar stores has increased from 4 in 2002 to 21 Oct 24, 2005. They have also launched private label initiative in Big-Bazaar. Understanding of the apparel industrial, decades of experience& a vertically, integrated structure provides with more compelling reasons to expand the number of private labels. We have launched a full range of accessories to supplement the apparel business including imitation jewellery, sunglasses, watches, mobile phones etc… INRERIM REPORT Page 35
  36. 36. Analysts attribute the success of PRIL to cheaper sourcing of products and lower distribution cost. Pantaloons sourced its products through ‘Consolidators.’ There was a consolidator for each product category. These consolidators were responsible for procuring quality goods at the cheapest possible price, and were paid commissions on their sale at the store. The consolidator directly dealt with manufacturers, and as a result the distribution cost could be slashed as no intermediates were involved. In addition to discounts on products through the year, Big Bazaar also held events such as ‘Kitchen Mela’, ‘Trouser Mela’, etc. to attract customers. INRERIM REPORT Page 36
  37. 37. MANAgEMENT OF BIg BAzAAR Mr. Kishore Biyani, Managing Director Kishore Biyani is the Managing Director of Pantaloon Retail (India) Limited and the Group Chief Executive Officer of Future Group. To know more, click here. Mr. Gopikishan Biyani, Wholetime Director Gopikishan Biyani, is a commerce graduate and has more than twenty years of experience in the textile business. Mr. Rakesh Biyani, Wholetime Director Rakesh Biyani, is a commerce graduate and has been actively involved in category management; retail stores operations, IT and exports. He has been instrumental in the implementation of the various new retail formats. Mr. Ved Prakash Arya, Director Ved Prakash Arya, is an engineer by training and is a graduate of the Indian Institute of Management, Ahmedabad. Prior to joining Pantaloon Retail, he was the CEO of Globus. Mr. Shailesh Haribhakti, Independent Director Shri Shailesh Haribhakti, is a Chartered Accountant, Cost Accountant, and a Certified Internal Auditor. He is the Deputy Managing Partner of Haribhakti & Co., Chartered Accountants and past president of Indian merchant Chambers. He is on the Board of several Public Limited Companies, including Indian Petrochemicals Corporation Ltd., Ambuja Cement Eastern Ltd. etc. He is on the Board of Company since June 1, 1999. BIg BAzAAR INRERIM REPORT Page 37
  38. 38. FOR THE gREAT INDIAN MIDDLE CLASS It is a unit of Pantaloon Retail (India) Ltd and caters to the Great Indian Middle Class. It was started as a hypermarket format in Mumbai with approx. 50,000 sqft of space. Its values and missions are to be the best in Value Retailing by providing the cheapest prices and hence go the tag-line “IS SE SASTA AUR ACHCHA KAHIN NAHIN” It sells variety of merchandise at affordable rates, the prices of which it claims are lowest in the city but the level of services offered is also very low. The following graph shows the retail life cycle and we can say that Big Bazaar is currently at the Growth Stage. Cash flow Flows Maturity Growth Decline Introduction Time OBSERVATION: INRERIM REPORT Page 38
  39. 39. There were various observations made from the time I entered the store. They can be summed up as follows:  Verticals inside the store relates to each category of product o Food Bazaar Depot- books o M-bazaar Electronic Bazaar o Furniture Bazaar Footwear Bazaar  Trolleys are not easily available, especially on other than ground floor.  Little attention to cleanliness. Dust on shelves as well as some product items.  In-house packaging not efficiently done.  Crowded store interiors. Items are arranged in a cluttered way. Tried to stock maximum number in limited area.  Sign boards are not prominent. Lack of direction creates confusion.  Family crowd is evident. Youth comprises of only around 10% of the crowd.  Food Bazaar very efficiently managed. It is a bit over-staffed but layout is very good. Shelf space is used very well to stock products with clear distinction. POSITIONINg STRATEgY INRERIM REPORT Page 39
  40. 40. COMPANY VISION, MISSION AND CORE VALUES “Future” – the word that signifies optimism, growth, achievement, strength, beauty, rewards and perfection. Future encourages us to explore areas yet unexplored, write rules yet unwritten; create new opportunities and new successes. To strive for a glorious future brings to us our strength, our ability to learn, unlearn and re-learn our ability to evolve. They, in Future Group, will not wait for the Future to unfold itself but create future scenarios in the consumer space and facilitate consumption because consumption is development. Thereby, we will effect socio-economic development for our customers, employees, shareholders, associates and partners. Their customers will not just get what they need, but also get them where, how and when they need. They will not just post satisfactory results, They will write success stories. They will not just operate efficiently in the Indian economy, we will evolve it. They will not just spot trends; They will set trends by marrying our understanding of the Indian consumer to their needs of tomorrow. INRERIM REPORT Page 40
  41. 41. It is this understanding that has helped us succeed. And it is this that will help us succeed in the Future. They shall keep relearning. And in this process, do just one thing. Rewrite Rules. Retain Values. Group Vision Future Group shall deliver Everything, Everywhere, Every time for Every Indian Consumer in the most profitable manner. Group Mission  They share the vision and belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development.  They will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments – for classes and for masses.  They shall infuse Indian brands with confidence and renewed ambition.  They shall be efficient, cost- conscious and committed to quality in whatever we do.  They shall ensure that our positive attitude, sincerity, humility and united determination shall be the driving force to make us successful. Core Values  Indian ness: confidence in ourselves.  Leadership: to be a leader, both in thought and business.  Respect & Humility: to respect every individual and be humble in our conduct. Introspection: leading to purposeful thinking. INRERIM REPORT Page 41
  42. 42.  Openness: to be open and receptive to new ideas, knowledge and information.  Valuing and Nurturing Relationships: to build long-term relationships. Simplicity & Positivity: Simplicity and Positivity in our thought, business Action.  Adaptability: to be flexible and adaptable, to meet challenges.  Flow: to respect and understand the universal laws of nature. Various Strategies After big bazaar coming to India it will be at its introduction stage so it is quite obvious that it will adopt some strategy for attracting the customers. The strategy which they would adopt is that they will have low price, high advertisements, it would offer different kind of schemes, offers, discounts, scratch cards, coupons. They would also give stress on providing the prompt services like home delivery, after sales services, guarantees and warrantees, so as to sustain in the market and to create a good reputation. Following are some additional strategies they require to adopt: • Thorough market research • Site selection and evaluation • Employee search and training • Less premium and low price branded goods in merchandise assortment. • Gaming zone and restaurant • Promotional activities like advertisement, seasonal discounts, festival offers, etc. INRERIM REPORT Page 42
  43. 43. While formulating strategies we should keep in mind that strategies should be flexible. This is helpful to change or revival of strategy. SUMMERY This paper provides detailed information about the growth of retailing industry in India. It examines the growing awareness and brand consciousness among people across different socio-economic classes in India and how the urban and semi-urban retail markets are witnessing significant growth. It explores the role of the Government of India in the industry’s growth and the need for further reforms. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the India Retail Industry to grow faster. The paper includes growth of retail sector in India, strategies, strength and opportunities of retail stores, retail format in India, recent trends, and opportunities and challenges. This paper concludes with the likely impact of the entry of global players into the Indian retailing industry. It also highlights the challenges faced by the industry in near future. In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn INRERIM REPORT Page 43
  44. 44. will help the India Retail Industry to grow faster. Indian retail is expected to grow 25 per cent annually. Modern retail in India could be worth US$ 175-200 billion by 2016. The Food Retail Industry in India dominates the shopping basket. The Mobile phone Retail Industry in India is already a US$ 16.7 billion business, growing at over 20 per cent per year. The future of the India Retail Industry looks promising with the growing of the market, with the government policies becoming more favorable and the emerging technologies facilitating operations. INRERIM REPORT Page 44
  45. 45. CONCLUSION The retail sector has played a phenomenal role throughout the world in increasing productivity of consumer goods and services. It is also the second largest industry in US in terms of numbers of employees and establishments. There is no denying the fact that most of the developed economies are very much relying on their retail sector as a locomotive of growth. The India Retail Industry is the largest among all the industries, accounting for over 10 per cent of the country’s GDP and around 8 per cent of the employment. The Retail Industry in India has come forth as one of the most dynamic and fast paced industries with several players entering the market. But all of them have not yet tasted success because of the heavy initial investments that are required to break even with other companies and compete with them. The India Retail Industry is gradually inching its way towards becoming the next boom industry. For launching Big bazaar in India city is company’s mission to expand the business. For this purpose company is carrying out many marketing strategy. To study this marketing strategy I will be visiting the mall and also the manager to collect the data from them. Also I’ll be collecting data from the customer as what strategies they liked. INRERIM REPORT Page 45
  46. 46. REFERENCE  Magazines, Newspaper, pamphlets  www.google.com  www.pantaloon.com  Marketing textbook  Retail Management textbook  Challenges of India's retail boom, Jan 2007. Retrieved Nov 2007 from  http://www.rediff.com/money/2007/jan/30spec.htm  Opportunity India Retail, Mar 2007. Retrieved Nov 2007 from INRERIM REPORT Page 46
  47. 47. INRERIM REPORT Page 47

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