Case Study of Metro Cash & Carry on Business Environment
INSTITUTE OF PROFESSIONAL EDUCATION AND RESEARCH METRO CASH & CARRY SUBMITTED BY- AISHWARYA PATERIYA AMIR NAQVI NIDA ZAINAB SIDDIQUI RENU SAINI TAMANNA SETHI SANDEEP PATEL
COMPANY PROFILE• Type: Private• Founded: 1964• Headquarter: Dusseldorf, Germany.• Business units: Real/Extra, Kaufhof, Media market, Metro C&C• Employees: More than 1,20,000.• Countries operating: 30
What is Business Environment???Business Environment has two components:1. Internal Environment2. External Environment
THE METRO C&C MODEL: Wholesale business: Business customers and institution such as Hotels, Restaurants, Bars, Cafes, General or specialized food and non food retailer. Valid business registration. Format of stores: Classic (10,000 to 16,000 sqm) Junior (7,000 to 9,000 sqm ) ECO (2,500 to 4,000 sqm )
Procurement: Metro group buying (MGB), group‟s Central purchasing entity. Source 90% of stock locally . Develop an efficient supply chain. Cold-storage facility.
Metro C&C Market Entry Evaluation Process,2006Source: Company Documents.
PEST ANALYSIS POLITICAL ENVIRONMENT CHINA RUSSIA INDIA China is a single-party Political environment has Long procedures to makestate become more stable. a governmental decision Governed bythe Communist Party of Some measures have been Political instabilityChina. taken to reduce taxes, improve business Distinction between environment. government and state legislation Macroeconomic development trends and Multiparty in different institutional reforms. states destroys the coordination
ECONOMICAL ENVIRONMENTCHINA RUSSIA INDIA Developing economy Market-based and Consumer Spending globally-integrated economy. increase Socialist plannedeconomy where the Economic reforms in the FDI Increasegovernment (one party) 1990s privatized mostcontrolled and owned all the industry. Strong Economicmeans and methods of Growthproduction GDP 469(Euro billion). Increased Land Urbanization 40.5% in Cost of logistics because Prices.china of poor infrastructure. Prices are 30-45% below GDP 1,326 (Euro Billion) Poor Growth Rate. the government prices Soaring land prices &increasing scarcity of largeplots.
SOCIAL ENVIRONMENTCHINA RUSSIA INDIA spirit of entrepreneurship Large number of its Local Traders andin china population would decline associations are opposing as told by some Metro C&C Literacy Rate 91% projections. Urban Immigration and Guanxi- „Wank‟ informal Strong supply chain was Rising Living Standardspersonal networks of missing due to that it wasinfluence, & central idea of not able to win the market Fear among localChinese society. of russia. community resulted in protests.
TECHNOLOGICAL ENVIRONMENTCHINA RUSSIA INDIAPoor Logistic system. only 2.5% share of No cold storage facilities modern groceryUse of centralized distribution Delays in infrastructurewarehouse development Environment. The ineffciency of the Mandis brought out 40% of waste.
Cost and Wastage for Tomato Distribution in India,Traditional and Modern Supply Chains.Source: S. Ranghunath and D. Ashok, “Significance of Cash and Carry Model for Small and Medium Businesses in theIndian Wholesale Distribution Formats,” Metro Cash & Carry Bangalore internal document, October 16, 2006, p. 5.
Valuable Suggestions for furtherImprovement are Always Welcomed, if any.