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Retail or pharma business case competition

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Business case competition on Retail and Pharma Industry. Author benchmarks both the industry and final provides reason to choose retail industry for technology services.

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Retail or pharma business case competition

  1. 1. Case study IT Pitch for Retail and Pharma Dhruvajyoti Roy 159773 Engineering Services
  2. 2. Content Problem statement Overview of the Retail and Pharma Industries Business Model Analysis Financial Analysis Final Decision 30 Sec 60 Sec 120 Sec 120 Sec 30 Sec Agenda of Presentation Time limit
  3. 3. Problem statement “To do an analysis of the Retail and Pharma sector in India and pick & Pitch for the sector which will be more favorable for business and potential to be a good opportunity for the use of IT applications/ services/ products”
  4. 4. Parameters Retail Industry Pharma Industry Market size and Industry CAGR till 2020 • By 2015, the total market size is estimated to be around US$ 600 billion. • CAGR of 7.45 per cent since 2000 • Expected to grow to US$ 1.3 trillion by 2020, CAGR of 9.7 per cent between 2000-2020 • US$ 6 billion in 2005 and is expected to expand at a CAGR of 15.92 per cent to US$ 55 billion by 2020. Global Industry Market size • 22 Trillion USD • 1.3 Trillion USD Global IT Spend 2015- Gartner • 179.538 Billion USD • 141 Billion in 2015 Major Players • Vmart • Pantaloon • Provogue • Bharti • Reliance • Spencer • Cipla • Dr Reddy • Lupin • Aurobindo • Sun • Cadilla Source : http://www.gartner.com/newsroom/id/3135718, http://www.statista.com/statistics/309466/global-r-and-d-expenditure-for- pharmaceuticals/ Overview of the Retail and Pharma Industries
  5. 5. Value chain Analysis-Retail RetailPharma
  6. 6. Business Model Analysis Porter’s Five Forces •Bargaining power of suppliers •Bargaining Power of customers •Threat of substitute •Threat of new entrants Competition • Local IT Vendors • Start up culture Porters Five Forces Pharma Retail Competition High Medium New Entrants Low Medium Substitutes High Low Customers-BP Low High Suppliers -BP Low Low
  7. 7. Business Model Analysis SWOT Analysis Strength Weakness Opportunities Threat Retail • Rise in Income • Changing consumer mindset • Entry of large global players • Growth of Mobile • E-commerce as substitute. • Hyper competition • FDI investment • Global Brands entering India • Political opposition to protect unorganized sector. Pharma • Low cost production • Good in generics • Tough regulations in • Dependence on exports • High competition • Generics market increasing • India as an alternative to China • Quality issues • Penalties by large Indian firms
  8. 8. Financial Analysis IT Sector 2012 2013 2014 2015 2016 CAGR (2012-2016) % Hardware 9.1 9.5 10.9 12.5 14.3 7.5 Software 3.5 4.0 4.5 5.2 6.0 11.4 Services 9.2 10.3 11.9 13.8 16.1 8.9 Telecom 44.7 47.8 51.5 54.6 59.5 3.6 Total 66.4 71.5 78.9 86.2 95.9 5.3 • IT spending in India is projected to total $71.5 billion in 2013, a 7.7 percent increase from the $66.4 billion forecasted for 2012. • Software will record the strongest revenue growth at 15 per cent, IT services will grow at 12 percent. Average CAGR of 10% for software, Hardware and services. http://www.rediff.com/business/slide-show/slide-show-1-tech-indias-it-spend-to-rise/20121010.htm#1
  9. 9. Financial Analysis http://www.rediff.com/business/slide-show/slide-show-1-tech-indias-it-spend-to-rise/20121010.htm#1, Capitaline Companies Sales in Cr Average IT spend of 1% Aditya Bir. Fas. 1,850.73 18.5073 Arshiya Lifest - 0 Arvind Lifestyle 2,192.72 21.9272 Arvind Retail 506.29 5.0629 Baazar Retail - 0 Brandhou.Retail 512.02 5.1202 Cantabil Retail 138.68 1.3868 Devinder Text 0.06 0.0006 Future Lifestyle 3,310.19 33.1019 Future Ret. DVR 5,355.79 53.5579 Future Retail 10,994.03 109.9403 Hypercity Retail 1,056.14 10.5614 MW Unitexx 4.42 0.0442 Provogue (India) 545.46 5.4546 Shoppers St. 3,202.94 32.0294 Smart Retail - 0 Store One Retail 134.37 1.3437 Trent 1,440.04 14.4004 V2 Retail 286.77 2.8677 V-Mart Retail 720.5 7.205 Welspun Global 2,396.15 23.9615 Ind.Composite 34647.3 346.473 Total IT spend in 2015 57.7455 Total IT spend considering 10% CAGR 92.99970521 Sales in Cr Pharmaceuticals - Indian - Bulk Drugs & Formln Lrg 69801.1 Total IT spend in 2015 29.08379 Total IT Spend 2020 46.83974
  10. 10. Final Decision Parameters Weightage Retail High -5 Medium-3 Low-1 Pharma High -5 Medium-3 Low-1 IT Spend 30% 5 3 Industry Growth rate 30% 5 3 Competition 20% 5 5 IT Adoption 20% 5 3 Cumulative score 6 4 Final choice is Retail Industry due to its high market size , cumulative growth rate for the future , a good need for faster IT adoption and intense competition.

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