HRM Term project #2 Recruitment in bpo & retail


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HRM Term project #2 Recruitment in bpo & retail

  1. 1. CONTENTS Topic PageBPO Industry Overview 3Attrition Rate 4Youth oriented Industry 4Assumptions about organizational Structure 4Level of Hierarchy 4Requirement 5Job Analysis of TCE 5Job Description 5Job Specification 5Recruitment Strategy 6Pharmaceutical retail chain Overview 7External Environment 9Industry environment 13Porter’s 5 force model 14Store Staff Structure 16Recruitment Requirements 16Major factors of External environment 16Sources of Candidates 16Application form 17Selection process 17Job description 17Job Specifications 18 1
  2. 2. References 18Indian BPO Industry: A Transforming Landscape Despite a volatile global economic climate in 2009 and gradual economic recovery in 2010, theIndian BPO industry held its head up, continued to take centre stage in global sourcing strategies,and maintained its position as a strategic offshoring destination. Efficiencies gained during theeconomic crisis were not lost and the industry continued to re-engineer internally. Overall, theBPO segment remained a net hirer, continuing to create employment opportunities.BPO spend witnessed a recovery during 2009-10, growing at 4 per cent. Revenues from BPOservices rose to USD 158 billion in 2010. The industry was driven by traditional and developingmarkets, the emergence and adoption of new technologies, new business models and newcustomer segments.Change too was the norm for the Indian BPO industry. The sector aligned itself to alteringcustomer expectations and their dynamic requirements. With BPO spend impacted by the globaleconomic slowdown, customers began looking at getting the highest Return on Investment (RoI)out of every BPO engagement, through the extensive use of diligence and intense negotiation ofcontracts.In 2010-11, as the global economic tide began to reverse, Indian BPO organisations announcedtransformative initiatives, including industry-specific BPO solutions and platform BPOofferings, to differentiate themselves.Transformation has in fact become the new theme for the global sourcing industry.Transformation is about change and not repeating or replicating today’s issues, but doing thingsdifferently, and eliminating activities that do not add value. Transformative service delivery isbusiness focused, aimed at delivering confidence and managing risks, using modern businessrealignment, delivering higher performance and economies of scale, at the same time, enablingsustained savings and value. 2
  3. 3. During 2010-11, the Indian BPO sector also focused on value-based Mergers and Acquisitions(M&As), purchasing small niche and regional players, to fill gaps in their current offerings, andextend market reach. Though at a nascent stage, some components of BPO delivery also movedto the Cloud.The industry remained committed to achieving excellence in business process management.Additionally, it focused on growing higher end knowledge services, that delivered significantintellectual arbitrage. The result was that the BPO sector generated USD 14.1 billion in exportrevenues in 2010-11, growing at 14 per cent over the previous year. The industry employed closeto 835,000 people in 2011. It accounted for over 34 per cent of the worldwide BPO market, thusbecoming the largest global destination for BPO services delivery.In the new decade, the industry is expected to build on its existing phase of evolution — BPO3.0, which is characterized by greater breadth and depth of services; process reengineering acrossthe value chain; increased delivery of analytics and knowledge services across platforms andstrong domestic market focus and SMB-centric delivery models.High Attrition RateAttrition cannot be blindly classified with a negative connotation. A healthy attrition rate in anyindustry is necessary for new ideas and innovation to flow in as well as to facilitate the overallgrowth of the industry in terms of knowledge sharing. But after a particular level the same boonbecomes a bane.Attrition rate shoots up to 55%.Recruiters explain that the high attrition rates significantlyincrease the investments that are made on the employees. The problem of losing funds inemployee acquisition is more prominent in the high-end BPO segment. Companies invest a lot oftime and money in training a candidate for the first four months. But these investments do notalways get converted into actual profits. In case of the BPO industry, each agent levelrecruitment roughly costs the company Rs. 5000/-. This is the amount which a company needs topay the job recruitment agency. Other than the direct cost, an associated cost of training andadministrative service is also involved. Each agent works is non-productive or partly productivein the organization for nearly the first 2-3 months. Hence an employee leaving the organizationwithin the first 6 months is a bad investment for the company. Also, as stated earlier the cost ofattrition in the industry is 1.5 times the annual salary.However, there is another perspective for attrition which is specific to the BPO industry in India.India at the moment is working on low end Business Processes which do not require quite a lotof amount of high skills. The reason for India’s success has been primarily the low cost, highquality labor which India provides. Compared to other competitors such as Philippines, SouthAfrica, Ireland; India is the only country where we have a balance between the cost involved andthe quality provided till now. For Indian companies to remain successful in future they wouldhave to keep the cost low. Since the tasks performed by an agent are pretty standard and does notrequire added skills, there is no benefit in retaining a highly experienced employee. At the floorlevel operation, a non-experienced candidate could work with the same efficiency of a 2-3 year 3
  4. 4. experienced employee after minimal training. Hence the industry players consider the presentattrition as a positive attrition which is serving the industry by keeping the cost low.Youth Oriented IndustryFor today’s youngsters, the call centers are a welcome addiction. The majority among thoseemployed in this sector are people in the age bracket of 19 to 25, or young India, to be precise.Some conservatives may scream that this is nothing more than americanisation of the Indianculture and these youth have their moral values etc.The industry has woven such magic aroundthe entire nation that these days a city without a call centre would be hard to find. Call centerscontribute a fair share to the revenue of the Indian BPO industry. About 70% of the BPOindustry’s revenue comes from call-centers, 20% from high-volume, low-value data work andthe remaining 10% from higher-value information work.The average Indian’s attitude towards life has undergone a drastic change in the last few years.The motto of today’s young Indian generation is “Live life king size”. The changing lifestyles,demand for luxury and emergence of high-income spending groups coupled with a thoroughlycosmopolitan outlook of life are changing the modern Indian. Call centers are a major turn on foryoung graduates. In addition to providing employment, the call centres offer excellent benefits,good working environment and attractive remuneration packages.English coaching InstitutesThe size of the BPO industry in India and elsewhere has increased like no other. In order toensure the best applicants in the leading BPO firms of the country, several institutes and Englishcoaching centers have started operating in different parts of the country to provide practicaltraining to students who wish to pursue a career in business process outsourcing. The chief citiesin India from where the maximum numbers of BPOs operate are New Delhi, Mumbai, Kolkata,Chennai, Bangalore, Pune, Hyderabad and Gurgaon.Assumptions about the Organization StructureThe company is a mid size organization employing 100-150 people, dealing with the clientsbased in U.S. The company deals directly to corporate houses and does not deal with individualcustomers.This BPO company act as an intermediary between the Advertising Agency which promoteshotel,inns, motels to international traveller and Hotels and Restaurants. The BPo companycompany calls these Hotels and Restaurants on the behalf of the advertising agency andpersuades them to post their advertisements on their website with suitable lucrative offers andother benefits.The organization targets youth force of age between 18-25 who form the mainchunk of the employees in organization. There is no discrimination on the basis of gender andequal preference is given to males and females.Levels of Hierarchy: 4
  5. 5. Requirementthere is shortage of sixteen telecaller executives and one team leader. Overall four groups areaffected as four TCEs from each group is falling short of, while other six groups are perfectlyfine in their composition.Job Analysis of Tele Caller ExecutivesManaging and receiving CallsTele Caller Executives are responsible for calling the motels are convincing them to post theirtheir advertisements on the Advertising agency’s website. Tele Callers have to meet the target ofmaking calls that has been given by the team leader. They should honestly handle therepresentatives of the Hotels to whom they are talking to, and should genuinely make themrealize the value of advertisement in order to increase their revenue and increase their brandawareness.Responding to Enquiry of all kinds.It is the duty of the Tele Caller Executives that they should handle all kind of enquiries that arebeing made by the representatives of the Hotel’s with due patience. As the Tele Callers are wellacquainted with the facts and figures of the advertisement costs and the facts behind that, so theyshould deliver the true information without concealing the facts.Resolve problem within given time frame.Tele Callers should respond to the enquiry made by them within a given time frame rather thanmaking them wait too long. It is the duty of the telecaller executive to divert the call to othertelecaller if the information demanded by the seeker is not with him, but the telecaller is aware ofthe fact that other telecaller knows about the facts demanded by the seeker.Preparing daily reports about call volume and customers.The most important task of the telecaller is maintain the daily report of the volumes of callshandled by him/her. On daily basis this report is to be maintained and segregation is to be donebetween incoming and outgoing calls, and whether the daily target has been met or not, and thedeviation from the target.Job Description 5
  6. 6. The job is expected to be undertaken with utmost integrity and commitment. The employee hasto add value to the organisation and safeguard its privacy by not leaking it to friends, families orany person which may pose threat to organisations growth.The employee will be provided with an amiable work environment but should be capable ofhandling mental stress which is the nature of BPO industry.Job Specification:Knowledge: Basic knowledge about BPO industrySkills: Good command over english Excellent communication skill Patient and Pleasing disposition Basic computer skillsAbilities: Able to handle customer grievances and requests Able to handle call volumeRecruitment StrategyInternal hiring with the existing employee referrals The organization aims to recruit employees through employee referrals as this works inrelatively short time with minimal cost.Moreover as they are well acquainted with the qualityand the nature of the work they will refer only the people with right attitude that fits into theorganization.Advertising through posting online on job PortalsOnline job portals have become one of the largest source of attracting the job seekers. As India isa booming economy with exponential growth rate in the BPO industry, online portals have beensuccessful in attracting job seekers in short span of time with virtually no cost to theorganization.Tie-Up with institutes providing English speaking and Personality development courses.Candidates can be directly hired from English speaking institutes, as many students during orafter the graduation primarily learns english to join the BPO industry. One of the benefits inhiring from these industries is that they are already been given training on telecalling, that alsoleads to low training costs by the BPO’s. 6
  7. 7. Recruitment Strategy for Guardian Lifecare Pvt Ltd:A Pharmaceutical Retail chainRetail Industry in India: An OverviewIndian economy, with one of the handsome economic growth rate in the world, is also witnessing boom inIndia’s retail industry. Although the recent recession slowed down the growth for some time, it still hasgreat prospects. To show the extent of its scope consider this – penetration of organized retail in US ismore than 85% where as in India it is just about more than 8%.The Indian retail industry is divided into unorganized sector and the organized sector. Organized sectorconsists of the retail shops which are registered, licensed (where applicable) and pay sales and incometaxes. It also consists of big malls which provide a jubilant shopping experience with all the glitz andglamour. Unorganized sector typically consists of small grocery stores, more popularly known as kiranastores, hand cart vendors, street vendors, door-to-door direct sales vendors, bargain shops etc.Though in urban parts of the country, there are many retail shops and malls, a big chunk of contributiontowards GDP from the entire retail industry still predominantly comes from the unorganized sector.Almost 93% of retail is manned by unorganized sector. Efforts are to bring the contribution to 9-10% by organized sector. The retail industry also happens to be the largest source of employment afteragriculture.The penetration of organized retail will happen much faster in the coming decade, even in tier 2 and tier 3cities, because of the changing demographics of our population and a healthy rate of economic growth.With good underlying economic growth, increase in disposable income, increased awareness due topenetration of broadband and mobile devices with internet accessibility, the demand for consumer goodswill rise. With better systems and processes in place, all this is bound to assist in increasing thepenetration of the organized retail sector in India. According to report by McKinsey & Co., the organized retail market in India is expected to growto 14-18% by 2015 of the total retail market in India from 8% in 2008. Its value is estimated to bearound US$450 billion by 2015.The BMI India Retail Report for the first quarter of 2011 forecasts that the total retail sales will grow toUS$ 674.37 billion by 2014, from US$ 392.63 billion in 2011. The growing wealth with the middle-classin India, the population size and the big percentage of population being in 30s, makes immensepossibilities for entrepreneurial growth in the retail sector. Some of the fastest growing segments of thisindustry are food & beverages, electronics and apparels. The consumer electronics segment is expected togrow at about 55% between 2011-2014, with most of the growth driven by demand for TVs, mobiledevices and laptops and desktops. With changing lifestyles and habits, food segment is also expected todouble to US$ 150 billion by 2025.Pharmaceutical retailBased on a 2006 McKinsey study, the size of the pharmaceutical retail market was estimated at overUS$9.5 billion up from approximately US$3 billion in 1992. In addition, at least another US$10.5 billionof FMCG products were being retailed from these chemist shops, putting the total size of the total chemist 7
  8. 8. market at over US$20 billion. All these stores are mostly traditional ‘mom and pop’ stores; the concept ofchain pharmacy stores had started in India in first decade of 21st century.With over 15 million outlets, India’s retail sector is highly fragmented. Out of this total number of retailshops, one of the major retail segments is the “Chemist shop”. We can find a chemist shop at every cornerof every village and city in our country under different names, ranging from ‘druggist’ and ‘chemist’ to‘drug store’ and ‘pharmacy’.It is estimated that there are between 7.5 lakhs to 8 lakhs chemist shops dotted across the length andbreadth of our vast country.Five years ago as the Indian retail landscape was being explored, every retail chain took a decision tolaunch their own pharmacies inside their supermarkets.Within a few months, we had home-grown pharmacies in the following supermarkets 1. Big Bazaar (Tulsi) 2. Reliance retail( Reliance Health and Pharma) 3. Ranbaxy (Fortis) 4. Sagar Drugs & Pharmaceuticals (Planet Health) 5. Subhiksha 6. Vishal 7. Dabur (New U) 8. Zydus Cadilla (Dial for Health) 9. Religare Pharmacies 10. Medicine Shoppe 11. Morepans (Life Spring) 12. Lifetime Healthcares (LifeKen)In addition, there were over twenty other individuals or companies such as CRS, 98.4, Health and Glow,Lifeken, 24x7, Trust Chemists, Viva, and Rx, which had started their own pharmacy chains, the biggestbeing Apollo Pharmacy.Today there are only four major pharmacy chains left in the country: • Apollo Pharmacy • Guardian Lifecare • Religare wellness • Med PlusIn addition, there are less than six small chains spread across different cities and states, such as TrustChemist in Karnataka, GNRC in Guwahati, Planet Health in Ahemdabad, Frank Ross in Kolkata, andViva and 98.4 in NCR.All these pharmacy chains started off as regional players and today some of them, including Guardian, areslowly beginning to expand their presence across the country. 8
  9. 9. External EnvironmentDemographic Environment:Demographic environment has been proved beneficial for the company and at the same time alsopossesses the challenges before the company. Since the company is providing the solution to the existingproblems with the earlier format of Chemist shops, so company have the immense opportunity to expand.When the company was started, it started as a regional player but it has the presence at pan-India level. InDemographic environment, following factors comes in picture.Population Size:India is second highest population country in the world with approx 121 crores of population. India’s 70%population lives in rural India, providing immense opportunity for the company. Guardian started the newformat of Aushadhi stores in India.Age structure:India’s total population comprises of 63.6% people in age bracket of 15-64 and 5.3% are more than 65years of age. Guardian has the products to cater the requirements of each age group. Since Guardian has alot of non-prescription products i.e. nutritional products, FMCG products and a lot of other types soGuardian can untapped this opportunity easily.Geographic Distribution:India’s 30% population lives in urban India and company exiting focus are to first explore theopportunities in urban India. Company has opened 80% stores in urban areas of different states. Guardianis present in 26 cities in North, East and West India- Mumbai, Gurgaon, Delhi, Noida, Meerut,Faridabad, Ghaziabad, Jaipur, Varanasi, Hissar, Ludhiana, Lucknow, Kanpur, Gorakhpur, Allahabad,Agra, Jhansi, Kota, Mathura, Ranchi, Bangalore and Pune. So we can easily interpret that at presentGuardian is completely concentrated in urban India.Ethnic Mix:As the company have the plans to be a national player, then company will have to go through a lot ofchallenges in promotion and advertising of private level products in southern part of country due to achange in language and state government rules are also vary slightly in different states.Income Distribution:These pharmaceutical retail chains sell products mainly in 4 categories. These categories areprescriptions, OTC drugs, FMCG and nutritional & wellness products.As the disposable income of the consumers have increased due to increase in education label, LPG, andothers, People have started to spend more on nutritional and wellness products. This is here the mainprofit lies. Company earns less profit on prescription and high profits on private label brands. Guardianhas 270-275 private label brands. So an increase in income has definitely enhanced the sale of Guardian.Social cultural Environment:People have become more conscious about their health. Now more people go for routine check-ups andultimately it increases the sale of pharmacies. The one of the most problem with drug industry is that lot 9
  10. 10. of spurious drugs are available in the market. Patients and doctors both have the serious concerns aboutthis.With the busyness in day to day life, nuclear family culture customers in urban area wants better services,reliability, cleanliness, ambience and availability of medicines.Initiatives by the Government and NGOs have also helped a lot in the change of social culturalenvironment. GOI has also done a lot of work in healthcare sector in its 5 year plan in 2007-2012. Activeinvolvement of WHO, Bill and Mandela Gates Foundation, Red cross and a lot of international supporthas initiated a change in the way of looking of people towards their health and wellness.Indian workforceIndia has a young workforce. A large number of people are entering the Indian professional workforce ata time of rapid economic expansion. This provides increased opportunity for the well qualified and wellconnected individuals. However, access to higher and professional education, socialization, entry andcareer progression and advancement is still disproportionately concentrated among certain groups ofsociety. These groups have traditionally dominated the professional fields. Despite its much strength, theeducational system doesn’t provide sufficient trained talent for the job market, particularly the IT sectorthat is the new economy’s engine of growth. And IT has a big role to play for the banking industry, astoday most of the banking operations are depending on IT services for their smooth functioning. This putsa lot of pressure on employers in India around finding, competing for, holding and cultivating the skilledemployees they need.Workforce DiversityIn India, the main diversity is categorized based on gender, religion, place of birth (ethno-linguisticregion) and, for Hindus, caste – specifically, whether individuals belong to one of the traditionallydominant “Forward Castes,” one of the traditionally excluded “Scheduled Castes” or “Scheduled Tribes,”or the large “Other Backward Castes” grouping.Earlier in India caste discrimination used to be a big challenge in the receiving employment opportunitiesand converting them. In order to discourage this practice government came up with many solutions withdifferent approaches. Overall, the approach toward tackling caste-based employment discrimination hasbeen quantitatively fixed in the form of reservations (quotas) in public-sector jobs, state-financed collegesand legislatures. The pros and cons of this approach are passionately debated, in ways reminiscent ofpublic controversies earlier and even today in India. Indian government also wanted to extend the sameapproach of reservation for victimized social groups in the private sector as well. But the recent attemptsmade by the Indian government to extend the reservations system to the private sector have met stiffresistance from Indian industry, and this initiative is now on hold. Backlash against the existingreservations system has also won some legal victories. The coming decade will see continuingcontroversy and change in this aspect of India’s legal framework. A sign of voluntary change is theadoption by most of India’s major IT companies of the U.N. Global Compact’s principles regarding theelimination of discrimination with respect to employment and occupation.The scope of diversity does not only limit itself to the gender and different social groups which wereunderprivileged but also to the persons with disabilities, different nationalities, different cultures, differentgenerations, sexual minorities such as the lesbian, gay, bisexual, transgender (LGBT) categories and soon. Holding a rich diversity always attracts healthy discussions and different viewpoints in anyorganization. An enriched, diversified system always leads to efficiency and effectiveness.Women in the workforceMen dominate the numbers of those enrolled in higher educational degrees with a whopping 61.7 %whereas women have secured only 38.3 % out of the total. This is also a very big answer to the questionthat why are women less than men in number when we take workforce diversity into account. This is 10
  11. 11. because when less number of women will receive higher education as compared to men, the economy willhave less qualified female graduates or post graduates ready to pull in organizations.• Indian Census found that only 31.6% of all workers are women.• Women are an estimated 38.2% of all economically active individuals.• Out of all women that work in the Indian work force, only 20% of them work in urban areas.• Women in India earn 66% of men’s salary for equal work.• 26.2% of women in India as compared to 9.0% of men face a lack of role models as a barrier to advancement.Economic Environment:Increase in Disposable Income:Increase in disposable income and change in foreign direct Investment rules have affected the industry toa great extent. Increase in disposable income has affected the industry in a very positive manner.Foreign Direct Investment:FDI has affected the whole retail industry to a great extent. At present Government of India has allowed100% FDI in single brand retail, 50% in multi brand wholesale cash and carry but GOI has not allowedFDI in multi-brand retail. There are following global retail players in the Pharmacy retail who can step inonce GOI allowed FDI in pharmacy retail. • Walgreen (USA) • CVS (USA) • Rite Aid (USA) • Duane Reade (USA) • Boots (UK) • Shoppers Drug Mart (Canada) • Watsons (Hong Kong) • Nepster (China)Political Environment:Government is supporting the retail industry by not allowing the FDI in multi-brand retail becauseGovernment wants these retail chains to develop in a protected environment. In India a big voting sectionis in unorganized retail and Government does not want to make them anger. Ultimately it is good for theorganized retail chains. Since India is a country of diversity and these domestic retail chains haveimmense experience about the culture, need, and requirement of people of different states that will be aplus point over global players. 11
  12. 12. Legal Environment:In pharmacy retail chain, every store should have a person in-charge who has Pharmacy License. Gettinga Pharmacy License is not an easy task.The provisions under the Drugs and Cosmetics Act in India are challenging and must be met. Some of therequirements to get a license are: 1. Minimum area of the store must be 110 square feet. 2. Minimum height between ceiling and floor must be nine feet and two inches. 3. Only one door, both for entry and exit, is permitted irrespective of the size of the store. 4. Ceiling and walls must be made from brick and mortar. Wood or any other material would not do. 5. A pharmacist’s license must be shown along with his curriculum vitae. The original degree certificate of the pharmacist must be taken by the company since there have been several instances of multiple uses of the same degree for several pharmacies. 6. A copy of rent receipt confirming that applicant has taken the store on rent. 7. Blueprint of the shop (a photocopy of the design does not work). 8. One refrigerator with a minimum capacity of 165 liters must be in the store. The receipt of purchase of the refrigerator has to be attached to the application form. 9. Payment of a fee of Rs.3000, and a copy of the treasury receipt. 10. Air conditioning is recommended for all chemist shops, though this requirement is generally not enforced. 11. The shop cannot be located on a DDA plot or in a flat, or at any location which is disputed or non-commercial. 12. Proof of ownership of the premises should be presented by the landlord. 13. The drug license is given in the name of the company for a specific pharmacist; if the pharmacist is on leave and there is no other pharmacist, the store cannot be opened.Regulatory environment in retail pharmacy sector in low income countries:Formal pharmaceutical retailing in most countries in the world is governed by regulations concerningownership, staffing, medicines, prescriptions and prices. However, in most low and middle-incomecountries regulatory enforcement of these regulations is difficult or impossible constrained by limitedgovernment capacity, and complicated by the fragmented nature of pharmaceutical retail markets.This paper documents the current status of private-sector retail pharmacy legislation and regulation in thelow-income countries where private financing of healthcare is most important. We look at regulatoryframeworks in 25 countries, what legislative and market forces are causing changes in the practice ofretail pharmacies, and what the effects of these changes have been in recent years. 12
  13. 13. In most countries studied, pharmacy legislation and regulation is fragmented and there is sporadic andlimited enforcement of regulations. Market consolidation through shared ownership, franchisearrangements, or formal collaboration, is usually impeded by ownership laws. Consolidation in SouthAfrica has resulted from a recent legislative change, while in India it has been driven by refinement ofexisting legislation and changing market forces. In these two countries recent changes have permittedrapid expansion of pharmacy chains. The early effects of these chains appear to be lowered prices, greatercompetition, and an initial balance between newly opened stores in shopping centers and the closure ofindependent pharmacies.Four main factors determine the extent to which consolidation is possible in the private pharmacy sector:1. Legislation on ownership, 2. Regulation, licensing and registration of pharmacies, 3. Availability ofqualified pharmacists, and 4. Access to finance to set up a pharmacy.Industry Environment:Since the operation costs and competition from unorganized sector are very high and margins onprescriptions are low, very few pharmaceutical retail chains are still viable in business. Out of more than15 retail chains earlier, very few are still exist. Even in those retail chains very very few are in profit. Oneof the drawbacks of other retail chains is that they sell the products of other company. They don’t havetheir own label brands.But Guardian has more than 250 own label products and with time has established a good brand loyaltyfor its own label products. The profit margin is 10-15% high on company label products than on theproducts of other companies.Guardian Lifecare Private Limited is India’s fastest growing chain of Health, Wellness and Beauty storeswith over 230 stores in the country. The company has presence in 26 cities, spread over 6 states Mumbai,Gurgaon, Delhi, Noida, Meerut, Faridabad, Ghaziabad, Jaipur, Varanasi, Hissar, Ludhiana, Lucknow,Kanpur, Gorakhpur, Allahabad, Agra, Jhansi, Kota, Bangalore and Pune.It is expanding across India by adding two new stores every week. According to the company website, Itserves 10 million customers in a year.Guardian is the master franchisee for GNC Live Well, the global leader in health and nutritionsupplements.In addition to retail store operations, Guardian also has a strong presence in hospitals.Porter’s five force model:1. Threats of new entrants:Retail is a capital intensive business and pharmaceutical industry is completely different from the otherretail industry segments. Strict and compulsive requirements of Drugs and Cosmetic act also make itdifficult. Generally supermarket and hypermarket retail chains keep their stores inside the supermarketand hypermarket which are normally far away from the residential societies. To be successful thesemedical stores have to be near Hospitals, clinics or in housing societies so those big players cannot reapits benefits. For every store there is a requirement of drug license, so your expansion plan also dependson it. Due to high attrition rate, it is very difficult to maintain staff of pharmacist.2. Bargaining power of Suppliers:In pharmaceutical retail chain industry we can divide the suppliers in three major segments 13
  14. 14. 1. Suppliers of prescriptive drugs. a. Branded drugs b. Generic drugs 2. Suppliers of OTC drugs 3. Suppliers of FMCG, beauty and wellness productsIn the early years of the inception of Guardian, they used to buy the products from distributers but withthe presence of more than 250 stores, company buy the products directly from the manufactures and holdsgood relationship with them. Bargaining power differs with the suppliers of different segments.Bargaining power in case of suppliers of prescribed drugs:In case of prescription drugs, pharmacy stores have no power at all because drug manufacturingcompanies adopt pull strategy. Ultimate buying power resides with doctors who prescribe the medicines.Pharmacy stores get fixed and low margins on these prescribed drugs. The nature of this industry is likebuyer does not take substitutes of drugs often. It is very difficult to persuade the buyer to take thesubstitutes.Bargaining power in case of suppliers of FMCG products, beauty and wellness products:The relationship between the manufacturer and retailer has been started to change. The manufacturer canno longer dump stocks on the retailer at the end of each quarter to meet their quarterly targets, only to getthe returns later. The modern retailer has become as educated and well trained as the manufacturers. Hecan think like manufacturers and can talk like manufacturers.Earlier, these companies were used to dealing with small stores to which they could push their stocks atthe end of each month, quarter or year. Manufacturing companies are beginning to change and most ofthem have set up a separate department for trade.Since there are a lot of substitutes are available before the buyers and retailers so these are themanufactures who holds less bargaining power and trade on low margins but high volume.Guardian carries a very large range of FMCG products and therefore they have strong relationship withmost major FMCG companies.These companies were receptive to dealing with Guardian, a new retail chain but now Guardian ranksamong the largest buyers in the pharmacy retail segment of the country.3. Bargaining power of Buyers:This is the only Industry where the manufacturer or brand owner, instead of treating the person who paysfor his product as the primary customer, accords that importance to the one who prescribe itand theperson who sells it become the secondary customer.The pharmaceutical Industry sees the doctor as its customer and not the patient who buys its products.Most Pharmaceutical manufacturers spend all their marketing rupees on promotional activities to woodoctors. However this trend is now beginning to change through strong implementation of legislation.The customer who buys the medicines is clueless about what he is buying and has no way to verify orcheck their quality.Issue of ‘Fake & Spurious’ medicines: 14
  15. 15. The Pharmaceutical Industry was and continuous to be faced with the huge issue of fake and spuriousmedicines, and in spite of a lot of media coverage, customers’ general comment is that they are awareOf the seriousness of the problem, but are also convinced that their chemist would not sell them fakemedicines.Counterfeit and fake medicine and manufacturers, distributors and retailers are the bane of every societyand the strongest possible action should be taken against them. But the laws in India are very lax and theimplementation of these laws leaves much to be desired.The motive of these manufacturers, distributors and retailers is simply profit and nothing else. They willsell harmless medicines –that will never kill or harm the patient who is their golden goose. But whetherthe medicines are effective is an altogether different matter.Guardian has understood this pain of patients and customers and has established the whole company onthe base of honesty, trust and commitment.4. Threats of Substitutes:Pharmaceutical retail chains majorly sell allopathic medicines. These retail chains also sell FMCGproducts, Beauty & Wellness products also. Herbal drugs, Ayurvedic medicines, Unani drugs , Spa arethe substitutes which are gaining momentum with time and likely to be proved a major threat in nearfuture. Due to various concerns like side effects, fake medicines people are diverting to these substitutesbut due to the lack of scientific research in these areas there have not been much research to find theanswer of various diseases. With the change in the environment, diseases have become more complexthan earlier and needs extensive research to find out the solutions. Only big MNC can do such extensiveand costly research to find out the solutions.And looking at the present scenario of India there is much more to do still in case of Allopathicmedicines. People in rural area are still struggling to get genuine medicines that it all depends on thecompany to explore and cash the opportunity.But Guardian has explored the opportunity by adding some brands of herbal products and has alsolaunched its own Ayurvedic and herbal products.5. Competition and rivalry among firms:Guardian has the competition from other organised retail chains in India, Pharmacy stores in unorganizedsector and the global players in near future.There is intense competition among the pharmaceutical retail chains in India. In the last decade more than15 retail chains entered in pharmaceutical retail business but only 4-6 are still viable and doing well. Mostof the firms were selling the products of other companies which give very less profit while companies likeGuardian Pharmacy, Apollo Pharmacy, Religare Wellness, 98.40 also manufactured their own privatelabel products which give higher margins to compensate the higher operation cost in retail chain business.The other substitute of pharmaceutical retail Industry; Small pharmacy stores(unorganized sector) presents a different case. In case of threat, the case is reverse. This organised retail sector has been proved athreat to the existing model of unorganized retail sector. These retail chains have huge capital power,advance technology, huge experience, better customer service, ambience, high number of brand presence,and high bargaining power with suppliers, changing buyers’ habits and so on.And in Pharmaceutical industry manufacturers do not sell drugs directly to the consumers so there is nothreat from manufacturers’ side.Since GOI has not allowed FDI in multi-brand retail in India so at present there is no threat from theglobal players. These global players can be proved strong competitors in the near future. 15
  16. 16. Store Staff Structure• 1 store manager• 1 -2 pharmacists• 1 nutritionist• 1 delivery boy• 1 security guard Recruitment requirements: Hiring: 5 Pharmacists Location : Gurgaon, Haryana Joining Date : May first week, 2012 Assumption:  No internal hiring since it is an entry level job. Major factors of External Environment: Following are the points which will be need to be considered while going for recruitment process: Intensive competition among rivalry Strict regulations of Drug & Cosmetic Act High attrition rate at operational level Sufficient supply of pharmacists High training cost Conditions:• Local residents will be given preference. 16
  17. 17. • Male pharmacists will have to work 15 days in first shift and 15 days in second shift. Female pharmacists will be given duty only in first shift. • Pharmacists should have done Bachelor of Pharmaceutical Science or Diploma in Pharmaceutical Science • Pharmacist should be registered with Pharmacy Council of India. • Pharmacist should be ready for Transfers across city. • Pharmacist will have to wear lab-coat during duty. Sources of Candidates: • Company data bank: Company has the option to upload the resumes on its website so that whenever there will be a requirement, company can use the database and can call the candidates. • LinkedIn • Employment Agency • Campus RecruitmentRecruitment yield Pyramid:Based on the experience of past recruitment process company has decided to follow the following yieldratio in order to fill all the posts. 17
  18. 18. New Hires Offers Made (3:2) Candidates Interviewed (3:2) Candidates Invited (4:3) Leads Generated (3:1) Application form Application form should be divided in to 3 sections:1. Personal History2. Employment History3. Personal Declaration Selection Process: Selection process includes three steps:1. Aptitude Test: This test includes the tests of general reasoning ability (intelligence) and tests of specific mental abilities like memory and inductive reasoning.2. Area Specific Test: To check the knowledge about drugs, its components and its side effects.3. Interview process Job Description: 18
  19. 19. • Pharmacist will read the prescription and will check all the medicines before giving to the customer. • Pharmacist will have to sign the bill after checking the medicines. • Pharmacist will have to call doctors in case of any doubt in prescription • Pharmacist will check the stock from time to time to check the expiry dates of drugs. • Pharmacist needs to offer substitutes in case of non availability of drugs. • Pharmacist will try to do cross selling/ up selling to get the incentives. Job Specifications: Knowledge: knowledge about drugs (salts and brand names), its side effects, Synergic effects, precautions, basic computer knowledge Skills: Good Communication skills Confidence Abilities: To stand 8 hours during job Able to handle customer grievances and requestsReferences: 19
  20. 20. for Pharmaceutical retail chain: 20