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MANAGING ACROSS

BORDERS

INDIAN RETAIL INDUSTRY

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CONTENTS:

1. India Retail Industry

2. Macro-Environments

3. Increasing complexity in internationalbusiness

4. Implications for business managers

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INDIAN RETAIL INDUSTRY

History Started from stores in villages

Retail stores for convinience

The concept has changed

Forecast Bright future, increase 42% in 2008

Expect to grow 45 billions $ and create 10-15 mil jobs inthe next 5 years

Trends is changing

Increase in young working population

Increase of female power

Alternative spaces or channels for retailers

Changing in shopping habit

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INDIAN RETAIL INDUSTRY

Trends Low share of organized retailing

Falling real estate prices

Increase in disposable income and customer

aspiration Increase in expenditure for luxury items

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MACRO-ENVIRONMENT

Geographic environment

Economical environment

Social and cultural environment

Political and legal environment

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GEOGRAPHIC ENVIRONMENT

Location Southern Asia, bordering the Arabian Sea and the

Bay of Bengal, between Burma and Pakistan

Area and Board Total: 3,287,263 sq km

country comparison to the world: 7

land: 2,973,193 sq km

Natural Resources coal (fourth-largest reserves in the world), iron ore,

manganese, mica, bauxite, titanium ore, chromite, naturalgas, diamonds, petroleum, limestone, arable land

https://www.cia.gov/library/publications/the-world-factbook/rankorder/2147rank.html?countryName=India&countryCode=in&regionCode=sas&rank=7https://www.cia.gov/library/publications/the-world-factbook/rankorder/2147rank.html?countryName=India&countryCode=in&regionCode=sas&rank=7

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GEOGRAPHIC ENVIRONMENT

Climate Winter: very cold, but bright and pleasant, with

snowfall in the northern hills (Nov Mar)

Summer: very dry, hot and humid (Mar Jun)

Monsoon: heavy rainfall (Jun Nov)

Natural and environmental hazards Natural: droughts; flash floods, flooding from

monsoonal rains; severe thunderstorms; earthquakes

Environmental: deforestation; soil erosion;overgrazing; desertification; air pollution; waterpollution; tap water is not potable; huge and growingpopulation is overstraining natural resources

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ECONOMICAL ENVIRONMENT

Second fastest growing major economy

Members of WTO in 1995, World Bank andsouth Asian association for Regional

Cooperation (SAARC)

Main Industries: textiles, chemicals, foodprocessing, steel, transportation equipment,

cement, mining, petroleum, machinery,software

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ECONOMICAL ENVIRONMENT

GDP stood at 6.7 per cent in 2008:

Agriculture: 17.2%

Industry: 29.1%

Services: 53.7%

Labour force: 523.5 million

Agriculture: 60%

Industry: 12%

Services: 28%

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ECONOMICAL ENVIRONMENT

Labour force: 523.5 million

Agriculture: 60%

Industry: 12%

Services: 28% (2003)

Unemployment: 6.8%

Exports: Petroleum products, Textile goods, Gems andJewelry, Engineering goods, Chemicals, Leather manufactures

Imports: Crude oil, Machinery, Gems, Fertilizer, Chemicals

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SOCIAL AND CULTURALENVIRONMENT

Social Changing towards satisfying the different hierarchy of

needs of customers.

Who have the language and social cultural as well asthe communication skills to function well in the

international business. Democracy at work.

International business will be diversity.

Cultural Great diversity of religious practices, languages,

customs, and traditions

Culture is defined by relatively strict social hierarchy.

Strict social taboos have governed these groups

Some of these lines have blurred . Nuclear family isbecoming central to Indian culture.

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SOCIAL AND CULTURALENVIRONMENT

Changing towards satisfying the different hierarchyof needs of customers.

Who have the language and social cultural as well as

the communication skills to function well in theinternational business.

Democracy at work.

International business will be diversity.

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POLITICAL AND LEGALENVIRONMENT

Political Limit on FDI in retail industry

Government has share in local retailers

Under pressure from US, open retail market

LegalRetail is the prohibited sector for FDI

Need approval from Central Government for FDI

Approval from State government, Local authority..etc

Need license to locate within 25 km of urban in 25 cities, non-polluting industry doesnt need license

Can own up to 51% shares

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General: Free Trade : Globalization.

Capitalism:The switch of many nations to market-based economies and capitalism has advanced

globalization's reaches. Democracy : More open societies.

Internet:The Internet aided in the rapid spread ofideas and has helped in the formation of global

society.

PopularCulture:The popularity of movies, music,actors, musicians and television and the availability ofthem across the globe expanded globalization.

INCREASING COMPLEXITY IN INTERNATIONALBUSINESS PAST FACTORS

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INCREASING COMPLEXITY IN INTERNATIONALBUSINESS PAST FACTORS

Economic: Boom industry

Low share of organized retailing

Falling real estate prices

Increase in disposable income and customeraspiration

Increase in expenditure for luxury items

young working population increasing working-women population and emerging opportunities in theservices sector

development of retail space

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INCREASING COMPLEXITY IN INTERNATIONALBUSINESS-PAST FACTORS

Political & Legal:

Government supports local retailers, unfaircompetitions

Limit on shares can own, less control from

foreign investors

More red tapes, more license and approval

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Future Factors: Reducing physical contact with employees (on-line meetings,

working at home, ...)

Multilingual team (Chinese, American, Indian, ...)

Increasing on on-line purchasing

High cost when combined with physical stock as the price of landshall increase at India

Not peaceful region: With the growing Muslim population in India,religious conflicts can occur

Extremely overpopulation

Wide range of ageing employees

More retails channels Multi-specific retail stores

Overseas purchases

INCREASING COMPLEXITY ININTERNATIONAL BUSINESS

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IMPLICATIONS FOR BUSINESSMANAGERS

Upgrade understanding of local law and consultantfirm

Choose the right entry model

Clear commitment with local authorities

Create special fund to solve all unwritten lawsproblems

All red tapes are solved by local managers

Choose the right economy scale and standard of

products Choose the right products for each states with

different culture and religion

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Thanks for your attention!

Rafael DYM0817

Joy AOM3000

Luna AES3048

Dai BCP3000