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RETAIL INDUSTRY ANALYSIS (BIG BAZAAR)Presentation ByLagnajit Ayaskant Sahoo Somya Ranjan Pattanayak Priyanka Raj Sanat Rout

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Plan of Presentation Industry AnalysisIndustry size Key Players Key Drivers of change(PESTEL, Diamond Analysis) Opportunity and Threat

Organization Analysis Company details Stake Holder Analysis Value System Resource Analysis Competitive Strategy Conclusion

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Industry Size India s top retailers are largely lifestyle, clothing and apparel stores This isfollowed by grocery stores Following the past trends and business models in thewest retail giants such as Pantaloon, Shoppers Stop and Lifestyle are likely totarget metros and small cities almost doubling their current number of stores These Walmart wannabes have the economy of scale to be low medium cost retailerspocketing narrow margin

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Key Players Pantaloon Retail (India) Limited with over 12 million sq ft of retail spad over 1,000 stores across 71 cities in India. Tata Trent limited Retail sectoractivity: Apparel, books and music Current store formats: Hypermarket, supermarkets Future plans: New venture called RPG Enterprises Stores: 250 stores, including 36 large format stores across 66 cities in India Retail sector activity: Music, food and grocery, beauty products Landmark Group Apparel, home dcor and fur

nishing, Current outlets: 15 Lifestyle stores and eight Home Centers Madura garments 82 store in India across 50 cities and five international stores Retail sector activity: Apparel Vishal Mega mart 180 showrooms in 100 cities, Retail areacoverage of 2,990,146 sq ft Bata 1,250 outlets in India Provogue Ltd. Apparel and footwear, 124 own stores and 228 outlets in 64 cities Archies Ltd. Archies has100 company-owned stores in India and 450 franchise-run outlets

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PEST ANALYSIS POLOTICAL Government is stable Government policy towards investment is liberal(49%) Labor law Restriction for MNC s ECONOMICAL Economy is growing(7.2%) Recoveryfrom recession Monetary policy

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CONTD . Socio-cultural According to mckinsey report Indian consumer goods market is expected to reach $400 bl. By 2010 TECHNOLOGY Rapid expansion of IT sector New trends are coming

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Key drivers of change Multiple drivers leading to a consumption boom: Favorable demographics Growth inincome Increasing population of women Raising aspirations : Value added goods sales Food and apparel retailing key drivers of growth Organized retailing in India has been largely an urban phenomenon with affluent classes and growing numberof double-income households. More successful in cities in the south and west ofIndia. Reasons range from differences in consumer buying behavior to cost of re

al estate and taxation laws. Rural markets emerging as a huge opportunity for retailers reflected in the share of the rural market across most categories of consumption IT is a tool that has been used by retailers ranging from Amazon.com toeBay to radically change buying behavior across the globe.

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Opportunities and threatsOPPORTUNITIESTHREATS

Retail industry in INDIA accounting 10% of the country s GDP. Successive Indian

government have steadily Liberalize policies related to investment, banking, trading etc. URBANISATION caused more concentration of middle income and high income people. Hypermarket is emerging as the most favorable format for the time being in India Increasing workforce of women Falling real estate prices Increase indisposable income and customer aspiration Increase in expenditure for luxury items Low share of organized retailing

Automatic approval is not allowed for foreign investment in retail. Regulationsrestricting real estate purchases, and cumbersome local laws. Taxation, which favours small retail businesses. Absence of developed supply chain and integrated

IT management. Lack of trained work force. Low skill level for retailing management. Lack of Retailing Courses and study options Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins.

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About Big Bazaar Out let Parent group Owner Founded Head quarter Industry website Tag line Vision

Hyper mart Chain of development store in India 120 out lets Located in India Future group Kishore Biyani (CEO) 2001 Jogeswari , Mumbai Retail www.bigbazar.com Is se sasta aur achha kahin nahi. Everything ,Everywhere, Every time for every Indian consumer in the most profitable manner

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Main Market/ Non Market stakeholders

Stakeholders & Big BazaarMarket Stakeholders The stockholders The Big Bazaar Executive The Employees TheCommunities where Big Bazaars located Consumers Suppliers Non profit Organization Competitors

Contributions

Big BazaarInducements

Contributions

Inducements

Non Market Stakeholders The Labor Unions The International Retail Stores The Politicians

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Value System BIG BAZAAR

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IN HOUSE BRANDS @ BIG BAZAARDJ & C KORYO FRESH & PURE SARAPOLO CLEAN MATE STAR SITARA RENUKA and SENSEI CAREMATE MAJITHIA

40 more brands

FEW BRANDS @ BIG BAZAAR

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Porter s five force model

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Analysis5 ForcesRivalry among the competitor

AnalysisReliance Retail, Aditya Birla Group , Vishal Retails, Bharti and Walmart, etcFDI policy not favorable for international players. Economies of scale (minimum s

ize requirements for profitable operations) High initial investments and fixed costs Cost advantages of existing players due to experience curve effects of operation with fully depreciated assets Scarcity of important resources, e.g. qualifiedexpert staff

Threat of entrants

Bargaining power of supplier

The bargaining power of suppliers varies depending upon the target segment. The unorganised sector has a dominant position. There are few players who have a slight edge over others on account of being established players and enjoying brand di

stinction. Consumers are price sensitive.. Availability of more choice. Unorganized retail

Bargaining power of buyers

Threat of substitutes

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Resource Analysis Human Resource Well Trained Staff Appearance Empowered Individual Encouraged ToThink Out Of The Box Employ close to 10,000 people and recruit nearly 500 additional people every month Use Scenario Planning as a tool for Quick Decision Making Security Gaurds At All Gates

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Financial data

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CORE COMPETENCY Big Bazaar Core-Competency of OF BIG BAZAR A choice of more than 20000 products Delivery across more than 1500 cities covering around 16000 pin codes A dedicated customer care helpline for any queries Fast delivery-tie up with world leader logistic & transportation services Talks ofQuality and Cost Special emphasis on apparels and life style products Providinginteresting discounts

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Strength - High Brand Equity - State-of-art infrastructure - EDLP - PoP promotions - Variety of stuff under single roof -MIS

Weakness- Unable to meet store opening targets - Falling revenue/sq. ft. - General perception

Opportunity Organized retail (4.15%) Evolving consumer preferences In Store Experience Improvements New formats and consumption space Looking at expansion

Threat- Competitors - Government policies - Unorganized retail -Economic condition

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Customer Segmentation Big Bazaar targets higher and upper middle class customers. The large and growing young working population is a preferred customer segment. Big Bazaar specifically targets working women and home makers who are the primary decision makers.

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Big Bazaar At BCG MatrixM A R K E T H I G H

G R L O O W W T H

High Market Share

Low

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Organization value and customer value

*High organization value *Low customer value

Big Bazaar *High organization value *High customer value

*Low organization value *Low customer value

*Low organization value *Low customer value

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Strategy Focus on Rural customer? 73% of population live in 6,00000 villages out of Totalpopulation 114 billion. Minimum support price. NREGS -100 days employment. Income from farm products is Tax free.

Customer oriented Employee oriented- high attrition rate

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Thank You

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References

www.bigbazaar.com It Happened in India- Kishore Biyani www.ibef.org www.google.co.in www.economictimes.com futurebazaar.com

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