Professional Documents
Culture Documents
ACQUISITION
Assignment :1
Sanya Mohindra
Mum13ap11
INTRODUCTION
The Indian retail market is growing at a very fast pace of about 20% and has a
market size of US$ 500 billion. The retail sector is the second largest employer
after agriculture. The retail industry alone managed to generate more than 35
million job opportunities.
The Indian retail industry is segregated into two sectors: organized and
unorganized retailing. Organized retailing comprises of those kind of trading
activities which are undertaken by retailers who are registered for sales tax,
Income tax etc. Corporate backed hypermarkets, retail chains, privately owned
large retail businesses are some of the examples of organized retailing.
Unorganized retailing mainly comprises of local kirana shops, owner managed
general stoes, street vendors, convenience stores etc.
However now it can be seen that traditional markets are paving way for
development of departmental stores, supermarkets, specialty stores. shopping
from malls and buying branded products is also gaining momentum. Inspite of all
this Indian retail sector is mainly dominated by Unorganized segment with 95%
-97& share. The reason for this being deep penetration of this sector in the rural
areas and large number of mom and pop stores in the urban areas.
Some of the key players in the organized retail sector
Pantaloons Retail Ltd, a future group venture
Shoppers Stop Ltd
Spencer Retail, RPG enterprises
Lifestyle, Landmark Group Venture
Other major indigenous players in retailing are Reliance Retail, Bharti Retail,
Globus, Aditya Birla "More" etc.
Many Foreign players have entered India through Joint Venture with domestic
firms like :
Carrefour in New Delhi, which launched its first cash and carry store here.
Wall Mart, joint venture with Bharti Retail, owns Easy Day
British retailer TESCO Plc entered into JV with Trent , retail segment of
TATA group.
Marks & Spencer joint venture with Reliance Retail
Modern retail formats: The growth of western style malls is changing the way
customers shop. The size of these stores is about 50,000 sq ft.
INDIA:
The retail companies are found to be rising in India at a remarkable speed with
the years and this have brought a revolutionary change in the shopping attitude
of the Indian customers. The Growth of Retail Companies in India is facilitated by
certain factors like Existing Indian middle classes with an increased purchasing power
Rise of upcoming business sectors like the IT and engineering firms
Change in the taste and attitude of the Indians
Effect of globalization
Heavy influx of FDI in the retail sectors in India
PANTALOON RETAILING
The flagship company of Future Group, Pantaloons Retail operates over 16 million
square feet of retail space, has over 1000 stores across 73 cities in India and
employs over 30,000 people. It can boast of launching the first hypermarket Big
Bazaar in India in 2001. The companies also operates in other retail segments
such as - Food & grocery (Big bazaar, Food bazaar), Home solutions (Hometown,
furniture bazaar, collection-i), consumer electronics (e-zone), shoes (shoe
factory), Books: music & gifts (Depot), Health & Beauty care services (Star, Sitara
and Health village in the pipeline), e-tailing (Futurbazaar.com), entertainment
(Bowling co.)
Opportunities
Increasing competitors
Government policies
Unrecognized modern retailing
Local policies
Resistance from small retailer
SHOPPERS STOP
The RPG group forayed into retail with Shoppers Stop, Indias first departmental
store in 2001. It is the only retailer from India to become a member of the
prestigious Intercontinental Group of Departmental Stores (IGDS). They have
signed a 50:50 joint venture with the Nuance Group for Airport Retailing.
Shoppers Stop has a national presence, with over 2.05 million square feet area
across 39 stores in 17 cities. It has also introduced new formats in the market
viz., Home Stop the exclusive home furnishings, decor as well as furniture store
and Hyper City a premium shopping destination for Foods, Home ware, Home
Entertainment, Hi-Tech Appliances, Furniture, Sports, Toys & Fashion. Other
format of the company includes -- Crossword Book Store, Mother Care & Early
Learning Centre (ELC), Estee Lauder group, Airport Retailing, Time Zone
Entertainment.
Weaknesses
Very high prices
Less schemes
Less discounts
Competition from stand alone
Loyal customer
Low risk
Good financial position
Presence across various
segments
Opportunities
stores
Late entry into value retailing
Store makeover expenditure
Threats
Government policies
Entrance of new players
High attrition
Lesser consumer spending
Entry of foreign players
Unorganized sector
Independent stores
TATA GROUP
Strengths
Resources and
capabilities
Vast experience
The business model
Weaknesses
Distribution
Value chain innovation
Macro environment
Serving the global markets with high quality
and low price
Opportunities
New markets
Exports
Threats
Indias recent mergers of global markets
Acquisitions
RELIANCE INDUSTRIES
The company owns more than 560 Reliance Fresh stores and recently it has
also launched Reliance Mart Hyper mart. The company further plans to launch its
hyper mart in Delhi / NCR, Hyderabad, Vijay Wada, Pune and Ludhiana region.
Weaknesses
Strengths
Strong brand recognition
Internet sales
Growing international presence
Superior research and
development department
Strong financial returns
Strong sense of culture in the
working environment
Successful experience being
competitive
Effective leadership
Cost leadership
Prestigious client base
Customer loyalty
Diversified business
Product innovation capabilities
Technological excellence
Weaknesses
Complexity of operation
Lengthy processing chain
Opportunities
Growth of core sector industries
Rapid interaction with global
economy
Booming construction business in
Asia
Growing e-commerce & business
Increasing urbanization
Threats