Premium Essay

Look at the Indian Organised Retail Industry. Would Collaboration with Global Retailers Such as Wal-Mart and Tesco Be a Better Growth Strategy, or Would It Be in Understanding Who Their Major Competitors Are and

In: Business and Management

Submitted By manurbhav
Words 638
Pages 3
Look at the Indian organised retail industry. Would collaboration with global retailers such as Wal-Mart and Tesco be a better growth strategy, or would it be in understanding who their major competitors are and matching their capabilities and out competing them?

The recent wave of reforms by the Government to incentivize Foreign Direct Investment (FDI) in various sectors is bringing a new zeal to the investment climate in India. One of the most debated reforms is the policy for allowing 51 per cent FDI in multi-brand retail. Organized retail, which constitutes 8 per cent of the total retail market, will grow much faster than traditional retail. It is expected to gain a higher share in the growing pie of the retail market in India. Various estimates put the share of organized retail as 20 per cent by 2020.

The Indian retail industry has experienced growth of 10.6% between 2010 and 2012 and is expected to increase to USD 750-850 billion by 2015. Food and Grocery is the largest category within the retail sector with 60 per cent share followed by Apparel and Mobile segment.

Multi-brand specialty retail segment such as Beauty & Wellness and Consumer Electronics are still in their nascent stage. Their current market size may not hold a big potential for foreign retailers.

India is not one market:
States in India differ in terms of culture, language, socio-economic development etc. Further, different spending power results in different customer segment even within a state. This makes it imperative on the part of the international retailers to customize their offerings to suit regional Indian tastes.

Real Estate Choice:
Another critical success parameter is the real estate choice at prime location and reasonable rentals. This is especially true for a multibrand retailer, which requires a large retail space.

Private Label brand:
To meet the…...

Similar Documents

Premium Essay

Indian Retail Industry

...OVERVIEW India is the fifth largest retail market globally, with a size of INR 16trn, and has been growing at 15% per annum. Organized retail accounts for just 5% of total retail sales and has been growing at 35% CAGR. Though the journey has so far been rather mixed, organized retail is being tipped as one of the biggest gainers from growing consumerism and rising income. India’s robust macro and microeconomic fundamentals, such as robust GDP growth, higher incomes, increasing personal consumption, favourable demographics and supportive government policies, will accelerate the growth of the retail sector. 1) Learning from the Past: During2005-2007, the sector was in a hyper growth phase. In pursuit to capture market, companies made strategic as well as operational errors which has been broadly classified as follows: I .Race for increasing retail space resulting in haphazard growth ii. Unviable formats iii. High lease rentals iv. Manpower costs and productivity issues v. Poor back end infra structure vi. Entry of too many new players 2) Consolidation:Duringtheglobalslowdownphaseof2007-2009,theIndianretailplayerspausedtorealizetheirpastmistakesandtooktimeandefforttore-organizethemselves:i.Focusonprofitablegrowth * Exit from unprofitable stores/formats * Rental renegotiation/revenue sharing arrangements * Reduction in salaries/higher manpower productivity * Significant investments in backend ...

Words: 3256 - Pages: 14

Premium Essay

Wal-Mart Mis Strategy

...Wal-Mart- A Case Study of MIS Strategy Walden University Wal-Mart – A Case Study of MIS Strategy Management information system is all about people using technology to work with information as they support the organization in its quest for a competitive advantage (Haag & Cummings, 2008, p. 29). Researchers and authors have discussed management information systems and technology over the decades. The concepts of competitive advantage, technology, outsourcing etc. have been theorized, yet discussion on the subject matter continues. While MIS strategy formulation has seen advancement, organizations are evolving and constantly changing their operating models. An example of such organization is Wal-Mart, the global retail giant. This research seeks to pin-point Wal-Mart’s key management information system strategy, while providing a deeper understanding of the organization’s management information systems strategy and its impacts. Further it aims to investigate knowledge management, e-commerce strategy, and the impact of database management which are aspects that can be incorporated into the MIS strategy formulation. To achieve this objective the literature survey was conducted to explore available published papers in the sphere of IS/IT strategy formulation. Considering that the applicability of information systems and technology is mission critical, the research design focused on the qualitative approach. The primary method of data collection was through......

Words: 1763 - Pages: 8

Premium Essay

Fdi in Retail Detailed Analysis FDI Good or Bad for India Who will benefit in India if FDI is allowed in Multi Brand this is Kirana Business Few days back the Union Cabinet of India overcame years of indecision to allow up to 51% FDI in multi-brand retail. Government also increased the FDI limit in single-brand retail to 100% from 51% Government says it will benefit India. Traders fear the move. Opposition parties oppose the move as they know they will benefit if they support the traders. No one is touching the real issues and accepting the truth that today or tomorrow FDI, big global corporations will enter into India directly or indirectly. Today world is becoming a global village. Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (‘FIPB’) is required. In franchising and commission agents’ services, FDI (unless otherwise prohibited) is allowed with the approval of the Reserve Bank of India under the Foreign Exchange Management Act. Examples of Such Business - Pizza Hut or Nike or Spencer 100% FDI is allowed in wholesale trading. Wholesalers do the business with the Retailers. Wholesalers never do business with Consumers. Few days back......

Words: 12116 - Pages: 49

Free Essay

Global Market

...Chapter 7 Operating in Global Markets “Globalisaton is clearly a double-edged sword. The advantages of being a transnational corporation in emerging markets have declined dramatically in recent times. Smart local companies have used the benefits of globalization to close gaps in technology capital and talent with their rivals from the developed world.” - Arindam K Bhattacharya, David C Michael, Harvard Business Review, March 2008. Introduction Global companies operate across the world. In different markets, customer requirements may vary. The temptation to customise for each market, has to be tempered by the need to keep costs down through standardisation. As discussed before, the logical approach would be to identify and analyse the various value chain activities that make up the marketing function and decide which of these must be performed on a global basis and which localised. This chapter covers product management, pricing, sales and distribution and customer relationship management. Global branding, which merits a separate treatment is covered in Chapter 8. Product management Should the same product be offered across overseas markets? Or should it be customized according to the specific needs of different markets? A globally standardised product can be made efficiently and priced low but may end up pleasing few customers. On the other hand, excessive customisation for different markets across the world may be too expensive. The trick, as in the case of...

Words: 7365 - Pages: 30

Premium Essay

Wal-Mart Failure in German

...retailing: the case of Wal-Mart’s failure in Germany Susan Christophersonà Abstract Wal-Mart’s exit from the German market in 2006 after 10 years of attempting to achieve sustainable competitive advantage contributes an interesting case to the small but expanding literature on ‘failure’ in international investment. The work on the disinvest decision in all its forms has been critical to a re-conceptualization of the international investment process as dynamic rather than static, linear and inexorable. An important segment of the work on investment and disinvestment as dynamic processes focuses on the environment in which investment and disinvestment decisions evolve. While the environment of the host country market has begun to be examined, the market environment of the country in which the retail transnational corporation (TNC) originates also affects the international disinvestment process. To explore this ‘home country effect’, I examine the resources Wal-Mart brought into the German market and their ability to use those resources in the German context. WalMart’s resources were shaped by the market governance regime in which the firm evolved, and not insignificantly, over which it had and has influence. Within this theoretical frame, Wal-Mart’s reliance on the resources of network dominance and autonomous action that made for its success in the USA contributed to unsuccessful strategies in the German retailing market. Keywords: lean retailing, Wal-Mart, Germany,......

Words: 10244 - Pages: 41

Premium Essay

Retail Industry

...INTRODUCTION The last decade has witnessed dynamism in Indian retail sector. Various urban areas have been at the center of attraction with emergence of different kinds of organized retail formats gaining momentum. It is largely due to rising income, increasing purchasing power, credit facilities, changing pattern of consumer behaviour and increased consumer awareness. Retailing has emerged as one of the most important sectors of Indian economy beyond the 90s. A large number of retail model retail formats have come in force offering a wide spectrum of merchandise and services. The professional orientation and incorporation of various technology–enabled softwares has offered these retailers better customer relationship management, merchandise offering, store atmosphere and inventory management. There’s a flurry of activity as a revolution sweeps through small town India, with intimidating Malls, Hip stores, looming Hypermarkets & hangouts mushrooming all over the place, apart from a perceptible lifestyle change, breathing fire into these cities (Agarwal, 2006). And it is happening not just in one or two cities, but across all major Tier – II & III cities of India, and in a spectrum of sectors – booming real estate, malls, multiplexes and cinemas, global majors setting up plants and offices, sprawling IT hubs, SEZs and much more. More & more corporate houses including large real estate companies are coming into the retail business, directly or indirectly, in the form of malls......

Words: 16163 - Pages: 65

Premium Essay

Growth and Challenges of Retail Industry in India: an Analysis

...2319-2836 GROWTH AND CHALLENGES OF RETAIL INDUSTRY IN INDIA: AN ANALYSIS SUNITA SIKRI & Ms. DIPTI WADHWA Assistant Professor M.L.N College Yamuna Nagar-Haryana ABSTRACT The Indian Retail Industry is the fifth largest in the world. Comprising of organized and unorganized sectors, Indian retail industry is one of the fastest growing industries in India, especially over the last few years. Though initially the retail industry in India was mostly unorganized, however with the change of taste and preferences of consumers, the Industry is getting more popular these days and getting organized as well. The Indian Retail Industry is expected to grow from US$330 billion in 2007 to US$640 billion by 2015. According to the 10th Annual Global Retail Development Index (GRDI) of A.T. Kearney, India is having a very strong growth fundamental base that’s why it’s the perfect time to enter into Indian Retail Market. Indian Retail Market accounts for 22% of country’s GDP and it contributes to 8% of the total employment. The total retail spending is estimated to double in the next five years. Of this, organized retail –currently growing at a CAGR of 22%- is estimated to be 21% of total expenditure. The unorganized retail sector is expected to grow at about 10% per annum with sales expected to rise from $309 billion in 2006-07 to $496 billion in 2011-12. This paper focused on changing face of Retail Industry, organized or unorganized retail industry, major players in retail industry......

Words: 4929 - Pages: 20

Premium Essay

Wal Mart

...Management at wal mart Submitted to: Prof Mhihr Das Submitted By: Kunal Bhatia (M00116, Hitesh Bambhaniya (M00126), Saloni Umraniya (M00128), Sagar Nathani (M00134) 3/6/2014   Table of Contents Introduction 3 Value Chain System of wall mart 4 Porter 5 force 4 SWOT 5 Competitors 6 Suppliers 8 Back haul of wall mart 9 Role of HR 10 Role of RFID 11 Strategy 12 Strategy of other companies 13 Conclution 16 Introduction The retail industry is dominated by few retail giants, with Wal-Mart competing in several retail categories. Wal-Mart competes against Kmart and Target in the general merchandise retailing; against Costco in the warehouse club segment; and against Kroger, Albertson’s and Safeway in the supermarket retailing. Competition among retailers centers on pricing, store location, variations in store format and merchandise mix, store size, shopping atmosphere, and image with shoppers. Further analysis provided by the following figure diagnoses the competitive environment of the retail industry. As a fact, Wal-Mart is considered as the world’s largest retailer nationwide that has been guided by its founder Sam Walton’s passion toward customer satisfaction, and his beliefs in excellence, as well as his philosophy in lowering his prices that has been proven with his famous slogan “everyday low prices.”1Visible outstanding success has required a lot of effort, strategies, dedication, and wide consideration. Such as......

Words: 3334 - Pages: 14

Premium Essay

Fdi in Retail: Beneficial or Detrimental and It’s Future Affect on Indian Economy

...FDI IN RETAIL: BENEFICIAL OR DETRIMENTAL AND IT’S FUTURE AFFECT ON INDIAN ECONOMY BY HARJOT KAUR PARMAR (UGC NET, MBA, PGDM, BBA,) ABSTRACT FDI is a type of investment that involves the injection of foreign funds into an enterprise that operates in a different country of origin from the investor. Regardless of today’s crisis, India is considered as one of the most superlative place by foreign investors because of its increasing young population and rising disposable income among the middle class society, that is why large corporations like walmart are showing keen interest in initiating there retail operations in India. But mass round of discussions and debate has started after Government decision on 14 September 2012 allowing FDI in aviation up to 49%, in the broadcast sector up to 74%, in multi-brand retail up to 51% and in single-brand retail up to 100% with high level of disagreement and resistance from the opposition who believe that entry of Big Corporations in retail sector will badly effect the crores of retail shopkeepers and vendors resulting in depart of kirana stores, Whereas government is in favor and believe that it will generate large scale of employment, benefit both farmers as well as consumers and will help in reducing inflation. This research paper aim is to find why foreign investors are attracted towards India, find arguments in favor and against of FDI and what will be its effect on Indian economy in future, whether FDI will be......

Words: 5668 - Pages: 23

Free Essay

Wal- Marts Current Strategy

...Analyse The Wal Marts Case Study Management Essay /essays/management/analyse-the-wal-marts-case-study-management-essay.php Wal-Mart Stores, Inc. opened in 1962 by Sam Walton and his brother. Nowadays, it is ranks as the largest corporation in the World. In early 1990s, the company announced that it would initiate the international operations, which commenced in 1991 in some countries like Canada, Puerto Rico, Argentina, China, etc. (Reference for Business, 2012). PEST Analysis In order to analyse the Wal-Mart's case study we are going to apply the PEST analysis which is 'A type of situation analysis in which political-legal, economic, socio-cultural and technological factors are examined to chart an organization's long-term plans' (Business Dictionary, 2012). II.1. Political Factors When a firm desires to undertake businesses in a foreign country there are some factors to investigate before taking a final decision, for example, the system of the government, law and local trade unions, language, religious and ethical values. Wal-Mart faced numerous complications on the legal and political front in many countries. For example, in Mexico the company participated in an aggressive lobbying campaign to amend the long-standing U.S. anti-bribery law that the company might have violated. The 1977 law, well-known as the Foreign Corrupt Practices Act, prohibits U.S. firms from offering fees or gifts to foreign officials to advance corporate interests (Hamburger, Dennis &......

Words: 1692 - Pages: 7

Premium Essay

Strategic Development in Global Food Retail

...Case Study – Strategy Development in the Global Food Retail Supermarket Industry Introduction In order to develop a global strategy, the deep understanding of the term ‘globalization’ is very important for every company. Globalisation: The globalization increases the mobility of goods. Globalization is a term describing different complex ideological, political, environmental and cultural forces as one world. During World War II, the national boundaries got faded and financial markets, information services, manufacturing concerns as well as cultural products have made themselves available to the whole world. American hamburgers are available in Tokyo today and Japanese cars gets assembled and marketed in America. Virtually everybody is connected through Internet throughout the world. The world around us seems completely borderless. (Steger, 2009) The globalization of food retail super market industry has developed extensively in the supply chain retailing. It has made a greater impact on the public consumer market. The globalization has forced the local food retailers to think beyond retailing in the domestic markets for sustainable growth and presence. The global food retailing industry is a complex collection of diversified supermarket chains, independent food stores, and direct-to-consumer services that supply much of the food consumed today. The successful food retailers usually follow two strategic formats which are as follows: * Discount Outlets These......

Words: 3699 - Pages: 15

Premium Essay


...Acknowledgements : First of all we would like to introduce our selfs, BIALLACH Safae and EL YOUNSI nahide, a 3rd year students in SUP DE CO MARRAKECH. In the third year the internship is a part of the program at our school. But for the two of us, we didn’t do an internship because we shose to go for a summer school programme in LONDON, UNITED KINGDOM for two weeks at the LONDON SCHOOL OF BUSINESS AND FINANCE (LSBF). The objectives during this journey were to improve our level in English language, to Discover a new culture, to visit a lot of places that we wanted to see and also to meet a lot of different people from different countries. Studiying in LONDON was a wonderful experience that we wont forget. for that, we would like to give some thanks to all the people that helped to gave us the chance to go for this programme. Without forgeting a special Thanks to our English Teatcher M.EL FOUADI KAMAL for this opportunity. Last, but not least, we would like to thank our parents and family for supporting our stay in LONDON financially and emotionally. INTRODUCTION ...................................................................................................2 SECTION 1 : TESCO……………. .........................................................................4 1-BUSINESS DESCRIPTION…………. ......................................................5 2-HISTORY......

Words: 9552 - Pages: 39

Premium Essay

Global Marketing Wal-Mart

...Wal-mart A global organization that has been unsuccessful in transferring their successful products or ideas from their home country to foreign markets is Wal-mart. Wal-mart has failed to do this in many countries. For example, in Brazil and Germany, Wal-mart did not understand the local culture, and failed to transfer their products into these countries. In Brazil, there were many other discount stores in which food was available at cheaper prices. Wal-mart’s business model of selling low prices, having obsessive inventory control, and a having a large variety of merchandise failed in this market because Brazil already had their own discount chain stores which were successful there. As we have established, there are some companies that experience "issues" when deciding to move their products or services to a changing consumer market. Although these companies have shown success in domestic locations, it is evident that without consideration of the changing consumer, and the ability to adapt product and services, companies, as large as they may be in some locations, have an increased failure rate internationally.  “US based Wal-Mart, the world's largest retailer, entered Brazil in 1995 by forming a 60:40 joint venture with one of the country's leading business conglomerates, Grupo Garantia (” The entry mode would be in association with Lojas Americanas, which is controlled by Grupo Garantia. Wal-Mart’s intention was to achieve the number one retailer......

Words: 1712 - Pages: 7

Premium Essay

Aditya Birla Retail Ltd

...CHAPTER 1 GENERAL INTRODUCTION INTRODUCTION OF THE STUDY Retailing in India is receiving global recognition and attention and this emerging market is witnessing a significant change in its growth and investment pattern. It is not just the global players like Wal-Mart, Tesco and Metro group are eying to capture a pie of this market but also the domestic corporate behemoths like Reliance, K K Modi , Aditya Birla group, and Bharti group too are at some stage of retail development. Reliance, announced that it will invest $3.4 billion to become the country's largest modern retailer by establishing a chain of 1,575 stores by March 2007. The last couple of years have been rosy for real estate developers and the retailers are finding suitable retail space in prominent locations. The industry is buoyant about growth and the early starters are in expansion mood. There is increased sophistication in the shopping pattern of consumers, which has resulted in big retail chains coming up in most metros; mini metros and towns being the next target. Consumer taste and preferences are changing leading to radical alteration in lifestyles and spending patterns which in turn is giving rise to new business opportunities. Companies need to be dynamic and proactive while responding to the ever-changing trends in consumer lifestyle and behavior. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, or by post, in small or individual lots......

Words: 7607 - Pages: 31

Premium Essay

Retail Marketing

...Dheepak on Retail STVP 2007-002 STVP-2007-002 [June 12, 2007] Organized Retail “Inquilab” in India Current Landscape of Retail in India The Indian government does not recognize retail as an industry. In India 98% of the retail sector consists of counter-stores and street-vendors.1 With no large players, inadequate infrastructure and a small affording population that believed in saving rather than spending, Indian retail never attracted the interest of large corporations. That was till they realized that retail in India is a USD 320 billion dollar industry, growing at CAGR 5% and contributing to 39% of the GDP2 (See exhibit 1 for projected market size of retail in India.). It might seem almost nonsensical that this important sector of the country’s economy has been overlooked by corporate giants. One cannot blame them though. Indian retail has been a traditionally unorganized sector, dominated by counter-stores and street vendors (See Exhibits 2 and 3 for pictures). While retail employs a large sector of the population, most of these people are uneducated, unskilled individuals that regard retail as the preferred career alternative to agriculture. They never had the means nor will to develop the sector or expand their business. Retail never enjoyed the support of the Indian consumer. A miserly population that barely had the means to make end meet never treated shopping as a form of leisure. While individual retailers saw small gains, lack of......

Words: 10715 - Pages: 43