RETAIL INDUSTRY ANALYSIS(BIG BAZAAR)

Presentation By-Lagnajit Ayaskant Sahoo

Somya Ranjan PattanayakPriyanka RajSanat Rout

Plan of Presentation• Industry Analysis Industry 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

Industry Size• India’s top retailers are largely

lifestyle, clothing and apparel stores

• This is followed by grocery stores

• Following the past trends and business models in the west retail giants such as Pantaloon, Shoppers’ Stop and Lifestyle are likely to target metros and small cities almost doubling their current number of stores

• These Walmart wannabes have the economy of scale to be low –medium cost retailers pocketing narrow margin

Key Players• Pantaloon Retail (India) Limited with over 12 million sq ft of retail space

spread over 1,000 stores across 71 cities in India.• Tata Trent limited Retail sector activity: 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 décor and furnishing, 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 area coverage 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 has 100 company-owned stores in India and 450

franchise-run outlets

• POLOTICAL • ECONOMICAL

• Government is stable• Government policy

towards investment is liberal(49%)

• Labor law • Restriction for MNC’s

• Economy is growing(7.2%)

• Recovery from recession

• Monetary policy

PEST ANALYSIS

• Socio-cultural • TECHNOLOGY

• According to mckinsey report Indian consumer goods market is expected to reach $400 bl. By 2010

• Rapid expansion of IT sector

• New trends are coming

CONTD….

Key drivers of change

• Multiple drivers leading to a consumption boom:• Favorable demographics• Growth in income• 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 number of double-income households. • More successful in cities in the south and west of India. Reasons range

from differences in consumer buying behavior to cost of real 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 to eBay to radically change buying behavior across the globe.

Opportunities and threatsOPPORTUNITIES

• 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 in disposable income and

customer aspiration• Increase in expenditure for luxury

items• Low share of organized retailing

THREATS

• Automatic approval is not allowed for foreign investment in retail.

• Regulations restricting 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.

About Big Bazaar Hyper mart Chain of development store in India

Out let 120 out letsLocated in India

Parent group Future group

Owner Kishore Biyani (CEO)

Founded 2001

Head quarter Jogeswari , Mumbai

Industry Retail

website www.bigbazar.com

Tag line Is se sasta aur achha kahin nahi.

Vision Everything ,Everywhere, Every time for every Indian consumer in the most profitable manner

Stakeholders & Big Bazaar Main Market/ Non Market stakeholders

Market Stakeholders• The stockholders• The Big Bazaar Executive• The Employees• The Communities where Big Bazaars located• Consumers• Suppliers• Non profit Organization•Competitors

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

Big Bazaar

Contributions

Contributions

Inducements

Inducements

- SUPPLY CHAIN BIG BAZAAR

Supplier

Warehouse

Inspection

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Quality Check

Inspection

Value System – BIG BAZAAR

IN HOUSE BRANDS @ BIG BAZAAR

DJ & C CLEAN MATE SENSEI

KORYO STAR SITARA CARE MATE

FRESH & PURE RENUKA MAJITHIA

SARAPOLO and 40 more brands

FEW BRANDS @ BIG BAZAAR

Porter’s five force model

Analysis 5 Forces Analysis Rivalry among the competitor •Reliance Retail, Aditya Birla Group , Vishal Retail’s,

Bharti and Walmart, etc

Threat of entrants •FDI policy not favorable for international players. • Economies of scale (minimum size 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. qualified expert staff

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 distinction.

Bargaining power of buyers • Consumers are price sensitive..•Availability of more choice.

Threat of substitutes •Unorganized retail

Resource Analysis

• Human ResourceWell Trained StaffAppearanceEmpowered IndividualEncouraged To Think 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

Financial data

CORE COMPETENCY 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 of Quality and Cost• Special emphasis on apparels and life style products• Providing interesting discounts

Core-Competency of Big Bazaar

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

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.

MARKET

GROWTH

Market ShareHigh

LOW

HIGH

Low

Big Bazaar At BCG Matrix

MARKET

GROWTH

HIGH

LOW

MARKET

GROWTH

HIGH

Low

LOW

MARKET

GROWTH

HIGH

High Low

LOW

MARKET

GROWTH

HIGH

Market ShareHigh Low

LOW

MARKET

GROWTH

HIGH

HighMarket Share

High LowMarket Share

High

MARKET

GROWTH

LowMarket Share

High

LOW

MARKET

GROWTH

LowMarket Share

High

HIGH

LOW

MARKET

GROWTH

LowMarket Share

HighMarket Share

High LowMarket Share

High

MARKET

GROWTH

LowMarket Share

High

LOW

MARKET

GROWTH

LowHigh

HIGH

LOW

MARKET

GROWTH

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HIGH

LOW

MARKET

GROWTH

LowHigh

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

Strategy

Focus on Rural customer?• 73% of population live in 6,00000 villages out of Total

population 114 billion.• Minimum support price.• NREGS -100 days employment.• Income from farm products is Tax free. Customer oriented Employee oriented- high attrition rate

Thank You

References

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