environmental analysis of big bazaar for the year 2010

8/3/2019 Environmental Analysis of Big Bazaar for the Year 2010

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ENVIRONMENTAL ANALYSIS OF BIG BAZAAR FOR THEYEAR 2010 – 2011

SUBMITTED TO PROF. GARIMA SHARDA

BY:AAYUSHI BAROT

ASHWIN SONIMANAN PATELSWEETY VAISHNAV

(MBA-II SEM-III (B) NOON SHIFT)



INDUSTRY INTRODUCTION:

The Indian Retail Industry is the largest among all the industries, accounting for over 10

per cent of the country‟s GDP and around 8 per cent of the employment.

The Retail Industry in India has come forth as one of the most dynamic and fast paced

industries with several players entering the market.

Retailing in India is gradually inching its way toward becoming the next boom industry.

The whole concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India.

Modern retail has entered India as seen in sprawling shopping centers, multi-storied

malls and huge complexes offer shopping, entertainment and food all under one roof.

The Indian retailing sector is at an inflexion point where the growth of organized retailing

and growth in the consumption by the Indian population is going to take a higher growthtrajectory.

The Indian population is witnessing a significant change in its demographics. Retail and

real estate are the two booming sectors of India in the present times. And if industry

experts are to be believed, the prospects of both the sectors are mutually dependent on

each other.

Retail, one of India‟s largest industries, has presently emerged as one of the most

dynamic and fast paced industries of our times with several players entering the market.

Accounting for over 10 per cent of the country‟s GDP and around eight per cent of theemployment retailing in India is gradually inching its way toward becoming the next

boom industry.

As the contemporary retail sector in India is reflected in sprawling shopping centers,

multiplex- malls and huge complexes offer shopping, entertainment and food all under

one roof, the concept of shopping has altered in terms of format and consumer buying

behavior, ushering in a revolution in shopping in India.



This has also contributed to large-scale investments in the real estate sector with major

national and global players investing in developing the infrastructure and construction of

the retailing business.

The trends that are driving the growth of the retail sector in India are

• Low share of organized retailing

• Falling real estate prices

• Increase in disposable income and customer aspiration

• Increase in expenditure for luxury items

Another credible factor in the prospects of the retail sector in India is the increase in theyoung working population. In India, hefty pay packets, nuclear families in urban areas,

along with increasing working-women population and emerging opportunities in the

services sector.

These key factors have been the growth drivers of the organized retail sector in India

which now boast of retailing almost all the preferences of life - Apparel & Accessories,

Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and

Leisure and many more.

With this the retail sector in India is witnessing rejuvenation as traditional markets make

way for new formats such as departmental stores, hypermarkets, supermarkets and

specialty stores.



COMPANY INTRODUCTION:

Big Bazaar is a chain of hypermarket in India. Currently, there are 210 stores across 80cities and towns in India. Big Bazaar is designed as an agglomeration of bazaars orIndian markets with clusters offering a wide range of merchandise including fashion andapparels, food products, general merchandise, furniture, electronics, books, fast food

and leisure and entertainment sections.Big Bazaar is part of Future Group, which also owns the Central Hypermarket, and isowned through a wholly owned subsidiary of Pantaloon Retail India Limited that is listedon Indian stock exchanges.

ABOUT BIG BAZAAR

OutletsAbout 104 outlets in India

Parent groupFuture group

OwnerKishore Biyani (CEO)

Founded2001

Head quartersJogeshwari, Mumbai

IndustryRetail

Tag line

Is se sasta aur achha kahin nahi

HISTORY:

Big Bazaar was launched in September, 2001 with the opening of its first four stores inCalcutta, Indore, Bangalore and Hyderabad in 22 days. Within a span of ten years,there are now 150 Big Bazaar stores in 80 cities and towns across India.

Big Bazaar was started by Kishore Biyani, the Group CEO and Managing Director ofPantaloon Retail.

Though Big Bazaar was launched purely as a fashion format including apparel,cosmetics, accessory and general merchandise, over the years Big Bazaar hasincluded a wide range of products and service offerings under their retail chain. Thecurrent formats include Big Bazaar, Food Bazaar, Electronic Bazaar and FurnitureBazaar.

http://en.wikipedia.org/wiki/Hypermarket

http://en.wikipedia.org/wiki/Future_Group

http://en.wikipedia.org/wiki/Central_(Hypermarket)

http://en.wikipedia.org/wiki/Pantaloon_Retail_India

http://en.wikipedia.org/wiki/Calcutta

http://en.wikipedia.org/wiki/Indore

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Hyderabad,_India

http://en.wikipedia.org/wiki/Kishore_Biyani

http://en.wikipedia.org/wiki/Kishore_Biyani

http://en.wikipedia.org/wiki/Hyderabad,_India

http://en.wikipedia.org/wiki/Bangalore

http://en.wikipedia.org/wiki/Indore

http://en.wikipedia.org/wiki/Calcutta

http://en.wikipedia.org/wiki/Pantaloon_Retail_India

http://en.wikipedia.org/wiki/Central_(Hypermarket)

http://en.wikipedia.org/wiki/Future_Group

http://en.wikipedia.org/wiki/Hypermarket



OPERATIONS:

Most Big Bazaar stores are multi-level and are located in stand-alone buildings in city

centers as well as within shopping malls. These stores offer over 200,000 SKUs in a

wide range of categories led primarily by fashion and food products.

Food Bazaar, a supermarket format was incorporated within Big Bazaar in 2002 and is

now present within every Big Bazaar as well as in independent locations. A typical Big

Bazaar is spread across around 50,000 square feet (4,600 m2) of retail space.

While the larger metropolises have Big Bazaar Family centers measuring between

75,000 square feet (7,000 m2) and 160,000 square feet (15,000 m2), Big Bazaar

Express stores in smaller towns measure around 30,000 square feet (2,800 m2).

Big Bazaar has the facility to purchase products online through its official web page, and

offers free shipping on some of their products.

INNOVATIONS:

Wednesday Bazaar

Big Bazaar introduced the Wednesday Bazaar concept and promoted it as “Hafte Ka

Sabse Sasta Din”. It was mainly to draw customers to the stores on Wednesdays, when

least number of customers is observed.

According to the chain, the aim of the concept is "to give home makers the power to

save the most and even the stores in the city don a fresh look to make customers feelthat it is their day".

Maha Bachat

Maha Bachat was started off in 2006 as a single day campaign with attractive

promotional offers across all Big Bazaar stores. Over the years it has grown into a 6

days biannual campaign.

It has attractive offers in all its value formats such as Big Bazaar, Food Bazaar,

Electronic Bazaar and Furniture Bazaar - catering to the entire needs of a consumer



VISION:

“To deliver "everything, everywhere, every time to every Indian customer in the most

profitable manner.”

MISSION:

“Try to be the trendsetters in evolving delivery formats, creating retail reality, making

consumption affordable for all customer segments- all classes and all masses.”

We share the belief that our customers and shareholders shall be served only by

creating and executing future scenario in the consumption space leading to economic

development.

We shall infuse Indian brands with confidence and renewed ambition.

We shall be efficient and cost conscious and committed in quality in whatever we do.

We shall ensure that our positive attitude, sincierity and united determination shall be

the driving force to make us successful.



EXTERNAL ANALYSIS:

GENERAL ENVIRONMENT:

PESTEL ANALYSIS:

1) Political and Legal Factors:

A stable government at the centre will facilitate speedy economic

recovery and create an encouraging investment climate

Problems of getting subsidy from Octroi and on different taxes like

land, water taxes

Problems of taking over properties and real estate

2) Economical:

India, one of the fastest growing economies(6-6.5% GDP growth

rate)

Retail Industry to grow to 300 billion by 2010

Increase in the percentage contribution of the service sector to

GDP

Increase in the investment on IT with focus on cost minimization

3) Socio-Cultural Factors:

Increase in Nuclear families People prefer to shop in local stores with the reasonable prices

Increase in working women‟s proposition

Life style changes

Shift in product and service preferences

Increase in young population

4) Technological:

Technological development for fast billing and the service

Better applications of information technology in the modern retail

industry, like in supply chain management, store management,

point of sale and customer relationship management



INDUSTRY ENVIRONMENT:

PORTER’S FIVE FORCE MODEL:

FIVE FORCES ANALYSIS

Rivalry among the competitor Reliance retail, Vishal mega mart

Threats of new entrance Domestic conglomerates to start retail

chains, international players

Threats of substitutes Unorganized retail

Bargaining power of suppliers Unorganized sector has a dominant

position

Bargaining power of buyers Consumers are price sensitive

Availability of more choices



COMPETITOR ENVIRONMENT:

Big Bazaar faces competition from all the quarters of RPG Spencer Superstores, Reliance fresh stores, Trinethra stores, Food Bazaar. But the mainthreat and the strategies of Big Bazaar is around the local neighborhoodKirana Stores because this is where the big potential for growth lies.

•Continue with expansion planby opening more retail outlets

•To increase its operating retailspace as well as footfalls

FUTUREOBJECTIVES

•Providing wide choice ofproducts and bundling

•Customer oriented

CURRENTSTRATEGY

ASSUMPTIONS

•High brands

•Huge investment

•Low prices

CAPABILITIES

RESPONSE



INTERNAL ANALYSIS:

SWOT ANALYSIS:

STRENGTHS:

High brand equity enjoyed by Big Bazaar

State of the art infrastructure

A vast variety of stuff available under one roof

Everyday low prices, which attract customers

Maximum percent of footfalls converted in sales

Huge investment capacity

Biggest value retail chain in India

It offers a family shopping experience, where entire family can visit together

Available facilities such as online booking and delivery of goods

WEAKNESSES:

Unable to meet store opening targets on time

Falling revenue per sq ft

General perception: „Low price = Low quality

Overcrowded during offers

Long lines at billing counters which are time consuming

Limited only to value offering low price products. A no of branded products arestill missing from Big Bazaar’s line of products. E.g. Jockey, Van heusen



OPPORTUNITY:

A lot of scope in Indian organized retail as it stands at approximately 4%.

Increasing mall culture in India.

More people these days prefer to visit big stores where they can find large variety

under one roof

THREATS:

Changing Government policies

International players looking to foray India

Competition from other value retail chains such as Shoprite, Reliance (Fresh and

trends), Hyper city and D mart.

Unorganized retail also appears to be a threat to Big Bazaar’s business. A large

population still prefers to visit local convenient stores for daily purchases

CORE COMPETENCIES:

A choice of more than 20,000 products

Delivery across more than 1500 cities and towns in India covering around

16,000 pin codes

Fast deliveries – tie ups with world leaders in logistics & transportation

services

A dedicated customer care helpline for any queries

Talks of quality and cost Special emphasis on apparels and life style products

Providing interesting discounts



STRATEGIES:

Big Bazaar has launched new marketing strategy which is based on Guerrilla

Marketing. Guerrilla marketing warfare strategies are a type of marketing

warfare strategy designed to wear-down the enemy by a long series of minor

attacks, using principles of surprise and hit-and-run tactics. Attack, retreat, hide,

then do it again, and again, until the competitor moves on to other markets.

Strategic Decisions Taken to Build the Big Bazaar Brand

The strategic decisions that lead to building of Big Bazaar were: -

Real Estate Game

For a retailer, location is one of the most important things. According to Kishore

Biyani, real estate cost should be less than 5% of total sales of store in order toprovide maximum benefits to customer.

The strategic decisions to secure spaces before other retailers join in have resulted in

cost-saving. Also, it has created early presence in market.

Nurturing Relationships

Kishore Biyani follows strategy to develop trust and nurture relationships with

suppliers. This trust led to strategically correct decisions most of the time. Whoever

works with Future Group, either leaves in initial deals or continues forever.

Use of Technology, Scenario-Planning & Story-Telling

Big Bazaar planning and design used advance technologies like scenario-planning and

story-telling. These techniques were mainly used for store-design layout, store-

location selection. The strategy to use user-focused, prototype-based development tool

made the brand adapt to the fast-changing external environment.

Design Management

Design-led thinking helped Big Bazaar to achieve ‘customer -first' objective and

ultimately led to better financial performance. Big Bazaar strategy to focus on design

led to creation of Idiom, an independent design and consultancy firm, based in

Bangalore. They are one of the few organizations in India having economists,

ethnographers and sociologists working across various teams as a part of Design

Management team.

Back-end Operations, Supply Chain



Harvard Business School just did a case study on Pantaloons' Supply Chain and it

says that Pantaloons' is the most cost-effective supply chain in the world. India may

not have a modern supply chain but it definitely has a cost-effective one. Retailers

have made use of the existing supply chain.

Strategic Analysis

Business Level Strategy

:: Managing relationship with the customers

As by the name Big Bazaar is deemed to be a place where good number of products

and of a standard quality is available to the customers at a lower price compared to the

other super markets and market , there is always a high number of step in’s expectedin the market ( Big Bazaar ). So this would create a relationship with the customers

that would act as a fruitful strategy . Also big bazaar applies a strategy for providing

products in group or combo at a lower price than individual product’s price . There isalso a mode of attraction being created by activities such as tattoos , mehandi , lucky

draws etc. which increase the satisfaction level of the customers.

On occasions there are certain activities which are done such as : On the fifth

anniversary of Big Bazaar the fiftieth customer was given a gift.

Big Bazaar is following a strategy in which there are standard brands (not too big and

not too low) included in case of apparels like DJ and C , etc. which are not too

expensive and of a good quality. So there is a high probability that the lower and

middle level people would opt to buy these brand’s products.

In case of food products there is a strategy to sell the products in the form of combo .

Corporate Level Strategy

:: Diversification

Big Bazaar is a part of future group which entails several departments as in apparels ,

footwear , food products , travelling products , house crockery , etc which forms a

super market and big bazaar in itself is diversified in products.

:: Core competencies:

Big bazaar differentiates itself from other markets as

- In case of food products there is a combo sale strategy .

- In case of apparels brand and price related focus for the middle level and

lower level customers.



- Its strategy is to make a good variety of products available to the

customers for sale.

- It also has a strategy for the refreshment of the customers as availability

of snacks and milk shakes .

Big Bazaar has focused diversified area in the cities and location according to the

market prospect.

Functional Strategy

Big Bazaar has a retail functioning and is termed as a Super Market where maximum

kind and variety of products are available and at a lower price. It has organized its

departments in which various efforts of employees are coordinated and related to each

other. All the functions and operations are based on the real needs of the customers

which are been estimated and analyzed by some form of surveys and questionnaires.

Big bazaar includes several brands and it also has its own products. The products arebeen placed according to the trend identification and then they are been open to the

customers.

The employees are given benefits in the form of incentives and commission . The

employees are been heard by their supervisor and motivated .

Every employee has to get checked by the security before entering the floor ( Big

Bazaar) or leaving the floor.

There is a strategy been followed in which the customers can give bulk and heaps of newspapers and they would be getting some kind of benefits.

environmental analysis of big bazaar for the year 2010

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