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Introduction
Indian retail industry is going through a transition phase. Most of the
retailing in our country is still in the unorganized sector. The spread out of
the retails in US and India shows a wide gap between the two countries.Though retailing in India is undergoing an exponential growth, the road
ahead is full of challenges.
What is retailing?The word "Retail" originates from a French-Italian word. Retailer-
someone who cuts off or sheds a small piece from something. Retailing is the
set of activities that markets products or services to final consumers for their
own personal or household use. It does this by organizing their availability on
a relatively large scale and supplying them to customers on a relatively smallscale. Retailer is a Person or Agent or Agency or Company or
Organization who is instrumental in reaching the Goods or
Merchandise or Services to the End User or Ultimate Consumer.
Scenario of Retailing In IndiaRetailing is the most active and attractive sector of last decade. While
the retailing industry itself has been present since ages in our country, it is
only the recent past that it has witnessed so much dynamism. The
emergence of retailing in India has more to do with the increased purchasingpower of buyers, especially post-liberalization, increase in product variety,
and increase in economies of scale, with the aid of modern supply and
distributions solution. Indian retailing today is at an interesting crossroads.
The retail sales are at the highest point in history and new technologies are
improving retail productivity. though there are many opportunities to start a
new retail business, retailers are facing numerous challenges.
Present Indian Scenario Unorganized market: Rs. 583,000 crores
Organized market: Rs.5, 000 crores
5X growth in organized retailing between 2000-2005
Over 4,000 new modern Outlets in the last 3 years
Over 5,000,000 sq. ft. of mall space under development
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The top 3 modern retailers control over 750,000 sq. ft. of retail
space
Over 400,000 shoppers walk through their doors every week
Growth in organized retailing on par with expectations and
projections of the last 5 Years: on course to touch Rs. 35,000crores (US$ 7 Billion) or more by 2008-09.
Contribution To GDP
The Indian retail market, which is the fifth largest retail destination
globally, has been ranked the second most attractive emerging market for
investment after Vietnam in the retail sector by AT Kearney's seventh annual
Global Retail Development Index (GRDI), in 2008. The share of retail trade
in the country's gross domestic product (GDP) was between 810
per cent in 2007. It is currently around 12 per cent, and is likely to
reach 22 per cent by 2010.
According to industry experts, the next phase of growth is expected to
come from rural markets, with rural India accounting for almost half of the
domestic retail market, valued over US$ 300 billion. Rural India is set to
witness an economic boom, with per capita income having grown by 50 per
cent over the last 10 years, mainly on account of rising commodity prices
and improved productivity.
According to the Investment commission of India, the overall retail
market is expected to grow from US$ 262 billion to about US$ 1065 billion by
2016, with organised retail at US$ 165 billion (approximately 15.5 per cent of
total retail sales). India is expected to be among the top 5 retail markets in
the world in 10 years.
Types of Retailing In IndiaTraditional retailing continues to be the backbone of the Indian retail
industry, with traditional/unorganized retailing contributing to over 95% of
total retail revenues. The quintessential mom-and-pop retailing outlets or thecorner- store formats constitute a major part of Indian retail store formats.
Over 12 million small and medium retail outlets exist in India, the highest in
any country. More than 80 per cent of these are run as small family
businesses.
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Business EnvironmentA business does not function in a vacuum. It has to act and react to
what happens outside the factory and office walls. These factors that happen
outside the business are known as external factors or influences. These
will affect the main internal functions of the business and possibly the
objectives of the business and its strategies.
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Macro economics is the study of behavior of the
economy as a whole. It examines the overall level of nationsoutput, employment, price and foreign trade. Macroeconomics is concerned
with aggregate and average of entire economy.
Business environment is a set of political, economic, social and
technological (PEST) forces that are largely outside the control and
influence of a business, and that can potentially have both a
positive and a negative impact on the business.
In other words in macro economics study how these aggregates
and averages of economy as whole are determined and what
causes fluctuation in them. For making of useful economic policies for the
nation macroeconomics is necessary.
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A macro environmental analysis can be completed alone or in a
brainstorming session, however you may like to do some research before
starting. To simplify the Macro Environment Analysis the following 6 broad
heading will provide some structure, a good start is to list all of the trends
you can think of or can find and indicate whether they will have a positive
impact or negative impact on the size of your industry.
Economic Trends: The macro economic environment analysis will
identify trends such as changes in personal disposable income, interest
rates, inflation and unemployment rates.
Political Trends: The macro political environment analysis will
identify changes in the position politicians take on issues. A current
example is a shift towards greener policies in the developed world.
Technological Trends: The macro technological environment
analysis will identify changes in the application of technology. A
current example is a shift towards online transactions and in some
areas a shift away from online transactions.
Legal Trends: The macro legal environment analysis is closely linked
to the political environment (politicians tend to make the laws), but
also includes trends in court decisions such as liability compensation.
Social/Cultural Trends: The macro social/cultural environment
analysis will identify trends in societies beliefs, behaviours, values and
norms. Such as the number of part time workers, attitudes towards
global warming, make up of the family structure.
Demographic Trends: The macro demographic analysis will identify
trends in population growth at relevant ages for your industry (Theremaybe zero population growth in general but high growth in the
number of people over 65), the population location.
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Economic Environment
Retail markets consist of purchasing power as well as people. Total
purchasing power is a function of current income, prices, savings and creditavailability. Marketers should be cognizant of major trends in the economic
environment. The changes in economic conditions can have destructive
impacts on business plans of a firm. Economic forecasters looking ahead
through the next decade are likely to find their predictions clouded by the
recurrent themes of shortages, rising costs and up and down business
cycles. These changes in economic conditions provide marketers with new
challenges and threats. How effectively these challenges could be converted
into opportunities depend on well-thought-out marketing programmes and
strategies.Economic conditions, economic policies and the economic system
are the important external factors that constitute the economics of
a business.
The fast and furious pace of growth of the Indian economy is the
driving force for Indian consumerism; with the Indian consumers
confident about their earnings and are spending a large portion of their
high disposable incomes. Projections by analysts suggest that India has
the potential to be labeled the fastest-growing economy and outpace
the developed economies by 2050.
The Government is progressively undertaking reforms and liberalizing
the retail sector by give 49% FDI(Foreign Direct Investment).
India ranking as the fourth largest economy in terms of Purchasing
Power Parity (PPP), next only to United States,Japan and China. India is
expected to outpace Japan by the year 2010 to become worlds third
largest economy. With 54 per cent of the Indians aged below 25, the
young Indian consumer is buying big to look good and feel good.
Performance of a retail sector in India indicates the bright future.
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Following economic factors affecting Retail Industry in India :
GNP or GDP per capita
As we have already seen in above discussion that India`s GDP growth
rate was 9.4% in 2006-07. GDP shows the tendency to grow bigger & bigger
in future. It is expected to grow more than 27& in next 5-6 years. Retail
industry contributed around 13% to the GDP. So it shows that there is a big
opportunity to grab the market opportunities.
In India unorganized sector have grab 95% retail market. So there is
an opportunity for organized market to grab those 95% market share. Indian
retail business promises to be one of the core sectors of the Indian economy,
with organised retail sector estimated to grow by 400 per cent of its current
size. India ranking as the fourth largest economy in terms of Purchasing
Power Parity (PPP), next only to United States, Japan and China. India is
expected to outpace Japan by the year 2010 to become worlds third largest
economy. With 54 per cent of the Indians aged below 25, the young Indian
consumer is buying big to look good and feel good.
Economic growthThe fast and furious pace of growth of the Indian economy is the
driving force for Indian consumerism; with the Indian consumers
confident about their earnings and are spending a large portion of their high
disposable incomes. Projections by analysts suggest that India has the
potential to be labeled the fastest-growing economy and outpace the
developed economies by 2050. Analysts predict India to sustain an average
GDP growth rate of 5 per cent till the mid of this century, with India
projected to outpace the other developed economy markets by 2050.
The average annual growth rate for 1994-2004 was pegged at
6.1 per cent, second only to China. The more recent growth rates of over
9 per cent posted for India, promise a continued robust growth story.
Private consumption accounted for 62 per cent of Indias GDP in 2004-05,
comparable to most of the leading economies around the world.
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Unemployment rate
India has a vast resource base of talent and skilled labour. Over
37,000,000 students were enrolled in about 150,000 pre-college institutes
and over 11,700,000 in 14,000 higher education institutions. With english
being the language for business in india, the language skills of the indianworkforce score higher than that of emerging economies. Retail
management is a sought after education stream amongst students, with
over15 premier institutes offering specialised courses in retail management.
Due to increase in retail industry people get employment. In India Retail
Industry provide employment to 8% of total population.
Inflation rate
In recent times country passes through deflationary period. In such a
period business have to face many problems like low rate of consumption,more savings etc. But International retail jiants are increasingly choosing
India as the target market of the global retail power house.
Due to high rate of inflation retail Industry may face following problems-
High cost of land, labour
High transportation
Reduction in consumption pattern
Lesser demand for luxurious product
Less profit margin
Consumer & Investor ConfidenceHow did those companies develop and cement that trust? They promised
and delivered the following principles of building and maintaining
trust.
T - Truth
Trust and solid relationships are built on telling the truth. Companies mustmaintain this principle both with internal and external customers. It is
imperative that this value is represented in everything a company does. We
have seen how the lack of solid ethics can crumble even the largest of
companies.
R Responsibility
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Trust is built when everyone within an organization realizes what their
responsibilities are and that they are held accountable for them. Choose to
schedule reviews quarterly for every member of the company to make sure
they are aware of their responsibilities. Take ownership of mistakes and be
diligent to find ways to make corrections.
U Unselfishness
Trust is built when employees give of their time and talent in the workplace
and do it, unselfishly. Customers appreciate the employee who goes out of
their way to satisfy the customer. Customers don't appreciate hearing how
badly the employee wants to go home, or how they didn't get a break, or
how awful their schedule is.
S - Security
Trust is built on a feeling of security. Good lighting in the parking lot and
store entrance, fitting rooms with doors that lock, employees that handle
ringing up a sale with accuracy, and alarm systems that are visible are all
ways to make the customer feel safe in your place of business. Employees
want to feel a sense of job security and that they are appreciated for the job
the.
T - Teamwork
Trust is built when everyone within the organization feels a sense of
ownership. How well do your employees work together? Are they willing togo out of their way to help each other out?
Road Ahead; Plans of Large Retailers
Reliance Retai l: investing Rs. 30,000 crore ($6.67 billion) in setting
up multiple retail formats with expected sales of Rs. 90,000 crore plus
($20 billion) by 2009-10. Pantaloon Retai l: Will occupy 10 mn sq.ft retail space and achieve
Rs.9,000 crore-plus ($2 bn) sales in 2008.
RPG : Planning IPO will have 450-plus Music World, 50-plus Spencer's
Hyper covering 4 million sq.ft by 2010.
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LIFESTYLE : Investing Rs.400 crore-plus ($90 million) in next five years
on Max Hypermarkets & value retail stores, home and lifestyle centres.
Raheja's : Operates Shoppers' Stop, Crossword, Inorbit Mall, and
'Home Stop' formats. Will operate 55 "Hypercity" hypermarkets with
US$100 million sales across India by 2015.
Piramyd Retail : Aiming to occupy 1.75 million sq.ft retail spaces
through 150 stores in next five years.
Political & Government Environment
Political systems can be classified based on the party system in the
society, and mode in which governments attain power. Based on the way
governments come into power, they can be classified into parliamentary
type or absolutist type. To understand and assess the political environment
of a company it is necessary to identify and evaluate factors that can cause
political instability. Social unrest, attitudes of nationals, and policies of the
host government are some factors that can cause social instability. Political
risk refers to political actions that have a negative impact on a firm's value.Companies operating internationally have to deal with foreign politics,
domestic politics, and international politics.
The process of establishing a cause-and-effect relationship between
political factors and business income is called political risk analysis. Some
government policies that adversely affect the business environment include ;
Non-convertibility of currency
Preventing the repatriation of profits
Nationalization and inadequacy of compensation Domestic political violence.
The major political and governmental factors affecting Indian retail sector
are ;
Political climate - amount of government activity
Political stability and risk
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Government debt
Budget deficit or surplus
Corporate and personal tax rates
Payroll taxes
Import tariffs and quotas
Export restrictions
Restrictions on international financial flows
Minimum wage laws
Environmental protection laws
Worker safety laws
Union laws
Copyright and patent laws
Anti- monopoly laws
Municipal licenses
Political impact of larger FDI in Retail Sector
The political impact of larger FDI in India has transformed the Indian
investment scenario in various areas. The fact that more multinationalcorporations are investing in India signifies that India is increasingly focusing
on the industrial sector. The increase in Foreign Direct Investments
resulted in the Government of India making critical reforms in 1991 and
since then, the emphasis on Indian industry has been constantly on the rise.
The political scenario of India is looking forward to Foreign Direct
Investment as a mechanism for development. In fact, there has been
development in the fields of land use, water, power generation, and
roads. This points towards the great political impact of larger FDI.
The increase in FDI flow has strengthened the foreign politicalrelations and now foreign companies are trying to persuade the Indian
Parliament to increase FDI capital depending on the sector.
There are some chief bodies and boards that have been set up for the
purpose of Foreign Direct Investment, such as:
Project Approval Board (PAB)
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Licensing Committee (LC)
District Industries Centers
Investment Promotion and Infrastructure Development Cell
Foreign Investment Promotion Board (1991)
Foreign Investment Promotion Council (1996)
Foreign Investment Implementation Authority (1999)
Investment Commission (2004)
Thus, the political impact of larger FDI has made prospects for India's future
relationships with foreign companies really bright and exciting.
Socio-Cultural Environment
Humans essentially create their own cultural and social environment.
Customs, practices and traditions for survival and development are passed
down from one generation to the next. In this way, the members of a
particular society become conditioned to accept certain "truths" about life
around them. The increasingly competitive international businessenvironment calls upon exporters to tailor or adapt their business approach
to the culture and traditions of specific foreign markets. The inability or
unwillingness to do so could become a serious obstacle to success.
In the context of the socio-cultural environment, there are a number of
factors that you will need to consider. These are:
Language: A language usually defines the parameters of a particular
culture. Thus if several languages are spoken within the borders of a
country, that country is seen to have as many cultures. Translationsshould be undertaken within the country concerned or at least by a
native of the country in question.
Material Culture: Material culture relates to the way in which a
society organises and views its economic activities. It includes the
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techniques and know-how used in the creation of goods and services,
the manner in which the people of the society use their capabilities,
and the resulting benefits. When one refers to an 'industrialised' or a
'developing' nation, one is really referring to a material culture.
Aesthetics: A culture's aesthetics refer to its ideas concerning good
taste and beauty as expressed in the fine arts - music, art, drama and
dance - and in the appreciation of colour and form. Insensitivity to
aesthetic values can not only lead to ineffective advertising and
package design for products, it can also offend prospective customers.
Social Organization: Social organization refers to the ways in which
people relate to one another, form groups and organize their activities,teach acceptable behavior and govern themselves. It thus comprises
the social, educational and political systems of a society. In a culture
where great importance is attached to the family unit, promotional
efforts should be directed at the family rather than the individual.
Religious Belief: Religious system refers to the spiritual side of a
culture or its approach to the supernatural. Western culture isaccepted as having been largely influenced by the Judeo-Christian
traditions, while Eastern or Oriental cultures have been strongly
influenced by Buddhism, Confucianism, Taoism and Hinduism.
Although very few religions influence business activities directly, the
impact of religion on human value systems and decision-making is
significant. Thus, religion exerts a considerable influence on people's
actions and outlook on life, as well as on the products they buy.
Attitudes: Attitudes are psychological states that predispose people
to behave in certain ways. Attitudes may relate, for example, to work,
wealth, achievement, change, the role of women in the economy, etc.
Stereotypes are sets of attitudes in which one attributes qualities or
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characteristics to a person on the basis of the group to which that
person belongs.
Values: Values are judgements regarding what is valuable or
important in life, and they vary greatly from one culture to another.People who are operating at a survival level will value food, shelter and
clothing. Those with high security needs, on the other hand, may value
job security, status, money, etc.
Space: The concept of space is different wherever one goes. In
western corporate culture, the size and location of an executive's office
is usually determined by his level of seniority in the company. The
locality and size of an Arab business executive's office, on the otherhand, are a poor indication of the person's importance.
In recent years, the concept of social responsibility has
entered into the marketing literature as an alternative to the marketing
concept. The implication of socially responsible marketing is that retail firms
should take the lead in eliminating socially harmful products such as
cigarettes and other harmful drugs etc. There are innumerable pressure
groups such as consumer activists, social workers, mass media, professional
groups and others who impose restrictions on marketing process and its
impact may be felt by retailers in doing their business. The society thatpeople grow up in shapes their basic beliefs, values and norms.
Demographic Environment
Favorable demographics, combined with increasing disposable
incomes, are progressively changing the face of Indian consumerism. With
the economy opening new vistas of employment and with employers
offering attractive compensation packages and perks, the pool of Indian
skilled professionals are boasting of higher disposable incomes. From frugal
spending to frenzied shopping, Indias swelling middle class is redefining
lifestyle patterns with adoption of western values and growing brand
consciousness.
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With the countrys income pyramid changing dramatically,
there has been a definite shift from thesaving tendency to
the spending attitude. Increased consumer exposure to the latest
trends and brands driven by the mass media is contributing to the
soaring retail revenues. There has been a marked increase in the
number of new entrants in the retail sector with player revenues
increasing across all the retail segments
The thriving services sector growth has handed young India a bulging
wallet and a penchant for luxury products. The new found freedom toshop at plush malls and stores for expensive gadgets like mobile
phones and laptops has fuelled the growth of organised retail in India.
The Indian consumer is gradually moving from the local kirana
shopping to Mall Hopping. With a number of domestic and
international brands available in stores in metros and smaller cities
and with a wide range of product offerings from food and grocery to
furniture and fixtures, the Indian consumer is fast embracing modern
retail.
The first environmental fact of interest to retailers is population
because people make up markets. Retailers are keenly interested in
the size of the population, its geographical distribution, density,
mobility trends, age distribution and social ethnic and religious
structure.
Some of the Demographic Business Factors are :
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Population size and distribution
Age distribution
Socio demographic factors will lead to faster growth of Organized
retail in India:
Education levels
Income levels
Ethnic origins
Demographic structure is seldom static for
long and changes in its composition often test the residency of a marketing
firm. Further, these changes influence the behaviour of consumers which, in
turn, will have a direct impact in the retailer's business. The ripples of these
changes will reach the organisation forcing it to alter or amend the existing
marketing practices in vogue. In short, Retail firms, will have to continuously
measure the changes - qualitative as well as quantitative - that are taking
place in the population structure. To avoid negative consequences brought
on by active consumer groups, a retailer must communicate with consumers,anticipate problems, respond to complaints and make sure that the firm
operates properly.
Technological Environment
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Technology can be defined as the method or technique for converting inputs
to outputs in accomplishing a specific task. Thus, the terms 'method' and
'technique' refer not only to the knowledge but also to the skills and the
means for accomplishing a task. Technological innovation, then, refers to the
increase in knowledge, the improvement in skills, or the discovery of a new
or improved means that extends people's ability to achieve a given task.
Technology is the knowledge or methods that are necessary to
carry on or to improve the existing production and distribution of
goods, services, products or processes, and also includes
entrepreneurial expertise and professional know-how.
Changes in the technological environment have had some of the most
dramatic effects on business. A company may be thoroughly committed to a
particular type of technology, and may have made major investments in
equipment and training only to see a new, more innovative and cost-effective technology emerge.
Technology is a critical factor in economic development. Because of
the advances of international communication, the increasing economic
interdependence of nations, and the serious scarcity of vital natural
resources, the transfer of technology has become an important
preoccupation of both industrialised and developing countries.
The infrastructure of the retail sector will evolve radically in the
recent future. The emergence of shopping malls are increasing at asteady pace in the metros.
The most dramatic force shaping people's lives is technology.
Advances in technology are an important factor which affects retail
marketers in two ways. First, they are totally unpredictable and secondly,
adoption of new technology often is prevented by constraints imposed by
internal and external resources. At the same time, it should be
remembered that technological progress creates new avenues of opportunity
and also poses threat for individual firms. Technology has helped retailers to
measure the products with modern weighing machines. Earlier, they haveused balances which could not measure the merchandise correctly.With the
help of weighing machine, products can be measured with the result
customer satisfaction can be enhanced. In the following areas where
technology have been extensively used.
Packing of the products
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Printing the name of the shop on the product visibly
Modern refrigerators where merchandise can be used for a long time
Billing
Customer Interfacing Systems
Bar Coding and Scanners
Point of sale systems use scanners and bar coding to identify an item, use
pre-stored data to calculate the cost and generate the total bill for a client.
Tunnel Scanning is a new concept where the consumer pushes the full
shopping cart through an electronic gate to the point of sale. In a matter of
seconds, the items in the cart are hit with laser beams and scanned. All that
the consumer has to do is to pay for the goods.
Payment
Payment through credit cards has become quite widespread and this enables
a fast and easy payment process. Electronic cheque conversion, a recent
development in this area, processes a cheque electronically by transmitting
transaction information to the retailer and consumer's bank. Rather than
manually process a cheque, the retailer voids it and hands it back to the
consumer along with a receipt, having digitally captured and stored theimage of the cheque, which makes the process very fast.
Internet
Internet is also rapidly evolving as a customer interface, removing the need
of a consumer physically visiting the store.
ERP System
Various ERP vendors have developed retail-specific systems which help in
integrating all the functions from warehousing to distribution, front and back
office store systems and merchandising. An integrated supply chain helps
the retailer in maintaining his stocks, getting his supplies on time, preventing
stock-outs and thus reducing his costs, while servicing the customer better.
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These technology product profiles will help retailers evaluate the latest retail
enterprise solutions and keep pace with fast-moving innovations andtechnological advances. Customer reviews and retail technology
comparisons will help identify the best and most cost-effective solutions for
any retail operation. To use or adopt new technology in business consist of,
Efficiency of infrastructure, including: roads, ports, airports, rolling
stock, hospitals, education, healthcare, communication, etc.
Industrial productivity
New manufacturing processes
New products and services of competitors
New products and services of supply chain partners
Any new technology that could impact the company
Cost and accessibility of electrical power
The transfer of technology is essential for attaining a highlevel of industrial capability and competitiveness. Multinational corporations
are playing an increasingly important role in technology transfer because
they invest abroad to expand production, marketing and research activities.
There is also a growing consciousness amongst governments of the need to
increase technology transfer to the developing countries to help stabilise
their economic and social conditions.
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Global Environment
A major environmental change that has taken place in the last fifteen
years is the globalization of business. The world has become a global village
and business has become global in character. Organizations are venturing
beyond national boundaries in the pursuit of business opportunities.
Globalisation is affecting all aspects of social and economic activity,
and retailing is no exception. Many retailers are increasingly venturing
beyond their traditional territories, identifying expansion opportunities in
new countries and regions around the world. Retail business grew between
25% - 30% percent in India and 13 percent in fast growing economies Chinaand Russia. Global retail industry has been expanding to new markets for
a few years now. It is not a secret that retail business is one of the most
actively developing sectors of national economy. Besides territorial extension
retail chain now tends to create new formats of retail outlets in order to gain
more customers. With the increase in the purchasing power of the people the
retail business is sure to flourish.
Studying international business is important because:
Most companies are either international or compete with international
companies.
Modes ofoperation may differ from those used domestically.
The best way of conducting business may differ by country.
An understanding helps you make better career decisions.
An understanding helps you decide what governmental policies to
support.
How tourism helps the global retail.A strong retailing sector boosts tourism as seen from the experience of
Singapore and Dubai. Investment in whole supply chain Improved product
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basket from India for exports. Long term benefits,up-gradation of agriculture,
development of efficient small and medium size industries.
SWOT Analysis
Strength:1. Retailing is a " technology-intensive" industry. It is technology
that will help the organized retailers to score over theunorganized retailers. Successful organized retailers today work
closely with their vendors to predict consumer demand, shortenlead times, reduce inventory holding and ultimately save cost.Example: Wal-Mart pioneered the concept of buildingcompetitive advantage through distribution & informationsystems in the retailing industry. They introduced twoinnovative logistics techniques cross-docking and EDI(electronic data interchange).
2. On an average a super market stocks up to 5000 SKU's against afew hundreds stocked with an average unorganized retailer.
Weakness:
1. Less Conversion level : Despite high footfalls, the conversionratio has been very low in the retail outlets in a mall ascompared to the standalone counter parts. It is seen that actualconversions of footfall into sales for a mall outlet isapproximately 20-25%. On the other hand, a high street store ofretail chain has an average conversion of about 50-60%. As aresult, a stand-alone store has a ROI (return on investment) of25-30%; in contrast the retail majors are experiencing a ROI of 8-10%.
2. Customer Loyalty: Retail chains are yet to settle down with the
proper merchandise mix for the mall outlets. Since the stand-alone outlets were established long time back, so they havestabilized in terms of footfalls & merchandise mix and thus havea higher customer loyalty base.
Opportunity:
1. The Indian middle class is already 30 Crore & is projected to
grow to over 60 Crore by 2010 making India one of the
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largest consumer markets of the world. The IMAGES-KSA
projections indicate that by 2015, India will have over 55 Crore
people under the age of 20 - reflecting the enormous
opportunities possible in the kids and teens retailing
segment.
2. Organized retail is only 3% of the total retailing market in India.
It is estimated to grow at the rate of 25-30% p.a. and reach INR
1,00,000 Crore by 2010.
3. Percolating down : In India it has been found out that the top 6
cities contribute for 66% of total organized retailing. While the
metros have already been exploited, the focus has now been
shifted towards the tier-II cities. The 'retail boom', 85% of which
has so far been concentrated in the metros is beginning to
percolate down to these smaller cities and towns. The
contribution of these tier-II cities to total organized retailing salesis expected to grow to 20-25%.
4. Rural Retailing: India's huge rural population has caught the
eye of the retailers looking for new areas of growth. ITC launched
India's first rural mall "Chaupal Saga" offering a diverse range of
products from FMCG to electronic goods to automobiles,
attempting to provide farmers a one-stop destination for all their
needs." Hariyali Bazar" is started by DCM Sriram group which
provides farm related inputs & services. The Godrej group has
launched the concept of 'agri-stores' named "Adhaar" which
offers agricultural products such as fertilizers & animal feed
along with the required knowledge for effective use of the same
to the farmers. Pepsi on the other hand is experimenting with the
farmers of Punjab for growing the right quality of tomato for its
tomato purees & pastes.
Threat:
1. If the unorganized retailers are put together, they are parallel
to a large supermarket with no or little overheads, highdegree of flexibility in merchandise, display, prices and
turnover.
2. Shopping Culture: Shopping culture has not developed in India
as yet. Even now malls are just a place to hang around with
family and friends and largely confined to window-shopping.
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Conclusion:-
To conclude, it can be said that though the globalretail industry has reached its maturity, the Indian retail industryis still at its infancy. But with the huge potentiality existing in theIndian market, it is expected to grow in leaps and bounds in thenear future.
Bibliography
Internet
www.wikipedia.org
www.ril.com
www.investopedia.com
Books
Capital Budgeting: Theory and Practice by
Pamela Parrish Peterson
BRCM College of Business Administration, Surat
http://www.wikipedia.org/http://www.wikipedia.org/http://www.ril.com/http://www.ril.com/http://www.google.co.in/search?hl=en&sa=X&biw=1436&bih=715&tbs=bks:1&q=inauthor:%22Pamela+Parrish+Peterson%22&ei=mCSUTafhHo7SrQeJhLHqCw&ved=0CC4Q9Aghttp://www.wikipedia.org/http://www.ril.com/http://www.google.co.in/search?hl=en&sa=X&biw=1436&bih=715&tbs=bks:1&q=inauthor:%22Pamela+Parrish+Peterson%22&ei=mCSUTafhHo7SrQeJhLHqCw&ved=0CC4Q9Ag8/7/2019 Project retail
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