Big Bazar vs Wal-mart

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STRATEGY FOR BIGBAZAAR Submitted by- Deepak Kumar Deepali Mathur Honey Gupta Lalit Choudhary Sayed Fazal Husain Upendra Kumar Vindya Malviya

Transcript of Big Bazar vs Wal-mart

STRATEGY FOR BIGBAZAAR

Submitted by-

Deepak Kumar

Deepali Mathur

Honey Gupta

Lalit Choudhary

Sayed Fazal Husain

Upendra Kumar

Vindya Malviya

AGENDA(BEST PRICE&BIG BAZAAR)

• Corporate profile• Swot analysis• Typical quotes• Market penetration strategy• Product/services strategy• Existing supply chain• Distribution strategy• Pricing strategy• Promotion strategy• Pest analysis

AA DEKHE JARA KISME KITNA HAI DUM

WAL-MART PROFILE(BEST PRICE)

• Wal-Mart Stores is an American public corporation• Founded by - Sam Walton in 1962 • Slogan - "Save Money Live Better,”• Head Quarter- Bentonville, Benton County, United• Vision- to ordinary folk that the chance to buy the same

thing as rich people

Strengths Weakness

• It has a reputation for value for money, convenience and a wide range of products all in one store.

• The company has a core competence involving its use of information technology to support its international logistics system.

• Weak in some areas due to the huge span of control.

• Lack of focus• Presence in few

country

SWOT ANALYSIS OF WAL-MART

Opportunity Threat

• Expanding consumer markets.

• To take over, merge with, or form strategic alliances with other global retailers, focusing on specific markets such as Europe.

• New locations and store types offer Wal-Mart opportunities to exploit market development.

• Being a global retailer means that you are exposed to political problems in the countries that you operate in.

• Critical consumer behavior.

• Huge competition with Indian retailer.

SWOT CONT…

BIG BAZAAR PROFILE

• Type-hyper market• India’s first hyper market retail market• Vision-Everything ,Everywhere, Every time for every Indian

consumer in the most profitable manner• Industry-retail • Founded by - Kishore Biyani in 2001. • Headquarter - Jogeshwari, Mumbai, India.• Parent group - Future Group • Website - www.bigbazaar.com• Tag line- “Isse sasta aur accha

kahin nahin”

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• Special emphasis on apparels and life style

products(27% Vs 17%)• Fast delivery-tie up with world leader logistic

& transportation services

Strengths Weakness

• High brand equity

• State of art infrastructure

• Pop promotion

• Variety of stuff under single roof

• Unable to meet store opening targets

• Falling revenues/sq.ft.

• General perception

SWOT ANALYSIS OF BIG BAZAAR

Opportunity Threat

• Organized retail (4.16%)

• Evolving consumer preferences

• In Store Experience Improvements

• New formats and consumption space

• Looking at expansion

• Competitors domestic and foreign

• Government policies• Unorganized retail• Economic condition

SWOT Cont…..

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

ENVIRONMENT 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….

TYPICAL QUOTES

• "He doesn't realize it, but I know everything about him," says Indian retail magnate Kishore Biyani

• Will Wal-Mart Succeed in India? Perhaps...But It Won't Be Easy

PRODUCT/SERVICE STRATEGY

• Create positioning for FAMILY• Keep more branded products• More focus towards FMCG products• Penetrate the RURAL market with FMCG products• Divide store into two different category, turn small

competitors into customers• Keep north India girls for sales forces• India’s first community connection outlet• at maleshwaram in Bangalore

CONTD……

• Understand variation of how frequently they go for shop which types of products they purchase frequently

• Collaboration with shopper stop to tap higher segment customers

• As big bazaar focusing on cultural aspects (ex- at the season of festival they keep products according to festival) so, keep focusing on this services.

• Full line of festival materials

PRICING STRATEGY

• Existing pricing strategy is right• Apply market penetration strategy• Promotional pricing-• Low interest financing• Psychological pricing• Special event pricing• Time pricing• Bundling

CUSTOMER SERVICE STRATEGY

• Future card program • Billing system improvement• Huge variety of products• Future money provide financing system• Night shopping

PROMOTION STRATEGY

• Wednesday bazaar scheme• Festive season shopping• Partnership with BIG fix and BIG FM 92.7• Road show in residential colony• Outdoor campaign(hoarding, banner)

MALL LOCATION AND DESIGN

• Existing location strategy is right• Play music according to region• Keep focus where working people live and

keep walking

DISTRIBUTION STRATEGY

• Contract with small vendors• Do not change many vendors• Currently company is going to finance$830

million to its vendorsHEAD

OFFICE

ZONAL OFFICE

RETAILORS

WAL-MART SUPPLY CHAIN

VENDORS

DISTRIBUTION

CENTRE

RETAILORS

MANUFACTURER

RETAILORS

Existing Distribution channel

Cross docking distribution

EXISTING PROBLEM IN INDIA

• Transportation of goods from distribution centre to retailers is 2 days

• More than 4000 own trucks

• Most trained drivers• Cross docking

distribution

• Starts supply chain from scratch

• Transportation, warehousing and distribution infrastructure

• Cold chain distribution

• Real estate

WAL-MART SUPPLY CHAIN

Himalaya ahead for Wal-Mart

• India has 3rd largest network in terms of (roads) with 3,38344(k.m).• India has total 65,569 k.m of National Highways.• State Highways total length only 137771 9(k.m)• Largest National highway no-7(2369k.m)• Reality check• According to Goldman Sachs, India need to spend $1.7 trillion, but

NHAI planned to expand $70 billion over next three year.• Only 2500 (k.m)of national Highway are of international Standard.• National Highway represent only 20% of total network length.• Only 16%Of India’s road are 4 lane or above.• Approx.quarter of India 'Highway are Congested.

C0nt..

• U.S has the largest road network in the World with 6,430,366 (k.m)

• Number of Trucks U.S have 68,06,630.(6 tier or more)• In some cases Bus Speed (30-40 k.m.ph) reduced to (19-25

k.m. ph)• Goods transport from Gurgaon to the port of in Mumbai can

take upto 10 days.• The main roads are under huge pressure and required

modernization.• India has only 1% of World Vehicles.• In India 1300 truck per million .

CHALLENGES OF WAL-MART(opportunity for big bazaar)

• How it perceived by Indian consumers• According to Wharton marketing faculty-

customer perception (In U.S consumer understands big store means low price and small store means high prices, Reversely in India)

• India has 6000 castes and sub-castes in 28 states with their own taste, with 23 languages and also it keep changing.

• Typical Indian consumer does not travel more than 6-7km for its shopping

• Opening new stores in big cities

MARKET PENETRATION STRATEGY

• Existing targeted segment is middle class• More people are coming in middle class• Emerging market Jharkhand & Orissa• No. Of BIG BAZAR in Jharkhand & Orissa

STATE PER CAPITA(in Rs.) GROWTH RATE(%)

CHANDIGRAH 99262 6.3

GOA 82903 6

DELHI 49172 6.9

JHARKHAND 14990 16.6

ORISSA 14795 11.5

Focus to capture Nav Bharat Customer(Rural Market)

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

population 106 billion.• Minimum support price.• NREGS -100 days employment.• Income from farm products is Tax free.• Purchasing power in FMCG-$17 billion.• In Durable $2.5 billion.• How Big Bazaar can tap this?• Core Competency in FMCG Product(32-33% in total sale).• Apparel and Durable.

Cont….

• Why FMCG in Rural Market?• In financial year 2009-(April –March ) FMCG Rural Volume

Growth is estimated to be 5 % to 12 % higher than urban market.

• Big Bazaar can have small Cinthol ,Godrej 50 gm packs price Rs.4.

• They can focus on Customization by keeping durable products like

• Philip India’s VARDAAN T.V• Philips POWER RADIO .• LG Electronics SAMPOORNA T.V

Collaboration with Shoppers Stop

• Why Collaboration with Shoppers stop?• Shoppers stop presence with 27 stores in 12 cities• Their focus on Luxury market.• They keep National as well as International Brands like

Pepe, Gini, Carbon, Austin Reed (London)• Connection with Youth• Why:-India is very Young India • Source:-• Census of India .

In percentage

Age group

54 Below 24 year

35 0-14 year

19 15-24 year

Cont…

• The Changing Spends on Consumption

• Source:-CMIE• Introduced Café coffee day

• Provide conducive environment.

items 2005-06

2006-07

2007-08

2008-09

Beverage 1.78 1.89 1.92 2.85

Clothing &Footwear

5.17 5.48 5.95 6.02

Appliance 3.43 3.86 4.02 4.86

Food 35.38 34.28 33.21 32.89

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