INDIA

*Costco Case Analysis

*Costco Business Model

*Paid member based shopping model.

*Factory direct purchasing, high velocity resale.

*Lower shrink – less stolen, more sold. Member model reduces shrink.

*Higher freight volumes, lower turnaround to sale time

*Redistribution is quick – centralized.

*Cost reductions realized from fast inventory sales.

*Efficient sales floor layouts – more product, less wasted space = more sales.

*Costco Value Proposition

*Very low marketing, labor and a targeted discount model

* Coupon/Sales blasts sent to a limited target audience – members only.

* Reduction in marketing dollars over competitors equals lower costs for goods.

* Labor costs reduced via larger volumes of stock on hand, in pallets and ready for customer distribution with low labor required.

* Hours of operation limited to core shopping times and light need for overnight stocking staff.

* Return policy highly favorable in the market, most goods accepted back without receipts and with extended warranty options.

*India - Economy

*Gross Domestic Product (GDP) – $4.06 trillion (5th in the world)

*Inflation – 12% - High (206th in the world)

*GDP Growth Rate – 10.4% (5th in the world)

*Foreign Reserves – $287.1 Billion (7th in the world)

*GDP Per Capita - $3,500 (262nd in the world)

*Currency Stability – 43 - 49:1 USD – 52wk Range

*India - Government

* Ruling Party and Leader

* Pratibha Devisingh Patil – (2007 – Current)

* Party: Indian National Congress

* Government Stability

* Democratic Nation

* Harsh relations with China over allegations of munitions being traded with Pakistan and China’s oversized military footprint.

* Money Out – Imports

* By 2035 India will be the second largest importer of fossil fuels.

* Subsidies

* 14% of Indian GDP is subsidized.

* Majority of Indian subsidies are oil of which 39% of subsidized kerosene is stolen.

*India - Infrastructure

* Indian Transport and Fuel Infrastructure

* Airports – 353 (249 with paved runways)

* Heliports – 40

* Pipelines

* Condensate/Gas – 2km

* Gas – 9,596km

* Liquid Petroleum Gas – 2,152km

* Oil – 7,448km

* Refined Products – 10,486km

* Railways – 63,974km (4th in the world)

* Roadways - 3,320,410km (3rd in the world)

* Waterways – 14,500km (9th in the world)

* Merchant Marine – 324 (29th in the world)

*India – Real Estate Cost

* Indian Real Estate Cost

* India-wide housing prices have increased 21.3% in Q2 2011.

* Ranked 2nd out of 50 countries for annual growth of residential prices.

* High Growth - Compared to 2010 by City

* Bhopal +46.41%

* Faridabad +44.74%

* Chennai +35.52%

* Bengaluru +35.29%

* New Delhi +33.64%

* Low Growth – Compared to 2010 by City

* Kolkata +10.23%

* Surat +9.56%

* Jaipur +4.92%

*India Real Estate – Avail/Partners

*Real Estate Availability

*Moderate availability due to financial situations in India.

*High cost is a big detractor in Indian Real Estate Sales.

*Cost of land post Indian 2001 Economic Bubble exceed that of the median home sales prices.

* 65% of flats sold in Delhi and 35% of flats sold in Mumbai have sold to speculators.

*Booming growth in Indian GDP may result in more availability over 2013-2015 at affordable prices.

* Jones Lang LaSalle remains the largest partner for real estate sales and coverage in India.

*ADA Citations

*The following Web Content was used for this presentation.* The United States Central Intelligence Agency, Retrieved 10/6/2011

* https://www.cia.gov/library/publications/the-world-factbook/geos/in.html

* Yahoo! Finance, Retrieved 10/6/2011

* http://finance.yahoo.com/q/bc?s=USDINR=X&t=5y&l=on&z=m&q=l&c=

*Wikipedia, Retrieved 10/6/2011

* http://en.wikipedia.org/wiki/Energy_policy_of_India

* http://en.wikipedia.org/wiki/Real_Estate_in_India

*Global Property Guide, Retrieved 10/6/2011

* http://www.globalpropertyguide.com/Asia/India