21-01-2013, 04:43 PM
A STUDY OF INDIAN ORGANIZED RETAIL INDUSTRY
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ABSTRACT
This report consists from the origin of the retail to its today’s growth. Organized retail industry is at the introduction on stage. There is a huge potential for this industry in Indian market, because share of the organized retailing is just mere 3% of the total retailing industry. This is the reason why the world’s largest retailers are coming towards India for their operations.
This report includes the various types of retailing, world scenario as well as the Indian scenario of the organized retailing industry. Penetration of the organized retailing in India. There are major areas in which the retailing is used. Like food & grocery, footwear apparel etc. The major players of the Indian organized retailing and their various business models.
I have also studied and try to give the idea about the future of the India organized retailing. The analysis part of this report includes the environmental analysis, SWOT analysis, key success factor, BCG strategic environment matrix, 9-ps and porter’s five forces competitive analysis.
Environmental analysis consists Demographic, Government policy, Economic, Social, Technology how this factors affect the organized retail industry. SW-OT analysis is in two parts the SW analysis consists the strength and weaknesses of the Indian organized retail with the world organized retailing. The OT analysis includes the opportunity and the Threat of the Indian organized retail industry.
Key success factors analysis includes. Success factors which drives the industry, which includes the customer perspective and the competition survival strategy of the industry. The basic thing is to understand the customer and their needs. Other factor tests the competitive pressure of the industry.
BCG strategic environment analysis classify industry with two criteria, one is sources of advantages, and other size of advantage, there are mainly four types of industry which are Volume, specialization, Fragment and stalemate.
Five force model of porter which checks competitive pressure on industry. There are mainly five perspectives like suppliers of industry, Customers of industry, substitute of industry product, potential threat of new entry and the rivalry among firms. From five forces model industry is looking attractive. Above analysis will give perfect picture of industry. Challenges are regarding trend, workforce, technology, capital adequacy, but the most important challenges for the retailers in India is to change customers mind set and their buying habits. Indian consumer is used to purchase things from traditional mom and pop’s store. So mind set of the consumer has to be change for getting business from Indian consumer.
INTRODUCTION
World History of Retail
Retail comes from the French word retaillier which refers to "cutting off, clip and divide" in terms of tailoring (1365). It first was recorded as a noun with the meaning of a "sale in small quantities" in 1433 (French). Its literal meaning for retail was to "cut off, shred, paring".
When man started to cultivate and harvest the land, he would occasionally find himself with a surplus of goods. Once the needs of his family and local community were met, he would attempt to trade his goods for different goods produced elsewhere.
Thus markets were formed. These early efforts to swap goods developed into more formal gatherings. When a producer who had a surplus could not find another producer with suitable products to swap, he may have allowed others to owe him goods. Thus early credit terms would have been developed. This would have led to symbolic representations of such debts in the form of valuable items (such as gemstones or beads), and eventually money.
Early Markets
Over time, producers would have seen value in deliberately over-producing in order to profit from selling these goods. Merchants would also have begun to appear. They would travel from village to village, purchasing these goods and selling them for a profit. Over time, both producers and merchants would regularly take their goods to one selling place in the centre of the community. Thus, regular markets appeared.
The First Shops
Eventually, markets would become permanent fixtures i.e. shops. These shops along with the logistics required to get the goods to them were, the start of the Retail Trade.
How Retail Develops
Peddlers and Producers
The Retail Trade is rooted in two groups, the peddlers and producers. Peddlers tended to be opportunistic in their choice of stock and customer. They would purchase any goods that they thought they could sell for a profit. Producers were interested in selling goods that they had produced.
General Store
This division continues to this day with some shops specializing in specific areas, reflecting their origins as outlets for producers (such as Pacific Concord of Hong Kong), and others providing a broad mix, known as General Store (such as Casey's in the Midwest of the U.S.A.).
Although specialist shops are still with us, over time, the general store has increasingly taken on specialist products. Customers have found this to be more convenient than having to visit many shops - thus the term “Convenience Store” has also been applied to these shops. As the popularity of general stores has grown, so has their size. This combined with the advent of Self-Service has lead to the Supermarket, or Superstore.
How did retail develop?
When individuals or groups left their community and settled elsewhere, some missed foodstuffs and other goods that were only available in their birthplace. They arranged for some of these goods to be sent to them. Others in their newly adopted community enjoyed these goods and demand grew. Similarly, new settlers discovered goods in their new surroundings that they dispatched back to their birthplace, and once again, demand grew. This soon turned into a regular trade. Although such trading routes expanded mainly through the growth of traveling salesmen and then wholesalers, there were still instances where individuals purchased goods at long distance for their own use.
A second reason that distance selling increased was through war. As armies marched through territories, they laid down communication lines stretching from their home base to the front. As well as garnering goods from whichever locality they found themselves in, they would have also taken advantage of the lines of communication to order goods from home.
Retail Chains
Origins of Retail Chains
is likely that, as markets became more permanent fixtures they evolved into shops. Although advantageous in many respects, this removed the mobility that a peddler or traveling merchant may still have enjoyed. For some shopkeepers, it made sense to obtain extra stock and open up another shop, most probably operated by another family member. This would recover business from peddlers, create new business and the greater volume would allow the shopkeeper to strike a better deal with suppliers. Thus the Retail Chain would have started.
From Family Business to Formal Structure
Although retail chains would have been mostly run by families, as some chains grew, they would have needed to employ people from outside of their family. This was a limiting factor as there would have been a limit to the amount of trusted non family members available to help run the chain. Another, even more definite limiting factor was the distance the furthest shop would have been from the original shop. The greater the distance, the more time and effort would have been needed to effectively manage outpost shops and to service them with goods. There was, therefore, a natural barrier to expansion. That was the case until transport and communications became faster and more reliable. When this happened towards the end of the 19th century, chains became much bigger and more widespread. Many of these businesses became more structured and formalized, leading to the retail chains that we see today.