30753713-research-project-report

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DECLARATION

I, am the students of P.G.D.B.M. Third Semester Of NEW DELHI INSTITUTION OF

MANAGEMENT , Batch 2009-2011 , Roll No. B(63) are hereby declare that the

Research Report Project titled as STUDY OF SUPPLY CHAIN IN HYPER STORE

[BIG BAZAAR]


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CONTENT

CHAPTER 1

Introduction to the topic

CHAPTER 2

Significance of the study

CHAPTER 3

Research Methodology

a. Research Methodology used

b. Sample Size

c. Research Design

d. Collection of data [Primary Data & Secondary Data]

CHAPTER 4

Objective

Importance

CHAPTER 5

Data Analysis & Interpretation

CHAPTER 6

Findings, Suggestion


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APPENDIX

Questionnaires

CHAPTER 1

Introduction to Supply Chain Management

If your company makes a product from parts purchased from suppliers, and thoseproducts are sold to customers, then you have a supply chain. Some supply chains

are simple, while others are rather complicated. The complexity of the supply chainwill vary with the size of the business and the intricacy and numbers of items that

are manufactured.

Elements of the Supply Chain

A simple supply chain is made up of several elements that are linked by themovement of products along it. The supply chain starts and ends with the customer.

y Customer: The customer starts the chain of events when they decide topurchase a product that has been offered for sale by a company. The

customer contacts the sales department of the company, which enters thesales order for a specific quantity to be delivered on a specific date. If the

product has to be manufactured, the sales order will include a requirementthat needs to be fulfilled by the production facility.

y Planning: The requirement triggered by the customers sales order will becombined with other orders. The planning department will create aproduction plan to produce the products to fulfill the customers orders. Tomanufacture the products the company will then have to purchase the raw

materials needed.


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y Purchasing: The purchasing department receives a list of raw materials andservices required by the production department to complete the customersorders. The purchasing department sends purchase orders to selected

suppliers to deliver the necessary raw materials to the manufacturing site onthe required date.

y Inventory: The raw materials are received from the suppliers, checked forquality and accuracy and moved into the warehouse. The supplier will then

send an invoice to the company for the items they delivered. The rawmaterials are stored until they are required by the production department.

y Production: Based on a production plan, the raw materials are movedinventory to the production area. The finished products ordered by thecustomer are manufactured using the raw materials purchased from

suppliers. After the items have been completed and tested, they are stored

back in the warehouse prior to delivery to the customer.

y Transportation: When the finished product arrives in the warehouse, theshipping department determines the most efficient method to ship the

products so that they are delivered on or before the date specified by thecustomer. When the goods are received by the customer, the company will

send an invoice for the delivered products.

Supply Chain Management

To ensure that the supply chain is operating as efficient as possible and generatingthe highest level of customer satisfaction at the lowest cost, companies have

adopted Supply Chain Management processes and associated technology. Supply

Chain Management has three levels of activities that different parts of the companywill focus on: strategic; tactical; and operational.

y Strategic: At this level, company management will be looking to high levelstrategic decisions concerning the whole organization, such as the size andlocation of manufacturing sites, partnerships with suppliers, products to be

manufactured and sales markets.


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y Tactical: Tactical decisions focus on adopting measures that will producecost benefits such as using industry best practices, developing a purchasingstrategy with favored suppliers, working with logistics companies to develop

cost effect transportation and developing warehouse strategies to reduce thecost of storing inventory.

y Operational: Decisions at this level are made each day in businesses thataffect how the products move along the supply chain. Operational decisions

involve making schedule changes to production, purchasing agreements withsuppliers, taking orders from customers and moving products in the

warehouse.

Supply Chain Management Technology

y If a company expects to achieve benefits from their supply chainmanagement process, they will require some level of investment intechnology. The backbone for many large companies has been the vastly

expensive Enterprise Resource Planning (ERP) suites, such as SAP and

Oracle.

y Since the wide adoption of Internet technologies, all businesses can takeadvantage of Web-based software and Internet communications. Instant

communication between vendors and customers allows for timely updates of

information, which is key in management of the supply chain.


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Role of Supply Chain in Indian Organized Retail

The role of supply chain in Indian organized retail is very significant for on itdepends the growth of this sector. The Indian Supply Chain Council have been

formed to explore the challenges that a retailer faces and to find possible solutions

for India.

The role of supply chain in the organized retail sector in India should be a shelf-

centric partnership between the retailer and the manufacture for this will create

supply chains that are loss free. This will also give rise to top and bottom line

growth. In the organized retail sector in India the presence of fresh produce

(vegetables and fruits) is very small. This is so for the nature of supply chain is very

fragmented. This shows the important role of supply chain in the organized retail

sector in India.

In the organized retail market in India the role of supply chain is very important forthe Indian customer demands at affordable prices a variety of product mix. It is the

supply chain that ensures to the customer in all the various offerings that a company

decide for its customers, be it cost, service, or the quickness in responding to ever

changing tastes of the customer.

The infrastructure in India in terms of road, rail, and air links are not sufficient. And

so warehousing plays a major role as an aspect of supply chain operations. To

overcome these problems, the Indian retailer is trying to reduce trans portion costs

and is investing in logistics through partnership or directly. The Indian organized

retail sector is growing so the role of supply chain becomes all the more important.

It should become all the more responsive and adaptive to customers demand. There

is also need for the supply chain to be more cost efficient and collaborative to win

the immense competition in this sector.


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The role of supply chain in Indian organized retail has expanded over the years with

the boom in this industry. The growth of the Indian retail industry to a large extent

depends on supply chain, so efforts must be made by the Indian retailers to maintain

it properly.

Quality in the Supply Chain

To help improve customer satisfaction, greater emphasis is given to the aspect of

quality in the supply chain. The articles on this page will help you understand some

of the quality issues and methodologies that are relevant in current supply chainmanagement.

Benchmarking In The Supply Chain

Supply chain operations within an organization should be constantly reviewed to

identify where improvements can be made or deficiencies eliminated. One methodto help do this is to perform a series of benchmarking tests on their supply chain

processes. This article reviews the methods involved in benchmarking supply chain

processes.

TotalQuality Management (TQM)

Total Quality Management (TQM) is an approach that seeks to improve quality and

performance which will meet or exceed customer expectations. TQM looks at the

overall quality measures used by a company including managing quality design and

development, quality control and maintenance, quality improvement, and qualityassurance. This article looks at the history and implementation of TQM.


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Benchmarking In the Supply Chain

Benchmarking Overview

Supply chain operations within an organization should be constantly reviewed to

identify where improvements can be made or deficiencies eliminated. One method

to help do this is to perform a series of benchmarking tests on their supply chainprocesses. Benchmarking or goal setting allows a company to assess the

opportunities they may have for improving a number of areas in their supply chain

including productivity, inventory accuracy, shipping accuracy, storage density andbin-to-bin time. The benchmarking process can provide a company some estimate of

the benefits achieved by the implementation of any improvements.

History of Benchmarking

Benchmarking is the process whereby an assessment of an act or performance ismeasured by some means, whether this is by a measurement of time, value or

quantity. For example, an assessment of moving items from one storage location to

another can be measured by time for a single movement or by quantity if theperformance is over a set period. A benchmarking project will gather the

assessments and develop a plan of action to improve the process that was assessed.The popularity of benchmarking was spearheaded by the Xerox corporation in the

1980s and is now used in corporations throughout the world.

Types of Benchmarking

Three types of benchmarking can be identified; internal which is focused on the

processes of a single company, external which examines processes outside of acompanys direct industry and competitive, which examines processes at firms

within the same industry.


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Internal Benchmarking

The internal benchmarking process allows a company with a number of facilities

that operate the same supply chain processes to compare and contrast the ways inwhich the process is performed in those facilities. For example if a company

operates five distribution centers in the US and Canada, the benchmarking processcan examine a number of operations that take place at each of the distribution

centers and compare how they are performed and what improvements can be made

by comparing the results of the benchmarking. If a company benchmarks theprocesses around inventory accuracy, shipping accuracy and storage density, the

results of the assessments of the facilities can help a company to improve on those

processes at all of the facilities.

External Benchmarking

For companies that have performed internal benchmarking and want to investigate

new ways in which to improve performance of their internal processes, externalbenchmarking can produce significant improvements. Many companies believe thattheir processes are as efficient as possible, but quite often, the efficiencies are

limited by the knowledge within the company. The external benchmarking process

takes a company outside of its own industry and exposes them to different methodsand procedures. For example, a manufacturer and distributor of electrical

components have internally benchmarked their warehouses for a number of yearsand have exhausted ideas on improving efficiencies. They approached a very

successful retail company to visit their central warehouse and benchmark the

processes that occur there to compare to their own warehouse processes. Theexternal benchmarking allowed the manufacturer of the electrical components to

assess the processes seen in the retailers warehouse and develop an improvementplan for their own facilities based on the results.

Competitive Benchmarking

For companies that are not performing as well as their competitors they may want

to identify the reasons why their processes are not as efficient. Consulting and

research firms can perform competitive benchmarking studies for companies thatwill identify the strengths and weaknesses of their processes based on those of their

competitors. The company can then produce improvement plans based on theresults of the competitive benchmarking.

Components of Benchmarking

There are a number of components to a benchmarking study. Not every

benchmarking project will incorporate these components, but a combination of

these can be used.


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y Financial benchmarking This involves a financial analysis of theoperations that are assessed. For example, a company can compare the costof storing a component in each of its warehouses.

y Performance benchmarking This can compare the efficiency ofperforming a task in one company location to another, or to a competitors.

y Product benchmarking This method compares the product of onecompany against another, or comparing between facilities in the samecompany.

y Strategic benchmarking This method observes how other companiescompete. This can be within the same industry or outside of the companiesindustry.

y Functional benchmarking This is considered to be traditionalbenchmarking where a company will benchmark a single process at a

location or a number of locations to identify where efficiencies can be made.

Total Quality Management (TQM)

Total Quality Management (TQM) is an approach that seeks to improve quality andperformance which will meet or exceed customer expectations. This can be achieved

by integrating all quality-related functions and processes throughout the company.

TQM looks at the overall quality measures used by a company including managingquality design and development, quality control and maintenance, quality

improvement, and quality assurance. TQM takes into account all quality measurestaken at all levels and involving all company employees.

Origins of TQM

Total quality management has evolved from the quality assurance methods thatwere first developed around the time of the First World War. The war effort led to

large scale manufacturing efforts that often produced poor quality. To help correctthis, quality inspectors were introduced on the production line to ensure that the

level of failures due to quality was minimized.

After the First World War, quality inspection became more commonplace inmanufacturing environments and this led to the introduction of Statistical Quality

Control (SQC), a theory developed by Dr. W. Edwards Deming. This quality method

provided a statistical method of quality based on sampling. Where it was notpossible to inspect every item, a sample was tested for quality. The theory of SQC

was based on the notion that a variation in the production process leads to variationin the end product. If the variation in the process could be removed this would lead

to a higher level of quality in the end product.

After World War Two, the industrial manufacturers in Japan produced poor quality

items. In a response to this, the Japanese Union of Scientists and Engineers invitedDr. Deming to train engineers in quality processes. By the 1950s quality control was


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an integral part of Japanese manufacturing and was adopted by all levels of workers

within an organization.

By the 1970s the notion of total quality was being discussed. This was seen ascompany-wide quality control that involves all employees from top management to

the workers, in quality control. In the next decade more non-Japanese companieswere introducing quality management procedures that based on the results seen in

Japan. The new wave of quality control became known as Total Quality

Management, which was used to describe the many quality-focused strategies andtechniques that became the center of focus for the quality movement.

Principles of TQM

TQM can be defined as the management of initiatives and procedures that are aimed

at achieving the delivery of quality products and services. A number of keyprinciples can be identified in defining TQM, including:

y Executive Management Top management should act as the main driverfor TQM and create an environment that ensures its success.

y Training Employees should receive regular training on the methods andconcepts of quality.

y Customer Focus Improvements in quality should improve customersatisfaction.

y Decision Making Quality decisions should be made based onmeasurements.

y Methodology and Tools Use of appropriate methodology and toolsensures that non-conformances are identified, measured and responded toconsistently.

y Continuous Improvement Companies should continuously work towardsimproving manufacturing and quality procedures.

y Company Culture The culture of the company should aim at developingemployees ability to work together to improve quality.

y Employee Involvement Employees should be encouraged to be pro-activein identifying and addressing quality related problems.

The Cost of TQM


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Many companies believe that the costs of the introduction of TQM are far greater

than the benefits it will produce. However research across a number of industrieshas costs involved in doing nothing, i.e. the direct and indirect costs of quality

problems, are far greater than the costs of implementing TQM.

The American quality expert, Phil Crosby, wrote that many companies chose to payfor the poor quality in what he referred to as the Price of Nonconformance. The

costs are identified in the Prevention, Appraisal, Failure (PAF) Model.

Prevention costs are associated with the design, implementation and maintenance

of the TQM system. They are planned and incurred before actual operation, and caninclude:

y Product Requirements The setting specifications for incoming materials,processes, finished products/services.

y Quality Planning Creation of plans for quality, reliability, operational,production and inspections.

y Quality Assurance The creation and maintenance of the quality system.y Training The development, preparation and maintenance of processes.

Appraisal costs are associated with the vendors and customers evaluation of

purchased materials and services to ensure they are within specification. They caninclude:

y Verification Inspection of incoming material against agreed uponspecifications.

y Quality Audits Check that the quality system is functioning correctly.y Vendor Evaluation Assessment and approval of vendors.

Failure costs can be split into those resulting from internal and external failure.

Internal failure costs occur when results fail to reach quality standards and aredetected before they are shipped to the customer. These can include:

y Waste Unnecessary work or holding stocks as a result of errors, poororganization or communication.

y Scrap Defective product or material that cannot be repaired, used or sold.y Rework Correction of defective material or errors.y Failure Analysis This is required to establish the causes of internal

product failure.

External failure costs occur when the products or services fail to reach quality

standards, but are not detected until after the customer receives the item. These can

include:

y Repairs Servicing of returned products or at the customer site.


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y Warranty Claims Items are replaced or services re-performed underwarranty.

y Complaints All work and costs associated with dealing with customerscomplaints.

y Returns Transportation, investigation and handling of returned items.

Major Retail Players

Comprised of organized and traditional retail formats,Indian Retail market isestimated to be worth USD 350 billions.

o Organized Retail is estimated at USD 8 billions.Organised Retail isgrowing at over 30% annually.

o Of Indias 12 millions retail outlets, more than 80% are operated bysmall family business using household labor.

o The retail industry represents 13% of GDP and accounts for 6% ofIndias work force.Burgeoing growth rate in the retail industry are

attributed to growth in India economy, rising income and changing

consumption and expenditure patterns.

Top Major Retail Players

Retailer Existing

formats

Brand

Names

No. of

Store

s

Total

Retail

Space(00

0 sq ft)

Total

Sales

2004-

05(US

D mn)

Expansions

Plans


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Pantaloo

n Retail

Indian

Ltd

Department

store

Pantaloon 13 1,948 241 Invest

around

USD125 mn

between

FY06-FY08.Open 80-100

more stores

across

formats.

Hypermarket Big Bazaar 18 N/A N/A Triple total

Retail area by

FY08 to 6.5

mn Sq. ft.

Supermarket

s

Food

Bazaar

9 N/A N/A Enter into

Furniture

and home

retailing.

Seamless

Malls

Central 3 N/A N/A

RPG

Retail

Hyper

markets

Spencers 3 480 96 Open 21

hypermarkets and

supermarket

s

Music Stores Music

world

225 N/A N/A Open another

100 Music

Stores in

FY08.

Super

markets

Spencers 49 N/A N/A


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Shoppers

Stop Ltd.

Department

stores

Shoppers

Stop

20 1000 96 Add 2 mn Sq.

Ft. of Retail

Space in

FY08

Books &

Music Stores

Crossword

s

33 N/A N/A Entering

Hypermarket

format, 18

Stores

planned by

FY08

Home

furnishing

Home Stop N/A N/A N/A Setting up

Speciality

Stores forHome

Solutions.

Landmar

k Group

(Based in

Dubai)

Department

Stores

Lifestyle 8 370 67 Set up 25

New

Departmenta

l stores by

FY08. Invest

USD 65mn

over next 5

years.

Trent

India Ltd

Department

Stores

West side 19 350 52 Add 640,000

sq.ft. of Retail

Space.

Hypermarket

s

Star India

Bazaar

1 N/A N/A Open 17

Stores under

the

departmental

and

Hypermarket

formats by

FY08.


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Books &

Music Stores

Land Mark 4 N/A N/A

Company Profile:-

Pantaloon Retail (India) Limited, is Indias leading retailer that operates multiple

retail formats in both the value and lifestyle segment of the Indian consumer

marker. Headquartered in Mumbai (Bombay), the company operates over 5 million

square feet of retail space, has over 450 stores across 40 cities in India and employs

over 18,000 people.

The companys leading formats include Pantaloons, a chain of fashion outlets,

Big Bazaar, a uniquely Indian hypermarket chain, Food Bazaar, a supermarketchain, blends the look, touch and feel of Indian bazaars with aspects of modern

retail like choice, convenience and quality and Central, a chain of seamless

destination malls. Some of its other formats include, Depot, Shoe Factory, Brand

Factory, Blue Sky, Fashion Station, aLL, Top 10, mBazaar and Star and Sitara. The

company also operates an online portal, futurebazaar.com.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home

Town, a large-format home solutions store, Collection i, selling home furniture

products and E-Zone focused on catering to the consumer electronics segment.

Pantaloon Retail was recently awarded the International Retailer of the Year 2007

by the US-based National Retail Federation (NRF) and the Emerging Market Retailer

of the Year 2007 at the World Retail Congress held in Barcelona.


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Pantaloon Retail is the flagship company of Future Group, a business group catering

to the entire Indian consumption space.


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Future Group Manifesto

Future the word which signifies optimism, growth, achievement, strength,

beauty, rewards and perfection. Future encourages us to explore areas yet

unexplored, write rules yet unwritten; create new opportunities and new

successes. To strive for a glorious future brings to us our strength, our ability to

learn, unlearn and re-learn, our ability to evolve.

We, in Future Group, will not wait for the Future to unfold itself butcreate future

scenarios in the consumer space and facilitate consumption because

consumption is development. Thereby, we will effect socio-economic

development for our customers, employees, shareholders, associates and

partners.

Our customers will not just get what they need, but also get them where,how and when they need. We will not just post satisfactory results, we will

write success stories. We will not just operate efficiently in the Indian

economy, we will evolve it. We will not just spot trends, we will set trends by

marrying our understanding of the Indian consumer to their needs of

tomorrow. It is this understanding that has helped us succeed. And it is this

that will help us succeed in the Future. We shall keep relearning. And in this

process, do just one thing.

Rewrite Rules. RetainValues.

Group Vision

Future Group shall deliver Everything, Everywhere, Everytime for

Every Indian Consumer in the most profitable manner.

Group Mission

We share the vision and belief that our customers andstakeholders shall be served only by creating and executing

future scenarios in the consumption space leading toeconomic development.

We will be the trendsetters in evolving delivery formats, creatingretail realty, making consumption affordable for all customer

segments for classes and for masses.


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We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost- conscious and committed to quality in

whatever we do.

We shall ensure that our positive attitude, sincerity, humility andunited determination shall be the driving force to make us

successful.

Core Values

y Indian ness : confidence in ourselves.y Leadership: to be a leader, both in thought and business.y Respect & Humility: to respect every individual and be humble in our conduct.y Introspection: leading to purposeful thinking.y Openness: to be open and receptive to new ideas, knowledge and information.

Valuing and Nurturing Relationships: to build long term relationships.

y Simplicity & Positivity: Simplicity and positivity in our thought, business and action.y Adaptability: to be flexible and adaptable, to meet challenges.y Flow: to respect and understand the universal laws of nature.


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Hierarchy of Pantaloon (Future Group)

Mr. Kishore Biyani, Managing Director

Mr. Gopikishan Biyani,Wholetime Director

Mr. Rakesh Biyani,Wholetime Director

Mr. Ved Prakash Arya, Director

Mr. Shailesh Haribhakti, Independent Director

Mr. S Doreswamy, Independent Director

Dr. D O Koshy, Independent Director

Ms. Anju Poddar, Independent Director

Ms. Bala Deshpande, Independent Director

Mr. Anil Harish, Independent Director


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Big bazaars, small customer

With its high decibel 'sabse saste 3 din' campaign last month, India's top retailerPantaloon Retail clearly has no problem attracting customers to stores, but getting them to

buy is a different matter altogether.

Sales from the Rs 3,237 crore (Rs 32.37 billion) retailer's existing stores ('same store', in

jargon) grew a mere 3.6 per cent in January (on a year-on-year basis) as compared to 29per cent in January 2007, and the last six month's average of 10 per cent.

October, the festival season, saw a similarly dismal performance when sales fell 25 percent -- things picked up with Diwali in November but sales for the value segment (Big

Bazaar and Food Bazaar) for the two-month period rose just 2.8 per cent as compared to a

much higher 15 per cent in 2006. For the Lifestyle segment (Pantaloon and FashionStation), things were marginally better with sales in these two months rising 9 per cent in

2007 as against over 20 per cent in 2006.

For the entire company, of course, sales have grown faster in 2007-08. Overall sales for theyear are expected to grow 78 per cent as compared to 71.3 per cent in 2006-07 -- but this

includes sales from new stores as well. It's true that in mature western markets where the

penetration of organized retail is high, growth in same-store sales does peter off after threeyears or so, and settle at around 1-2 per cent. In India, however, where the penetration of

organized retail is very low, the slowdown is alarming.

Since consumer spending is clearly on the rise, the only reason for sluggish sales is thegreater competition and the possibility that organized retail is still not offering the kind of

value propositions which will make it unbeatable. While the penetration of organized retail

is 3-4 per cent at the all-India level, it is true that in major cities, there are pockets whereorganized retailers are located close to each other and offer more or less the same

merchandise.

Pantaloon Retail has tried to beat this slowdown through rapid expansion. The overall salesgrowth shows the strategy is working, but this is happening at a huge cost -- the company's

profit margins are getting eroded and revenues per square foot of space are declining. Total

sales for the last four quarters show that the revenue per square foot has been slowing.

While a sequential comparison may not be strictly in order for the lifestyle segment which

is, to some extent, a seasonal business, the value segment (Big Bazaar and Food Bazaar) ismuch less so.

The result is that sales are not growing fast enough to leave the retailer with a decent gross

margin. The gross margin, which does not reflect real estate costs or start-up costs for newstores, has been falling.

From 33 per cent in FY06, it slipped to 31.7 per cent in FY07, and in the June 2007 quarter


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this fell 550 basis points y-o-y. Even in the first two quarters of the current year, gross

margins fell by 266 basis points y-o-y and 180 basis points y-o-y, respectively.

One reason for this is the gradual shift in the product mix towards the value segment -- BigBazaar and Food Bazaar -- where products are far less profitable. Value retailing today

contributes approximately 72 per cent to turnover, up from 68 per cent in FY06 -- lifestyleretailing accounts for the rest.

Another reason is the higher promotional offers required to sustain same store sales in thevalue-retail formats. Besides, the increasing contribution from the relatively low margin

consumer electronics business is also partly to blame.

With real estate and salary expenses on the rise, operating margins too have not beenreally robust averaging 7 per cent over the last eight quarters.

However, of late, some scale benefits and better supply chain efficiencies appear to be

creeping in, boosting margins in the first half of FY08. One of the main reasons for thebounce back in operating profit margins in the first quarter of FY08, when they expanded

after four quarters of margin contraction, is lower staff costs and other overheads. In thesecond quarter of FY08 too, the ratio of employee costs to sales improved significantly -- it

dropped from 6.5 to 5.7 per cent.

Besides, there was a less-than-proportionate increase in marketing and general overheads.

While margins could remain flat as grocery-based formats proliferate, the advantage with a

format like Big Bazaar is that it can do higher inventory turns. However, that too doesn'tseem to be happening in any significant manner. In fact, one of the key concerns of analysts

is the high level of finished goods inventory.

The company's inventory rose by Rs 160 crore (Rs 1.6 billion) inQ2FY08 and the

inventory-to-sales ratio stood at 12. 8 per cent, compared with 13 per cent in Q2FY07. InQ1FY08 too, there was a sharp rise in inventory, by Rs 140 crore, and the inventory-to-

sales ratio rose to 12.9 per cent compared with 6.5 per cent in Q1FY07.

Stocks as per cent of sales have been rising since the third quarter of FY07. While some of itcan be attributed to stocking up for new rollouts, it is nonetheless disconcerting. What

makes things worse is that Pantaloon persists with an inventory accounting policy that is

less prudent than those of its competitors.

The valuation method overstates inventory and therefore, profits -- Pantaloon values its

inventory at the retail price less a markdown (about 15 per cent) compared with thestandard retail practice that values inventory at the cost of bringing it to the point of sale or

the selling price, whichever is lower.

Pantaloon can protect its margins by increasing the share of private and store brands --which it is doing. The share of store brands for the value segment is currently 38 per cent


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and should go up to 50 per cent by FY2010. For the lifestyle segment, however, there isn't

much scope for further increases since such brands are already at around 70 per cent.

The competition in the food and grocery segment, which accounts for 40 per cent ofconsumer spending at the all-India level, is keen with chains such as TruMart, Reliance

Fresh and Subhiksha growing. The Pantaloon group itself is launching KB Fair Price shops.All of this will hit margins since each chain tries to woo customers through huge discounts.

The result is that, while Pantaloon's gross margins are over 30 per cent, net margins areunder 3 per cent. So, even if the company is in a growth phase, there can be little doubt

costs are completely out of whack. Unless the benefits of scale are seen quickly, the

company's growth may be painful. And if, as expected, the economy starts to slow down, itwill hurt the retailer even more.

7 p and SWOT analysis of Big Bazaar


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7P Analysis of Big Bazaar

7P Marketing Mix is more useful for services industries and knowledge intensiveindustries. Successful marketing depends on number of key issues. The seven keys issues

are explained as: -

Product

Big Bazaar offers a wide range of products which range from apparels, food, farmproducts, furniture, child care, toys, etc. Products of all the major brands are

available at Big Bazaar. Also, there are many in house brands promoted by Big

Bazaar. Big Bazaar sold over 300,000 pairs of jeans, 50,000 DVD-players and 25,000microwave-ovens. In all, the fashion, electronics and travel segments made up about

70% of sales. Last year, these categories made up only about 60%.

Price

The tag-line is Is se sasta aur accha aur kahin nahi. They work on the model of economicsof scale. There pricing objective is to get Maximum Market Share. The various techniques

used at Big Bazaar are: -

Value Pricing (EDLP - Every Day Low Pricing): Big Bazaar promises consumersthe lowest available price without coupon clipping, waiting for discountpromotions, or comparison shopping.

Promotional Pricing: Big Bazaar offers financing at low interest rate. The conceptof psychological discounting (Rs. 99, Rs. 49, etc.) is used as promotional tool. BigBazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga

Pooja). Differentiated Pricing: Time pricing, i.e., difference in rate based on peak and non-

peak hours or days of shopping is also a pricing technique used in Indian retail,

which is aggressively used by Big Bazaar. Bundling: Selling combo-packs and offering discount to customers. The combo-

packs add value to customer.

Place

Big Bazaar stores are located in 50 cities with 75 outlets. Big Bazaar has presence inalmost all the major Indian cities. They are aggressive on their expansion plans.

Promotion

Big Bazaar started many new and innovative cross-sell and up-sell strategies inIndian retail market. The various promotion techniques used at Big Bazaar include

saal ke sabse saste teen din, Future Card (the card offers 3% discount), Shakti Card,


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Brand Endorsement by M. S. Dhoni, Exchange Offer - Junk Swap Offer, Point-of-Purchase Promotions.

Advertising has played a crucial role in building of the brand. Big Bazaaradvertisements are seen in print media, TV, Radio (FM) and road-side bill-boards.

People

They are one of the key assets for any organization. The salient features of staff of BigBazaar are: -

Well-trained staff, the staff employed by Big-Bazaar are well-suited for modernretail.

Well-dressed staff improves the overall appearance of store. Employees are motivated to think out-of-the-box. Retail sector is in growth stage, so

staff is empowered to take innovative steps. Employs close to 10,000 people and recruits nearly 500 people every month. Use of technology like scenario planning for decision making. Multiple counters for payment, staff at store to keep baggage and security guards at

every gate, makes for a customer-friendly atmosphere.

Process

The goods dispatch and purchasing area has certain salient features which include: -

Multiple counters with trolleys to carry the items purchased. Proper display / posters of the place like (DAL, SOAP, etc.). Home delivery counters also started at many places.

Physical Evidence

It deals with the final deliverable or the display of written facts. This includes the current

system and available facilities.


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CHAPTER 2

Significance of the study

This is a limited study which takes into consideration the responses of 20 employees of big

bazaar. This data can be explorated to take in the trends across the industry. The

significance for the industry lies in studying these trends that emerge from the study. It is a

rapidly changing and evolving sector. A study like this can attempt to guide the future of

the industry based on current trends and need .This study is helpful to find out the effect of

supply chain in hyper store like big bazaar and customer satisfaction.


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CHAPTER 3

Research Methodology

This research involved a study, which was descriptive in nature. This study mainly focuses

upon the Plans and Strategies using by retailer [hyper store] regarding supply chain

management for fulfilling the need and demand of the customer.

Methods of Data Collection:

There are mainly two types of data:

Primary Data

Secondary Data

1. Primary Data Collection:-

Primary data can be collected by three methods:

ObservationArea of Survey: - I am doing my survey in big bazaar which is in Agra city.

Sampling Unit: - Employees who are working in BIG BAZAAR.

Sampling Procedure: - Convenience sampling procedure has followed.

Sampling Method: - I am collecting data by Employees. I am meeting with the employee to

know about the supply chain which is follow in big bazaar and other hyper store.


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2. Secondary Data Collection: - Secondary data are collected from different books,

company journals, company records and other magazines and websites.


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CHAPTER 4

Objective of the Study

Study of existing system of supply chain management of BIG BAZAAR. How can existing system suggest to make the existing system more efficient. How supply chain reduce the holding cost.

Importance of the study

Through this study hyper store are able to manage their inventory level. This is helpful to know the different sources of merchandise. By having good supply chain hyper store are able to manage the cost, quality and

time of merchandise.

By this study hyper store are able to maintain good customer relationshipmanagement.

30753713-research-project-report

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