walmart vs bigbazar - analysis

8/9/2019 Walmart vs Bigbazar - Analysis

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vis--vis

CULTURE,VALUES as key forces in shaping STRATEGYand developing

COMPETENCIES


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AGENDA

Look out for differences and similarities in

WAL MART and Big Bazaar.

Look if strategy was shaped because of Value

and necessity.

Appreciate the unique Indian-ness Kishore

Biyani has employed in retail chain buisness.


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WALMART

Sam Walton started as a

specialty store owner of Ben

Franklin franchise stores.

He was forty-four when we

opened first Wal-Mart in

1962.


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Opening the first WalMart

We really had only two choices left: stay in the

variety store business; or open a discount store.

Many of our best opportunitieswere created out of necessity.

The things that we were forced

to learn and do, because we

started out in these remote,small communities.


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EarlyTimes

In the early days of Wal-Mart the emphasis on item

promotion helped us to make up for a lot of

shortcomings we hadan unsophisticated buying

program, a less than ideal merchandise assortment,and practically no back-office support.

Early periods were marked by extensive benchmarking

to such a level that managers lived half of the time in

competitors stores.


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StrategicNotes

I think that misunderstanding worked to our advantagefor a long time, and enabled Wal-Mart to fly under

everybody's radar until we were too far along to catch.

But while the big guys were leapfrogging from large

city to large city, they became so spread out that theyleft huge pockets of business out there for us.

Our growth strategy was born out of necessity, but atleast we recognized it as a strategy pretty early on. We

figured we had to build our stores so that ourdistribution centers, or warehouses, could take care of

them, but also so those stores could be controlled


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OperationsManagement

Getting an early start on all

these systems, building a

foundation for our

distribution centres

development, starting to put

data processing into the

stores, really saved our bacon

later on.


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CreatingCulture

Wal-Mart is not a big success merely because we

grew up out here in the country, where people

are just naturally friendly and therefore make

great retail employees. It's true that we havemany fine associates from the country, but they

have had to enter our culture and learn retailing

just like anybody else, and we have spent a good

deal of time teaching many of them to overcometheir natural shyness and learn to speak up and

help our customers.


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NEXT THE INDIAN CONTEXT


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Born in a middle class tradingfamily, Kishore Biyani startedhis career selling stone washfabric as trader.

His objective is to captureevery rupee in the wallet ofIndian consumer.

He is concentrating not just onretail but his ambitions span

over full consumer space. With the launch of Pantaloons,

Big Bazaar, Food Bazaar,Central he has redefined theretailing business in India

Raja of Indian Retail


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There are three kinds of entrepreneurs - Creators,preservers and destroyers.

He considers himself as both creator and destroyer at the

same time. Preserving the status-quo has never been thecup of his tea.

He strongly believes none of his business will ever cater tothe elitist class.

In the current era of knowledge economy Ideas will be the

greatest assets of a company. Organizations that allowinsights and information to flow freely will be the ones tocome out as winners.

ishore iyani KB

Vi s, Val a Visi .


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The changing demographic profiles, globalization,

increasing income levels, urbanization,

technology, and a free flow of ideas from within

and outside is bringing about dramatic shift inconsumer tastes and preferences.

Underlying these trends there are tow

undercurrents that are sweeping through young

India CONFIDENCE & CHANGE. These two have the potential to tweak an

unprecedented era ofCONSUMPTION.

Indian Consumer and 3Cs


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The younger India is expected to embrce the

values of family and continue and live the Indian

way.

Therefore it is imperative to attract and deliver

the consumer understanding and interpreting

the Indian-ness quotient of the consumer.

Indian Consumer


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Consuming class [ 14% ] High disposable income

Serving class [ 50%] Drivers, cleaners etc. They

serve the consuming class.

Struggling Class Live a hand to mouth existence.

Also the consumer class and serving class never shop at the same

stores.

Serving class feels comfortable in crowds and chaos and hesitates

even to enter the specialty stores.

Indian Consumer Space


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By 2010, almost half of our citizens will be working

age group of twenty to fifty four years . A youthful,

exuberant generation, bred on success will not only

drive productivity but also set a spiraling effect onconsumption and income generation

As retailers, we have not only to acknowledge this

change but remain ahead of evolution curve, not tomention be an agent of change.

Indian Consumer Space continued


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Indian consumer needs indigenous solutions to hershopping needs that give her best value for money

in an environment she is comfortable with..

While designing our Big Bazaarthe core idea was to merge the

look and feel of mandiswith

modern retails features like

quality, choice and convenience.

Catering the Indian Consumer


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The Indian consumer has her

peculiar preferences when it

comes to staple food. She

would like to touch, feel the

grains for herself before she

would buy them. It is hence

at Food Bazaar staples aresold loose.



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Abroad hypermarkets are typically designed on box

type formats, shoppers abroad usually shop alone

and it isn't considered an exciting activity.

For Indians shopping is entertainment, they come

with entire family and move in groups.

The U shaped sections

proved to be more

appropriate than the long

aisles of western

hypermarket.


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Shopping in India is a local experience and

habit. It is therefore imperative to understand

each and every community and make the

decisions on the grass root insights acquired.

Also it has set up Big Bazaar in key real estate

location in heart of important cities, which can

be leveraged in the long run.



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Retail stores need to drive sales and not be sales

driven.

KB is of a strong philosophy that the retailers job is to

create demand and the supply chain will follow out

of necessity.

By focusing on customers we have managed to keep

our business simple and agile.

Local sourcing has been adopted as centralized

processes may not be viable of a diverse country as

India.

Modus Operandi


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Although because of the value proposition and

scarcity of organized retail might have given Big

Bazaar the luxury to sideline operations, it is

expected to take the center stage as the formatscales up.

Modus Operandi


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Central

A mall with virtually no walls to

separate different store. The

brands pay a percentage of theirsale to proprietor and the owner

gets to decide which brands to

keep.

Specialty retail stores.

KBs Wholesale Market.

New Formats


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Allied ventures


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Buyers switching

cost is low

Firm can adjust

prices quickly Price elasticity of

demand demand

Five Force Analysis : Competitors


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FDI

Big Business houses

Five Force Analysis : Entrants

Use strong cash flows

from other sectors.

Have network capabilities.

Sourcing capabilities.


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Local Supplies

provide flexibility.

Contracts with largefirms provides

efficiency.

Five Force Analysis : Suppliers

Locally sourced suppliers.

Big companies like P&G &

HUL.

Home grown brands like

D&G John Miller.


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Low switching cost

Transportation cost

Because of wider product offering the customer will not

have options in every segment.

Five Force Analysis : Customers


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SWOT Analysis

STRENGHT

igh Brand Equity

Every Day Low price [ EDLP ]

Real estate and Infrastructure

Understanding Consumer

Preferences

WEEKNESS

Falling Revenue/ Sq Ft.

Unable To Meet Store Opening

Target

Perception Amongst Consumers

OPPORTUNITIES

Targeting Area More Prone To

DevelopmentIn Store Experience Improvements

New formats and consumption

space

THREATS

Competitors domestic and foreign

Economic Conditions


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IT Happened In India : Kishore Biyani.

Made In America : Sam Walton.

Flowingdata.com .

Google Image Search.

References


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TAG CLOUD

Change is no more incremental its TRANSFORMATIONAL

walmart vs bigbazar - analysis

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