STRATEGIC MANAGEMENT

PROJECT ON MYNTRA
E-COMMERCE – INDUSTRY

SUBMITTED TO
PROFESSOR RAMESH BAGLA

SUBMITTED BY:
RIDHIMA PANDITA
C 51
A0101918294
 TABLE OF CONTENTS
CHAPTER 1 – ABOUT THE COMPANY
CHAPTER 2 – EXTERNAL ANALYSIS – PESTLE ANALYSIS
2.1 Industry – E-commerce
2.2 Organisation - Myntra
CHAPTER 3 – PORTER’S 5 FORCES MODEL ANALYSIS
3.1 Risk of entry by potential competitors
3.2 Bargaining power of Buyers
3.3 Bargaining power of Sellers
3.4 Threat of Substitutes
3.5 Intensity of rivalry amongst existing firms
CHAPTER 4 – SWOT ANALYSIS OF MYNTRA
4.1 Strengths
4.2 Weaknesses
4.3 Opportunity
4.4 Threat
CHAPTER 5 – VALUE CHAIN ANALYSIS
5.1 Primary Activities
5.2 Support Activities
CHAPTER 6 – SCENARIO ANALYSIS
CHAPTER 7 – STRATEGIES
7.1 Strategy Selection
7.2 Evaluation of the Strategy
CHAPTER 8 – RECOMMENDATIONS
 CHAPTER 1 – ABOUT THE COMPANY

Myntra is a online ecommerce company that deals with trading of goods and services ranging
from a wide variety of Apparels, Electronics, Home décor, Footwear, Accessories, Jewellery,
Beauty & Personal Care, Luggage & Trolleys, Watches & Wearables, Lingerie & Sleepwear
etc.

The company has been acquired by Flipkart Internet Private Limited in May 2014. Myntra’s
most recent acquisition has been a company named, Pretr Online Services Private Limited in
August 2018. The company is headquartered in Karnataka, Bangalore, Karnataka.

Myntra understands its shoppers' needs and caters to them with choice of apparel,
accessories, cosmetics and footwear from over 500 leading Indian and international brands.
Prominent brands include Adidas, Nike, Puma, Catwalk, Inc 5, United Colors of Benetton,
FCUK, Timberland, Avirate, FabIndia and Biba to name a few. You can also shop from some
recently introduced labels such as - Roadster, Sher Singh, Dressberry, Kook N Keech and
ETC.

The company was established Mukesh Bansal, Ashutosh Lawania and Vineet Saxena in
February 2007. It has ranked amongst the top 10 e-commerce companies in India. It enjoyed
the first mover advantage in Online retailing business. But now companies like Flipkart,
Amazon, Snapdeal etc have become competitors.

It is the online portal which allows consumers to personalize their products such as shoes, t-
shirts, teddy bears, watches, calendars and many more things. The company offers more than
350 Indian as well as International brands. Also, it contains casual outfits from men, women
and kids.

In 2011, the company expanded its catalogue which includes fashion and lifestyle products
also. In 2014, Myntra merged with Flipkart to compete against Amazon.
 CHAPTER 2 - PESTLE ANALYSIS

2.1 INDUSTRY – E-COMMERCE

• Data Localization
• 100% FDI
Political • No FDI in invdentory model

• Increasing job opportunities

• More buying power
Economic • Rising internet user base

• Trends to adopt western culture

• Willingness of buyer to experiment
Social

• Personalising Artificial Intelligence

Technolog • Innvoating Payment Modes like PAymty, Phone Pe
-ical

• More laws towards protection of interest of online shoppers

Legal

• Wastage in terms of packaging

Environm- • Emission from vehicles of transportation
ental
 2.2 ORGANIZATION - MYNTRA

POLITICAL ECONOMIC
1. GOI to boost rural economy & promote 1. 100% FDI – online retail of G&S.
digital India. 1.2. Removal of distinction in different
1.2. GST, The game changer. types of overseas investment.

SOCIAL
1. Startup jobs may suffer a downfall.
1.2. Empowering youth through
employment.
2.3. Rise in no. of online consumers.
3.4. Shift in preference towards online
shopping as it saves time and money.
TECHNOLOGICAL
1. Implementation of Data Analytics and
cloud.
1.2. Leveraging AI for optimization.
2.3. Advent of Payment Banks.

LEGAL
1. Infringement of Intellectual Property ENVIRONMENTAL
(IP). 1. Saves paper, hence promoting green
2. Regulatory change for protection of environment.
Online shoppers.

2.1 POLITICAL

1. The government of India has plans to provide high speed broadband connectivity to
1.5 lakh gram panchayats which would lead motivating rural and semi-urban areas in
promoting online shopping. Hence, expanding reach for Myntra.
2. With lowering the VAT rates for merchants, the benefit won’t be realised by big e-
commerce players like Myntra which can affect tehir discounting strategies. Also,
20% fall in logistics is a promising factor for faster deliveries. But the changes in GSt,
is going to make the tax collection at source (TCS) for online sellers more
cumbersome and expensive.
2.2 ECONOMIC

1. Government permits 100% FDI only in the case of single brand online retailers.
However, there is still 51% FDI in Multi brand online retail. It implies that a primary
seller established by Myntra will thus be restricted and Myntra has to restructure its
business accordingly.
2. The removal of distinctions in different types of overseas investment i.e. upto 49%
will not require government approval until there is no transfer of ownership from
Indian entity to foreigner. It acts as a support for attracting more and more foreign
investments.

2.3 SOCIAL

1. The E-commerce retailers like Flipkart, Myntra deferred joining campus recruits from
IIMs & IITs which might led to management and tech graduates join safer companies
rather than volatile start-ups.
2. Myntra has collaborated with dpronto, a delivery platform that provides career
opportunities to underprivileged youth of the economy. Myntra has tied up with
dpronto to strengthen its delivery system with skilled labour.
3. Increase participation of all over the country, improvement in ease of net banking
favours of Myntra.

2.4 TECHNOLOGICAL

1. One of the major reason for Myntra’s sale is successful due to implementation of
strong data analytical tools like Microsoft Azure as its exclusive public cloud
computing software.
2. Myntra’s makes use of AI to optimize data of 100 million user database to predict
sales of the products. This helps the organization to better understand consumer
behaviour, purchasing power etc. and target appropriate products for right customer
base.
3. Access and adoption of e-payment platforms like PhonePe, Paytm, BhimApp etc.

2.5 LEGAL

1. The company has been recently encountered violating the Copyright Act and
Intellectual Property Act, by selling the product. Though once the seller has exercised
 his right to issue copies then owner loses all the future right to control the sale of
subsequent copies. However, this has degraded company’s brand value.
2. Increasing regulation to protect the interest of online shoppers. Thus efforts are being
put in regulatory framework to enhance consumer data and piracy protection.

2.6 ENVIRONMENTAL

1. Myntra aimed to cater eco-friendly and health conscious customers by investing in

trading of merchandise which is reusable and recyclable in nature.
 CHAPTER 3 – PORTER’S FIVE FORCES MODEL

3.1 RISK OF ENTRY BY POTENTIAL COMPETITORS

Though Myntra has established the largest market share,

• Threat of new participants is high. Thus, Government permits 51% FDI in multi mark
online retail (Shoppers Stop, Car Bazaar) & 100% in single brand online retail (Nike,
Wills Lifestyle).

• Liberal measures of framework is required.

• Comparatively low cash is required for set-up of an online portal.

• Industry is expected to grow exponentially by 76 billion $ by 2021.

Clearly, nobody would like to miss this huge open door.

 3.2 BARGAINING POWER OF BUYERS

• Buyer is the client who makes purchase on the web

• Numerous players in the industry which leads to wide variety to choose from.

• There is a benefit of changing from one organization to another since same items will
be shown in a few online retail sites.

Client is more powerful in contrast to online retail organizations.

3.3 BARGAINING POWER OF SELLERS

• Supplier is the one producing or manufacturer of finished products.

• Challenges in logistics are encountered in a way that online retail companies range
from technical to apparels to cosmetics etc. Many producers are present for a single
category so they cannot show their energy on online retail companies.

• For e.g. For computers, we have Dell, Toshiba, Lenovo etc desirous to sell products
online. So they’ll not be having the ability to operate the online retail companies.
Meanwhile, online customers can choose from a variety of products, thus changing
cost is 0.

• Hence should have an online retail industry acts as an intermediary to sell the
manufacturer’s produce.

Producer’s power is low due to dependence on online retail industry.

3.4 THREAT OF SUBSTITUTES

• Close Competitors are majorly Offline or Physical Stores

• But as per client’s perspective, threat encountered is less since customers are more
inclined towards online shopping as it saves time, exertion and cash.

• However, relative quality and cost of item is somewhere to be same with offline
stores.
 • Also, options of online discounts are lucrative to customers.

Threat of competitor in this industry is low.

3.5 INTENSITY OF RIVALRY AMONGST ESTABILISHED FIRMS

• Industry current net worth 2 bn $ approximately. It is further expected to grow at 10

bn $ in next few years.

• Rivalry is high in this industry within large no. of players Flipkart, Amazon, Alibaba,
Jabong, Snapdeal etc.

• Major challenges faced by the company are education, trust and customer loyalty.

• Customers are observed to be preferring Cash on delivery more than debit/credit card
payments.
 CHAPTER 4 – SWOT ANALYSIS

The next component of Strategic thinking requires the generation of a series of strategic
alternatives, or choices of future strategies to pursue , given company’s internal strengths and
weaknesses and it’s external opportunities and threats. The comparison of Strengths,
Weaknesses, Opportunities and Threats is normally referred to as a SWOT analysis.

4.1 STRENGTHS

1. Due to the merger with flipkart, additional customer base and variety adding up the
strengths.
2. Able to retain its independence even after merging with flipkart
3. Offering more than 1.5 lakhs products with over 1000 brands.
4. Efficient supply chain and delivery capability helps it to cater to 90,000+ locations.
5. ”End of season sale” – a successful drive catering to worth of goods Rs. 90,000 being
sold.
6. Aggressive advertising and marketing campaigns on TV, internet and print media.

4.2 WEAKNESSES

1. Myntra has however been able to keep its costs low due to its logistics arm, but it’s still
facing difficulty in expanding its reach. On the contrary, due to use of outsourcing,
Global giants like Amazon & eBay can deliver the product anywhere in the country.
2. Due to stiff competition in the market & low customer retention, the cost of Acquisition
is high because Myntra acquires a lot of customers through online advertising. As per
myntra data, the company spends R.s 400/- on acquiring a new customer on an average.
3. The industry is filled with a huge variety of sellers like Myntra which makes it difficult
for changing costs, hence power lies in the hands of buyers to choose from ranging
products and online platforms.
4.3 OPPORTUNITY

1. Selling private labels can increase their margin.

2. Partnership with celebrity designers, Bollywood movies can increase its fashion
appeal.
3. Bridal collection to tap the big wedding market in India.
4. Expansion into global markets can boost business.

4.4 THREAT

1. Global competitors like Amazon slowly making its foray

2. Fashion segment is becoming popular leading to increased competition
3. Economic fluctuations and unfavourable govt policies
4. Adding to its niche proposition is its app only business decision and closing website
might prevent it from capturing the growing online space.
 CHAPTER 5 – VALUE CHAIN ANALYSIS

5.1 PRIMARY ACTIVITIES

 Outbound Logistics – Myntra being an online retail e-commerce store deals with
merchandising. They receive the finished goods from various brands, store them at
their warehouses and then ship them to customers who ordered.
• Marketing & Sales – Myntra makes use of a third party courier services for their
outbound logistics i.e. it is their responsibility to give the demanded product to the
third party which will then be delivered to the end user. Through proper marketing
channels, Myntra is trying to create awareness among customer & enhance their
online shopping experience.
• Customer Service – Myntra believes in utmost consumer satisfaction through post-
sale feedbacks and adopts suitable strategies for consumer retention.

5.2 SUPPORT ACTIVITIES

• Company Infrastructure – The office of Myntra represents youthfulness, freshness and

vibrancy while incorporating fashion as the overall theme. The company keeps in
 mind the objective of the firm is trading in merchandise which is fashionable thus
keeps the employees interested at work and reminds them about the underlying
company goals.
• Technical Development – The website of the company has been designed in such a
way that the potential buyer can browse through online catalogues, which enables
them to choose from a wide range out of what he/she wants to buy, make online
payments and receive the goods at his/her doorstep.
• Procurement – Myntra acts as an intermediary between manufacturer and the end
user. They take the goods from the producer store them into their warehouses and
transport them into desirable quantities to the buyer at the accurate point of time and
place.
• Human Resource Management – The organisation is observed to be employee
friendly. It implies that major focus is laid upon work-life balance. The employees are
not pressurised enough to work as per deadliness unless their urgency at the end of
redressal of buyer or seller, stock updation etc.
 CHAPTER 6 – SCENARIO ANALYSIS

SCENARIOS

Best Case Scenario Worst Case Scenario Most Likely Scenario

BEST CASE SCENARIO (Most Optimistic Situation)

The best case scenario for Myntra will be enjoying MONOPOLY in the E-commerce retail
industry i.e. all potential competitors have been replaced by Myntra and they are enjoying the
complete market share. This leads to further increase in profits (abnormal profits for the short
run only) and revenues of the business. Thus, the bargaining power lies in the hands of the
seller. This situation, however, is the most beneficial scenario, but the major drawback of
such a scenario is that the company after some point of time will lose its drive to innovate and
the variety before the consumer will become redundant.

Thus, being in the Best Case Scenario is not really the most favourable position for the
enterprise.

WORST CASE SCENARIO (Most Pessimistic Situation)

At the extreme point of the business, it may happen that the competitors may have replaced
the brand, Myntra and the business is no longer in the run of the e-retail industry. In this
scenario, the profitability will not only fall but it will also become difficult to cover up the
costs. In other words. The business is encountering normal losses for its functioning. Hence,
the survival of the business will become impossible. Thus, the enterprise may have to shut
down.

MOST LIKELY SCENARIO (Most Possible Situation)

This is situation which close to reality i.e. the most possible scenario for the business wherein
the enterprise is likely to face competitions and understand that there is presence of other
related sellers dealing with same nature of business operations, thus the brand positioning in
the industry is at stake. The firm is expected to continuously bring innovation and develop
strategies to maintain the interest of customers and plan their retention. This is only possible
if at all the business can strive towards learning from fellow e-retailers nad adapt changes in
its operations if required. In such a scenario, a business may not enjoy abnormal profits in
short run, or there may be presence of normal profits only. But this can lead to abnormal
profits for the long run of the business.
 CHAPTER 7 – STRATEGIES

7.1 STRATEGY SELECTION

CORPORATE LEVEL STRATEGY

 Launch of Virtual Trial Room

Myntra has launched a new tech application for Virtual Trial room called “Style Studio”.
Through this application, customers can view themselves in the desired outfit via an
interactive web cam. Style Studio, built on the HTML 5 instead of Flash to enhance
compatibility across devices, is a part of Myntra's 'Style zone' - a one stop shop for all its
fashion properties including ‘Star N Style’ which brings celebrity youth icons to build a
connect with customers. Herein, customers can try over 2000 products and conclude their
buying decision over the same.

 Collaboration with Celebrities

It has planned tie ups with celebrities through movies and events as they represent fashion
sense & it is a marketing strategy that they’ll employ more often in the future. For
example, For the Try and Buy campaign, the big and bold creative of the campaign using
images of celebrities like Prateik Babbar and Ira Dubey strived to make a 'wow' impact at
handpicked premium units.

 Rolling out OOH Campaign

Myntra positions itself as a fashionable new age brand. OOH Campaign was a campaign
launched in 2012, Out of Home campaign was rolled out across 2 cities to build brand
awareness and promote online shopping. This was done to gain confidence on the
loopholes that online shopping fails to deliver, that targets the key essence of 'Try and
Buy'.

 Aggressive Promotion – Social Media

 The company has adopted viral marketing and internet for its popularity coupled with
occasional discounts and referral discounts.

Though Jabong started off 4 years later than Myntra in the eCommerce race, it has raced
ahead of it on social media. Not to compare their respective sales figure but one look at
their engagement rates gives an insight Jabong being at the top. Inspite of Jabong having
half of fans as Myntra their effective content strategy has ensured a highly engaging
community.

FUNCTIONAL LEVEL STRATEGY

 Workforce diversity

The company believes in accepting and welcoming employees across all parts of the
nation. They believe in bringing together diverse ideologies and practices and come to a
conclusion that caters to the needs of our end users.

 Cost leadership

The company believes in minimising its cost i.e. selling below the average industry prices
to gain the market share. Myntra aims at selling merchandise by offering a variety of
discounts and cashback offers to its potential customers.

 Focus on product line

By focussing exclusively upon its narrow product line of fashionable products, it helps
myntra to gain high degree of customer loyalty, and this entrenched loyalty discourages
other firms to compete directly.

 R&D
 Myntra has invested enough in Research and Development for understanding the buying
behaviour and dynamic tastes and preferences of the potential buyers. This R&D has
majorly been done through surveys, questionnaires and post-sales feedbacks.

7.2 EVALUATION OF STRATEGY

On the basis of strategies adopted following are the conclusions drawn,

1. Though myntra is doing a decent job in Social media marketing at establishing itself
as a fashion destination but a lot needs to be done to achieve at goal since social
media was never about generating sales but mainly about building a community and
keeping them hooked to you. Excessive self-promotional content can kill your brand.
2. Launch of Style Studio, gives Myntra a competitive advantage in the industry
supporting the growth and development of the organisation. As per the statistical data,
Myntra has seen more log-ins with the advent of app launch as compared to the
previous users.
3. The ‘Try & Buy’ Campaign of Myntra takes OOH Route, Myntra realises the essence
of touch and feel service to the customers. This enables in spreading a prompt
message and a lasting effect.

Influence of the above strategies on engagement on the website

Apart from engagements, Myntra has also been motivated to draw interest of customers
through Push Notifications, Data Mining, Automated Search, Reminders, Wishlist updation,
Automated 2-step payment, personalised shopping experience and what not.
 CHAPTER 8 – RECOMMENDATIONS

 Opening of Physical/Offline Stores

The company is suggested to expand its profitability and open chain of offline store of
private labels under the same. It will help them to grow exponentially. As per the
statistics, it has been observed that if the company opens approximately 15 stores in the
next one year, the profit will rise threefold it will be able to reach the $1-billion mark in
gross merchandise value (GMV).

 Launch of Express Product delivery system

Myntra is targeting to cater the needs and wants of fast-fashion shoppers. Keeping in
mind the perspective of the underlying goal of the organisation, they should focus upon
the delivery of the products. Myntra should adopt the strategies of quick delivery to its
customers, similar to that of its competitors. It is not only going to be helpful for existing
customer base but also attracts new buyers who are in need of merchandises on
immediate basis.

 Giving a personalised experience

There is always a positive response to the fashion-focused content and services such as
style solutions by stylists, look-good tips and curated offerings backed by a wide selection
of brands. The company should plan to take the next step by bringing a new experience to
its users through features that would enable discovery and consumption of fashion
products, content and services -- personalized to individual’s need, taste and choice.