vis-à-vis

CULTURE,VALUES as key forces in shaping STRATEGY

and developing
COMPETENCIES …
 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.
WALMART

• 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.
 Opening the first WalMart
• We really had only two choices left: stay in the
variety store business; or open a discount store.

• Many of our best opportunities

were created out of necessity.
The things that we were forced
to learn and do, because we
started out in these remote,
small communities.
 EarlyTimes
• In the early days of Wal‐Mart the emphasis on item
promotion helped us to make up for a lot of
shortcomings we had—an 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.
 StrategicNotes
• I think that misunderstanding worked to our advantage
for 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 they left
huge pockets of business out there for us.
• Our growth strategy was born out of necessity, but at
least we recognized it as a strategy pretty early on. We
figured we had to build our stores so that our
distribution centers, or warehouses, could take care of
them, but also so those stores could be controlled
OperationsManagement
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.
 CreatingCulture
• 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 have many 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 overcome their
natural shyness and learn to speak up and help our
customers.
NEXT THE INDIAN CONTEXT
Raja of Indian Retail
• Born in a middle class trading
family, Kishore Biyani started his
career selling stone wash fabric as
trader.
• His objective is to capture every
rupee in the wallet of Indian
consumer.
• He is concentrating not just on retail
but his ambitions span over full
consumer space.
• With the launch of Pantaloons, Big
Bazaar, Food Bazaar, Central he has
redefined the retailing business in
India
 Kishore Biyani KB
Views, Value and Vision.
• 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 the cup
of his tea.
• He strongly believes none of his business will ever cater to
the elitist class.
• In the current era of knowledge economy Ideas will be the
greatest assets of a company. Organizations that allow
insights and information to flow freely will be the ones to
come out as winners.
 Indian Consumer and 3C’s

• 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 in consumer 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 of CONSUMPTION.
 Indian Consumer

• 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 Space

India One
Consuming class [ 14% ] – High disposable income

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

India Two serve the consuming class.

Struggling Class – Live a hand to mouth existence.

India Three

• 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 continued
• 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 on
consumption and income generation

• As retailers, we have not only to acknowledge this

change but remain ahead of evolution curve, not to
mention be an agent of change.
 Catering the Indian Consumer
• Indian consumer needs indigenous solutions to her
shopping needs –that give her best value for money
in an environment she is comfortable with..

While designing our Big Bazaar

the core idea was to merge the
look and feel of ‘mandis’ with
modern retail’s features like
quality, choice and convenience.
Catering the Indian Consumer
• 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 are
sold loose.
 Catering the Indian Consumer
• 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.
 Catering the Indian Consumer
• 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.
 Modus Operandi
• 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
• 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 format
scales up.
New Formats
• Central
A mall with virtually no walls to
separate different store. The
brands pay a percentage of their
sale to proprietor and the owner
gets to decide which brands to
keep.
• Specialty retail stores.
• KB’s Wholesale Market.
Allied ventures
Five Force Analysis : Competitors
• Buyer’s switching
cost is low
• Firm can adjust
prices quickly
• Price elasticity of
demand demand
Potential
Entrant

Suppliers Competitors Customers

Substitutes
 Five Force Analysis : Entrants

• FDI • Use strong cash flows

from other sectors.
• Big Business houses • Have network capabilities.
• Sourcing capabilities.

Potential
Entrant

Suppliers Competitors Customers

Substitutes
 Five Force Analysis : Suppliers
• Locally sourced suppliers. • Local Supplies
• Big companies like P&G &
provide flexibility.
HUL.
• Home grown brands like • Contracts with large
D&G John Miller. firms provides
efficiency.
Potential
Entrant

Suppliers Competitors Customers

Substitutes
 Five Force Analysis : Customers
• Low switching cost
• Transportation cost
• Because of wider product offering the customer will not
have options in every segment.

Potential
Entrant

Suppliers Competitors Customers

Substitutes
 SWOT Analysis
STRENGHT WEEKNESS
• High Brand Equity • Falling Revenue/ Sq Ft.
• Every Day Low price [ EDLP ] • Unable To Meet Store Opening
• Real estate and Infrastructure Target
•Understanding Consumer • Perception Amongst Consumers
Preferences

OPPORTUNITIES THREATS
•Targeting Area More Prone To • Competitors domestic and foreign
Development • Economic Conditions
•In Store Experience Improvements
•New formats and consumption
space
 References
• IT Happened In India : Kishore Biyani.
• Made In America : Sam Walton.
• Flowingdata.com .
• Google Image Search.
 TAG CLOUD

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Change is no more incremental its TRANSFORMATIONAL