GROUP 9

METRO CASH & CARRY

Submitted by
0017/58 Komal Meshram
0070/58 Yash Pawar
0353/58 Akshat Singh
0300/58 Prerna Singh
0267/58 Tarun Simon
0149/57 Supratim Maitra
PRODUCT FLOW
 Sale of Edible and non edible goods for immediate cash sales
 Metro stores are open for 16 hours with shipping borne by clients themselves
 Individual identity cards given to customers/authorized for purchase of product
 Was the first Cash and Carry with foreign origin to enter Indian Markets

Order of Operations by Metro Wholesale

Supplier/ Metro Cash Hotels, cafes

And Carry and Other End User
Manufacturer
Businesses
What can Metro learn from its
experience in other countries
about entry into India?
METRO C&C CHINA RUSSIA INDIA
• No internal
• JV may be able to
• No competition competition
penetrate into the market
• Local business are • Highway
Opportunities • WTO allowed Metro C&C
open in regular development will
up to 90%
working hours connect
• Poor distribution system in
• Government wants to M,K,C(imagination)
the country
modernize the cities • 2nd world populous
country.

• Real estate price doubles • Forecast of • Political Instability

• No Distinction between
Wholesale Business
Threats &Hypermarkets
• Competition for
Locations(Carrefour &
Walmart)
decreasing • Lack of cold storage
population & highway still not
• Accession to the finished
WTO result in comp • Difference in policies
• Location for Central • Opposition of Metro
hub C&C (BJP)
Russia:
● Management needs to focus on implementing supply chain management efficiently, as it is observed that
the supply chain is missing in the market, which is causing the company to lose so the company must invest
in the Indian market, as it is growing at a substantial ratio and  an increase has been observed in the living
standards in India but the opposition from the local traders and associations must be managed, and the
management must adopt efficient negotiation skills
● There must be changes concerning the cold storage, and now the company must start using cold storage
facilities
● The most important concern is the environmental concern, therefore the company must make changes to
reduce the wastage
China:
There is a poor logistics system, which should be focused on, in order to bring an improvement in the Chinese
logistics processes, so that the customers wouldn’t have to compromise over quality and on-time delivery

Suggestion to do:
● Implement changes in the training plan to increase efficiency.
● Daily management huddles and meetings to identify and resolve problems on an immediate basis.
● Introduce new benchmark metrics to track trainees’ productivity-increases and effectiveness of the training
What should Metros entry strategy
be for India?
The entry strategy of the company went wrong due to the many reasons, such as: there was an
insufficient integration between Indian operation and headquarters, lack of trust over Indian people
and politicians and negligence towards addressing the opposition in media

● Company needs to build an ecosystem for its business in India, which could be done through
educating retailers as well as farmers, and improving the relations with public as well as the
government, to make sure that there would be a long-term growth and sustainability in India
● Public relations have the higher potential to bridge the gap between different Indian linguistic
communities, as it is of paramount importance for gaining the support of farmers, retailers and
people. Moreover, the company should improve public relations by working closely with the
local-language press and advert in the local language
● Strategic expansion of the company should follow the approach of opening smaller stores in big
cities with good infrastructure, in order to improve the products’ sales
● The company should also search for better intermediaries and should strengthen its relationship
with retailers as well as suppliers
● The company should also sell the products at the competitive pricing, below the maximum
retail price until and unless the company successfully gets succeeded in attracting the loyal
customers formed

● The company should enter into the market through a joint venture as it helps the company in
gaining valuable insights about the overall market of India which would help Metro Cash and
Carry to avoid harsh protests from anti-FDI protesters

● The company needs to obtain understanding and knowledge regarding the country’s complex
political environment

● The company is advised to communicate the value propositions of Metro Cash and Carry to
the masses, with the use of lobbying, media and other useful means
What challenges is Metro facing &
how should it resolve them?
PROBLEMS FACED IN INDIA
 Inability to make direct purchases of fruits and vegetables from farmers
 Customers not having confidence to desert existing suppliers despite evident discounting
 Long procedures and Government Red Taping for purchase of land to set up stores
 Poor infrastructure & lack of efficient supply chain network to ensure timely delivery of
perishables
 Lack of state of the art cold storage facilities

Furthermore, there was stiff competition faced by Metro by the following firms:
 Reliance Retail
 Walmart and Bharti Enterprises
 Carrefour, Sears and Tesco (French, American and UK based firms trying to enter
competition)
PEST ANALYSIS IN INDIA

POLITICAL ECONOMIC

• Long procedures to make a govt. decision • Consumer spending Inc.(34% from 2001-05)
• Multi parties in diff. state • FDI Inc.(just 1% GDP of China 2005)
• Party opposition (BJP) • Expected entrance of Walmart & Tesco

SOCIAL TECHNOLOGICAL

• Cultural differences
• Small Wholesalers do not allow Foreign
• Lack of cold storage
Comp.
• Delay's in infrastructure Development
• Literacy rate is low as compared to Russia &
China
RECOMMENDATION

● Transaction facilitator - provide infrastructure connecting buyers and sellers

● The lone wolf error - had no strategy to involve local partners preventing the company from
local knowledge, connections and relationships
● Understand the political environment and work around the APMC act
● Adjust the store format to reflect local needs and local real estate price constraints
● Build an ecosystem for its business in India by educating farmers and retailers and improving
government and public relations
● Communicate MCC value proposition to masses through media, lobbying etc