Swot analysis of reliance trends

SUBMITTED TO: Associate Professor G.H.S.Prasad

SUBMITTED ON: 6 September 2010

SUBMITTED BY: Anjul Baijal

MFM (IIIRD SEM)

SWOT ANALYSIS

SWOT analysis is a tool for auditing an organization and its environment. It is the first stage

of planning and helps marketers to focus on key issues. SWOT stands for strengths,

weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors.

Opportunities and threats are external factors.

In other words SWOT analysis is a strategic planning method used to evaluate the

Strengths, Weaknesses, Opportunities, and Threats involved in a project or in a business

venture. It involves specifying the objective of the business venture or project and

identifying the internal and external factors that are favourable and unfavourable to achieve

that objective. The technique is credited to Albert Humphery.

A SWOT analysis must first start with defining a desired end state or objective. A SWOT

analysis may be incorporated into the strategic planning model in conjunction with other

tools for audit and analysis, such as PEST analysis and Porter's Five – Forces analysis.

The aim of any SWOT analysis is to identify the key internal and external factors that are

important to achieving the objective. These come from within the company's unique value

chain. SWOT analysis groups key pieces of information into two main categories:

Internal factors – The strengths and weaknesses internal to the organization.

Strengths: attributes of the person or company that are helpful to achieving the

objective(s).Weaknesses: attributes of the person or company that are harmful to achieving

the objective(s).

External factors – The opportunities and threats presented by the external

environment to the organization.

Opportunities: external conditions that are helpful to achieving the objective(s).Threats:

external conditions which could do damage to the objective(s).

A strength could be:

Your specialist marketing expertise.

A new, innovative product or service.

Location of your business.

Quality processes and procedures.

Any other aspect of your business that adds value to your product or service.

A weakness could be:

Lack of marketing expertise.

Undifferentiated products or services (i.e. in relation to your competitors).

Location of your business.

Poor quality goods or services.

Damaged reputation.

An opportunity could be:

A developing market such as the Internet.

Mergers, joint ventures or strategic alliances.

Moving into new market segments that offer improved profits.

A new international market.

A market vacated by an ineffective competitor.

A threat could be:

A new competitor in your home market.

Price wars with competitors.

A competitor has a new, innovative product or service.

Competitors have superior access to channels of distribution.

Taxation is introduced on your product or service.

COMPANY PROFILE

Reliance Retail Limited (RRL) is a subsidiary of Reliance Industries Limited, based in

Mumbai. RRL was set up in 2006 and marks the foray of the Reliance Group into organized

retail. RRL has been conceptualized to include growth for farmers, vendor partners, small

shopkeepers and consumers. It is based on Reliance’s vertical integration strategy, to

build a value chain starting from farmers to consumers.

VISION

To make RIL one of the most innovative companies in the world and to

achieve breakthrough growth in revenues and profits by creating and

implementing sustainable solutions.

MISSION

To be the most admired and successful organised retail company in India that

materially enhances the quality of life of every Indian.

SPIRIT OF RELIANCE

Growth has no limit at Reliance, only when you dream it you can do it. Meeting deadlines is not enough but beating deadlines is the expectation.

We bet on people

CORPORATE STRUCTURE

Reliance Retail Limited is the vision of Mukesh Dhirubhai Ambani who is also the Chairman

& Managing Director of RIL. The Executive Directors are Nikhil R. Meswani, Hital R.

Meswani, Hardev Singh Kohli, PMS Prasad and R. Ravimohan. Ramniklal H. Ambani is the

non-executive and non-independent director.

Key Executives for RRL are:

Raghu Pillai – Director, Chief Executive and President of Retail Operations & StrategyAjay Baijal – President of Corporate PlanningManu Kapoor – Senior Vice-President of Corporate Affairs DivisionBijay Sahoo – Head of Human Resources

Reliance Retail Ltd. has a number of company-owned outlets along with a franchisee format.

Its various divisions are:

a) Reliance Mart

It is designed to be an all under one roof supermarket that again caters to household needs.

b) Reliance Fresh

The stores would typically be of an area of around 3,000-5,000 sq ft. Each store is to provide

fresh fruits, vegetables and also products of Reliance Select and other related groceries

c) Reliance Super

It will be a smaller version of the hypermarket format. It is to offer over 10,000 products in

various categories like grocery, home care, stationery, pharmaceutical products, apparels &

accessories, FMCG, consumer durables & IT, automotive accessories and lifestyle products.

Reliance Super stores are to be large supermarkets with an area of 4,000 to 10,000 sq. ft.

d) Reliance Digital

It is a consumer electronics concept mega store. It is designed to be a one stop shop for all

technology solutions in the field of consumer electronics, home appliances, information

technology and telecommunications. The stores are to cover an area of more than 15,000

sq. ft. and offer a variety of over 4,000 products spread across 150 brands along with

solution bundles to meet diverse customer needs.

e) Reliance Trends

It is a specialty apparel store that will sell men, women and children’s garments. The store

will carry the best of national and international brands like John Players, Peter England,

Indigo Nation, Wrangler, Reebok, and Lee, apart from in-house brands. The store layout is to

compliment the evolving taste and preference of fashion savvy consumers, giving them an

opportunity to view /shop with ease, along with well trained customer service associates, to

compliment the entire shopping process. By 2010, Reliance has planned to open 100 more

stores across the country with focus on major cities. The company is targeting a turnover of

`20,000 crore ($5 billion) from this format. This is a part of the US$ 25 billion (`100,000

crore) overall sales from retail business.

f) Reliance Wellness

It is a chain of specialty wellness stores that would offer pre-emptive, curative as well as

health and beauty solutions. The store is to add value to people’s lives, by providing

products and services that will proactively work to enrich people’s body, mind and spirit.

They will also house alternate medicine, health books & music. The stores are to showcase

Wellness Events, Seminars, Workshops and Advisory camps on contemporary wellness

issues like diabetes, hypertension, fitness, diet and nutrition, weight management and skin

care.

g) Reliance Footprints

It is a specialty footwear store that would offer over 25,000 pairs of formal, casual, ethnic,

party wear and sports wear in men, women and children footwear. It shall offer brands from

Europe and America like Josef Siebel, Rockport, Hush Puppies, Lee Cooper Clarks, Levis,

Nike, Adidas, Piccadilly, Dr. Scholl’s and more. For kids, Crocs and Disney will be showcased.

The store plans a pan-India presence by opening over 15 more specialty stores.

h) Reliance Jewels

It is a stand-alone fine jewellery format. It is to be a one stop shopping destination for fine

jewellery.

i) Reliance Timeout

With over 56,000 products Reliance Timeout will offer customer an extensive range of

merchandise in books, music, stationery, toys and gifts. It is to a format based on the

ideology to provide a place where a consumer can unwind and relax, browse and buy a

book, sample some music, choose a gift, and buy a toy or some exclusive stationery for

themselves. Reliance Timeout will offer a comprehensive range of products in these

categories along with an attempt to create a fascinating customer experience with a warm,

lively ambience.

COMPANY PROFILE OF RELIANCE TRENDS.

Company : Reliance Retail

Subsidiary Company : Reliance Trends

Founded : 2007

Headquarters : Bangalore

Chairman and Managing Director : Mr Mukesh Ambani

The Apparel, Luggage and Accessories division of reliance retail has announced the launch

of their first Apparel speciality store “Reliance Trends”. Reliance Trends stores has been

designed and furnished by the best of the international design agencies to offer a high style

and lavish experience to the Indian consumer. The store layout compliments the evolving

tastes and preference of fashion savvy consumers, giving them an opportunity to view/shop

with ease, along with an army of well trained customer service associates to compliment the

entire shopping process.

Reliance trends, the apparel division of Reliance Retail is well on track to democratise

fashion and make it attainable to the masses. This is being possible by the extraordinary

design pool of Indian and International designers, integrating the international design trends

and preferences of the Indian consumers.

The company is offering solutions to common maintenance problems through its state of

the art innovative products like Ever White Shirts, Anti Stain Trousers, Wrinkle free range

of garments, aromatic clothes for infants and quick-dry sportswear that ensures optimum

moisture management. To deliver the customer the best value for their money, only those

products that demonstrate an exemplary safety and quality meeting both implicit and

explicit needs of the consumer are approved for purchase.

Product quality has been ingrained into the DNA of Reliance Trends and is integral to the

mission of “Grahak Devo Bhava”. The quality system are designed, implemented and

monitored as per international standards by a highly competent team of professionals.

For the first time in organised retail, Reliance Trends is introducing Made to Measure

tailoring service offering customised fits to all the customers buying fabric from the store at

prices compatible to neighbourhood tailors.

Reliance Trends is offering a homogenous mix of private label of brands across men’s,

women’s and children’s category to fulfil every customer’s requirements.

The Network range of garments comprises of formal office wear and collection for men and

women, while the Netplay range, showcases a smart casual collection for the evolving

workplace. The DNMX range has been developed with a clear focus on the youth of India,

offering them exclusively crafted fashion garments like Denims, T-shirts etc.

Sparsh range of Indian wear for women, offers the finest collection of salwar kurtas,

churidars and a fast evolving Mix and Match range of garments. An exclusive label Panda

has been developed for infants and toddlers, while the FRENDZ range of garments would

compliment the wardrobes of the growing generation of boys and girls.

Apart from these private labels, the store is also offering some of the most renowned

brands in the country like Levis Strauss Signature, Peter England, Indigo Nation, American

Tourister, John Players etc. Some designer labels either directly or through their sub brands

most of these exclusively for Reliance Trends.

Continuing the tradition of reaching out to the middle class of the country, the current

offering from Reliance Trends is easily affordable to the Indian consumer. The specific

private label called First Class, is designed to cater to the range of garments cutting across

men’s, women’s and children’s wear to deliver extreme value to the Indian consumers.

Taking forward the voice of Shri Mukesh Ambani, Chairman & Managing Director, Reliance

Industries Ltd, Reliance Trends delivers unmatched affordability, quality and chain of

products and services to the consumer. Reliance Retail continues to fine tune its offering

and listening to its customers and learning from them. This as the Chairman envisions, will

be the beginning of transformation of Indian Retail with benefits for the consumer.

PRODUCT PROFILE OF RELIANCE TRENDS

Women’s Wear

Indian wear Formal wear

Semi Formal wear Casual wear

Dress material Lingerie

Men’s wear

Sports wear Formal wear

Semi Formal wear Casual wear

Men’s wear fabric Under garments

Kid’s wear

Infants Toddlers

Girls 2-8 years Boys 2-8 years

Girls 8-14 years Boys 8-14 years

Accessories

Handbags Socks

Handkerchiefs Sports Goods

PRIVATE LABELS BY RELIANCE TRENDS

NATIONAL AND INTERNATIONAL BRANDS AT RELIANCE TRENDS.

SWOT ANALYSIS OF RELIANCE TRENDS

STRENGTHS

Reliance Trends is financially sound. Being an subsidiary of a gigantic

industry group RIL it has sufficient resources in terms of time and

money to take it’s time to break even in the highly competitive retail

sector

Stores are located at location that ensures good footfall. Reliance

trends store occupy competitive advantage in terms of the retail

locations of the store.

Low prices of the merchandise attract middle income group

customers. The merchandise is designed uniquely to fill the market

gap in middle to lower middle income group level.

Merchandise is fashion oriented.

Merchandise is targeted towards the fastest growing demographic

segment of age i.e. 18-25 years of age; it contributes to a very large

market size.

The store signed in youth icons like Katrina Kaif and Ranbir Kapoor to

promote the store.

Though the loyal customer base is small but customers are highly

satisfied with the store.

Reliance Trends enjoys the good will and reputation earned by the

Reliance Group over the years.

WEAKNESSES

Lack of differentiation in the product line. Since Reliance Trends is a

late entrant in the Indian retail sector; it lacks the differentiation

factor which it can use to attract customers to the store.

Acute lack of awareness about the store, even after heavy

advertisements the store is unable to build a strong customer pull

towards itself.

Visual merchandising of the store demands a great amount effort.

The product are displayed in a very geometrical pattern creating a

huge but brush effect and sending across a message that the

merchandise is comparable to FMCG products.

Lack of major national and international brands in the store also a

major hindrance to footfall in the store.

The quality of the merchandise is low especially the private labels.

This acts like a major hindrance to the customer pull towards the

store.

The sales consultant on the floor should be more trained to promote

the store aggressively.

OPPORTUNITIES

Value retail is associated with Reliance Trends offers fresh stock at

such low price and thus trying to differentiate from other

competitors.

Customers who demand fashion merchandise which is a bit low on

quality but available at low price patronize the store.

It can target tier II and tier III cities of the country and can adopt a

market penetration strategy.

The store offers in-house labels and thus has freshness associated

with it.

It can effectively use other subsidiaries of Reliance Retail to promote

its brand

THREATS

Negligible awareness about the presence of store in cities where the

store is not present.

The company is started in a time when the retail space is already

occupied with many competitors. Reliance trends gives a “me – too”

image to the company.

It has positioned itself for middle to lower middle income group

customers but this income group might not generate revenues similar

or equivalent to sustain the huge market expansion plans of the firm.

Reliance trends faces cut throat competition from stores like

“lifestyle, Pantaloons, and Shoppers Stop” respectively. These are well

established in the market and grabbed a good market share.

CONCLUSION

SWOT analysis has helped me understand the customers who patronize Reliance trends

demand fashionable merchandise at low price and are less concerned about the quality of

the products. Reliance Trends has up come to fill the market gap in the middle income and

lower middle segments of the market. One of the major hindrances for growth is bringing

target customer into store. A lot of awareness programs may help in getting better footfalls.

Consumers have high expectations from Reliance Trends as it comes from a well known

industrial house of the country. It has to carve out a niche in its retail foray.