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BRM PROJECT

ONSHOULD FDI BE ALLOWED IN INDIAN RETAIL SECTOR

S UBMITTED TO -

DR. P. SHAHIKALA

SUBMITTED BY –

SHUBHAM ANANDBANITA KAIN

SHUBRAJYOTI MUKHERJEESAKSHI DUA

ACKNOWLEDMENT

Behind every achievement lies an unfathomable sea of gratitude to those who had extended

their support and without whom it would never had come into existence. To them we say our

words of gratitude.

We somehow feel that had if we not had the guidance from certain people along the way, we

would have gotten lost in an abyss of confusion. So, it was with a heart filled with gratitude

that we acknowledge their assistance.

We would like to thank DR. P SHASHIKALA who was the source of constant guiding light

throughout the project. He has always motivated us to put our best foot forward by setting

high standards for us. He directed us from the scratch how to make the report. Most

importantly, we thank him for giving us this project as it was a good learning experience.

2

CONTENTS

Introduction……………………………………………….......3

Definition of retail………………………………………….....4

FDI policy in India…………………………………………....5

FDI policy with regard to retailing in India…………….......6

FDI in single brand retail………………………………….....7

Retailing in India……………………………………………..8

Major Indian retailers……………………………………….9

What is Wal-Mart…………………………………………...10

Wal-Mart and India…………………………………………10

Research methodology………………………………………11

Problem definition…………………………………………..11

Research objective…………………………………………..12

Sample design………………………………………………..12

Scope of project……………………………………………...13

Data collection……………………………………………….13

Questionnaire………………………………………………14-18

Questionnaire analysis……………………………………..19-21

Data analysis…………………………………………………22

Factorial analysis…………………………………………..23-30

Conclusion……………………………………………………31

Bibliography……………………………………………….....32

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INTRODUCTION

India without a doubt is in a ‘growth phase’ in terms of economy and many consider it to be an attractive country to invest in, particularly with rapidly changing and growing retail market scenario.Foreign Direct Investment (FDI) is restricted in the retail sector, and despite many years of debate, the regulations are changing very slowly and there are still loads of uncertainties.At Kearney (2009), an international management consultancy, in their Annual Global Retail Index, ranked India as No.1 out of 30 of the top emerging markets, consistently for some years. Foreign Investors have been eyeing India for some time now they are ready for action in the retail market, but still there are plenty of uncertainties, restrictions and potential socioeconomic risks.

This division of the retail sector, which has a very heavy weighting towards, unorganized, is just one of the issues contributing to the sensitive debate on FDI in India at the moment. What are the potential risks to the unorganized retail sector, and of course to the wider Indian economy? There are several groups who strongly oppose to FDI invasion in the Indian retail sector, but are their concerns unfounded? Equally, could FDI in retail be a disaster for the retail sector and the Indian economy?What reforms are necessary, if any, to protect the subcontinents domestic retail sector and national interests?

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AIMS AND OBJECTIVES

The aim of this report is to provide an analysis on the arguments for and against WALMART entry in India's retail sector, in order to provide recommendations on reforms by the government policies that could reduce the risk of lifting restrictions on FDI in retail.The objectives are to investigate the Indian market and review its current policy and regulations with regards to foreign investors so as to gain an understanding of the current position on FDI, as well as an overview of the Indian system. This will be followed by an examination of the arguments for and against the changing current policy and improve the regulatory environment. This will enable us to assess the key factors to be considered in making policy changes in the future.

The next objective will then be to compare the thoughts and opinions of people working within or alongside India's domestic retail sector, via a survey, to interpret the domestic market sentiment towards foreign investment, and to explore thoughts on the issues faced by the sector. It will then be possible to consider what solutions could potentially resolve the issues and are supported by the majority of domestic retail players.

5

DEFINITION OF RETAIL

In 2004, The High Court of Delhi defined the term ‘retail’ as a sale for final consumption in contrast to a sale for further sale or processing (i.e. wholesale).A sale to the ultimate consumer.

Thus, retailing can be said to be the interface between the producer and the individual consumer buying for personal consumption. This excludes direct interface between the manufacturer and institutional buyers such as the government and other bulk customers. Retailing is the last link that connects the individual consumer with the manufacturing and distribution chain. A retailer is involved in the act of selling goods to the individual consumer at a margin of profit.

FDI POILCY IN INDIA

FDI as defined in Dictionary of Economics (Graham Bannock) is investment in a foreign country through the acquisition of a local company or the establishment there of an operation on a new (Greenfield) site. To put in simple words, FDI refers to capital inflows from abroad that is invested in or to enhance the production capacity of the economy.

Foreign Investment in India is governed by the FDI policy announced by the Government of India and the provision of the Foreign Exchange Management Act (FEMA) 1999. The Reserve Bank of India (‘RBI’) in this regard had issued a notification, which contains the Foreign Exchange Management (Transfer or issue of security by a person resident outside India) Regulations, 2000. This notification has been amended from time to time.

The Ministry of Commerce and Industry, Government of India is the nodal agency for motoring and reviewing the FDI policy on continued basis and changes in sectoral policy/ sectoral equity cap. The FDI policy is notified through Press Notes by the Secretariat for Industrial Assistance (SIA), Department of Industrial Policy and Promotion (DIPP).

The foreign investors are free to invest in India, except few sectors/activities, where prior approval from the RBI or Foreign Investment Promotion Board (‘FIPB’) would be required.

6

FDI POLICY WITH REGARD TO RETAILING IN INDIA

It will be prudent to look into Press Note 4 of 2006 issued by DIPP and consolidated FDI Policy issued in October 2010 which provide the sector specific guidelines for FDI with regard to the conduct of trading activities.

a)      FDI up to 100% for cash and carry wholesale trading and export trading allowed under the automatic route.

b)      FDI up to 51 % with prior Government approval (i.e. FIPB) for retail trade of ‘Single Brand’ products, subject to Press Note 3 (2006 Series).

c)      FDI is not permitted in Multi Brand Retailing in India.

ENTRY OPTIONS FOR FOREIGN PLAYERS PRIOR TO FDI POLICY

Although prior to Jan 24, 2006, FDI was not authorised in retailing, most general players had been operating in the country.  Some of entrance routes  used by them have been discussed in sum as below:-

1.         Franchise Agreements 

2.         Cash And Carry Wholesale Trading 

3.         Strategic Licensing Agreements 

4.         Manufacturing and Wholly Owned Subsidiaries.

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FDI IN SINGLE BRAND RETAIL

The Government has not categorically defined the meaning of “Single Brand” anywhere neither in any of its circulars nor any notifications.

In single-brand retail, FDI up to 51 per cent is allowed, subject to Foreign Investment Promotion Board (FIPB) approval and subject to the conditions mentioned in Press Note 3 that (a) only single brand products would be sold (i.e., retail of goods of multi-brand even if produced by the same manufacturer would not be allowed), (b) products should be sold under the same brand internationally, (c) single-brand product retail would only cover products which are branded during manufacturing and (d) any addition to product categories to be sold under “single-brand” would require fresh approval from the government.

While the phrase ‘single brand’ has not been defined, it implies that foreign companies would be allowed to sell goods sold internationally under a ‘single brand’, viz., Reebok, Nokia, Adidas. Retailing of goods of multiple brands, even if such products were produced by the same manufacturer, would not be allowed. 

Going a step further, we examine the concept of ‘single brand’ and the associated conditions:

FDI in ‘Single brand’ retail implies that a retail store with foreign investment can only sell one brand. For example, if Adidas were to obtain permission to retail its flagship brand in India, those retail outlets could only sell products under the Adidas brand and not the Reebok brand, for which separate permission is required. If granted permission, Adidas could sell products under the Reebok brand in separate outlets.

8

RETAILING IN INDIA

Retailing in India is one of the pillars of its economy and accounts for about 15% of its GDP. The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets in the world by economic value. India is one of the fastest growing retail market in the world, with 1.2 billion people.

India's retailing industry is essentially owner manned small shops. In 2010, larger format convenience stores and supermarkets accounted for about 4 percent of the industry, and these were present only in large urban centres. India's retail and logistics industry employs about 40 million Indians (3.3% of Indian population).

Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process.

In November 2011, India's central government announced retail reforms for both multi-brand stores and single-brand stores. These market reforms paved the way for retail innovation and competition with multi-brand retailers such as WALMART, CARREFOUR, and TESCO, as well single brand majors such as IKEA, NIKE, and APPLE. The announcement sparked intense activism, both in opposition and in support of the reforms. In December 2011, under pressure from the opposition, Indian government placed the retail reforms on hold till it reaches a consensus.

In January 2012, India approved reforms for single-brand stores welcoming anyone in the world to innovate in Indian retail market with 100% ownership, but imposed the requirement that the single brand retailer source 30 percent of its goods from India. Indian government continues the hold on retail reforms for multi-brand stores. IKEA announced in January that it is putting on hold its plan to open stores in India because of the 30 percent requirement. Fitch believes that the 30 percent requirement is likely to significantly delay if not prevent most single brand majors from Europe, USA and Japan from opening stores and creating associated jobs in India.

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MAJOR INDIAN RETAILERS

REI AGRO LTD Retail: 6TEN and 6TEN kirana stores

Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station, Brand Factory, E-Zone etc.

Raymond Ltd.: Textiles, The Raymond Shop, Park Avenue, Park Avenue Woman, Parx, Colourplus, Neck Ties & More, Shirts & More etc.

Fab India: Textiles, Home furnishings, handloom apparel, jewellery

RP-Sanjiv Goenka Group Retail-Formats: Spencer’s Hyper, Spencer's Daily, Music World, Au Bon Pain (International bakery cafeteria), Beverly Hills Polo Club

The Tata Group-Formats: Westside, Star India Bazaar, Steel junction, Landmark, Titan Industries with World of Titans showrooms, Tanishq outlets, Croma.

Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance AutoZone, iStore

Reliance ADAG Retail-Format: Reliance World

K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, In orbit Mall

Marks & Spencer: Clothing, lifestyle products, etc.

Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise brand stores.

Pyramid Retail-Formats: Pyramid Megastore, TruMart

Next retail India Ltd (Consumer Electronics)(www.next.co.in)

Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe Deposit Lockers

PGC Retail -T-Mart India [1], Switcher, Respect India, Grand India Bazaar, etc.,

Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.

Trinethra- Formats: Fab mall supermarket chain and Fab city hypermarket chain

Vishal Retail Group-Formats: Vishal Mega Mart

BPCL-Formats: In & Out

German Metro Cash & Carry

Shoprite Holdings-Formats: Shoprite Hyper

Aditya Birla Group - "More" Outlets

Kapas- Cotton garment outlets

Nmart Retails with 71 operating Stores till now and total 153 Stores in India and 1 to open in Dubai Shortly.

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WHAT IS WAL-MART ?

With around 5000 retail outlets worldwide, operating in more then a dozen countries and with over US$286 billion in annual sales, Wal-Mart is the top retail chain and number one fortune 500 company in the world. Wal-Mart is the top employer in the U.S. with 1.3 million employees, “the company accounts for 9 cents of every US retail dollar and sells around 20 per cent of the nation’s groceries and pharmaceuticals.” (Times News Network)

Wal-Mart’s sheer size gives it unrestrained economic power which allows it to drive down costs in the retail and manufacturing sectors and to enact its own standards with regards to its work force. 

HOW WILL WALMART AFFECT INDIAN RETAILERS ?

In all of the countries Wal-Mart has set up shop it has put other retailers out of business and driven down wages.   Wal-Mart has a clearly defined anti-union policy aimed at preventing its work force from gaining any collective bargaining power which could result in increased wages, covered health benefits and job security. Many reports have been written documenting the economic and eventual social and environmental degradation which occurs when Wal-Mart “comes to town”.

“Over the course of [a few years after Wal-Mart entered a community], retailers' sales of men’s' and boys' apparel dropped 44% on average, hardware sales fell by 31%, and lawn and garden sales fell by 26%. In towns without Wal-Marts that are close to towns with Wal-Marts, sales in general merchandise declined immediately after Wal-Mart stores opened. After ten years, sales declined by a cumulative 34%.”[Kenneth Stone at Iowa State University, “Impact of the Wal-Mart Phenomenon on Rural Communities”].

WAL-MART AND INDIA

•    Wal-Mart is seeking to open its own retail chain throughout India. India's $250 billion retail business is the eighth largest in the world and has the potential to grow 7 per cent by 2011. [McKinsey Report] For a company already dominating the world markets, this is an un-passable opportunity.•    The owners of Wal-Mart stand to gain enormous profits from this move while India’s economy will suffer and its workers will be subjugated to the unfair work practices of this Multinational Behemoth.

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RESERACH METHODOLOGY

Marketing Research Problem :

To study the impact of WALMART presence on Indian retail industry and the factors contributing to it.

Sub problem 1 –

To identify the WALMART management practise as it enter Indian retail sector.

Research Question 1: Analyze the impact of various parameters such as price, quality, supply, growth, service, management, etc as WALMART planning to enter Indian retail sector.

Data Analysis for Research Question 1:

Ho: All parameters have equal impact on WALMART as a boon to Indian retail.H1: consumer preference has a higher impact on WALMART threat to Indian retail.

PROBLEM DEFINITION

In order to make the purpose of the research clear and to collect the necessary and relevant information, a research objective was made under the problem definition which was to identify the key factors responsible for effect of FDI on Indian retail sector.

12

RESEARCH OBJECTIVE

To analyze the impact of FDI on Indian retail sector.

To know and analyze the response of Indian Consumer on FDI in Indian retail sector.

To give recommendations on reforms to government

Policy that could reduce the risks of lifting restriction on FDI in retail

SAMPLE DESIGN

Students-150 Survey shall be conducted by administering the questionnaire to 150 students from

IBS Hyderabad.

Data Gathering- from campus students. Data Processing-In-house Editing, Coding and analytical tools will be used.

Report Preparation-A written report will be submitted and Oral presentation of the analysis will be made.

Budget and Time Schedule.

13

SCOPE OF THE PROJECT This project is intended to find out the impact of wal-mart on Indian retail industry.. The project aims to evaluate the parameters which possess threat to Indian retail due

to the presence of wal-mart. We intend to conduct the survey in a both personal and online form. The geographical region for personal surveying will be primarily Hyderabad city or

IBS Hyderabad campus.

DATA COLLECTION

(Sources of data ,sampling design, research design, techniques of data analysis)

SECONDARY: PRIMARY:

-Literature review. -Questionnaire

-Research papers -In-depth interviews

-newspaper article.

IDENTIFICATION OF RESERACH DESIGN

Exploratory research/Qualitative research

In order to refine the research sub-problems and explore into the preferences of prospective consumers, this phase will be taken to gain clarity regarding target segments and introduction of a new entrant.

For the sake of convenience and in view of certain other limitations we will restrict our sample to the students of ICFAI Business School, Hyderabad or to the retail store of Hyderabad. Within the campus or city, however, we seek to target a sample of 200 respondents on the basis of simple random (probability) sampling. This means that within ICFAI or the city the respondents would be chosen on a random basis with the probability of each being included in the sample is equal.

14

QUESTIONARIE

Q1. Are you aware of the current FDI in Retail Regulation & Policy?

YES

NO

Q2. Do you think the Indian Government should open up Foreign Direct Investment (FDI) restrictions in the Retail Sector?

STONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q3. Please give reasons for your answer to Question 2.

Q4. If FDI policy is to open up in the future, do you think any of the following conditions should be imposed on foreign retailers? (More than one)

o None

o Equity limits

o Only allow FDI in specific cities/areas

o A minimum investment amount requirement

o An exclusion of specific products for the domestic retailer

o Certain products must be manufactured/sourced in India by the foreign investor

o Only allow certain retail formats (e.g. Malls)

o Only allow branded products

o Other restrictions…? (Please specify)

15

Q5. What percentage of the FDI should the government allow?

NONE

1%-20%

21%-40%

41%-50%

51% and above.

Q6.FDI in retail means huge profits are eaten up by foreigners at the expense of local retailers?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q7. Do you think that government reforms need to be made to support domestic retailers so that they can face the foreign investment competition?

Yes

No

Q8. Following Question 7, what reforms do you think should / should not be made?

Q9. Do you believe that lifting restrictions on FDI in retailing will allow more investment, technical skills and consumer choice?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q10. Do u think FDI would help Indians learn the best practices from foreign companies?

16

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q11. Do you think inviting foreign players will create monopoly by reduced prices and eliminating competition?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q12. Do you think the employment generated by the foreign players will offset the loss of self employment of domestic retailers?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q13. Do you think consumers will get better quality products?

STRONGLY AGREE

17

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q14. Will FDI be necessary at all there is enough domestic capital being injected into the retail sector?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

Q15. Do you think the retail industry (Market size) would grow due to FDIs invasion?

STRONGLY AGREE

AGREE

NEUTRAL

DISAGREE

STRONGLY DISAGREE

S. No.

Questions Yes No

18

16 Are you aware of the current FDI in Retail Regulation & Policy?

17 Will Walmart entry bring cheaper goods for customers?

18 Do you think that Govt. reforms need to be made to support domestic retailers so that they can face the foreign investment competition?

19 Will you go for Indian retail outlets( big bazaar, reliance fresh)etc., or go for Walmart?

21. So what will be your final call regarding Walmart entry in India.

Boon Bane

Name: Mobile no:

Email id: Enrollment no:

QUESTIONAIRE ANALYSIS

19

THE RESPONCE – AN OVERVIEW

The questionnaires are filled by 110 persons. Received response from all 110 persons.

TOTAL SAMPLE SPACE

THE RESULT

Awareness of current FDI in Retail Regula-tion & Policy

yes

no

20

Walmart entry will bring cheaper goods for customers

YesNo

Need of Govt. reforms to be made to support domestic retailers so that they can face for-

eign investment competition

YesNo

21

Entry of Walmart should be allowed or not & imposition on foreign retailers

NoneEquity limitsOnly allow FDI in metrosA minimum investment amount requirementAn exclusion of specific products for the domestic retailers Products to be manufactured /sourced by foreign investorAllow certain retail formatsAllow branded productsother restrictions

Final call regarding Walmart entry in India

BoonBane

ANALYSIS OF FACTOR

22

Factors taken into consideration

The majority of respondents feel that the better quality goods, low prices, more jobs, regular

supply, fdi inflow, improve infrastructure, improve supply chain, better logistic management,

better services, fair prices to farmers, threat to kirana store, etc. are the main drivers that may

affect if wal-mart enters Indian retail market.

So government should consider all the factors before making walmart enter into india.

DATA ANALYSIS

The data has been analyzed further by using appropriate Statistical Techniques:

LINEAR ANALYSIS

FACTOR ANALYSIS

FACTOR ANALYSIS:

Factor analysis was carried out to find out the significant factors affecting insurance buying decisions. Using data from a sample, factor analysis applies an advanced form of correlation analysis to the responses to a number of statements. The purpose of this analysis is to determine if the responses to statements are highly correlated. The variables in consideration are analyzed to find out the inter-correlations between variables and grouping them into clusters of more generalistic factors. These new clubbed variables in a factor are maximally correlated among each other and these factors are minimally correlated between each other.

RELIABILTY TEST

23

First, we will check the reliability of the survey that whether the data is reliable for analysis with the help of reliability test. In this survey question 2 is the dependent variable which is variable 1.

Reliability Statistics

Cronbach's Alpha N of Items

.724 9

The result of the reliability test is .724, so we can say that the data is reliable enough

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.647

Bartlett's Test of Sphericity

Approx. Chi-Square 95.845

Df 28

Sig. .000

The KMO and Bartlett’s test actually determines the adequacy of the sample. If the value of the sampling adequacy is more than .5 then the sample is adequate and here find the value of the KMO is .647 and in the bartlett’s test the significance level is .000. So we can interpret that our sample is adequate enough.

So next we will check the communalities of each variable, in this the communalities of each variable should be greater than .5

Communalities

24

Initial ExtractionVAR00002

1.000 .431

VAR000031.000 .519

VAR000041.000 .515

VAR000051.000 .634

VAR000061.000 .335

VAR000071.000 .568

VAR000081.000 .351

VAR000091.000 .302

Extraction Method: Principal Component Analysis.

The third output is an important one as this is the first output of the principal component extraction. Here we determine the communalities. It determines the extent to which the variance in the variables has been accounted for by the extracted factors.Here we find the value of the variable 3, 4, 5 and 7 are above than .5 so we will take these variables only.

Rotated Component Matrix(a)

Component

1 2VAR00002 .656

VAR00003 .719

VAR00004 .715

VAR00005 .790

VAR00006 .447

VAR00007 .742

VAR00008 .452

VAR00009 -.547

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization. A) Rotation converged in 3 iterations.

The most important part of the data analysis is the interpretation of the rotated factor matrix.

CHECK KMO AGAIN

25

In the related component matrix we are removing variable 9 as it is negative and will check the KMO again .

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.657

Bartlett's Test of Sphericity

Approx. Chi-Square82.447

Df21

Sig..000

Here the value is KMO is .657 and the significance level is .000

Communalities

Initial ExtractionVAR00002

1.000 .485

VAR000031.000 .528

VAR000041.000 .514

VAR000051.000 .627

VAR000061.000 .400

VAR000071.000 .568

VAR000081.000 .380

Extraction Method: Principal Component Analysis.

Component Matrix(a)

26

Component

1 2VAR00002 .627

VAR00003 .642

VAR00004 .670

VAR00005 .746

VAR00006 .555

VAR00007 .605 -.450

VAR00008 .590

Extraction Method: Principal Component Analysis. A) 2 components extracted.

Here also we will remove the variable 6.

Rotated Component Matrix(a)

Component

1 2VAR00002 .695VAR00003 .726 VAR00004 .709 VAR00005 .780VAR00006 .539VAR00007 .748 VAR00008 .426 .446

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization. A Rotation converged in 3 iterations.

Here we will remove the variable 8 and will check the KMO again.

CHECK KMO AGAIN

KMO and Bartlett's Test

27

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.607

Bartlett's Test of Sphericity

Approx. Chi-Square66.908

Df 15

Sig..000

The value of KMO is .607 and the significance level is .000

Communalities

Initial ExtractionVAR00002 1.000 .489

VAR00003 1.000 .549

VAR00004 1.000 .534

VAR00005 1.000 .647

VAR00006 1.000 .479

VAR00007 1.000 .573

Extraction Method: Principal Component Analysis.

Component Matrix(a)

Component

1 2VAR00002 .665

VAR00003 .703

VAR00004 .716

VAR00005 .786

VAR00006 .554 .415

VAR00007 .668

Extraction Method: Principal Component Analysis.A) 2 components extracted.

We will remove the variable 6 here.

Rotated Component Matrix(a)

28

Component

1 2VAR00002 .699VAR00003 .741 VAR00004 .723 VAR00005 .797VAR00006 .581VAR00007 .750

Extraction Method: Principal Component Analysis.Rotation Method: Varimax with Kaiser Normalization. A Rotation converged in 3 iterations.

KMO and Bartlett's Test

Kaiser-Meyer-Olkin Measure of Sampling Adequacy.

.577

Bartlett's Test of Sphericity

Approx. Chi-Square 48.977

Df 10

Sig. .000

The value of KMO is .577 and the level of significance is .000

Communalities

Initial ExtractionVAR00002 1.000 .677

VAR00003 1.000 .605

VAR00004 1.000 .572

VAR00005 1.000 .595

VAR00007 1.000 .562

Extraction Method: Principal Component Analysis.

Component Matrix(a)

Component

1 2

29

VAR00002 .822VAR00003 .773 VAR00004 .743 VAR00005 .764VAR00007 .732

Extraction Method: Principal Component Analysis.a 2 components extracted.

Rotated Component Matrix(a)

Component

1 2VAR00002 .820VAR00003 .776 VAR00004 .749 VAR00005 .768VAR00007 .724

Extraction Method: Principal Component Analysis. Rotation Method: Varimax with Kaiser Normalization.a Rotation converged in 3 iterations.

Here we have two factors, in factor 1 there are three variables like variable 3 (better technology), variable 4 (learning), variable 7 (better quality goods).

In factor 2 we have variable 2 (threat as market share) and variable 5 create monopoly).

Reliability Statistics

30

Cronbach's Alpha N of Items

.609 3

The reliability of factor 1 is .609 which is above than .5

Reliability Statistics

Cronbach's Alpha N of Items

.487 3

The reliability of factor 2 is .487 which is below than .5

31

MODEL SUMMARY

Model R R SquareAdjusted R

SquareStd. Error of the Estimate

1.226(a) .051 .024 .88248

A) Predictors: (Constant), VAR00007, VAR00004, VAR00003

The value of R square is .051

ANOVA (b)

Model Sum of

Squares df Mean Square F Sig.1 Regression 4.441 3 1.480 1.901 .134(a) Residual 82.550 106 .779 Total 86.991 109

A) Predictors: (Constant), VAR00007, VAR00004, VAR00003B) Dependent Variable: VAR00001

Coefficients (a)

Model Unstandardized CoefficientsStandardized Coefficients T Sig.

B Std. Error Beta1 (Constant)

2.879 .490 5.876 .005

VAR00003.187 .115 .172 1.631 .106

VAR00004.069 .096 .074 .715 .476

VAR00007.030 .097 .032 .312 .756

A) Dependent Variable: VAR00001

32

CONCLUSION

After analyzing the results of our study we can conclude that the factors which influence the entry of FDI in Indian retail sector is: variable 3The value of the variable 3 is closer to the significance level so we can say that the variable 3 has some impact on the dependent variable.

QUESTIONNAIRE ANALYSIS

It helps the reader to know and understand about the variables i.e. quality, price, employment, etc on which survey was carried out and also factors taken into consideration.

FACTOR ANALYSIS

Using Factor analysis we are able to segregate twenty variables into eighte factors namely

Better quality low Price More employment money flow better services organised retail

In the order of their relative importance. So, using this we can understand that which factors influence the entry or exit of wal-mart into India. So, if the government wants to bring foreign retail outlets to India so it have to adopt some measures which is not objectionable to any and should benefit society as a whole.

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BIBLIOGRAPHY

RESEARCH PAPERS

http://www.cpim.org/upa/10272005_fdi_retail%20trade.pdf

http://www.slideshare.net/subhajitray/fdi-in-indiaan-analysis-on-the-impact-of-fdi-in-indias-retail-sector

http://www.josephandjoseph.in/legalupdates/FDI_In_Retail.pdf

http://www.cci.in/pdf/surveys_reports/indias_retail_sector.pdf

INTERNET

http://www.legalindia.in/foreign-direct-investment-in-indian-retail-sector-%E2%80%93-an-analysis

http://www.indiafdiwatch.org/fileadmin/India_site/10-FDI-Retail-more-bad.pdf

http://www.indiafdiwatch.org/index.php?id=76

http://en.wikipedia.org/wiki/Retailing_in_India

http://www.chakreview.com/Lifestyle/FDI-in-Retail-sector-in-India

NEWSPAPER

http://www.firstpost.com/politics/fdi-in-retail-why-the-politicians-are-illogical-and-have-got-it-wrong-141898.html

http://articles.timesofindia.indiatimes.com/2011-11-29/india/30453728_1_retail-sector-small-retailers-global-retail-giants - THE TIMES OF INDIA

http://www.dnaindia.com/mumbai/report_will-fdi-help-indian-retail-market-grow-pune-speaks-up_1620277 - DANIK BHASKAR

http://www.thehindu.com/business/Industry/article2667976.ece - THE HINDU

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