Final Project Copy of Strategic Management

8/12/2019 Final Project Copy of Strategic Management

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INDEX

Sr.No.

Particulars Page Number

1. Retail Marketing 1

2. Types of Retail Outlets 2

3. History of Pantaloons 3

. Profile of Pantaloons ! "

#. $usiness %iscription & ! '

". S(OT )nalysis

a* Strengt+s , ! 12b* (eaknesses 12 ! 13

c* Opportunities 13 ! 1#

-* T+reats 1# ! 1&

&. Strategies of Pantaloons 1' ! 21

'. Pantaloons Success Story in Organi/e-Retail

22 ! 2"

,. 0ustomer Surey 2&

1. in-ings from Surey 2'

11. 0onclusion 2,

12. $ibliograp+y 3

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Retail Marketing

Retail is the sale of goods and services fromindividuals or businesses to the end-user. Retailers are part ofan integrated system called the supply chain. A retailer

purchases goods or products in large quantities frommanufacturers directly or through a wholesale, and then sellssmaller quantities to the consumer for a profit. Retailing can bedone in either fixed locations like stores or markets, door-to-dooror by delivery. Retailing includes subordinated services, such asdelivery. The term retailer is also applied where a serviceprovider services the needs of a large number of individuals,such as for the public. !hops may be on residential streets,

streets with few or no houses or in a shopping mall. !hoppingstreets may be for pedestrians only. !ometimes a shoppingstreet has a partial or full roof to protect customers fromprecipitation. "nline retailing, a type of electronic commerce usedfor business-to-consumer #$%&' transactions and mail order, areforms of non-shop retailing.

!hopping generally refers to the act of buyingproducts. !ometimes this is done to obtain necessities such as

food and clothing( sometimes it is done as a recreational activity.Recreational shopping often involves window shopping #)ustlooking, not buying' and browsing and does not always result ina purchase.

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Types of retail outlets

*n some parts of the world, the retail business is stilldominated by small family-run stores, but this market is increasinglybeing taken over by large retail chains.

+ollowing are the Types of Retail arketing-

' /epartment !tores%' /iscount !tores.0' 1arehouse !tores2' 3ariety !tores4' /emographic !tores5' om-And-6op !tores

7' !pecialty !tores8' $outiques or &oncept !tores9' :eneral !tores;' &onvenience !tores' -tailers5' 3ending achines7' Automated Retail !tores8' $ig $ox !tores


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History Of Pantaloons

Pantaloon 4as incorporate- as Man/ (ear Priate 5imite- in1,'&. 6n t+e same year7 t+e company launc+e- Pantaloons trouser7 6n-ia8sfirst formal trouser bran-. 6n 1,,17 Pantaloon launc+e- $)R97 t+e :eans

bran-. 6t starte- Pantaloon S+op7 a franc+ise- mens4ear store across 6n-ia in

1,,. 6n t+e same year7 Pantaloon initiate- -istribution of bran-e- garmentst+roug+ multi!bran-e- retail outlets t+roug+out 6n-ia. 6n 1,,#7 it launc+e-;o+n Miller7 t+e formal s+irt bran-. 6n 1,,&7 Pantaloon launc+e- a familystore7 Pantaloons7 in NT0*. 6n Mumbai7 t+e company opene- its -estinationmall7 0entral7 in Mumbai.

T+e company8s flags+ip format7 Pantaloons7 opene- its first storein Nagpur an- $ig $a/aar 4as opene- in A4alior -uring t+e year in 2'.Pantaloon acBuire- t+e rural retail c+ain7 %ue to t+e uncertain e@ternaleconomic enironment7 Pantaloon initiate- arious cost control measures an-con-ucte- scenario planning e@ercises in C2'. T+ese initiaties en+ance-t+e efficiency an- pro-uctiity of t+e company.Pantaloon in association 4it+ Sac+in Ten-ulkar co!create- a bran-7 Sac+ an-launc+e- of Sac+ toot+paste in Marc+ 21.

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Profile of Pantaloons

Spotlig+ting to-ay8s buoyant yout+7 Pantaloons7 6n-ia8spremium lifestyle apparel company offers c+ic an- tren-y fas+ion to meett+eir eer!c+anging nee-s. Pantaloons reflects t+e i-eology of al4ays

keeping alie t+e 8ne4ness factor8 t+roug+ fas+ion apparel an- accessoriest+at are isually appealing an- fas+ionably upbeat.

T+e first Pantaloons store 4as launc+e- ami-st muc+ fanfarein Aaria+at7


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anot+er.

$acke- by t+e giant conglomerates7 )$N5 an- uture Aroup7bot+ t+e entities 4ill 4ork in tan-em to -erie operational synergies forback!en-7 supply c+ain anot+er crucial alue -riers of t+e business. (it+all t+ese a-ancements7 Pantaloons is one of t+e fastest gro4ing apparelcompanies. )n- is poise- to gro4 bigger an- better...

(it+ a ast collection of more t+an a 1 prestigious bran-sfor t+e -iscerning fas+ionista7 Pantaloons offers an incre-ible an- completeone!stop s+opping e@perience to its buyers. T+e &2 aest+etically -esigne-stores sprea- across t+e country7 -isplay a range of classy an- tren-ymerc+an-ise t+at truly lies up to Pantaloons8 ma@im of 8fres+ fas+ion8.

) typical Pantaloons store is sprea- across a spra4ling retailspace of about 2'7 sB. ft.7 4it+ a bran- portfolio t+at runs across a 4i-e

gamut of styles t+at spell class. T+e range caters to 4omen7 men an- ki-salike. T+e collection is all about rea-y!to!4ear 4estern an- et+nic apparelfor men7 4omen an- ki-s7 complimente- 4it+ an e@+austie range ofaccessories.

T+e 4omen8s section +ouses priate labels of $are %enim7$are 5eisure7 Rig7 )nnabelle7 Honey7 an- ):ile7 in 4estern 4ear7 in a--itionto a c+oice of et+nic 4ear from Rang Manc+7 Tris+aa an- )kkriti. Ot+er

popular bran-s like 5ee 0ooper7 $iba are also aailable.

T+e priate labels for men in 4estern 4ear inclu-e 5ombar-7Rig7 $are %enim7 $are 5eisure an- ;M Sport apart from tren-y bran-s likeFrbana7 Scullers7 ;o+n Miller an- 6n-igo Nation 4+ile )kkriti proi-es a4i-e selection of et+nic 4ear.


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BUSINESS DESCRIPTION

Pantaloon Retail >Pantaloon or t+e companyI* operatesmultiple retail formats in bot+ t+e alue an- lifestyle segments in 6n-ia. 6toperates oer 1 stores across &3 cities in 6n-ia7 an- occupies retailspace of about 12 million sBuare feet. T+e company offers its pro-ucts in

arious lines of businesses suc+ as foo-7 fas+ion7 +ome an- electronics7telecom an- 6T7 general merc+an-ise7 leisure an- entertainment7 4ellnessan- beauty7 books an- music. T+e company also offers pro-ucts t+roug+its 6nternet retailing store futureba/aar.com. Pantaloon offers foo- pro-ucts t+roug+ retail formats suc+ as$re4 $ar7 0afe $olly4oo-7 oo- $a/aar7 an- Sports $ar. $re4 $ar offersoer 1# bran-s of -omestic an- importe- beer. $re4 $aralso offers snacks an- set meals. 0afe $olly4oo- >$olly4oo- refers to t+e

6n-ian film in-ustry* is a fast foo- retail c+ain offering eateries in a$olly4oo- ambiance. 6t offers 6n-ian street foo-7 burgers7 pi//as7 an-

:uices. oo- $a/aar is a c+ain of supermarkets 4+ic+ offers pre!packe-commo-ities. Sports $ar is a concept bar t+at focuses on t+e 4orl- ofsports. Sports $ar offers -omestic an- importe- spirits7 beers an- 4ines.Pantaloon offers fas+ion relate- pro-ucts un-er banners suc+ as a557 $ig$a/aar7 $lue Sky7 $ran- actory7 0elio7 0entral7 9t+nicity7 fas+ionJ$ig$a/aar7 5ee 0ooper Naaras7 Pantaloons an- Planet

Sports. a55 is a fas+ion store for plus si/e men an- 4omen. 6t offers rea-y!to!4ear fas+ionable clot+es an- accessories in 4estern 4ear7 6n-o!4esternor et+nic 4ear in bot+ formal an- casual categories. . Pantaloons stores offers fas+ion pro-ucts suc+ as casual7et+nic7 formal7 party an- sports 4ear for men7 4omen an- ki-s.6n t+e general merc+an-ise category7 Pantaloons operates retail formats suc+as $ig $a/aar7 $ig $a/aar (+olesale 0lub7 $lue Sky7 $ran- actory70entral7 Naaras7 Pantaloon an- S+oe actory. Pantaloon +as presence in

t+e leisure an- entertainment space t+roug+ an affiliate- company7 Aala@y9ntertainment. Pantaloon operates foo- courts7 fine -ine specialtyrestaurants7 t+ali restaurants7 banBuets an- multiple kiosks 4it+ bran-s suc+as 0opper 0+imney7 $ombay $lue7 Noo-le $ar7 Spag+etti


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>0%!ROMs* pro-ucts an- gift items.

COMPETITORS6n t+e fas+ion segment7 t+ey face competition from S+oppers Stop7 Trent7(estsi-e an- 5ifestyle. T+oug+ t+e +ypermarket is ne4 only t+ree to four

years ol- in t+e country competition is face- from likes RPA >Spencer8s*7Trent >Star 6n-ia $a/aar* an- 4it+ S+oppers Stop . 6n t+e oo-

businesscompetition is face- from Sub+iks+a an- oo- (orl-.

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SWOT ANALYSIS

Pantaloon Retail >Pantaloon*7 a part of t+e uture Aroup7is a lea-ing 6n-ian operator of multiple retail formats. T+e company

balance- its alue an- lifestyle portfolio t+ere by +aing presence int+e mass market t+is enable- Pantaloon to tap a large market an- at t+esame time engage in +ig+ margin business 4ill sustain profitability forPantaloon. Ho4eer7 +ig+ penetration of unorgani/e- retail playerscouple- 4it+ e@pansion of large foreign players increase- t+ecompetition in t+e market 4+ic+ mig+t lea- to market s+are erosion an-+ig+ pressure on margins.

Strent!s

$alance- alue an- lifestyle portfolio PantaloonKs -ominantpresence in t+e alue retail segments capitali/es on t+e attractie-emograp+ic profile of t+e country. 6n-iaKs ma:or population currentlyis an- in t+e future is e@pecte- to be in t+e mi--le class income group.T+is group7 by natural inclinations7 prefers alue retailing formats like+ypermarkets7 supermarkets7 -iscount an- conenience stores. Sincealue retail stores are usually large7 t+ey sere as a one!stop s+op forcustomers an- offer -istinct a-antages of conenience an- timeeffectieness compare- to t+e small unorgani/e- retail sector in 6n-ia.6n a surey con-ucte- by


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t+e margin in t+e 0entral format is +ig+est at 22."L in C 2,7attracting ma:or inestments in t+is format. Pantaloon +as balance- itsalue an- lifestyle portfolio t+ereby +aing presence in t+e mass marketenabling it to tap a large market at t+e same time engaging in +ig+margin business 4ill sustain profitability for t+e business. 5ogisticsnet4ork an- back4ar- integration 4ill improe margins Pantaloon +as

a large an- efficient logistics an- inentory management system inplace to cater to a large market. T+e companyKs logistic net4ork t+atcarries an aerage of t4o million pieces eery-ay 4it+ peak single!-aytransactions reac+ing four million pieces. ) fleet of oer ' e+iclesfrom oer en-ors to # 4are+ouses to stores in oer & cities aretransporte- on a regular basis. ) speciali/e- company uture 5ogisticSolutions 5imite- >5S5* +an-les all t+e relate- functions. %uring t+e year7 Pantaloon rationali/e- t+e number of

4are+ouses as fe4er an- bigger 4are+ouses facilitate economies ofscale an- at t+e same time7 consoli-ation of merc+an-ise in fe4erlocations +as also resulte- in +ig+er pro-uct aailability an- 4i-erc+oice to customers. T+e company create- +ig+ly automate-%istribution 0enters >%0s* t+at ensure- +ig+er ertical space utili/ationan- +ig+er t+roug+puts. 6mplementation of a-ance- (are+ouseManagement System >(MS* an- )utomatic Replenis+ment System>)RS* +as significantly improe- inentory isibility across

4are+ouses 4+ic+ 4ill facilitate improe- or-er fulfillment an-accuracy. PRl5 +as also set up a +ub7 4+ere it takes t+e -eliery no4instea- of to separate 4are+ouses. T+is +as le- to +ig+er efficiency incosts an- +ig+er inentory turnoer. )not+er significant step t+atPantaloon +as taken is to re-uce interme-iaries. Fntil no47 t+ere 4eret+ir- parties +an-ling t+e fruits an- egetables category at its arious$ig $a/aar an- oo- $a/aars. Pantaloon7 4+ic+ till no4 outsource- t+e

procurement7 +as no4 -eci-e- to set up a separate -iision +ea-e- by

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management is a competitie a-antage in an enironment 4+eremargins are lo4 an- competition is furt+er pressuri/ing t+em. Pantaloonis a -ominant player an- is e@pan-ing t+roug+ collaborations an-acBuisitions Pantaloon is one of t+e largest retailers in 6n-ia. 6t-emonstrate- aggressie gro4t+ in recent years an- touc+e- oer 12million sB ft in retail space. T+e company +as tie- up aroun- 1 million

sB ft. of retail space 4it+ -eelopers at rentals lo4er t+an in-ustryaerage. oot falls increase- from 11# million in 2& to 1"3 million in2' an- 1'# million in 2,. Pantaloon +as also +as +ig+ly successfulconersion rates from 1L in 2' to 3L in 2,. )erage ticket si/eincrease- from 6NR >?1#.&* in 2' to 6NR&,2 >?1"."* in 2,7 allt+e factors contributing in increasing t+e reenues furt+er strengt+eningt+e companyKs presence. )ccor-ing to in-ustry sources oo- $a/aarcaptures aroun- 2'L of total sales of M0A pro-ucts in mo-ern retail.

6n certain cities like )+me-aba-7 Pune an- pro-ucts in 6n-ia. 0G; 0lark is one of t+e largest makers of casuals+oes in t+e 4orl-7 manufacturing bran-s like 0larks7 $ostonian an- SP* to set up t4omega foo- parks 4it+ an inestment of 6NR3 million >?"2.&million*. T+e company t+roug+ its establis+e- presence is able tocapture a large a--ressable market. 6t 4ill be able to fle@ its muscle toimproe efficiencies in pricing an- supply c+ain. )--itionally7 t+estrong presence an- aggressie e@pansion 4ill better eBuip Pantaloon to

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effectiely -eal 4it+ competition 4+ic+ +as intensifie- in t+e market.

Wea"nesses

Hig+ -ebt >compare- to competitors* 4ill increasefinancial risk. T+e company reporte- -ebt of 6NR2'7# million

>?#,#.& million* at t+e en- of C2,7 4+ic+ translates into a -ebt toeBuity ratio of 1.2# times. 0omparing Pantaloon 4it+ its )sian peers7t+e company +as +ig+ -ebt. 6ts )sian peers +ae far lo4er -ebt toeBuity. or instance7 .137 1.27 .#,7 .# an- . are t+e -ebt eBuityratios of 5otte s+opping7 Parkson retail group7 5ifestyle 6nternationalHol-ings7 Aol-en 9agle Retail Aroup an- Aior-ano 6nternationalrespectiely. 6nterest an- financial c+arges outflo4 +as increase- from6NR17'#2.& million >?3'.& million* in 2&!' to 6NR371'2.2 million

>?"".# million* in 2'!,. T+e increase in interest an- financialc+arges is on account of a--itional borro4ing for fun-ing t+e gro4t+plans. )s a result7 t+e interest an- financial c+arges coer -uring t+eyear un-er reie4 +as fallen -o4n to 2.12 times as compare- to 2.#1times in t+e prece-ing year. )--itionally7 4eig+te- aerage cost of

borro4ing +as marginally increase- from 11.1#L to 11.3&L on accountof +ig+er cost of fun-s borro4ings -rien by market con-itions.Pantaloon +as raise- fun-s t+roug+ Bualifie- institutional placement

-uring 2, an- t+e -ebt eBuity ratio 4oul- re-uce to a certain e@tent in21. Ho4eer7 Pantaloon 4ill nee- a--itional -ebt for its e@pansionplans. T+e retail business runs on 4afer t+in margins an-7 +ence7internal accruals 4ill not be sufficient to fun- e@pansion plans.0onseBuently7 +ig+er -ebt mig+t be reBuire- to fun- t+e [email protected]+ interest rates are recurring e@penses 4+ic+ 4ill affect t+e marginsa-ersely. Hig+er -ebt also increases t+e risk in t+e business as t+einterest an- finance coer re-uces. ) -irect impact of t+is is t+at cost of

capital 4oul- furt+er increase7 making it een more costly to fun- t+ee@pansion. T+erefore7 +ig+ amounts of -ebt 4ill raise t+e cost offun-ing an- also increases t+e amount of recurring e@penses forPantaloon.

O##ort$nities

$ooming 6n-ian retail market an- prefences of t+e

6n-ian mi--le class. T+e retail in-ustry in 6n-ia is large o4ing to a largepopulation an- is set to gro4 as seeral factorscontribute. 6n-ustry reports forecast t+at total retail sales 4ill gro4 from

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6NR1".3 trillion >?3#3. billion* in 21 to 6NR2# trillion >?#3.2billion* by 21. Strong un-erlying economic gro4t+7 populatione@pansion7 t+e increasing 4ealt+ of in-ii-uals an- t+e rapi-construction of organi/e- retail infrastructure are key factors be+in- t+eforecast gro4t+. )lso7 as mi--le an- upper class consumer basee@pan-s7 t+ere 4ill also be opportunities in 6n-ia8s secon- an- t+ir-!tier

cities. T+e greater aailability of personal cre-it an- a gro4ing e+iclepopulation are to improe mobility 4+ic+ 4ill also contribute to a tren-to4ar-s annual retail sales gro4t+ of 11.L. 6n-ia8s nominal A%P is aforecast at ?1.#2 trillion in 21. )erage annual A%P gro4t+ of &.'Lis pre-icte- t+roug+ to 217 making it one of t+e fastest gro4ingeconomy in t+e 4orl-. (it+ t+e population e@pecte- to increase from1.1, billion in 21 to 1.2# billion by 217 A%P per capita is forecastto rise by oer L by t+e en- of t+e forecast perio-7 reac+ing ?2723'.

T+e consumer spen-ing per capita is estimate- to increase from ?&,3 in21 to ?171" in 21.)not+er key a-antage is t+e lo4 penetration of organi/e- retail 4+ic+

proi-es immense scope for Pantaloon. Organi/e- retail7 or largec+ains7 make up only "L of t+e market but is e@pecte- to e@pan- at2L a year. T+is is -rien by t+e emergence of s+opping centers an-malls7 an- a mi--le class of close to 3 million people t+at is gro4ingat :ust un-er 2L a year7 accor-ing to -ata from National 0ouncil of

)pplie- 9conomic Researc+ >N0)9R* an- (orl- $ank. Mass groceryretail is une@ploite- to t+e full potential an- sales in 6n-ia from t+isc+annel are forecast to un-ergo enormous gro4t+. 6n-ustry sources

pre-ict t+at sales t+roug+ mass grocery retail outlets 4ill increase by1#L to reac+ ?1#.2, billion by 21. T+is is a conseBuence of s+iftfrom small in-epen-ent retailers to large7 mo-ern outlets. Pantaloon +asestablis+e- its presence in t+e market an- is a -ominant player. 6tsaggressie gro4t+ plans t+roug+ organic an- inorganic means 4ill

enable it to effectiely tap into t+e +ig+ gro4t+ market. 6ncrease-penetration of priate labels 4ill improe margins. Pantaloon +as beenfocusing on increasing t+e s+are of priate label sales. T+ese labels are

price- lo4er t+an national bran-s 4+ile +aing better margins.Pantaloon +as create- many priate label bran-s t+at are sol- un-erarious formats like Pantaloons7 $ig $a/aar7 oo- $a/aar7 Home To4n7$ran- actory an- 9!/one. T+e s+are of priate labels is -ifferent forarious segments operate- by t+e company. 6ts s+are in t+e fas+ion an-electronics segment is +ig+er at 'L an- 2L7 respectiely7 4+ile t+atin foo- an- general merc+an-ise is lo4er at #!'L. Pantaloon +as beenlaunc+ing priate labels in M0A category. 6t +as launc+e- res+ an-

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Pure >foo- an- staples*7 0leanmate >+ome care*7 0aremate >personalcare pro-ucts*7 Tasty Treat >foo-7 snacks7 cola an- soft -rinks* an-Premium Harest >package- pulses an- rice*. T+e company plans tolaunc+ more priate labels in t+e M0A space to generate bettermargins from t+e segment. 0urrently7 priate labels contribute 2L toPantaloonKs top line7 an- Pantaloon e@pects to increase its s+are to 2#L.

(+ile t+e national bran-s +ae margins at 12 to 1&L7 t+e priate labelmargins are as +ig+ as 2#L to L. 6ncrease- penetration of priatelabel bran-s t+roug+ ne4 launc+es 4ill enable t+e company to increaset+e profits affecting profitability positiely. (ell positione- to forayinto t+e online c+annel t+roug+ futureba/aar.com . Pantaloon launc+e-futureba/aar.com t+roug+ utureba/aar 6n-ia 5t- >$65*7 to leerageon seeral a-antages t+at t+e c+annel offers. 9!retailing re-uces t+ecape@ an- increases t+e reac+ of t+e company at minimal e@tra cost. 6t

also re-uces costs like rental7 employee cost an- inentory carryingcosts 4+ic+ 4oul- +ae to be incurre- in a brick an- mortar format. 6tcreates time utility for customers by saing traelling cost for t+ecustomer an- transportation cost for t+e company. Pantaloon is furt+eris furt+er creating synergy in bot+ t+e brick an- mortar format an- e!retailing by proi-ing similar -eals on bot+ platforms. T+e onlinecustomers 4ere offere- t+e same -eals like t+at are aailable at $ig$a/aar. urt+ermore7 Pantaloon combine- t+e online portal 4it+

catalogue retailing t+roug+ kiosks locate- in malls an- s+opping centersto attract a ne4 set of customers. T+e 6n-ian e!commerce market is setto boom an- as t+e e!commerce market in rest of t+e 4orl- is gro4ingat '!1L7 6n-iaKs e!commerce is estimate- to gro4 4ell aboe 3L.Pantaloon t+roug+ its presence in t+e segment 4ill be able to increaset+e potential customer base an- 4ill effectiely participate in t+e

booming e!commerce market.

T!reats 6ntensely competitie market 4it+ +ig+ penetration ofunorgani/e- retailers is set to become een more so 4it+ entry of largeforeign players 6n-iaKs retail enironment is c+aracteri/e- 4it+ a large

pool of in-epen-ent retailers 4+o are currently -ominant players in t+emarket. T+ere are close to 12 million in-epen-ent retailers 4it+ amarket s+are of close to ,L. T+ese in-epen-ent retailers +ae lo4operational costs an- reBuire ery lo4 start up costs. Hence7 t+e

penetration into t+e markets is +ig+er an- t+eir small formats proi-e auniBue a-antage of conenience compare- to large organi/e- retailers.)lso7 t+e kirana stores >as in-epen-ent small retailers are referre- to*

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stock only t+e pro-ucts t+at are +ig+ly suitable for t+eir customers ast+ey speciali/e in sering a selecte- group of customers an- are 4ella4are of t+e nee-s an- reBuirements. )--itionally7 t+ese stores also

proi-e +ig+ customer serice an- informal cre-it serice as 4ell74+ic+ makes t+em t+e preferre- retailers for a large pool of customersin 6n-ia. T+e customer perception of alue is +ig+er for t+ese kirana

stores. T+e s+ift in t+is perception 4ill take some time to set in an- untilt+en organi/e- retail +as to increase efforts to capture a largea--ressable market reBuire- to leerage t+e +ig+ start up an-operational costs of t+ese organi/e- retailers like Pantaloon. 6n-ia +as

been ranke- first on Alobal Retail %eelopment 6n-e@7 2, signifyingt+at t+e 6n-ian retail sector is at a peaking stage7 is -eeloping Buicklyan- is rea-y for mo-ern retail. T+is +as ma-e t+e ne@t t+ree to fouryears t+e best time for foreign retailers anot+er 6n-ian corporate

retailers to enter 6n-ia. 6t is also t+e perfect time for e@isting players toun-ergo aggressie e@pansion. T+is lea- to large 6n-ian players likeReliance 6n-ustries7 )-itya $irla Aroup an- $+arti )irtel to e@pan-aggressiely to tap t+e +uge gro4t+ potential opportunities. )ccor-ingto t+e current %6 norms7 foreign companies are not allo4e- to o4nstakes in multi!bran- retail businesses7 a rule -esigne- to protect 6n-ia8sast in-epen-ent retail sector. T+e prospect of a rule c+ange +as seenlocal players e@pan- fast in or-er to secure a -ominant position before

t+e seemingly ineitable arrial of multinationals7 4+ile it +as also seenmultinationals enter t+e country t+roug+ 4+olesale :oint entures inor-er to begin buil-ing functions for a time 4+en t+ey can operatealone. T+e recent uptick in e@pansionary inestment is also a pro-uct ofgro4ing sentiment suggesting t+at t+e goernment mig+t reerse itsrestrictie stance on international inestment. )--itionally7 seerallarge international players +ae entere- t+e 6n-ian market. (al!Mart+as a :oint enture 4it+ $+arti 9nterprises an- it +as launc+e- t4o

4+olesale stores an- plans to open anot+er 1!12 oer t4o!t+ree years.Tesco7 t+e F


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pressure. )--itionally7 t+e organi/e- retail is a nascent stage an-alt+oug+ set to gro4 at a fast pace7 t+e player are competing 4it+ in t+e"L of 6n-iaKs retail market. )n- t+e prospect of retail liberali/ation +asseen an aggressie inestment by t+e 6n-ian peers to e@pan- t+e markets+are. )ll t+ese factors +ae increase- t+e competition in t+e market4+ic+ mig+t lea- to market s+are erosion an- +ig+ pressure on margins.

Hig+ lease rentals an- inestments 4ill a-ersely affect profitabilityan- e@pansion plans. T+e lease rentals an- infrastructure inestments+ae le- to t+e retail sector in 6n-ia being t+at of +ig+ inestment an-lo4 return business. Rentals in 6n-ia are consi-ere- to be among t+e+ig+est in t+e 4orl- an- account for 1L to 1#L of t+e retailerKsoperating cost. T+e percentage in ot+er countries is as lo4 as L to #L.)ccor-ing to in-ustry e@perts7 retailers in 6n-ia can sustain rents of6NR1# >?3.1* per sB. ft per mont+ if t+ey -o business of about

6NR1#7 >?313.#* for t+e same space in t+at time. Ho4eer7 rents +a-toppe- 6NR"# >?13."* per sB. ft per mont+ in Ne4 %el+i7 6NR&'>?,.,* in Noi-a an- 6NR3'# >?'* in Aurgaon7 some of t+e largestmetropolitan regions in 6n-ia. T+e rents are ery +ig+ for t+e businessas accor-ing to t+e company estimates t+e per sBuare feet sales are tocome in t+e icinity of 6NR,7 >?1''.1* per mont+ as t+e economyreies. )not+er factor t+at restricts t+e aailability of -esirable retailspace is t+at malls an- large retail comple@es are -eelope- only in fe4

top cities in t+e country. )ccor-ing to estimates ma-e7 at least mallsare being built in t+e country an- retailers in cities suc+ as Mumbai7%el+i an- 0+ennai see cannibali/ation -ue to presence of retailers 4+ooffer t+e same goo-s an- serices. urt+ermore7 6n-ian infrastructureremains +ugely un-er-eelope- an- t+is necessitates massie supplyc+ain inestments before a single store7 let alone a nation4i-e net4ork7can be opene-. T+is c+allenge 4ill remain a big one for large retailerslike Pantaloon to -eelop a national c+ain7 specifically to penetrate into

rural 6n-ia.T+ese factors +ae contribute- to t+e inestments being large an- t+eoperational costs are also +ig+ o4ing to +ig+ lease rentals7 +ig+ oil

prices an- +ig+ labor costs. T+ese factors +ae been constantlypressuri/ing t+e returns on inestments an- profitability an- +ae beenacting as barriers for Buick e@pansion. PantaloonKs margins mig+t bea-ersely affecte- o4ing to suc+ +ig+ costs.

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Strateies of Pantaloons

T+e company obseres retail customer tren- an- c+angingconsumption tastes. Organi/ation customer -rien oppose- to pro-uct-rien .0ompany is ery conscious about culture an-regional consumption

pattern. Strategies c+ange freBuently -ue to orient to t+e customer8s nee-s. T+e

continues of learning7 unlearning an- relearning is applie- to up-ate t+e Buickc+anging strategies across t+e organi/ation. )s


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population of t+is class is more t+an 3L. 6n t+e nee-s +ierarc+y t+ey arelocate- in for Social an- security .9arning capacity of t+is class is "L lessert+an 6N%6) ON9. or t+is class as t+e big ba/aar7 oo- ba/aar7 uture moneyan- ot+er retail formats are presente-. 6n-ia T+ree or struggling class. T+e classle- life on +an- to mout+ e@istence. T+ey can8t affor- for beater liing style.T+is segment -oesn8t contribute muc+ in t+e contribution cycle. T+e nee- of

t+e segment is local as t+ey are fin-ing it c+eaper. T+e present business mo-elis not a--ressing t+is class. 0+ange in consumption patter by -ifferent class in.6n-ia One +as c+ange- from 2#L to 3#L normally t+e total profit in t+issegment 4ill comparatiely 2L more t+an t+ey are sol- in ne@t segment. )sambiance is factor anot+er pleasuring non alue a--e- serices are necessary.6n-ia T4o +as not c+ange- it conception leel. 6n-ia T+ree +as seen 1L-ecline.

M a(i)$) )ar"et s!ares strateyT+e retail c+ain by pantaloons in all business patterns tries to ac+ieema@imum market s+are in all t+e pro-ucts or serice it proi-es. T+e 0ompany-oes not bot+ers about s+ort term profit or loss by a strategy. T+is areconsi-ere- as learning. T+e business 4ill sell at marginal profit some times toattract t+e ne4 customer 4+o 4ill proe potential customers in future. T+estrategy ac+iee- by focusing pricing factors in 6n-ia T4o an- on serice an-Buality in 6n-ia One.

Pri&in strateiesPricing is strategy use- by Pantaloon retail c+ain to attain

ma@imum market s+ares. T+e company offers numerous sc+emes to attract t+ene4 customer as 4ell as to retain t+e present customers. T+e company8ssc+emes are categori/e- in follo4ing groups alue pricing. T+is approac+ isuse- 4+ere e@ternal factors suc+ as recession or increase- competition forcecompanies to proi-e 8alue8 pro-ucts an- serices to retain sales. T+e pro-uctalue 4ill be associate- 4it+ e@ternal factors. Promotional pricing Pricing to promote a pro-uct is a erycommon application. T+e application of t+is -one by $OAO >$uy one AetOne*7 $TAO >$uy T4o Aet One ree* etc. $un-ling $un-ling is marketingtool sell t4o or more complementary pro-uct as a package 4it+ attractie

price. T+e price is 4ill lesser t+en in-ii-ual selling price. 9@ample ) Person

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nee-s one soap for a perio- of time $ut bun-ling 4it+ attractie price 4it+more t+an 3 soaps can attract t+em. 5o4 interest rate financing uture money +elps in asset

purc+ase at L interest. P+ysiological -iscounting in 6n-ia t+is approac+ iscalle- as $ata rating system. Organi/ation utili/es t+is approac+ 4+en pro-uct+as emotional alue rat+er t+an rational alue. 9@ample a pro-uct is price- for

,, instea- of 1.(+en boar- s+o4s price re-uction from 1 to ,,70onsumerlooks at 3 -igits to 2 -igits rat+er t+an e@act alue time pricing. T+e innoatie4ay of attract t+e customer is Timely pricing it is kno4n t+at -uring +oli-aysrate of customer is more. Re-uction of profit margin 4it+ lot of a-ertisement4ill inite ne4 customers. T+e company +as learnt it from strategy ma-e on

public +oli-ay 2"!eb. (+en t+e turnoer of t+e -ay reac+e- 3 cores 4+ereaerage is # cores. (it+ suc+ e@perience cro4-e- management is essential soto -iert potential customers (e-nes-ay ba/aarQ 4+ere it 4ill offer less profit

margin sales.

$un-ling Marketing! Tec+niBue of offering t4o or more complementary

goo-s or serices toget+er as a package -eal. $un-le- items are sol- at a priceattractiely lo4er t+an t+e total of t+eir in-ii-ual selling prices.

Le%ers iss$esHuman resource 4ell traine- staff7 )ppearance7 9mpo4ere-

in-ii-uals7 Fse scenario planning as a tool for Buick -ecision making7 $ran-ambassa-or Organi/ation structure G controls. T+e entrepreneurial culture an-spirit preails in t+e company. )ppetite for taking risks is encourage-7 learning

4+ile -oing7 No rigi- organi/ational structure7 organi/ation -esign approac+7$alance- Score car- approac+ Retail control Semi 0entrali/e-7 0omple@Sourcing 9!touc+ 4it+ supplier7 Self pro-uction facilities 4it+ small number ofsuppliers7 S+ort term contracts >base- on lo4est bi-* Process Mo-ern +ar-tec+nology7 %eole- internally7 Re-uces cost7 ne4 strategies an- processinnoations acilities Special propose7 5arge7 0apital -rien7 Place- in ma:orcities

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Pantaloons * A S$&&ess Story in Orani+e' Retail

Retail plays a ma:or role in increasing circulation an- sales for all kin-s ofconsumer goo-s an- serices. 0ountries like FS)7 F.


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approac+. T+e currently estimate- alue of organi/e- 6n-ian retailKs targetpopulation is larger t+an t+at of t+e entire Fnite- States. ote- t+e mostattractie retail -estination in t+e 4orl- for t4o years in a ro47 6n-ia ise@pecte- to 4itness 1L gro4t+ in its retail sector oer t+e ne@t fe4 years>Source Retail in 6n-ia Aetting Organi/e- to -rie gro4t+.I 066!).T.


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Pantaloon +as also intro-uce- a number of priate bran-s. ore@ample7 it +as e@perimente- 4it+ launc+ing clot+ing lines base- on famous$olly4oo- blockbusters.. (it+in t+e bran- retailing space7 Pantaloon +as alsotie- up 4it+ some of 6n-iaKs most popular bran-s like Aini an- ;ony to sellt+em at t+eir stores. Rat+er t+an attempt to compete 4it+ e@isting popular

bran-s t+e company +as -eci-e- to partner 4it+ t+em an- leerage t+em in t+e

ambiguous 6n-ian market. T+ese bran-s +ae ac+iee- success an- a loyal fanfollo4ing PantaloonKs moe +as broug+t in more customers t+en t+ey coul-retain. T+e competitors -o +ae t+e opportunity to learn from t+ee@periences of 6n-iaKs largest retailer7 but t+e e@perience t+at comes 4it+managing t+ese -ierse retail formats in t+e 6n-ian scenario is somet+ing t+atne4 entrants 4ill +ae to learn on t+eir o4n. %ue to t+e pace at 4+ic+Pantaloon +a- moe-7 it +as ma-e seeral sectors of organi/e- retail out of

anybo-yKs reac+.T+e Rig+t ;oint entures at t+e Rig+t Time 6n accor-ance 4it+ its e@perimentation policy Pantaloon +as forme-key :oint entures 4it+ a number of popular names like Staples an- Starbucks.(it+ its first!moer a-antage7 it actiely s+ut -oors for t+e competition bysnapping up ma:or bran-s before ot+ers coul- get to t+em.

/ersatile Retailin

Rat+er t+an e@pan- as a mens4ear retailer alone7 PantaloonKspolicy of compre+ensie e@perimentation +as gien it an important a-antage a ersatile retail presence. 0onsumers see Pantaloon as an e@clusie bran-retailer7 -iscount retailer7 specialty retailer an- foo- retailer all at once. One oft+e reasons for t+is ersatility is t+at t+e bran- name +as not been force- on7 oreen associate- 4it+ t+e -ifferent pro-ucts an- stores ot+er t+an t+e originalmens4ear line. 6nstea-7 eac+ store an- pro-uct +as been gien its o4n i-entityan- presence. Pantaloon is essentially an organi/e- retailer in t+e guise of a

large number an- ariety of unorgani/e- retailers. T+is again represents t+ecompanyKs uniBue un-erstan-ing of t+e 6n-ian scenario consumers often feelt+reatene- in a monopolistic enironment7 an- are t+us allo4e- to c+oose

bet4een multiple bran-s7 all of 4+ic+ essentially belong to t+e same parent

Strengt+ening $ack 9n- Operations Supply!0+ain ) robust Supply c+ain seres as t+e backbone of a successful retailc+ain in t+e long!run. )lt+oug+ t+e company ignore- t+ese aspects in initial

p+ases -ue to t+e ina-eBuacies in infrastructure7 it rig+tly faore-

e@perimentation oer organi/ation. $ut to continue to gro4 at t+e pace it +a-acBuire- in t+e first fe4 years7 it nee-e- to pay attention to its sourcing

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net4ork7 transportation system anot+er logistics.. (+at Pantaloon is an- 4illal4ays +ae to improise on is t+e absence of basic infrastructure liketransportation an- regulation. T+e pace of e@pansion of t+e retail in-ustry islikely to outstrip t+at of -eelopment of t+e countryKs infrastructure. Pantaloon4ill +ae to be innoatie in -eci-ing as to +o4 it compensates for t+eseina-eBuacies 4+ile efficiently managing its supply c+ain.

Money T+e Fltimate %ifferentiatorPantaloon +as t+e upper +an- as compare- to most potential foreign an--omestic competitors. Ho4eer t+e same c+aracteristics t+at +ae ma-e it ane@clusie an- ersatile retailer can proe to be a -isa-antage. Muc+ ofPantaloonKs competition comes from eit+er retail entures of ot+er large 6n-ianin-ustrial +ouses >Reliance Retail7 $irlaKs retail enture* or foreign retail giants>(al!Mart*. 6n ot+er 4or-s7 PantaloonKs competition is ric+7 ery ric+. (+ilet+e competition may not +ae ma-e inroa-s into t+e 6n-ian market as

t+oroug+ly as Pantaloon7 it still +as enoug+ money to compensate for t+iss+ortcoming.

S$))ary

T+roug+ a carefully e@ecute- policy of compre+ensie multi formate@perimentation7 Pantaloon +as manage- to un-erstan- an- take a-antage oft+e compresse- eolution of t+e organi/e- 6n-ian retail in-ustry >mentione-earlier* to become t+e -ominant player. )s far as in-ustry kno4le-ge7e@perience an- skill are concerne-7 Pantaloon 4it+ its -ream team is looking ingoo- s+ape. No4 it is facing stiff competition t+at is financially better!eBuippe-. Ho4 it takes a-antage of its e@isting resources7 accesses a--itionalcapital an- competes 4it+ its competitors in a race to -eelop an efficientsupply!c+ain 4ill -etermine t+e future of t+e company. (+ile t+e task is-aunting7 Pantaloon +as more lee4ay an- an enormous +ea-!start compare- toanyone else.

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C$sto)er S$r%ey

1. (+at is your nameUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU2. )re you 4orking 7 stu-ent or Retre- >i.e. status*

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

3. )re you a regular customer of Pantaloons

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

. (+y you prefer Pantallons to ot+er $ran-

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

#. (+at type of 0lot+es you buy from Pantaloons

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

". )ccor-ing to you 4+at are t+e possitie points of Pantaloons

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

&. or +o4 many years you are using Pantaloons

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

'. )ny Suggetions

UUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUUU

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0in'in 0ro) S$r%ey

6 took surey of aroun- 2 customers of Pantaloons speciallyin $oriali area. 6 took sureys on arious -ays of t+e 4eek. 6 4as ableto meet -ifferent age groups an- people from -ifferent financial status.

orm t+e ans4ers gien by arious people it is foun- t+atyoungsters are cra/y about t+e bran- PantaloonsI. 6n youngstersspecially college boys are more intereste- in buying bran-e- pro-ucts.)bout girls bet4een age group # to 1 years parents are intereste- to

buy pro-ucts for girls because of -esigning an- fas+ion7 4+ic+ are rarean- -ifferent. Some parents clearly mentione- t+at t+ey prefer t+is

bran- for ki-s because it is ma-e of cotton7 goo- for all seasons an-safe for skin.

0ollege girls an- 5a-ies +ae bit -ifferent ie4 about t+ebran-. T+ey sai- t+ey are intereste- in t+e bran- for only casuals. Nomuc+ party!4ears are 4it+in t+ere bu-get. 6n-irectly t+ey sai- t+is is acostly bran-. 6f you put your bu-get you may get many more items to4ear. Some of t+e 0ustomers gae a ne4 opinion t+at t+ey get-iscount coupons. So t+ey make yearly purc+ases of t+is bran- but t+eyare not ery muc+ fon- of pantaloons. T+e reasons being t+e pro-uctsare ery costly compare 4it+ ot+er bran-s. So eeryone +as -ifferentintentions an- e@periences about same bran- because of t+eir agegroups an- capacity to spen-.

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Con&l$sion

T+roug+ t+e stu-y it is obsere- t+at Pantaloons can be sai- an

organi/ation 4+ere t+e P8s of marketing is taken seriously for t+e ma@imumprofitability t+roug+ large range of pro-ucts. 0ompany +as -ii-e- market

into 3 groups7 6n-ia one 7 6n-ia t4o an- 6n-ia t+ree.6n-ia one is t+e class 4+ic+ purc+ases t+e pro-uct 4it+ pleasure an- for selfuse. 6n-ia one class is about 1L of t+e total population. 6n-ia t4o is t+e4orking an- sericing class7 (+ic+ is 3L of t+e population 4+ic+ cannotaffor- t+e bran- for self use. 6n-ia t+ree is a bare minimum class 4+ic+ isintereste- in buying t+e t+ings localy as t+ey are c+eap. Pantaloons 4is+ toconert 6n-ia t4o class an- 6n-ia t+ree class into t+eir customers.Promotional actiities for sales are taken seriously. $est Buality is t+eir

motie. 5atest -eelopment is Mr. )-itya $irla +as -eci-e- to inest in t+isbran-7 So t+e bran- 4ill be more popular in near future.

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Bi1liora#!y

or t+is pro:ect 6 +ae taken references from arious 4eb sites.(ikipe-ia444.pantaloons.co.in

or surey Vuestions )re aske- to Pantaloons customers.

Final Project Copy of Strategic Management

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