UK Country Report Ankit

8/13/2019 UK Country Report Ankit

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AMITY INTERNATIONAL BUSINESS SCHOOL

RESEARCH TO BE SUBMITTED BY

ANKIT KUMAR AGRAWAL

A1808711024

MBA-3C, 2011-2013

UK COUNTRY REPORT ANALYSIS AND COMPARISION OF TWO MAJOR

HYPERMARKETS TESCO IN UK AND BIG BAZAAR IN INDIA


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INDEX

CHAPTER 1: INTRODUCTION ..3

CHAPTER 2: REVIEW OF LITERATURE ....4

CHAPTER 3: OBJECTIVES AND METHODOLOGY.5

3.1: OBJECTIVIES.5

3.2: RESEARCH METHODOLOGY..5

CHAPTER 4: BRIEF ABOUT TESCO AND BIG BAZAAR.6

4.1: TESCO.6

4.2: BIG BAZAAR..6

CHAPTER 5: COMPARISION OF UK AND INDIA RETAIL INDUSTRY.7

CHAPTER 6: SWOT ANALYSIS ....8

6.1: SWOT ANALYSIS OF TESCO..8

6.2: SWOT ANALYSIS OF BIG BAZAAR.9

CHAPTER 7: MARKTING 4PS OF TESCO AND BIG BAZAAR10

CHAPTER 8: PORTERS FIVE FORCE MODEL118.1: TESCO PORTERS FIVE FORCE MODEL.11

8.2 BIG BAZAAR PORTERS FIVE FORCE MODEL....12

CHAPTER 9: ANALYSIS.13-15

CHAPTER 10: FINDINGS AND RECOMMENDATION..16-17

10.1: FINDINGS..16

10.2 RECOMMENDATIONS FOR TESCO AND BIG BAZAAR....17

CHAPTER 11: CONCLUSION..18

CHAPTER 12: BIBLIOGRAPHY AND REFERENCE..19

CHAPTER 13: ANNEXURE20-21


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CHAPTER.1

INTRODUCTION

Tesco is the worlds 3rdlargest and UKs no. 1hypermarket and big bazaar

Indias 1sthypermarket, and being a student of marketing and international

business so that I took 2 major player of retail industry Tesco and Big

Bazaar of UK and India. Now days retail industry is into spotlight because

there are two reasons behind of this, liberalization of the world economy and

large players of the industry have entered into the retail business. Earlier

FDI in retail industry have been permitted by the Indian government so that

large numbers of international retailers interested to enter into Indian retail

industry because the retail business of India is more than 450 US$ and one

of the top 5 retail market in the world and 84% of Indias retail industry isunorganized. In the world almost all the customers are very price conscious.

The main motive of all the hypermarkets is to provide products and services

at very low price than the others hypermarkets. Indian retail industry

environment is totally different from UK. The main difference I found is in

India customer are very price conscious, every item is with MRP by the

marketer of the particular product but in UK customer arent very much price

conscious and on the product there is no MRP by the marketer or

manufacturer of any product, the price decided by Tesco itself, there is no

MRP restrictions. In India, increasing in the disposable income of middle

class people and increasing the purchasing power of the people andconditions for growth of organized retail, the large players of retail industry

like Wal-Mart, Carrefour, and Tesco etc keep an eye on Indian retail business

and they are ready to enter into Indian retail business. Retail industries play

a major and very important role in virtually all economies the world over, in

this report I have research on customers perception about the Tesco and I

did a primary research for this. I asked 13 questions about the Tesco to the

30 peoples of London. And I also have done this research according to my

objectives. The research is being done in the area of marketing. In this

research I also have done SWOT analysis, PESTLE analysis and porters 5

force model of Tesco and Big Bazaar. I compared the UK and Indian Retail

industry which is totally different from each other. Its very clear that in UK

and India the retail sectors operate differently. So I tried to analyze and

comparison of UK and India Retail Industry and customers perception about

Tesco and according to my objectives.


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CHAPTER.2

REVIEW OF LITRATURE

Role of Retail in the world-

Retail play a very important and major role worldwide in increasing

productivity across a wide range of consumer goods and services. Retail

means to sale of goods and services from businesses or individuals to end

users. Retailers purchased goods in large quantities from manufacturers or

directly to wholesalers. Retailers are part of an integrated system that is

called Supply chain. Retailing can be done by door to door, online or fixed

locations like markets and stores. Retail can be identified into two forms;

one is organized retail and other unorganized retail. Organized retail is likesupermarkets, mall, and hypermarkets, unorganized like small shop, street

shop, general stores etc. Retail is classified by type of products like Food

products, durable goods (electronics, sporting goods appliances etc),

consumables goods (clothing, fabrics apparels etc) and types of retailers by

marketing strategy is department stores, warehouses stores, supermarkets,

hypermarkets, general stores, malls, Online business etc. Retail can be

identified into two forms; one is organized retail and other unorganized

retail. Organized retail is like which are registered, licensed like

supermarkets, mall, and hypermarkets, unorganized like small shop, street

shop, general stores etc.

Rising in GDP growth, increasing population, increasing in disposable

income, and increasing consumer purchasing power are combining to drive

the Global Retail industry and opportunities for retail segment players. The

retail market is forecast to reach an estimated $20,002 billion in 2017 with a

CAGR of 3.9% over the next six years (20122017).

Country Total Retail Sales

(USD) 2012

Share of organized

retail (%)

Share of unorganized

retail (USD) 2012

USA $2,983,000,000,000 85% 15%

UK $515,000,000,000 70% 30%

INDIA $450,000,000,000 16% 84%


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CHAPTER.3

OBJECTIVES AND METHODOLOGY

Ch.3.1 OBJECTIVES:

It is very clear that being in two different countries the retail sectors operatedifferently. India and United Kingdom both are huge nations with a lot ofavailable resources. And the retail industry is a very huge market of both thenations. There is a huge scope for hypermarkets to establish a big feet inmarket share, if strategies are in line. In the report I will try to analyze UKand Indias hypermarkets, their culture impact on hypermarkets and variousaspects that influence consumer decisions in both the countries.

1. To analyze the 2 major player of retail industry of UK and India bykeeping an eye on strategies used by Big Bazaar in India & Tesco inLondon.

2. To study the UK and India retail industry.3. Comparison of marketing strategies adopted by Tesco and Big Bazaar.4. To study the perception of customer about Tesco.5. To study the different marketing strategies used in the organized sector

in both the countries & the kind of clients they serve.

Ch.3.2 METHODOLOGY:

In order to achieve my objectives I used this longitudinal exploratory studytook into account both qualitative and quantitative research strategies.

The research is to achieve the objectives is qualitative and as well asexploratory in nature, and is meant to provide the basic informationrequired by research objectives.

Quantitative is being done, and also and qualitative research is beingdone both using primary and secondary information that is gatheredand assembled specifically for this study.

Qualitative secondary information from a variety of sources is gatheredlike Tesco Case Studies, Tesco Brochures, Tesco Website, books,

online journals, Newspaper and Magazine (The Grocer) Articles, Primary data has been collected for the customers perception about

Tesco by making a questionnaire and visit in Tesco stores. The Study is done in the area of marketing.


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CHAPTER.4

BRIEF ABOUT TESCO AND BIG BAZAAR

Ch.4.1 TESCO:

Tesco was founded in 1919 by Jack Cohen from a market stall in Londons

East End. Over the years Tescos business has grownand Tesco now operate

in 14 countries around the world, employ over 500,000 people and serve

tens of millions of customers every week. They have always been committed

to providing the best shopping experience. Today they continue to focus on

doing the right thing for their customers, colleagues and the communities

they serve.Tesco Is a UKs grocery and merchandise retailer and the biggest

hypermarket of UK, headquarter of Tesco in Cheshaunt, United Kingdom.Tesco stores are the subsidiary of Tesco PLC in UK. Tesco stores are divided

in 6 formats like Tesco express, Tesco Metro, Tesco superstores etc. The

vision of Tesco is to be the most highly valued by the customers they serve

and the community in which they operate and their staff and the

shareholders, a modern and innovative co. and applying their skills globally.

In India Tesco is a joint venture with TATA group and the stores named as

Star Bazaar. Tesco segments its store portfolio six four different store

formats. Express, Metro, Superstore, Extra, One-stop, Tesco and Home plus.

Ch.4.2 BIG BAZAAR:

Big Bazaar was founded in October 2001 by Kishore Biyani the Chairman

Pantaloon retail India limited, future group. Big Bazaar works on the same

economy model as Wal-Mart. And Big Bazaar had considerable success in

many Indian cities and small towns. The main vision of the Big Bazaar is

Everything at every place at every time for each Indian customer at a very

profitable manner. Big Bazaar is Indias number 1 hypermarket and there

are 214 stores in 90 cities of India till June 2, 2012. Big bazaar is the

fastest growing hypermarket of India. The tagline of Big Bazaar isse sasta

aur kuch nahi! which itself shows that Big Bazaar focus only those

customers who are very price conscious and they believe in low price. They

provide best product at the best price. Big Bazaar is situated near

transportation hubs to attract maximum customers. Big Bazaar with its

range of products and services offering reflects the aspirations of millions of

Indian.


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CHAPTER.5

COMPARISION OF RETAIL INDUSTRY OVERVIEW OF UK

AND INDIA

1.UK India1. In UK 11% of all VAT-registered

business are retailers. And

organized retail is 70% and

30% is unorganized or

traditional.2.The retail industry of UK

generates almost 8% of the

GDP.

3.Hypermarkets dominate the UKfood retail market, with 56.0%

of its sales.

4.The retail industry of UK givesemployment of 2.9 million

people.

5.The UK retail sector makes upapproximately 10% of its all

employment. It is more than

half of people who work part

time in the retail sector and its

compared to less than a 3rd

across the whole economy.

6.UK is the most internationalretail market with the highest

proportion of international

retailers trading.

1. In India only 16% retailindustry is organized and

rest 84% is unorganized.

2. The retail industry of Indiagenerates almost 14 to 15%of its GDP.

3.The Indian retail market isUS$ 450 billion and comes

one of the top five retailmarkets in the world.

4. Its poised to become $1.3trillion opportunity by 2020.

5.The Indian governmentrecently took a decision to

allow up to 100% FDI inmulti-brand retail and raise

the limit for overseas

investment in single-brand

retail to 100%.

6. In November 2011, India'scentral government

announced retail reforms

for both multi- brand storesand single-brand stores.


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CHAPTER.6 SWOT ANALYSIS

Ch.6.1 SWOT ANALYSIS OF TESCO:

Strengths Weakness

1. Tesco is the number 1supermarket chain in UK.

2. Tesco has strong brand name.3. Financial power is very strong.4. Presence of Tesco is

internationally.

5. Tesco is worlds Third largestretailer.

1. Tesco is more dependenton UK market.

2. In UK transport costs isvery high.

3. The strategy is single pointto serial acquisitions.

4. The main difficulty isIncreasing geographical

spread makes focus on

specific markets.

Opportunities Threats

1. The main opportunity is to opennew stores.

2. Asian market has huge retailindustry and in growing stageso Tesco must enter into Asian

markets.

3. Tescos opportunity is instrategic alliance with other

companies.

4. Tesco should try into non-foodretail because theyve strong

financial power.

5. Tesco should also try in Health& Beauty.

1. The main threat isInternational expansion of the

business.

2. Lowest price war betweenhypermarkets is main threat.3. The competition is very high

from Asda & Wal-Mart.

4. Raw material cost is risingday by day.

5. Innovation by other supermarkets is a highly threat.


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Ch.6.2 SWOT ANALYSIS OF BIG BAZAAR:

Strengths Weakness

1. Big Bazaar offers a widerange of products and

services.

2. Big Bazaar is affordable formiddle class & upper middle

class.

3. Big Bazaar providesattractive Promotional offers.

4. The strategy of Big Bazaar islow price guarantee which

attract customers.

5. Big Bazaar has high brandequity.

1. Big Bazaar is restricted to Indianmarket only it isnt globally.

2. Big Bazaar keep very thinmargin.

3. There are long lines at billingcounters of Big Bazaar which is

very time consuming.

4. Because they believe in low priceguarantee so that high branded

products are still missing from

big bazaars line of products.

Opportunities Threats

1. Theyve opportunity toexpand globally by tieups

other multinationalcompanies.

2. They must enter into highpremium segment.

3. Indian organized business isonly 16% so that there is a

lot of scope in Indian retail

industry.

4. In the rural area the wholeretail business are

unorganized so theyve achance to enter into rural

markets of India

5. Mall culture is increasing inIndia so theyve chance to

expand their retail business

widely.

1. India is developing countryand their policies change

randomly so changing ingovernment policies is threat

for Big Bazaar.

2. After the FDI in retail industrythe main player of retail

industry like Wal-Mart, Tesco

have entered into Indian

retail industry.

3. The competition of Big Bazaaris now with Wal-Mart and

other international stores sothat the threat is competitors

global presence.

4. High competition.


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CHAPTER.7

MARKETING 4 PS OF TESCO AND BIG BAZAAR

4 PS TESCO BIG BAZAAR

PRODUCT Tesco provides a wide range ofquality products like Food, Non-

food, personal finance,

telecom, online services, major

brands, and also include

Tescos own brand product.

Big Bazaar offers maximum

variety of each product it also

include own product of Big

Bazaar. Big Bazaar with its

range of products and services

offering reflects the aspirations

of millions of Indian.

PRICE Tesco sell best quality productat a low price in order to have

a large audience to target.

Big Bazaar believes in low cost

guarantee. Big Bazaar

considers its discounted price

its USP. Price of product is low

and they give average 7-8%

discount on all items on their

MRP.

PLACE Tesco has a store of every Pincode of London they have 6

multi format stores to have abetter geographic cover of

market.

Big Bazaar targets semi-urban

population. Big Bazaar

strategy is to find out a cheaplocation Big Bazaar is situated

near transportation hubs to

attract maximum customers.

PROMOTION Tesco emphasize on the ethicalthings like green, the supplier

care and social issues. Tesco

promotes their store every

little helpthe tagline of Tesco.

Tesco also provide their

customers loyalty scheme asclub card to reward their

customers.

Big Bazaar use 2 types of

promotional strategies of Big

Bazaar One is the holistic

advertisement promotion like

Sabse Sasta Din are a very

successful strategy to get

footfall and the second is theparticular store oriented

promotion like buy 2 get 1 free

etc. There are loyalty schemes

which reward customers.


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CHAPTER.8

PORTERS FIVE FORCE MODEL

Ch.8.1 Tescos Porters five force model

RivalryAmong

Competitors

(High)

Threat ofNew

Entrants

(Medium)

Bargainingpower ofbuyers

(Medium)

Threats ofSubstituteproducts

(Low)

Bargainingpower ofsuppliers

(Low)


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Ch.8.2 Big Bazaar Porters five force model

RivalryAmong

Competitors

(High)

Threat ofNew

Entrants

(High)

Bargainingpower ofbuyers

(Medium)

Threats ofSubstituteproducts

(High)

Bargainingpower ofsuppliers

(Low)


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CHAPTER.9

ANALYSIS

According to the questionnaire I found this result.

Q.1:- How often do you visit Tesco?

Q.2:- Are you satisfied with Tescos services (in store)?

Q.3:- Range of products available in Tesco satisfactory?

17%

33%47%

3%

How often visit to tesco?

Daily Twice in a week Once in a week Twice in a month

Yes

80%

No

20%

Satisfied with Tesco Services (in stores)

77%

23%

Product available in tesco satisfactory?

Yes No


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Q.4: Does the Tesco provide quality standard products?

Q.5:- Rate the customer service according to your experience.

Q.6:- Do you think the price range fixed by Tesco for its products reasonablecompared to other retail store?

83%

17%

Quality standard product?

Yes No

77%

10%

10% 3%

Customer Service

Excellent Good Average Poor

83%

17%

Locations easily accessible?

Yes No


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Q.7:- Do you think the price range fixed by Tesco for its products reasonable

compared to other retail store?

Q.8:- Are you a loyalty program (Club card) member of Tesco?

Q.9:- How much would you rate Tesco?

70%

30%

Price Reasonables?

Yes No

47%

53%

Clubcard Member?

Yes No

67%

23%

10% 0%

Rate Tesco

Excellent Good Average poor


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CHAPTER.10

FINDINGS AND RECOMMENDATION

Ch. 10.1 FINDINGS:

After all the research work Ive done I found some interesting facts about

Tesco and Big Bazaar, If we talk about Tesco and Big Bazaar marketing

strategies than these are different in many ways:

Tesco operates globally but Big Bazaar is in India only, so that Tescosstrategys is different for different countries, Tesco has more than

5000 stores in UK but Big Bazaar has only 300 stores in India.

At Big Bazaar waiting time in terms of Billing is a concern and more soduring the weekends. And during my personal observation when I saw

in India (Though it was for 3-4 hours which is a short period of time),it

was noted by me that few customers who had little to purchase, left

their trolleys due to long queue at the counter.

Opposite of this Tesco has a competitive benefit, Tesco has its store atevery pin code of UK, Tesco has huge network. So that people find

Tesco very easily. In India price of any product decided by the manufacturer or marketer

of the particular product, no one can sell a product more than the MRP

decided by the manufacturer but in UK things are totally different price

of any product decided by the seller, so Tesco has right to sell a

product as he want but Big Bazaar cant sell any product of maximum

of the MRP.

Retail industry play a very important role in both countries, retailindustry of UK generates 8% GDP and in India its 14 to 15% of its

GDP.

Main difference is that UKs retail industry is 70% organized and Indianretail industry is only 16% organized which makes a huge difference.

Indian retail industry comes in top 5 of the world, and the chances ofgrowing of this retail business is very high in India because mall

culture is growing in India, Indian customers are more price conscious

than the UK, and Indian government allows 100% FDI in retail

business and there are so many reasons so that we can say Indian

retail industry will grow faster than the UK retail industry.


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CHAPTER.11

CONCLUSION

Tesco and Big Bazaar is no.1 hypermarkets of UK and India, the strategy ofboth the stores to give best product at best price, price war has been begunbetween all the hypermarkets and the profit of this getting to the customersdirectly. There are the many government policies which affects these storesdifferent from each others. Big Bazaar is limited to India while Tesco isglobally and worlds 3rd largest hypermarket so that the working style,

marketing strategy are different. Tesco stores were developed at differentlocations which was a serving advantage to different consumer demands.These out of town, edge of town super stores offer one-stop shoppingservices for weekly outings, the smaller in town stores offer top up shoppingfacilities. Thus the Tescos portfolio was complemented. And Big Bazaar issituated near transportation hubs of India to attract maximum customers.Big Bazaars strategy is only for the middle class customers of India bygiving those attractive offers and low price guarantee.

The main weakness of both the stores is that Tescos dependency only on UK

markets and as well as Big Bazaar is depends only on India market. Tesco

has its strength is very constructive and competitive against his competitorsAsda and Sainsburys etc.In India after the 100% FDI investment in retailindustry, competition is going to very high for the Big Bazaar, because thebig players like Wal-Mart, Carrefour is ready to enter into Indian retailindustry. My conclusion after all my research work is Tesco and Big Bazaar isbig player of retail industry of UK and India, and retail industry play a veryimportant role for the growth of economy of any country. And low price warbetween all the hypermarkets is benefited to the customer ultimately.


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CHAPTER.13

ANNEXURE

Questionnaire:

I'm making a country specific research report for Master of Business Administration in Internationalbusiness and I am interested in analyzing your thoughts and opinion about Tesco. May I kindly takefew minutes of your time and ask you to fill out this? Your answers will be kept confidential and wouldbe used only for my educational purpose. I must appreciate your participation and honest answer forthe survey.

Name: ____________________________Contact no.:________________ Age: _____________

Gender: _________________

Q.1:- How often do you visit Tesco?

Daily Twice in a week

Once in a week Twice in a month

Q.2:- Are you satisfied with Tescos services (in store)?

Yes No

Q.3:- Why do you prefer Tesco over the other retail store?

Q.4:- Range of products available in Tesco satisfactory?

Yes No

Q.5:- Does the Tesco provide quality standard products?

Yes No

Q.6:- Are the locations easily accessible?

Yes No


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Q.7:- Rate the customer service according to your experience.

Excellent Good

Average poor

Q.8:- Are you aware about all the product line offered by Tesco?

Yes No

Q.9:- Do you think the price range fixed by Tesco for its products reasonable compared to

other retail store?

Q.10:- Are you a loyalty program (Club card) member of Tesco?

Q.11:- Are the staff friendly & helpful of Tesco?

Q.12:- How much would you rate Tesco?

Excellent Good

Average Poor

Q.13:- Any recommendation or comment.

Yes No

Yes No

Yes No

UK Country Report Ankit

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