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Introduction 2
Kmart Launch in New Delhi
1. Why New Delhi for Kmart 2
2. Entry Strategy... 3
3. Operating Environment... 4
4. Cultural Profile of New Delhi.. 5
5. Organization Structure 6
6. Staffing Policy7
7. Communication Issues.8
8. Leadership and Motivation..9
9. Legal and Compliance Issues10
10. Communal concerns between India and Australia.10
Recommendations...11
Conclusion.12
Introduction
This report examines and illustrates the various components of the launch
strategy of the discount retail giant Kmart into the Indian capital of New Delhi.
Kmart is the third largest US discounter behind Wal-Mart and Target.
Headquartered in Hoffman Estates, United States. The company founded by
S.S. kresge in year 1962. Company delivers numerous types of products;
clothing, appliances, toys, food, housewares and jewellery, serving more than
978 locations all over the world. Kmart Corporation is wholly owned subsidiary
of sears holding corporation from 2005. This report clarifies on the strategy for
launching and challenges Kmart would face while launching in India.
1. Why New Delhi for Kmart
The Indian market has immense potential and lots of opportunities for
outsiders to invest.
It provides huge market for any new business in the field. Our
expansion plan to Delhi has a reason we are going to focus on lower to
upper middle class people. According to the statistics, 28% middle
class and 20% fall in the lower middle class which constitutes
approximately half of the Delhi population (Delhi development
authority).
Middle class can easily afford buying from discount store, rather than
going to small vendors around the streets. Good number of migrants
every year shift to Delhi that will also add a point for growth.
Our strategy is to influence the traffic by low pricing and multi product
store under one roof. By giving our future customers world class
shopping experience.
Because of huge traffic its hard for shoppers to travel from one retailer
to other retailer, our focus is to provide all basics necessities on one
place.
Moreover, geographical area of Delhi is too large, future plans will be to
open more store throughout the Delhi. One more good future
indication, Delhis per capita income for previous financial year
increased by 13.50% in the year 2014-2015 (The times of India, 2015).
2. Entry strategy
Kmart will come up as a new hope for Delhi population, as we are established
from long time and know how to deal with diverse culture. Company is
dedicated to provide convenient and accessible place to shop. Further
strategies are discussed in detail:
a) Exchange and return: This will be totally new concept in India, to
give leverage to customer. Now they can decide whether they like to
keep that product, if not they will get their money back. By doing this,
we are giving customer more flexibility.
b) Social media marketing: Being Discount retailer to launch in a new
market, we need the best marketing strategy. Using social media
channels like Facebook and twitter, to promote and create awareness
among existing customer about low price commodities. In addition to
that, we have planned to use hard-sell tactics in which we are going
to use particular type of slogan, posting repeatedly about products or
list of products with price list. To reach to lower class we planned to
opt print media as well.
3. Operating environment
New Delhi used to be a place for local markets but now its growing and
developing. Moreover, there is a huge competition like pantaloons, BigBazar, Lifestyle, Vishal Mega mart etc.
CEO
CORPORATE MANAGERS
AUSTRALIA (HR, FINANCE,
OPERATIONS)
GEOGRAPHIC
AUSTRALIA
DIVISIONS MANAGERS
NEW
ZEALAND
STORE
STORE
INDIA
STORE
The organization chart for Kmart for entering the Indian market will be
divisional organization structure as it is suitable in offering products in a
variety of different markets which customers have different preferences and to
give customers product and services they require(Meyer, Mudambi & Narula
2011), divisional organization structure gives geographical managers the
ability to make autonomous decisions according to the market they are
serving this way they can swiftly react to changes in their specific business
environment(Snow 2015), India is a perfect example of a dynamic market that
has a lot of cultures and having someone that can make changes quickly will
make a big difference.
With each division structured like a functional structure, and having a strategic
business unit to satisfy the different market groups and in this case , the
Indian culture is so diverse with so many cultures from different regions all
meeting up at New Delhi where Kmart will make its maiden entry to the Indian
market. And one of the advantages of the divisional organization structure is
that its suited for an environment that is fast changing and it allows for units
to adapt to differences in products and customer preferences and this is seen
in the Indian market which has a lot of competition from small to medium
sized enterprises.
6. Staffing policy
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and it would be an opportunity for the company also to get first hand
information about the Indian market(Sebastian Reiche 2007).
7. Communication issues
Communications happens both internally and externally in an organisation,
which may also include some barriers like language barriers across nations,
also the new staff may not be able to connect well with the existing employees
that further causes communication gaps (George 2015). The issues, host
country may face would be the time difference between both the countries,
which varies from 4 hours and 30 minutes to 5 hours and 30 minutes
throughout the year as Australia follows daylights saving whereas India has a
standard time. Also, in India the stores operate from 10 in the morning till 9 at
the night whereas the stores in Australia shut around 5 in the evening, which
further leaves a very small window of communication of about 3 hours when
stores in both the countries would operate at the same time. Also,
communicating cross borders can be a bit hard at times as both the countries
have different linguistic approach and when we talk about India.
8. Leadership and Motivation
As we know the main element of Leadership is motivating the team or a group
of members or employees and leadership is one of the primary functions that
help run any business activity. So, in the case of setting up the business
overseas the leadership has to be as great as possible, also because the
business is expanding and exploring more opportunities and currently has a
great reputation and can possibly reach even higher stages of success as the
economy of India is growing gradually and shares a common border with
China where most of the electronics and other products come from, which can
definitely be an advantage to the company as it can take the benefits of free
trade and cut down on the transportation costs as well. In this scenario, the
leader must be inspirational and motivational to the employees. The staff will
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be provided suitable training so that they are full of energy on the launch of
the store and could further provide the best quality of service and also, serve
every customer with a smile. The organisation should facilitate incentives or
other benefits like health insurance for the employees for achieving their KPIs.
All the employees must be shown the organisational goal and must be trained
accordingly so that every member has a common goal and a shared vision
and further the best performer of the month could be awarded as the title of
the Employee of the month. Although every country has different ethics,
cultures and taste, but there must be a blend of the Australian practices in the
operating activities as well as Kmart has an outstanding reputation in Australia
and would be representing the country in the very first store of India for the
first time.
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Recommendations
Like most of the other online retailers, Kmart can provide free home delivery
within the radius of 10 kilometres and also, offer same day delivery on a
certain charge of about Rs100.
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