Reportbhaskar

SUMMER PROJECT/ INTERNSHIP REPORT ON RELIANCE RETAIL STORE OPERATION AT
KORAMANGALA-2 BANGALORE. Prepared by: SANKA KRISHNA BHASKAR Registration No: 10SBCM0042 Under Guidance of Prof. MOHANA SUNDARAM.K.
In partial fulfilment of the Course-Industry Internship Programme (IIP) in Semester II of the Master of Business Administration
Bangalore
ALLIANCE BUSINESS SCHOOL
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Master of Business Administration Industry Internship Programme (IIP) Declaration
This is to declare that the Report entitled RELIANCE RETAIL STORE OPERATION has been made for the partial fulfilment of the Course: Industry Internship Programme (IIP) in Semester II (Batch: August 2010-12) by me at RELIANCE RETAIL LTD (RRL) (organization) under the guidance of Dr./Prof MOHANA SUNDARAM.K. .
I confirm that this Report truly represents my work undertaken as a part of my Industry Internship Programme (IIP). This work is not a replication of work done previously by any other person. I also confirm that the contents of the report and the views contained therein have been discussed and deliberated with the Faculty Guide.
Signature of the Student
Name of the Student (in Capital Letters) : SANKA KRISHNA BHASKAR
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Registration No
: 10SBCM0042
Master of Business Administration Certificate
This is to certify that Mr. SANKA KRISHNA BHASKAR Regn. No. 10SBCM0042 has completed the Report entitled RELIANCE RETAIL STORE OPERATION under my guidance for the partial fulfilment of the Course: Industry Internship Programme (IIP) in Semester II of the Master of Business Administration
Signature of Faculty Guide: Name of the Faculty Guide: MOHANA SUNDARAM .K.
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ACKNOWLEDGEMENT I hereby take the opportunity to express my profound sense of gratitude and reverence to all those who have helped and encouraged me towards the successful completion of the project. First of all, I consider it a pleasant duty to express my heartfelt appreciation, gratitude and indebtedness to PROF. MOHANA SUNDARAM.K for guidance, continuance encouragement and aspiring suggestion during the project work. I am very thankful to him for all the value addition and enhancement done to me. I would like to thank Mr. SWAROOP, Store Manager at Reliance Fresh. His perceptive criticism kept me working to make this project more full proof.iam thankful to him for his encouraging and valuable support. I would also like to thank my industry guide Mr.Hemanth Nagraj, Deputy F&V Manager at Reliance Retail Ltd, who was always there to help and guide me whenever I needed help. Working under him was an extremely knowledgeable and enriching experience for me.
SANKA KRISHNA BHASKAR, MBA, 2ND SEM.
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Table of contents Serial Number 1. 2. Content Executive Summary Introduction 2.1 Industry Overview 2.1.1 Types of Retail Outlets 2.1.2 Global Scenario 2.1.3 Indian Scenario 2.1.4 Major Players in the industry 2.2 Company Overview 2.2.1 Mission & Vision 2.2.2 Products & Brands 2.2.3 Global & Indian Operations & Market Share 2.2.4 Organisation Structure 2.2.5 SWOT analysis 3. Project Profile 3.1 Objective 3.2 Methodology 4. 5. 6. 7. 8. 9 Observations & Analysis Findings Recommendation Conclusion Learning Outcome References 43 50 52 52 53 56 74 75 77 78 90 36 Page number 7 9 9 10 14 22 26 29 42
1. EXECUTIVE SUMMARY ALLIANCE BUSINESS SCHOOL Page 5
The project undertaken as a part of Industry Internship Programme is Store Operations at Reliance Freshs store which is a part of Reliance Retail ltd. Reliance fresh at South end, Bangalore was allocated to me to do the project for a span of 60 days. The main task is to indent, procure and manage inventory of the fruits and vegetables (F&V) with special reference to Mangoes. Higher revenues are generated within short period from the fruit and vegetables. Shelf life of these products is very short and thereby it is needed to be replenished frequently. Hence indenting, procuring and managing inventory of these perishable products plays a major role in generating revenues. In addition to these tasks, planogram, visual merchandising, dump & shrink management, promotional strategies and competitive bench marking are the other activities handled as a part of project. As Store operation is a vast area to cover in short internship period, I prepared an agenda for my daily task to be followed at the store as a daily routine. Cleanliness is first in any operational process in retail stores. Hence, ensuring clean shelf rack and crate for display is the first task. Right display at right place makes the product to be sold. Thus, cleaning is followed by proper display of F&V at their respective places. Price Communication is must at all retail stores as customers feel comfortable when the price tags are available near the respective products. Customers are the key target for retailers; they are supposed to attract them with attractive prices for the products. By examining the prices of competitor, benchmark price has to be set up. Some promotional offers are given during weekends and festivals to gain more sales. Billing counter is the Point of Sales for Reliance Retail ltd. The price mentioned in the tag should match with price at the POS and it has to be checked frequently. Customers search value for what they are ready to pay. Quality of the product is the key factor for them than price. Good quality F&V has to be procured and displayed. Hence Removal of rotten, damaged and over ripened F&V at the rack is a must task. In addition to above mentioned task, some documentation works are also assigned. The stock arrives to the store twice a day. The physical stock arrived is to be compared with the values printed in the invoice that comes along the stock. Any ALLIANCE BUSINESS SCHOOL Page 6
shortages or excess has to be reported the manager and also it is required to ensure that they arrived stock are good quality and with least unavoidable dump. Daily dump and shrinkage has to be measured and reported daily. These data are entered in SAP which assists in documentation purpose for Reliance Retail ltd for any reference purpose. And this documentation helps in future indenting of F&V required for the store. Current physical inventory of any product at the store can be known from SAP instead of physical weighing the product. Tracking of proper billing at POS is the final task assigned as many similar products are available. For example, there are more than 8 varieties of mangoes available at store. Billing of exact variety has to be ensured without mixing of varieties. Thus overall, I was given the task to replicate the task of a store manager for F&V with special reference to Mangoes, a seasonal product.
2. INTRODUCTION ALLIANCE BUSINESS SCHOOL Page 7
2.1 INDUSTRY OVERVIEW Retail the term which is the buzzword in todays day to day life is not at all a new concept and was there since the barter trade days. But the fact is that it has been modified, changed and has been given a new look and thus it has come under the flood lights i.e., as per the old proverb old wine, new bottle. India retailing boom is the result of rapid globalization and the recognition of being a very potential market by big giants and foreign companies making the market more competitive. This has cause existing retailers to re-tailor their strategies to suit the new landscape. Today Indian market is a hot cake in the field of retail and is enticing enough for every retailer to eye for a bigger piece of it. When we talk about organized retailing, with economy booming, competition in the market place is fierce. India is all set to experience the phenomenon of a global village. India Tops A T Kearneys list of emerging markets for global retailers for the 3rd consecutive years. It is the 2nd fastest growing economy in the world. India is the 3rd largest economy in terms of GDP in the next 5 years. India is rated among top 10 FDI destinations. India is the fastest growing market in Asia-Pacific for international tourist spending, according to the latest Visa Asia Pacific release. Economy is growing by over 8 per cent a year and Indias growth rate can actually exceed that of China by 2015. Indian economy is expected to grow larger than Britains by 2022 and Japans by 2032 to become the third-largest economy in the world after China and US and finally become the second largest economy after China by 2050. A report by investment banker Goldman Sachs, credits India with the potential to deliver the fastest growth over the next 50 years. According to Standard & Poors, FDI to India is likely to grow the fastest in next few years. The targeted FDI has already hit $13 billion in 12 months ending March2007, more than double Indias previous best of $5.5 billion hit in the previous year. India is investing over US $130 billion in infrastructure by the end of this decade. The retail industry itself has attracted investment of over INR 200 billion (over $4 billion) in creating infrastructure, systems & shop-fit. The additional retail space is expected to add INR 300 billion ($ 6.67 billion) of business to organized retail. India is having the largest young population in the world over 890 million people below 45 years of age. It has more English ALLIANCE BUSINESS SCHOOL Page 8
speaking people than in the whole of Europe taken together. Its 300 million odd middle class, the Real consumers, is catching the attention of the world. It is estimated that 70 million Indians earn a salary of over INR 800,000 ($18,000) a year, which will rise to 140 million by 2012. Over 10,000 small and big existing outlets to undergo complete facelift Retailing is one of the largest industries in India and one of the biggest sources of employment in the country. It is the largest employer after agriculture and an account for about 6 - 7% of population i.e., employs more than 4 crore people. The organized retail sector is divided into two types Instore retailing and Non-store retailing. The features of in-store retailing are fixed point-of-sale locations, which are designed to attract a high volume of walk-in customers. Non-store retailers serve the customers at their doorstep. The in-store retail is more prevalent in India. As per management philosopher Professor Dr. Phillip Kotler retailing includes all the activities involved in selling of goods or services directly to the final consumers for personal, non business uses. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing So in the other words, Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. Retailers satisfy consumer needs by offering the right product at the right place and at Retailers are the final business in a distribution channel that links manufacturers with the right price. consumers. A distribution channel is a set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer. Manufacturers make products and sell them to retailers or wholesalers. Wholesalers buy products from manufacturers and resell these products to retailers, while retailers resell products to consumers. Wholesalers satisfy retailers' needs, while retailers direct their efforts to satisfying needs of ultimate consumers. Types of Retail: Food products Soft goods- clothing ,apparel ,and other fabrics
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Hard goods (hardliner retailers ) appliances, electronics, furniture, sporting
goods etc
ORGANIZED RETAIL:India is at an early stage of evolution in organised retail, with its current penetration being 5 per cent, which indicates a huge potential for growth. The share of organised retail in total Indian retail trade is projected to grow at 40 per cent per annum. Organized retailers are the contemporary formats by which shoppers have the edge of a world class shopping experience. Fine examples of these formats are Pantaloon, Shoppers Stop and Trent. Organized retail may broadly be classified into the following formats-
Malls. The largest form of organized retailing today. Malls are located mainly
in metro cities, in proximity to urban outskirts; this format ranges from approximately 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under common roof.
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Hypermarkets. They are typically large, starting from 40,000sq. feet plus are
usually located outside the city limits. This format comprises of a multiple division layout, and usually has an industrial- look interior. Hypermarkets generally provide daily necessities and grocery like items. Pricing is competitive and they also offer volume discounts.
MBOs. Multi Brand outlets, also known as Category Killers, offer several
brands across a single product category. These usually do well in busy market places and Metros.
Super Markets. Large self service outlets, catering to varied shopper needs
are termed as Super markets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000 sq ft to 2,000 sq ft and large supermarkets ranging from a size of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.
Discount Stores. As the name suggests, discount stores or factory outlets,
offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.
Convenience Stores. These are relatively small stores 400-2,000 sq. feet
located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium.
Departmental Store. Large stores ranging from 20000-50000 sq. ft, catering
to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.
Exclusive Store. Ranging from a size of 500 sq ft to 5,000 sq ft. & above, this
format is owned/ managed by the Company or through its franchise. These can offer single brand as well as multiple bands. ALLIANCE BUSINESS SCHOOL Page 11
Specialty Store. These formats focus on a specific product category, Medium
sized layout in strategic location. Specialty stores provide a large variety base for the consumers to choose from. Despite the presence of the basic ingredients required for growth of the retail industry in India, it still faces substantial hurdles that will retard and inhibit its growth in the future. One of the key impediments is the lack of FDI. This has largely resulted in limited capital investments in supply chain infrastructure, which is a key for development and growth of retailing and has also constrained access to world-class retail practices. Lack of proper infrastructure and relatively high cost of real estate are the other impediments to the growth of retailing. While the industry and the government are trying to remove many of these hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this industry.
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GLOBAL SENARIO Value chain of the retail market The retail industry is composed of individuals and companies engaged in the sale of finished products to end-user consumers. It implies that retailing is the final step in the distribution of merchandisethe last point in the supply chainconnecting the bulk producers of commodities to the final consumers, Retailing covers diverse products such as food, apparels, consumer goods, financial services, leisure, etc. Considering the nature of the business, retailing is extremely competitive and the failure
rate of retail establishments is relatively high. While price is the most important arena of competition, other factors such as location, selection and display of merchandise, attractiveness of the establishment and reputation also matter. Retail is usually classified by the type of products as follows: - Food products - Soft goods: clothing, apparel and other fabrics - Hard goods (hardliner retailers): appliances, electronics, furniture, sporting goods, etc. Traditionally, the retail business was dominated by smaller family-run or regionally targeted stores, but this market is increasingly being taken over by multinational conglomerates such as Wal- Mart and Sears, indicating the era of retail globalization. These larger retailers have managed to set up huge supply/ distribution chains, inventory management systems, financing pacts and wide-scale marketing plans. This dynamic nature of the retail business has created different business models and a wide range of new formats such as vending machines, door-to-door and telephone sales, direct-mail marketing, online retailing1, and traditional formats such as discount houses, specialty stores, department stores, supermarkets, and consumer cooperatives. This has led to the
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emergence of multichannel retailing, which refers to the concept of selling goods through multiple channels rather than just one, such as traditional stores.
Major formats of in-store retailers
Format Branded Stores
Description Exclusive owned showrooms or franchised by
Value Proposition either Complete range available a for a given brand, certified product quality choice to the
manufacturer Specialty brand) Stores
(Multi- Focus on a specific consumer Greater need, carry most of the brands consumer, available
comparison
between brands possible
Department Stores
Large stores having a wide One-stop shop catering to variety of products; organized varied consumer needs into different departments, such as clothing, house-wares and toys
Supermarkets
Extremely retail outlets
large
self-service One-stop shop catering to varied consumer needs
Discount Stores
Stores offering discounts on the Low prices retail price by selling high volumes and through economies of scale
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Hyper-marts
Larger
than
supermarket, Low prices, vast choice
sometimes with a warehouse available including services appearance; generally located in as cafeterias quieter parts of the city Convenience Stores Small self-service formats Convenient location and
located in crowded urban areas Shopping Malls
extended operating hours
An enclosure having different Variety of shops available formats of in-store retailers all close to each other under one roof
Major formats of non-store retailers* Format Direct Response Description Television Marketed directly with Value Proposition over Rapidly and cost-effectively
(DRTV) Advertising Including television, Infomercials
prominent introduce a new product or
display of a toll-free number revive an under-marketed and/or internet address, asking product the consumer to take specific action leading to or making a product sale
Catalog Sales/ Online Catalogue Customers select products from Lower prices than other Sales catalogs and fill out an order retailers and lower overhead form. The order is brought to expenses due to the smaller the sales executive, who size of the store completes the order through the warehouse Vending Machines Chewing gum to hot meals have No human efforts required; been sold through these vending machines for are machines and have become an beneficial integral part of contemporary ALLIANCE BUSINESS SCHOOL Page 15 low-cost
consumption E-commerce
consumables
Buying and selling of products Increases consumers ability or services over electronic to gather information about systems such as the Internet and products and prices other computer networks
Multi-level Marketing
Products
and
company
are Cost of logistics is low
marketed directly to consumers and potential business partners by means and of relationship referrals marketing word-of-mouth
Global Overview of Retail Sector : Global retail sales declined 3.7 percent in 2009 to 13.9 trillion USD1. While sales for 2009 were low, it is worthwhile to note that sales of the global retail industry have doubled since 2003 when worldwide retail sales were $7 trillion USD. Along with sales growth, profitability for most retailers was also sharply affected. Profit margins of the 200 largest retailers in the world fell to 2.4 percent from 4.1 percent during fiscal 2008-09 with more than 30 retailers reporting operating losses2. This trend affected almost every retail category and geographical area except Africa and the Middle East where retailers saw an increase in profitability. The composition of the top 10 retailers in the world remained the same in 2009 compared to the previous year. This group now accounts for more than 30 percent of total retail sales of the top 250 retailers. Wal-Mart remained the worlds largest retailer, ahead of Carrefour Group. In major markets such as the US and UK, retail spending is expected to decline, while emerging markets such as China and India should have strong growth in 2010. There are signs of improvement for US consumers, but the recent destruction of wealth is expected to limit consumer spending. Asia is believed to represent the best growth prospects for retailers and consumer-product companies in 2010. ALLIANCE BUSINESS SCHOOL Page 16
Retail globalization Among developed countries, the UK continues to lead the world as the most international retail market. Europe maintains its ability to attract the worlds top retailers in 2009, with 58% of the worlds top 250 retailers having a presence in Europe. The UK outperformed other major European economies such as Spain, France, Germany and Italy, ranking first among the top 15 most international retail markets. European retailers are more prone to globalization than American retailers because they face restrictions on development in their home markets. In France, due to regulations, hypermarkets cannot open new stores in their home market easily. Consequently, they principally seek growth in other markets. This is why the lions share of global retailers is based in Europe. The US was 10th globally, with 39% of international retailers. This can be attributed, at least in part, to the size, maturity and strength of its domestic market. US retailers tend to penetrate their vast national market extensively before considering international expansion. Although Europe continues to dominate, with eight out of the top 15 most international retail locations, emerging economies such as China, Russia and the UAE have gained significant ground in the past 12 months. According to a recent survey of 60 retail executives from around the world3, the BRIC4 region remains the highest priority markets for retail expansion, with nearly 80 percent of respondents citing one of these markets as part of their firms plans for short-term international growth. Along with developed market players, emerging market-based local retailers have begun expanding outside their region. In a similar survey, 92 percent of respondents from emerging markets are looking to expand beyond their home market, with close to 30 percent of those saying a developed country is among their top three expansion targets. These emerging market retailers are using their unique insights into local business and culture to expand regionally in a trend that will impact the global retail landscape. In addition, retailers are looking for a shorter payback period of three years, compared to five to seven years in 2005. 1 Economist Intelligence Unit (EIU) 2 Bloomberg 3 As part of 2010 Global Retail Development Index, A.T. Kearney surveyed 60 retail executives from around the world to identify emerging competitive trends and confirm the GRDI rankings. 4 Brazil, Russia, India and China countries ALLIANCE BUSINESS SCHOOL Page 17
Despite the global economic slowdown, many retailers such as cash-rich private companies have continued their expansion plans throughout the past 12 months. A survey of 280 retailers5 saw them expand their international presence by two more countries than in the previous year. This was primarily in clothing, footwear and accessories. Multi-channel retailing According to a consumer survey6, 78 percent of respondents in the US used two or more retailing channels and 30 percent used three or more channels to research and then finally make their purchases. Similarly, in Europe, the population purchasing online increased from 32 percent in 2008 to 37 percent in 20097. To grab the benefits of multi-channel retailing, players are enhancing their capabilities. - For example, in May 2010, Marks & Spencer announced the launch of a new version of its Web site, designed to be easily accessible from mobile devices. This will allow customers to conveniently browse and buy items by using their mobile devices. - Similarly, Kroger, Safeway and ShopRite are sending smart electronic shopping coupons to their customers through wireless devices, television and computers. This option lets customers use these coupons to get discounts on their product purchases without going through the trouble of clipping and collecting paper coupons while helping retailers increase their distribution. - Tesco, whose online retail sales during the year ending February 2010 grew 7.3 percent annually, has set up a consultancy named Task Retail, which will advise Tesco on its online clothing strategy. Rise of online retailing: Global online retail sales grew by 14.5 percent in 2009 to reach 348.6 billion USD8. Electronics is the largest segment in global online retail sales, contributing around 22.6 percent. The US is the biggest market for online retail sales with 37.2 percent market share, whose total retail e-commerce spending reached 129.8 billion USD in 20099, marginally lower than the 2008 level of 130.1 billion USD. A high level of product differentiation together with low fixed costs and dynamic market revenue growth is seen in the US market. However, it also creates rivalry in the market as a large number of players are active along with the absence of consumer switching costs. ALLIANCE BUSINESS SCHOOL Page 18
Online retail sales still account for only 2.5 percent of total retail sales on a global basis. On an average, online sales account for 6.6 per cent of total sales for the top 100 retailers in the world10. Hence, most retailers have yet to make a strong online push through multi-channel retailing. By 2014, global online retail sales are expected to be 778.6 billion USD11, increasing at a CAGR of 22.2 percent. To sustain this level of sales, internet penetration in North America, Europe and Asia- Pacific is expected to increase by 10.6 percent, 7.6 percent and 12.7 percent12 on a y-o-y basis respectively. Key Players:Highly evolved US market has Wal-Mart taking only 8% market share UK market has Tesco with only 13.4% market share China market still does not have a clear leader USA = US$ 2,350 Bn ,UK = US$ 406 Bn ,China = US$ 313 Bn Total retail contribution in World GDP is 27% & Organized retail in US accounts for 22% of GDP. ORGANIZED RETAILING:
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Global players planning entry in India are
The world's largest retailer, Wal-Mart, has tied-up with Sunil Mittal's Bharti Enterprises to enter Indian retail market.
Microsofts first shop-in-shop pilot has been launched with the Tata Group subsidiary Infiniti Retail's multi-brand consumer durables retail format, Croma.
The Walt Disney Company, consumer product retailing arm of global animation giant, will soon add 135 new stores to its existing 15 stores.
Worlds leading coffee chain, Starbucks' enters India through a tie-up with the country's leading multiplex operator PVR Limited. 5. Apple Inc has entered into an exclusive marketing and distribution deal with Reliance Retail through "iStore by Reliance Digital". Some of the international players that have already entered India include McDonald's, Pizza Hut, Dominos, Levis, Lee, Nike, Adidas, TGIF, Benetton, Swarovski, Sony, Sharp, Kodak, Medicine Shoppe among others. NAME OF
RANK 1 2 3 4 5 6 7
RETAILER WAL MART USA TESCO UK CARREFOUR -FRANCE HOME DEPOTUSA KROGER-USA WAL GREENS USA ALDI GROUP GERMANY
SALES(USD BN) 235 63 58 55 55 52 48
COUNTRY OF OPERATION ARGENTINA,USA,UK,CHINA HUNGARY,UK,USA,MALYSIA CHILE,CHINA,FRANCE,UAE CANADA,MEXICO,USA USA USA,TAIWAN,HUNGARY UK,ITALY,VIETNAM,TURKEY
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The above are the top 7 global retailers across the world. (Source: Stores/Deloitte Touche Tomahatsu) INDIAN SCENARIO Retailing is emerging as a sunrise industry in India and is presently largest employer after agriculture. Some economists say that Retailing is one of the pillars of the economy in India, and some say it is gold mine of Indian economy. In India the unorganized sector comprises of 96.5% while that of organized sector just 3.5% that is mainly in major metropolitan and urban areas. Indian retailing traditionally dominated by a small family run kirana store retailing in India is the second largest untapped market after china .Professional management and strong customer focus characterise organized retailing. India has often been called a nation of shopkeepers. Presumably the reason for this is that, a large number of retail enterprises exist in India. In 2004, there were 12 million such units of which 98% are small family businesses, utilizing only household labour. Organized retailing in India is projected to grow at the rate of 25-30% p.a., is estimated to grow from the US $ 330 billion in 2007 to US $ 427 billion by 2011 and US $ 637 billion by 2015. The first retailer in India includes Bata, Pantaloon, Bombay Dyeing, Spencers, and Nilgiris & Higginbotham. The current retail scenario is controlled by the likes of Shoppers Stop, Brand Outlets, Big Bazaars, Reliance trendz etc. The opportunities as mentioned are aplenty with close to 15000000 sq.feet of retail space is under construction for various malls & shopping centre across the country. The Indian retail market, which is the fifth largest retail destination globally, has been ranked the 2nd most attractive emerging market for investment after Vietnam in the retail sector by AT Kearneys seventh annual Global Retail Development Index (GDRI), in 2008. The share of retail trade in the countrys gross domestic product (GDP) was between 8-10% in 2007. It is currently 12%, and is likely to reach 22% by 2012.. ALLIANCE BUSINESS SCHOOL Page 21
A McKinsey report 'The rise of Indian Consumer Market', estimates that the Indian consumer market is likely to grow four times by 2025. Commercial real estate services company, CB Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion. RETAIL SECTOR IN INDIA
Organized Retail Sector:After 50 years of unorganized retailing and fragmented Kirana stores, the Indian retail industry has finally begun to move towards modernization, Systematization and consolidation. Today, modernization is the catch phrase and the key to understanding retail in the next decade. There has been a boom in retail trade in India owing to a gradual increase in the disposable incomes of the middle class households, as a result of good performance of IT, Service and Infrastructure sectors. More and more players are entering the retail business in India to
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introduce new formats like malls, supermarkets, discount stores, department stores and even changing the traditional looks of bookstores, chemist shops, and furnishing stores. Organized retail formats prevalent globally Malls Supermarkets Hypermarkets Discount Stores Department Stores Specialty Stores Internet Retailing Convenience Stores Unorganized Retail Sector:The unorganized retail sector basically includes the local Kirana stores, hand cart, the vendors on the pavement (sidewalk) etc. This sector constitutes about 95% of the total retail trade. As 70% of the employment is generated in Agriculture sector, hence this form of retailing is widely seen in those areas and of course to some parts of the urban. There is a lot of hue and cry in the sector for opening of sector for direct investment from the foreign players, but government cannot neglect the interests of small players. One of main reason of not opening this sector to FDI is it may shrink the employment in the unorganized sector and expand that in the organized. The Evolution of retail in India Traditional Formats Established Formats Emerging Formats
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Itinerant Salesman Haats Melas Kiosks
Kirana shops Convenience/Department stores PDS Pan/Beedi shops Post Office
Exclusive retail outlets Hypermarket Malls/Multiplexes Specialty Malls Fast food outlets etc.
The factors responsible for the development of the retail sector in India can be broadly summarized as follows: Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Looking at income classification, the National Council of Applied Economic Research (NCAER) classified approximately 50% of the Indian population as low income in 199495; this has declined to 17.8% in 2006-07. Liberalization of the Indian economy which has led to the opening up of the market for consumer goods has helped the MNC brands like Kellogg, Unilever, Nestle, etc. to make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers. Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. The internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets. About 47% of Indias population is under the age of 25; and this will increase to 55% by 2015. This young population, which is technologysavvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country. As India continues to get strongly integrated with the world economy riding the waves of globalization, the retail sector is bound to take big leaps in the years to come. The Indian retail sector is estimated to have a market size of about $ 180 billion; but the organized sector represents only 3% share of this market. Most of the organized retailing in the country has just started recently, and has been concentrated mainly in the metro cities.
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India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold through the super markets and departmental stores. A similar phenomenon has swept through all other Asian countries. Organized retailing in India has a huge scope because of the vast market and the growing consciousness of the consumer about product quality and services. A study conducted by Fitch, expects the organized retail industry to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail-specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010. A McKinsey report on India says organized retailing would increase the efficiency and productivity of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share of employment of retail in India is low, even when compared to Brazil (14%), and Poland (12%). Total Private Consumption Expenditure in India is 375 Billion USD Retail Sale is 205 Billion USD Organized Retail is 6.2 Billion USD (3%) & Retailing is 35%of GDP.
KEY PLAYERS Player Tata Group Store brands (products) Landmark(books and music), Croma(multi-brand electronics), World of Titan (watches), Tanishq(jewellery), Titan Eye+ (eye wear),Westside (lifestyle retail store), Star Bazaar (hypermarket chain), Fashion Yatra(family fashion Future Group store) Central (shopping mall), Big Bazaar (hypermarket), Pantaloons (fashion outlet), Blue Sky (sunglasses), Brand Factory (multi-brand readymade garment), KB's Fair Price (essential products), Navaras(jewellery), Planet Store (multibrand sports and lifestyle speciality retail), aLL(fashion ALLIANCE BUSINESS SCHOOL Page 25
garments), Ethnicity (Indian ethnic wear), Home Town (home needs), eZone(electronics), Furniture Bazaar (home furniture), Electronics Bazaar (under Big Bazaar, electronics stores), Home Bazaar (satellite version of Home Town), Collection I (lifestyle furniture), Gen M & One Mobile (mobile phones), M-Port (electronics), Shoe Factory Reliance Group (footwear) and Depot (books and music) Reliance Fresh (neighbourhood store), Reliance Mart (supermarket), Reliance Super (mini-mart), Reliance Digital (consumer durables and information technology), Reliance Trends (apparel and accessories), Reliance Wellness (health, wellness and beauty), iStore (Apple products), Reliance Footprint (footwear), Reliance Jewels (jewellery), Reliance TimeOut (books, music and entertainment), Reliance AutoZone (automotive products and services) and Reliance Living (home ware, furniture, modular kitchensand RPG Group furnishings) Spencers(multi-format retail store), Music World ( music and home video store) and Books & Beyond (book store)
K RahejaGroup
Shopper's Stop (clothing, accessories, fragrances, cosmetics, footwear and home furnishing store), Crossword (book store), InorbitMall (fashion, lifestyle, food and entertainment) and Hyper City (hypermarket)
Landmark Group
Lifestyle (garments and accessories),Home Centre (household and furniture, garment and retail), Splash (high street fashion brand) and Funcity(family entertainment brands)
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BhartiGroup
Field Fresh (fresh and processed fruits and vegetables multiple-format store)
Mahindra Group
Mom and Me (infant and maternity care)
AdityaBirla Group
More (supermarket and hypermarket formats,earlier known as Trinethra)
Vishal Retail
Vishal Mega Mart (multiproduct stores)
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COMPANY OVERVIEW RELIANCE GROUP
The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 27 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain.
The Group's activities span exploration and production of oil and gas, petroleum refining ALLIANCE BUSINESS SCHOOL Page 28
and marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre producer in the world and among the top five to ten producers in the world in major petrochemical products. The Group exports products in excess of US$ 15 billion to more than 100 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail limited) and Reliance Industrial Infrastructure Limited.
Founder Chairman
"Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth."
Shri Dhirubhai H. Ambani Founder Chairman Reliance Group December 28, 1932 - July 6, 2002
PRODUCTS AND BRANDS:The Company expanded into textiles in 1975. Since its initial public offering in 1977, the Company has expanded rapidly and integrated backwards into other industry sectors, most notably the production of petrochemicals and the refining of crude oil. The Company now has operations that span from the exploration and production of oil and gas to the manufacture of petroleum products, polyester products, polyester intermediates, plastics, polymer ALLIANCE BUSINESS SCHOOL Page 29
intermediates, chemicals and synthetic textiles and fabrics. The Company from time to time seeks to further diversify into other industries. In January 2006, the Company approved a plan to establish a retail business through a subsidiary Reliance Retail Limited that will operate, among other things, supermarkets, convenience stores and specialty stores across India. The Company approved initial expenditure of US$ 750 million to fund the initial stages of this plan. The Company's subsidiary Reliance Jamnagar Infrastructure Limited is currently establishing infrastructure facilities such as roads and buildings for the proposed Special Economic Zone (SEZ) at Jamnagar, Gujarat. The Company's major products and brands, from oil and gas to textiles are tightly integrated and benefit from synergies across the Company. Central to the Company's operations is its vertical backward integration strategy; raw materials such as PTA, MEG, ethylene, propylene and normal paraffin that were previously imported at a higher cost and subject to import duties are now sourced from within the Company. This has had a positive effect on the Company's operating margins and interest costs and decreased the Company's exposure to the cyclicality of markets and raw material prices. The Company believes that this strategy is also important in maintaining a domestic market leadership position in its major product lines and in providing a competitive advantage. The Company's operations can be classified into four segments namely: Petroleum Refining and Marketing business Petrochemicals business Oil and Gas Exploration & Production business Others The Company's refinery at Jamnagar is the third largest refinery at a single location in the world. The Company is: The world's largest producer of Polyester Fibre and Yarn 4th largest producer of Paraxylene (PX) and Purified Terepthalic Acid (PTA) 6th largest producer of Mono Ethylene Glycol (MEG) Page 30
7th largest producer of Polypropylene (PP)
FOOD Food retail in India Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per cent and has set the growth agenda for modern trade formats. Food accounts for the largest share of consumer spending. Food and food products account for about 53 per cent of the value of final private consumption. Reliance Retail looks forward to be the driver of growth in this industry with a committed team. Targets:

Capture dominant market share of Indian Foods retail industry A Pan-India footprint in more than 800 cities and towns Cater to both urban and rural populations Reliance Foods team strives to continuously delight the customers. This is the first small step in their attempt to build and forge strong and enduring bonds with millions of farmers and transform their relationship with customers to a new level. The organization believes in giving customers quality food items, fruits and vegetables at affordable price at Reliance Fresh stores.
FOOTWEAR ALLIANCE BUSINESS SCHOOL Page 31
Envisioned by a clear goal of becoming a destination store for footwear Reliance industries plans to Stamp its Presence across 42 cities already opened over 80 independent stores, which will ensure them capturing maximum market share in the 18,000cr footwear industry. Armed with a mission of creating a destination Shoe Stop these stores will be stocked with National / International and Private Label products that will provide Cutting Edge Retail and Shopping experience to the Individual and Family. Products sourced from Brazil, China, Indonesia, Malaysia, Vietnam, Thailand to name a few countries will be on display and sold across all stores. These products are Value led, meant to create novelty and developed to be category killers in footwear, accessories and luggage in all segments and for all occasions. Creating this will be Portland Design Specialists in Design and Providing Solutions for a meaningful Customer Experience. All this will be provided though a State of the Art Design Studio which is being created to have an in-built Design / CAD Room, Product Development Area, Mock Display Room, Testing Laboratory, Range Presentation Area, Reprographics and Sample Storage Area. APPAREL As the glaring gaps in the market today remain unattended, it gives Reliance the ideal opportunity to step in and revolutionize the shopping environment in the country. The challenge is to transform the Indian consumers lifestyle and the way our people shop. By offering exciting, fashionable and extreme value products of international caliber they want to capture a significant share of consumer spending more on clothing and luggage. They plan to offer extreme value to the customer by weaving together competitive prices with an irresistible line, Where the customer would have the luxury of shopping from a diverse product range in an up market ambience. They will be focusing at offering affordable fashion with superior quality fabrics, as demographic figures of a youthful nation (62% are under 30) present an indisputable opportunity. They will also be looking at premium inhouse brands to build a strong business in their departmental and fast fashion apparel specialty and luggage stores. To be a part of Indias globalization, they plan to tie up with big International Brands.
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MEMBERSHIP FINANCE AND TRAVEL:Membership program: They plan to have 100 million customers out of which it is expected that 50 million will be membership customers - who will have access to the benefits of the loyalty program under Reliance One. Payments: To improve the customer experience and to enable cashless payments by customers it is proposed to introduce several payment options that can be used in all the store formats. The services offered are, Closed Loop Store Cards (Prepaid, Gift & Credit), Credit Cards, Debit Cards, ATM Availability, Mobile and Internet Payment Options etc. Lending: As the Indian consumer becomes increasingly aware and demanding, they will need access to easy credit to meet their requirements. It is expected that a significant percentage of Reliance Retail customers will use lending products both in the Urban and Rural areas. The services offered are Consumer Finance, SME Finance, and Rural Hub Finance. Insurance and Investment: Reliance Retail will play the role of a broker to service the needs of its customers by distributing a whole range of Insurance and Investment products. The intention is to give them choice and impartial advice. The services offered are Life Insurance, General Insurance and various Investment Products. Travel Services: Reliance Retail proposes to offer Travel Services to its customers covering a range of offerings at unbeatable value owning to the scale of distribution envisaged. Services offered are Travel packages for individuals, corporate clients and family holidays, FOREX, Other Foreign Travel linked products, Travel Insurance, Ticketing and Hotel Bookings (both Domestic & International.
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AUTOMOTIVE The team aims to participate in the vehicle ownership experience of Reliance Retail customers & constantly keep on creating value & retaining value. To deliver this, the organization will be retailing automotive products & accessories and setting up world class service facilities catering to two wheelers & passenger cars. India today boasts of a population of 9 million cars & 42 million two wheelers. Despite the burgeoning vehicle population, service & maintenance for these vehicles still remains a problem. It is with this underserved market that Reliance Retail decided to set its foot towards creation of a world class auto care chain, in sync with the Reliance Retail. The facility would also be retailing auto products namely- Tyres, tubes, lube, car accessories, e-bikes etc. All these facilities are coming up in Mumbai and Jamnagar shortly. LIFESTYLE At Reliance Retail Lifestyle they promise to offer a world of products and experiences never seen before. They provide world class style and excitement with indulgence and pampering of knowledge and entertainment. They recognize their roles in bringing style, excitement and entertainment to customers lives. So they are offering categories like jewellery, Books, Music, Cosmetics, Fragrances, Watches, Sunglasses, Toys, Sporting Goods, Stationery, Gifts, Flowers, Print Services.
CDIT IT will be a one-stop solution for all technology solutions in the field of consumer electronics, home appliances, information technology and telecommunication. Experience Zones A showcase for technology, every experience zone will have fully functional products, for the customer to have a true touch & feel experience. Experts will guide customers on how to get the best quality experience in their own setups at home. Zones will be for the following, and will be present in stores as per the respective business plans:
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Home Theatres different zones ranging from entry-level to a very premium Car AV installation bays Photography with a Digital Mini-lab Designer Kitchen completely operational kitchen with appliances Gaming area vibrant and happening A collapsible Classroom space for training & contests
experience.
Innovation Pillars:It is a technology-snapshot high point in the store. Customers are drawn to these high points and invited to Discover more". Innovation Pillars will be for the following, and will be present in stores as per the respective business plans Audio Video Imaging Laptop Gaming Mobile, and Home
GLOBAL OPERATIONS:Reliance Industries Limited is the largest and one of the fastest growing private sector companies in India, with business activities encompassing almost all major growth sectors of the Indian economy. The company manufactures and markets a wide range of products with market leadership in almost all its businesses. All of Reliance Group production and services ventures have one common feature global scale operations employing state-of-the-art technology in all fields. The company is truly emerging as a well diversified conglomerate with global
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competence in technology, management and financial capabilities to meet the needs of a rapidly growing Indian market. With domestic market shares ranging from 40-80 per cent, RIL is also ranked among the top 10 producers globally, for all its major product segments. It is one of India's largest business conglomerates with total revenues of Rs 1,00,650 crore (US$ 22.6 billion). It is being speculated within the industry that the ROIs made by RIL in the retail space will far out-shadow its existing core flagship businesses and very soon retail will become the core business for the Mukesh Ambani-controlled Reliance empire.
INDIAN OPERATIONS:RIL intends to invest close to Rs 25,000 crore over the next five years in the retail business. The company plans to establish 4,000 retail outlets across various formats by then, and is eyeing sales of Rs 1,00,000 crore over the 5-year period from the retail business. According to sources, RRL is planning to roll out almost 150 to 200 retail outlets in Mumbai including it hypermarket and consumer durable stores. The company is now looking for potential areas for business in Mumbai and greater Mumbai for the same. Industry experts believe that in Mumbai and Delhi alone, about 15,000 to 20,000 shops have recently been approached by Reliance Retail for their stores. Besides Reliance Fresh, the company also plans to launch larger format stores called Feel Fresh Plus which will be spread over 10,000-15,000 sq ft. The Fresh Plus stores will stock fruit and vegetables as well as apparel, consumer electronics, FMCG items and even medicines. From Hyderabad, these stores will travel to Mumbai and Delhi where Reliance has identified up to 80 locations each. But even as the retail debut kicks off with fruit and vegetables, it seems the company is doing a rethink on whether to get into the larger formats such as hypermarkets and supermarkets. These two formats require over 1 lakh sq ft of space and may not come up at prime city locations. Instead, Reliance is contemplating tapping alterative sites such as the SEZs for opening hypermarket. A targeted sales turnover of Rs 90,000 crore (US$ 20 billion) by 2010 with a planned investment of Rs 30,000 crore over the next five years that's the retail vision of Mukesh Ambani and his RIL retail team. RIL's retail venture seems all set to achieve the status ALLIANCE BUSINESS SCHOOL Page 36
of being the flag-bearer of India Retail Inc, and that too in record time. They are trying to introduce a new format of food and caf Reliance food. They have decided to open 6000 outlets in 784 cities across India in next 3-4 years. Products offered by Reliance Retail limited The various formats run by Reliance Retail are as follows:1. 2. 3. 4.
5.
Reliance Mart. Reliance Trends. Reliance Footprints. Reliance Wellness. Reliance Jewelers. Reliance Time-Out. Reliance Super. Reliance AutoZone. Reliance Fresh.
6. 7. 8. 9.
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So by this we can see how Reliance Retail is creating a strong base or foundation in the Indian Retail field. Its trying to make itself available to every needs and wants of present customers. Reliance retail with its huge and mammoth brand name has made its presence felt in the retail field already providing tough competition to the existing big sized retailers. With its Reliance Mart it has come up with so huge hyper market format to cater the needs of the customers making the entire product needed available at one roof to the customer.
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For the first time in organized retail, Reliance Trends is introducing a Made to Measure tailoring service, offering customized fits to all the customers buying fabrics from the store at prices comparable to their neighbourhood tailors. As we know Reliance Mart is a hyper market format in order to cater the needs. It is well on track to democratize fashion and make it attainable to the masses as we know the present trend of consumers are getting used to mall shopping. So this hyper market is ready to provide them with what they want.
Reliance Fresh is the retail chain division of Reliance Industries of India which is headed by Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RILs Rs 25,000 crore venture and it plans to add more stores across different cities and eventually have a pan-India footprint in this year. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for nonvegetarian products. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs.
According to Deccan Herald, the company is planning on opening new stores with storesize varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples, FMCG products and dairy products. Each store is said to be within a radius of 1-2 km of each other, in relation to the concept of a neighbour store. However, this is only the entry ALLIANCE BUSINESS SCHOOL Page 39
roll-out that the company has planned. Bangalore is said to have 40 stores in all by the end of the year. In a dramatic change due circumstances prevailing in UP, West Bengal and Orissa, It was mentioned recently in News Dailies that, Reliance Retail is moving out stocking. Reliance Retail has decided to minimize its exposure in the fruit and vegetable business and position Reliance Fresh as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT, wellness and auto accessories, with food accounting for the bulk of the business. The company may not stock fruit and vegetables in some states, Orissa being one of them.
Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly due to political reasons, and partly due to its inability to create a robust supply chain. This is quite different from what the firm had originally planned. When the first Reliance Fresh store opened in Hyderabad some years back, not only did the company said the stores main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its farm-to-fork theory. The idea the company spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way. Reliance may exit some businesses if the business does not increase by March 2008. Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends, Reliance Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various formats that Reliance has rolled out. In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of Apple Specialty Stores branded as iStore, starting with Bangalore.
ABOUT RELIANCE FRESH: ALLIANCE BUSINESS SCHOOL Page 40
Reliance Fresh
TYPE
Convenient Stores
Founded Headquarters Key people Industry Website
30Th October,2006 Mumbai, India Mukesh Ambani, CEO Retail www.ril.com
VISION OF THE COMPANY To be the most admired and successful organized Retail Company in India that materially enhances the quality of life of every Indian. We will achieve this by: Providing unprecedented affordability, quality and choice in global products and services
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Being the partner of choice in creating prosperity for Indian farmers and other producers of goods and services Unleashing the power of the Indian workforce through the generation of new & attractive employment opportunities, & creating an empowered & rewarding workplace
MISSION OF THE COMPANY Leap frog the way an Indian Consumer shops Be a trusted partner who provide the best products & services the world has to offer, at the best prices, in the most convenient setting. Create an efficient and transparent global supply chain by the creation and optimal utilization of world-class infrastructure and international partnerships, thus creating more value for our customers, suppliers, partners and stake holders. Bring prosperity to millions of Indian producers, especially our farmers, by providing the most attractive returns for their efforts. Be a capable and dependable partner to them right through their creation process and help them become more successful. Unleash the initiative, creativity & energy of Indian workforce through creation of new jobs, & provide our employees a supportive, rewarding environment to work and grow. Financially reward our shareholders on a sustained basis
Organizational structure
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Organizations are economic and social entities in which number of persons performs multifarious tasks in order to attain common goals. Once a group of people has established an organization to accomplish shared goals, organizational structure evolves to increase the effectiveness of the organizations control of the activities necessary to achieve its goals. Organizational structure is the formal system of task & authority relationships that control how people co-ordinate their actions & use resources to achieve organizations goals. The principle purpose of organizational structure is one of control: to control the means used to motive people to achieve these goals. For any organization, an appropriate structure facilitates effective responses to problem of co-ordination & motivation --- problems that can arise for any number of environmental, technological or human resources. As organizations grow & differentiate, the structure likewise evolves. Organizational structure can be managed & changed through the process of organization design Organization structures can be designed on the basis of departmentalization & relationships. Departmentalization is the process of dividing work of an organization into various units or departments. Relationships are the process by which organization brings relationships among employees at different levels, materials, money & machines. Types of Organizational Structures 1. Line Design 2. Functional Design 3. Line & Staff Design 4. Committee Design 5. Hierarchical Design
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Among these the Reliance Retail Limited is having Hierarchical organizational structure
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Operations Department This department is wholly concerned with the store operations which involve the following process:BUY MOVE SELL
BUY- The company purchases the goods from the Vendors ( Farmers, Distributers &
Wholesalers) which involves the Category, Marketing & commercial managers
MOVE- This phase is concerned with the Designation & Logistics (D&L) & Supply
Chain Management (SCM). The goods either move from the vendors directly to the stores or through the Distribution Centre (DC). The distribution centers are located at Nelmangla & Belgum in Karnataka. This is dealt in by the Replenishment officials in which the purchased goods move in the following process
VENDOR Or (DSD) VENDOR
DC
STORE
STORE
In case of return of goods the opposite process follows i.e. STORE DC VENDOR
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During the movement of goods from the vendors, several checking are undertaken like the Quality check, Quantity check, Stock check, Cost & Price check. The Warehousing activities can be classified as the Inward & Outward activities, which are as follows:- Inward Activities Storage locations Storage bins First in First out (FIFO) Stock up Outward Activities Picking Sorting & Grading Check for damages & dump Docking, load Dispatching Flow through Transport o Route plans o Trucks o Timeless
SELL The operations related to selling are listed as follows:
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Planogram A Planogram is the systematic arrangement of different products of different categories in different sections of the store so that it will be convenient for the customers to get the products as well as will be beneficial for the store. Planogram for different stores is different because the store size and shape varies constantly from place to place. In the planogram there are different arrangements for different categories of products. So the planogram for non-food items is different from that of Beverages. Stocking or replenishment Order the goods when the stock is about to be finished, so that customers get the things whenever they want Cleanliness Maintain good ambience and keep the store clean is another important process. Customer Service Customer is the king, so in order to gain more customers the customer service is made efficient. This gives the company a competitive edge in the market. Billing and Checkout - The CSAs are trained to carry on the billing process faster & with minimum mistakes, which results in low waiting time for customers & greater customer satisfaction. After billing the bills are rechecked at the exit by the security & thereby recorded in the log book, which results in minimizing frauds & future reference. Manpower management managing all level of employees effectively is also a complementary process
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Reliance freshs products range includes Fresh fruits. Vegetables, Chocolates Confectionaries, Cold drinks, Freeze items like butter, ice-cream etc House hold products, Toilet items, Spices and dry food & Office stationeries.
Reliance fresh supply chain model
A supply chain is a network of facilities and distribution options that performs the functions of procurement of materials, transformation of these materials into intermediate and finished products, and the distribution of these finished products to customers. Supply chains exist in both service and manufacturing organizations, although the complexity of the chain may vary greatly from industry to industry and firm to firm.
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From the above pictorial representation of supply chain management of reliance fresh it is clear that raw material is procured from vendors, transformed into finished goods in a single step, and then transported to distribution centres, and ultimately, customers. Realistic supply chains have multiple end products with shared components, facilities and capacities. The flow of materials is not always along an network, various modes of transportation may be considered, and the bill of materials for the end items may be both deep and large.
Procurement strategy for fruits and vegetables Reliance is the largest single big retail buyer of fresh vegetables and fruits in Karnataka. Reliance Fresh has an aim to procure vegetables and other farm products directly from farmers. By cutting out middlemen, their (10%) commission, loading, unloading and transportation charges are reduced. Thus they follow a philosophy to pay farmers more and sell fresh vegetables at ever lower prices to urban customers. They also implement contract farming to ensure stable supplies of fruits, vegetables and dairy products
Produced fruits and vegetables from farmers are collected at the Collection Centres (CC). The CC for the Koramangala-2store is at a place called Neelasandra. A preliminary Quality Check is done here.
From the CC, the goods are sent to Distribution Centres (DC), where they are sorted and graded. Here, all data is entered into the SAP system for easy tracking. Every day, the Store Manager of each store raises a purchase order for the next days requirements based on estimated demand. The total order for all the stores in an area is collected by the Area/Cluster Manager.
Based on the availability of goods, the ordered items are delivered to each store by the Area Manager daily.
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Procurement strategy for non fruits and vegetables
Supply chain for non fruits and vegetables Items directly collected from manufacturer or National level Distributor and delivered to the local DC. Each store has a Minimum Base Quantity (reorder level) for all items. Whenever the stock goes lesser than the MBQ, the SAP system automatically reorders.
SWOT ANALYSIS:Strengths This is the only super market with in 5 km of Sanjay Nagar store. It has a strong presence among young people who are brand conscious. Due to the technological advancement of Reliance they have most modern software SAP which can predict the demand on the basis of purchases. The shop also sells fruits, vegetables, staples, stationeries and other all house hold items. Quality is maintained with utmost care, fruits and vegetables are refrigerated. Since the store is located in the heart of the city it has got good brand name, good employee base. They implement contract farming to ensure the stable supply of fruits, vegetables & dairy products. ALLIANCE BUSINESS SCHOOL Page 52
They have a Network of 1600 channels in villages to procure fruits & vegetables. Private products are been sold under their name by enclosing (Reliance Select) label. Weakness Inability to purchase items based on local demand has been an issue, as most items are delivered on the basis of SAP output. Fruits and vegetables are not always fresh. There is no proper parking facility for two & four wheelers. Certain items like local snacks are sold at a price determined by the district office is always found to be more when compared to that of a typical neighbourhood bakery. Opportunities They follow farm to fork model which eliminates middle men, their (10%) commission, loading, unloading and transportation charges. They follow a philosophy to pay farmers more and sell fresh fruits & vegetables at ever low prices to urban customers. In the next 5 years 1 million farmers are going to get benefited by this farm to fork model. They generate steady source of income at the individual farmer level. Some students and staff members of nearby colleges and companies are a group of brand conscious people, and their demand cannot be satisfied by other shops in the area. So they are compelled to come to reliance fresh for all their purchases. Threats Many international retail giants like Carrefour, Metro AG, Tesco are planning to enter in Indian retail market operating costs are too high, even Bharti-Wallmart is trying to implement farm to fork model which it would be a big competitor to Reliance Fresh. The shop has no visibility as it is in a sub road. Also there is no board on the road for the people to find it. Another problem is the presence of socialist and communist parties in the region. There is lot of mass organized agitation and rallies against shops run by corporate, since people perceive it as a Bourgeois attempt to small shop keepers. So, the operations of shop may be disrupted or even the shop could be in a danger.
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PROJECT PROFILE
OBJECTIVES During this project my objectives were: My main objective was to find out what are the issues in supply chain of F & V and also to find out what are the steps taken to solve those issues.
To find out how indenting process is carried out for city like Bangalore. To understand the issues faced by the drivers hindering their job routines in reliance fresh supply chain.
Finding whether the indented stock is received at stores in time. To check what are the stock levels maintained at stores. To understand the daily routine of drivers in reliance fresh supply chain. To find out how many customers know about the store, whether they are aware of the price, products, and services available at the store. At the same time I wanted to increase the awareness.
To find out whether customers are satisfied with the products and services available at the store and if they have any additional requirement.
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METHODOLOGY My objective was to find out whether there are any issues in supply chain and to maintain inventory levels at store. Van drivers play an important role in supply chain of any company, so I did a research in finding out the issues faced by drivers as part of my project. Research procedure Research design is the conceptual structure in which research is conducted. It constitutes the blue print for the collection, measurement and analysis of data. A research design is a basic plan, which guides the data collection and analysis of the phases of the project. It is the framework, which specifies the type of information to collect the source of data collection procedure. Data was collected from primary and secondary sources. Types of research design:1. Descriptive Research: Descriptive research embraces a large proportion of marketing research. The purpose is to provide an accurate snapshot of some aspect of the market environment. In descriptive research, hypothesis often will exist, but them tentative and speculative. 2. Exploratory Research: Exploratory research is used when one is seeking insights into the general nature of the problem, the possible decision priorities. alternatives, and to establish research
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3. Causal Research: When it is necessary to show that one variable Causes or determines the values of other variables, a casual research approach must be used. Since data collection method is from surveys.
Type of research Descriptive research is used for the analysis of the data. Types and collection of data used Basically there are two types of data which are used Primary data: Data is collected through personal interviews using structured Questionnaire. Various sources of data are A. Observation B. Interview C. Questionnaires Interview: Interview is one of the chief means of collecting data in research process. Interview may be defined as a systematic conversation initiated for a specific purpose and focus on certain content areas. Secondary Data: The data once collected by once person become the secondary data if used by another person. Sources of Secondary Data: The various sources of data are as follows: 1. 2. 3. 4. 5. 6. Bibliography Directories Televisions Newspapers Journals Websites
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The Secondary data like information of existing customers, information about company has been taken from company website, companys yearly chronicles and employees of the company. Sampling technique Sampling technique is a technique in which instead of every unit of the universe, only a part of the universe is steady and conclusion are drawn on that basis for the entire universe. The random sampling was used to collect the data for the study. Random sampling refers to the sampling technique in which each and every item of the population is given an equal chance of being included in the sample. The selection is therefore free from personal bias because the investigator does not exercise her/his discretion or preference in the choice of items. Since the selection of items in the sample depends entirely on chance. This method is also known as method of chance selection Sample size used is 30. RESEARCH DESIGN The type of Research Design will be Descriptive The types of Primary Data collection procedures that would probably be used. Population: Drivers etc. Process Random sampling. Method of data collection Typed Questionnaire Statistical Tools Used: For the purpose of data analysis, Percentage Method is used for calculation and result was interpreted. No. of Respondents Percentage = --------------------------- 100 Total Respondents
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OBSERVATION & ANALYSIS
Research in retail is very essential, as customer preferences and choices are dynamic and change frequently, the retail company needs to understand these before redesigning its processes for enhancing business and many more. Since customer interaction takes place at the store and near store, there is a big opportunity to gather first hand information and feedback from customers through research and survey. Research is carried out at the retail level for concept testing, business feasibility analysis, identification of the right product mix, target customer and market potential. The major objectives of analysis of data are:1. To evaluate and enhance data quality 2. Describe the study population and its relationship 3. Examine effects of other relevant factors 4. Seek further insight into the relationship observed or not observed 5. Evaluate impact and importance
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PART 1: Age Group of drivers:No Of Respondents 24 4 2
Age group 20-30 31-40 41-50
% of Respondents 80% 13% 7%
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Source:
Primary Data
Inference: From the above table and pie chart we can infer that out of all respondents who answerd the questionnaire, 80% people fall in the age group 20-30 years, 13% people fall in the age group 31-40years, 7% people fall in the age group 41-50 years. From the above analysis, it is observed that majority of the drivers recruited by reliance are in the age group of 20-30. So reliance considers age group as a major factor in case of drivers. Habitat of Drivers:
Habits Smoking Alcohol Gutka None
Drivers 14 10 4 2
% of Drivers 47% 33% 13% 7%
Source:
Primary Data Page 60
Inference: From the above table and pie chart we can infer that out of all respondents who answerd the questionnaire, 47% people had habit of smoking, 33% people had habit of consuming alcohol, 13% people had habit of consuming gutka and 7% people dont consume any of these. From the above analysis, it is observed that majority of the drivers had habit of smoking and drinking which should be taken care of.
PART 2: Target Customers- Age Wise:This Table reveals about age group of customers at Richmond, Bangalore. Table-1 Age Group of Respondents Age Group 18-25 26-35 36-45 46-55 56+ No. of Respondents 100 185 56 37 22 % of Respondents 25% 46% 14% 9% 6%
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Pie Chart: 1 Source: Primary Data Inference: From the Table-1 and Pie chart-1 depicted above, Out of 400 respondents who answerd the questionnaire, 25% people fall in the age group 18-25 years, 46% people fall in the age group 26-35 years,14% people fall in the age group 36-45 years, 9% people fall in the age group 46-55 years and 6% people fall in the age group 56+ years. From the above analysis, it is observed that majority of the residents fall in the age group 18-25 and 26-35. Target Customer- Education Wise This table explains about education level of customers of Richmond, Bangalore. Table-2 ALLIANCE BUSINESS SCHOOL Page 62
Education Level of Respondents Education Level No. of Respondents % of Respondents S.S.C. 3 1% Inter 14 4% Graduate 224 56% Post Graduate 147 37% Others 12 3%
Pie Chart-2 Source: Primary Data Inference: From the table, pie chart depicted above, Out of 400 respondents who answered the questionnaire, 1% people belong to S.S.C. category education level, 4% people belong to Inter category education level, 56% people to Graduate category education level, 37% people belong to Post Graduate category education level and 3% people belong to others category education level. Occupation of Respondents This table describes the occupation of respondents who gave the answer of questionnaire and explain class of customers of Richmond, Bangalore. Table-3 ALLIANCE BUSINESS SCHOOL Page 63
Occupations Student House Wife Service Business Others
Occupation of Respondents No. of Respondents % of Respondents 28 7% 172 43% 86 22% 63 16% 51 13%
Pie Chart-3
Source: Primary Data Inference: From the table, pie chart depicted above, On this basis of 400 respondents who answered the questionnaire, 22% people belong to Service category, 16% people belong to Business category, 7% belong to Student category, 43% people belong to House Wife category and 13% people belong to Others category. Monthly Income of Respondents ALLIANCE BUSINESS SCHOOL Page 64
This table states about the monthly income level of Respondents who gave the answer of this survey questionnaire and belong to Richmond, Bangalore.& so taken by me as a sample of the entire population for the analysis.
Monthly Income of Respondents Monthly Income No. of Respondents < 5k 68 5k-10k 78 10k-20k 149 > 20k 105
% of Respondents 17% 20% 37% 26%
Pie Chart- 4 Source: - Primary Data Inference: From the Table-4 Pie Chart-4 depicted above, Out of 400 respondents who answered the questionnaire, 17% people belong less than 5000 monthly income category, 20% people belong to 5000-10,000 monthly income category, 37% people belong 10,000-20,000 monthly income category and 26% people belong to more than 20,000 monthly income category. ALLIANCE BUSINESS SCHOOL Page 65
Regular shopping place of Respondents This question reveals about preference of Respondents regarding retail stores where they shop regularly. Table-5 Regular Shopping Place of Respondents Shopping Place No. of Respondents % of Respondents Supermarket's 284 71% Kirana Stores 45 11% Others 5 1% Supermarket's & Kirana Stores 66 17%
Pie Chart-5 Source:- Primary Data Inference:- From the Table-5, Bar Graph-5 depicted above, Out of 400 respondents who answered the questionnaire, 71% people go to Supermarkets for shopping, 17% people shop at Supermarkets and Kirana Stores, 11% people shop at Kirana Stores and 1% people shop at others. Perception of Customers about visiting to supermarket
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This table reveals the opinion of customers for visiting a Supermarket. It means the convenience of the customer to visit a supermarket based on the different factors like better price, accessibility, availability of variety of products, parking facility, store ambience (it determined by store layout, soothing music, tempting visual display of the products with self selection facility, etc.), customer service, range of items, product quality, value for money, offers and discounts, after sales service. Table-6 Perception of customers for visiting Supermarket % of Very % of VG Poor % of Avg. % of Good Respons Response Response Response e 0% 29% 45% 12% 0% 1% 1% 0% 1% 0% 6% 37% 43% 3% 23% 7% 47% 35% 33% 57% 57% 44% 37% 13% 6% 28% 7% 39% % of No Respons e 11% 11% 11% 11% 12% 11% 11%
Outlook Better Price Good Quality of Products Variety of Product to choose Parking Facilities Convenience or Opening Hours Product Knowledge of Employee Store Comfortable to shop-in
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Diag-6 Source:- Primary Data Inference:From the Table-6, Column Chart-6 depicted above, Out of 400 respondents who answered the questionnaire, 44.75% said good about pricing of products, 28.5% said average, 12% said very good and none said very poor regarding Better Price in reasons for visiting a Supermarket. What do you mostly shop at reliance fresh? TYPE %OF RESPONDENTS F&V 35% FOOD ITEMS 11.25% COSMETICS 5% ALL PRODUCTS 48.75% Table -7
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Pie chart-7 SOURCE Primary data Data collected for project from 400 responded in which 195 customer are like to purchase all product and 140 are like to purchase vegetables and 45 are like to purchase Food Items 20 likely to purchase cosmetic product of total respondent InterpretationIn total respondent we analyzed that most of the customer are like to purchase all product in the store. Company should try to retain the customer and should increase the variety of cosmetic products & grocery. SEC Category of Family at Richmond, Bangalore. This table explains about SEC (Socio Economic Class) category of family at Richmond, Bangalore.. This is done with the help of Area Mapping technique.
Table 8 ALLIANCE BUSINESS SCHOOL Page 69
SEC Category of Family Family class % of Family SEC A + 5.40% SEC A 38.60% SEC B 52% SEC C 4%
Pie Chart-8 Source: Primary Data Inference :- From the Table-8, Column Chart-8 depicted above Richmond is developing area of Bangalore and it consists of all class of family. In this area 5.4% families belong to Socio Economy Class (SEC) A+, 38.6% families belong to SEC A, 52% families belong to SEC B and 4% families belong to SEC C. All this result has been found with the help of Area Mapping technique and all these data are approximate. By all these data we can find that this area is having good market opportunities retail Supermarket. Closest competitor of reliance fresh When I asked the customers who they think is the closest competitor of reliance fresh I got to know that majority of the customers almost of 39% think that Spencer is the closest competitor followed by Big Bazaar 28% ,food bazaar 15% .a very few respondents supported spinach & more 1% each. ALLIANCE BUSINESS SCHOOL Page 70
Some of them voted for two like 3% voted for food bazaar and spencer.2% voted for big bazaar & spencer.1% of them voted for all three of food Bazaar, Big bazaar& Spence, but some 6% of respondents couldnt answer as they were not aware of other stores.
pie chart 9
Category Contribution to Sales F&V contributes 50% of revenue to net sales followed by staples which is of 17%. So much importance should be given to it in maintaining quality and freshness. Category Contribution
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Fresh Fruits & Vegetable Food & Beverages Services Beverages Dairy Confectionary & Snacks Processed Food Staples Others
57% 5% 5% 9% 3% 5% 17% 4%
PART 3:
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Product Fill rate: - It is the fraction of product demand that is satisfied from product in inventory. Fill rate should be measured over specified amounts of demand rather than time. Thus it is more appropriate to measure fill rate over every million units of demand rather than every month. Fill rate is equivalent to the probability that product demand is supplied from available inventory. Cycle service level: - It is the fraction of replenishment cycle that ends with all the customer demand being met. A replenishment cycle is the interval between two successive replenishment deliveries. The CSL is equal to the probability of not having a stock out in a replenishment cycles. Order Fill rate: - It is the fraction of orders that are filled from available inventory. Order fill rate should also be measured over a specified number of orders rather that time. In a multiproduct scenario, an order is filled from inventory only if all the products in the order can be supplied from available inventory. Replenishment Policies: A replenishment policies consists of decisions regarding when to reorder and how much to reorder
1. Continuous review: Inventory is continuously tracked and an order for a lot size Q is
placed when the inventory declines to the reorder point (ROP). Periodic review: - Inventory status is checked at regular periodic intervals and an order is placed to raise the inventory level to a specified threshold
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The basic Key performance Indicators of a store:1. Sales compared to budget/target: 2. Actual sales divided by budget/target sales 3. Sales compared to last year (or any other period): 4. Actual sales for a given period divided by actual sales for the period you want to compare to 5. Sales per Square Foot: 6. Actual sales for a given period (usually a month or a year) divided by the total floor area (sq.ft) of the store. There are variants of this indicator in terms of sales per square foot of merchandisable area of choice (like walls and display units.) 7. Wage Cost: 8. Actual wage paid for a given period divided by actual sales achieved for the same period. 9. Average Sale per Customer/Transaction:
Total sale for a given period divided by the number of customers or transactions for the same period 10. Units per Customer/Transaction: 11. Total number of units sold in a given period divided by the number of customers or transaction for the same period 12. Conversion rate: 13. The number of transactions in a given period divided by the total number of customers who entered the store during the same period 14. Sales per Hour (for store or associate) selling hours only: 15. Actual sales $ for the store divided by the number of selling hours during the same period 16. Selling hours are used here rather than total labour hours 17. Sales per Hour (for store or associate) total labour hours: 18. Actual sales $ for the store divided by the number of labour hours used during the same period 19. Time Spent in the Store: ALLIANCE BUSINESS SCHOOL Page 75
20. Average time spent by customers in the store can be measured through sophisticated techniques utilizing RFID and wireless technologies or manually. Reason for this measurement: There is a direct correlation between time customers spend in a store and how much they buy.
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ANALYSIS AND FINDINGS 33% of the drivers are alcoholic and 47% are addicted to smoking. The drivers without any bad habits are only 7%, which is the major drawback in the supply chain network. 43% are house wives and are regular visitors of reliance and next highest visitors will be the people working in service sector. People with income 10k-20k, are 37% where IT workers are major frequent visitors of reliance retail. People who visits supermarkets are 71%, shows very large population in cities are frequent visitors of super markets. Consumer life style and spending patterns are changing, and more and more customers are visiting supermarkets. Reliance recruits most of the drivers who have enough experience in driving, which helps them to maintain sustainable supply chain transportation.
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RECOMMENDATIONS
Reliance has its brand name in every field from textiles to retails. It is not that it is losing its fame from above discussed observations. Those are few problems that are faced by the Reliance Fresh that could be solved by proper steps. Few recommendations that I suggest are as follows. Customers are the key target for any retail store. So their comfortable is the key role to be achieved. Greater the customers feel comfortable, more the time they used to visit. There is a complaint register at customer service desk where the customers feels hesitate to write as they believe it as wastage of time. Hence , the manager should take immediate action instead of convincing at that moment CSA has major responsibility in the store as they attend customer service, arrange product according to the planogram and they bill the customers product. Hence the CSA needs proper training. In spite of making them to work from the day one, he can be given lecture about his roles and responsibility and trained properly One of the major complaints at Reliance Fresh is about the long queue at the counter. The customer having one product to be billed is standing in the long queue. So the store can commence a counter particularly for minimum number of products throughout the day. The CSA at the counter has the responsibility to maintain cleanliness of the rack assigned to them. They have dual responsibility. Thus more CSA has to be appointed and they has to be assigned single responsibility and the work can be rotated daily Planogram should not be changed as the regular customer gets confused about the position of the products. And the store manager can initiate the display of the product availability at the beginning and end of the every rack so that customer need not search for CSA to help them. This reduces their purchasing time and reduces the burden of CSA. It makes smooth functioning of operation
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Any problems related to aesthetic atmospheric condition, the problem have to be noted and rectified as soon as possible. Air conditioner is must for fruits and vegetables. Hence, a regular check at regular interval can be done
The vegetables have to be arrived properly at time. Otherwise the customer will be dissatisfied. The manager has to make arrangements such that the goods from vehicle to be arrived on time. Or he can make necessary action to remedy the problem
Reliance fresh has its brand name for its fresh and good quality fruits and vegetable. So the goods procured should be of good quality. Whenever there arise a quality problem, fresh can go for checking at DC about the conditions of the F&V goods. If the quality problem arise from contract farmer, the fresh should go for alternative solution within a short period as there are lots of suppliers are available ready to negotiate with Reliance The recommendation mentioned above may add extra value in the enhancement of the
smooth operations of the store. However Reliance is processing on their issues regularly and has taken several steps to maintain proper customer service, good quality of products and for proper store operation and still finding more efficient way for better operation.
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CONCLUSION
India is now turning to be a boon for retail industries. Past few years, real estate had been an established business in India. Now the trend is going to change to retail industries. The retail has beaten the real estate over past few years. This has resulted in the opening of retailers like Big Bazaar, Mega Mart, Spencer, Reliance Fresh etc in almost all the cities with minimum outlet of 4 stores in metropolitan cities. The reliance fresh faces a great challenge from all of its competitors. The study at this condition gave a great experience. It is required for the company to be aware of its rivalry habitually to compete in the market. The observation helps in understanding the strategy behind the indenting and procuring process. IT maintains a key role in operation of the store. Instead old paper documentation, Reliance uses SAP for all documentation from stock available to dump measurement. Reliance also uses Decision Support System (DSS) which assist manager in decision making. The procurement and inventory management of fruits and vegetables is quite difficult as both the supply and demand is unpredictable. Quality is a major key factor in fruits and vegetables. Customers are ready to pay good quality and freshness. It is not necessary to dump the fruits that lose freshness and has a slight quality problem. Sometime few customer are ready to purchase at mark down price which is a strategy followed by Reliance to make sales. Right display of goods at right place at right price makes themselves to sell. Hence Visual merchandising along with pricing strategy attracts customers to purchase. Overall, Reliance has made a pre well planned strategy for retail operation so that they can be competitor in retail sector and be a leader in it. The company has good marketing and operational team who helps the company to progress towards its goal, vision and mission. Such a big company gave an opportunity to learn about operations that takes place in the retail and it is quite useful.
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LEARNING OUTCOMES
Reliance took the risk to allow students to learn about their retail operation. Such an opportunity gave the following outcomes Importance of geographic location of the store and store space. Geographic location should be where more customers can be targeted and close to the distribution Centre. Store space can accommodate all the products and the space should be convenient for customer to purchase Requirement of back room for safety / cyclic / periodic inventory to maintain. The strategy behind the indenting process of vegetables and fruits Regards the procurement process from farmers Exposure to retail outlets and retail operation The importance of team work in retail which is a key factor for success in this sector The tactics of managing demand during uncertainty in supply The significance of dump and shrink management in improving the profit margin The strategy behind benchmark price and promotional offers Customers are the key players in the retails. Every customer is different in buying behaviour. It is important to know the art of handling different customer
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ANNEXURE Annexure I: Inventory, Sales and Dump value At Store for Mango from 25/04/2011 12/06/2011
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Week 1(April 25 - May 1)

Variety BanganPalli Badami Mallika Malgoa Raspuri Sindhura TotaPuri Neelam Rumani Total Inventory (Kg) 223.76 146.68 0 0 33.56 31.49 228.17 0 0 663.66 Sales (Kg) 179.494 117.882 0 0 26.748 15.108 179.494 0 0 518.726 Sales(Rs) 18858.3 10863.28 0 0 1468.47 754.54 5742.96 0 0 37687.55 Dump (Kg) 18.604 6.768 0 0 0 5.026 14.644 0 0 45.042 Dump (Rs) 327.58 417.54 0 0 0 200.8 327.58 0 0 1273.5 Dump (%) 2% 4% 0% 0% 0% 27% 6% 0% 0% 3%
Week 2(May 2 - May 8)

Variety BanganPalli Badami Mallika Malgoa Raspuri Sindhura TotaPuri Neelam Rumani Total Inventory (Kg) 357.86 242.35 78.24 33.56 103.58 89.67 138.98 0 0 1044.24 Sales (Kg) 318.58 213.66 59.032 20.948 77.664 68.486 96.188 0 0 854.558 Sales(Rs) 14015.85 16906.65 3992.11 1460.08 3288.83 2673.89 2639.62 0 0 44977.03 Dump (Kg) 15.726 11.849 2.425 3.364 8.527 7.403 10.238 0 0 59.532 Dump (Rs) 559.79 721.09 105.88 157.72 274 201.01 231.57 0 0 2251.06 Dump (%) 4% 4% 3% 11% 8% 8% 9% 0 0 5%
Week 3(May 9 - May 15)

Variety BanganPalli Badami Mallika Malgoa Raspuri Sindhura TotaPuri Neelam Rumani Total Inventory (Kg) 414.62 273.11 208.64 11.6 138.37 108.47 199.75 0 0 1354.56 Sales (Kg) 373.548 210.512 125.24 9.466 119.684 87.136 254.726 0 0 1180.312 Sales(Rs) 14536.59 13345.6 7419.48 567.02 4132.93 2795.07 5551.48 0 0 48348.17 Dump (Kg) 20.987 48.766 9.237 0 3.27 0 15.512 0 0 97.772 Dump(Rs) 646.72 2635.07 375.57 0 77.79 0 230.56 0 0 3965.71 Dump (%) 4% 20% 5% 0% 2% 0% 4% 0 0 8%
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Note: All figures mentioned in the tabulation are taken from store SAP software
Annexure II: Graphs Showing Various Comparisons
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Questionnaire FEEDBACK FORM Name:-
Contact No:1. What is your age group? i) 18-25 ii) 26-35 iii) 36-45 iv) 46-55 v) 56+
2. Your Education Level 1. S.S.C 2. Inter 3. Graduate 4. Post Graduate 5. Others 3. Your Occupation 1. Student 2.House Wife 3. Service 4. What is your monthly income? 1. < 5000 2. 5000-10,000 3. 10,000 - 20,000 4. >20,000 4.Business 5. Others
5. Where do you shop regularly? 1. Supermarkets 2. Kirana Stores 3. Others 6.what do you mostly shop at reliance fresh? 1.fruits & vegetables 2.food items 3.cosmetic products.4.all product 7. whom do you think is the closest competitor of reliance fresh? 1.food bazaar 2.spencer 3.bigbazaar 4.more 5.spinach 8 .Are the Price of Reliance fresh lower than the other competitor ALLIANCE BUSINESS SCHOOL Page 87
1. Yes
2. No
3. Equal
4. No idea
9. Did you get help from CSA when asked? 1. Yes 2.No 3.some time 4. Never
10. What kind of services you expect? Please put a a mark Services Fast Billing Ticket Booking Counters Ample parking Home delivery All credit and debit cards should accept Important Not important
If, any other please specify
11. Reasons for visiting supermarket: Please highlight or enter the appropriate number Index: 1 for Very Poor and 5 for Very good
Very Poor
Very Good
1-5
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Better Price Good Quality of Products Variety of products to choose Parking Facilities Convenience/Opening hours Product knowledge of Employee Store comfortable to shop-in
1 1 1 1 1 1 1
2 2 2 2 2 2 2
3 3 3 3 3 3 3
4 4 4 4 4 4 4
5 5 5 5 5 5 5
SUGGESTIONS
Thank You Reliance fresh
Supply Chain issues (Drivers Life cycle Analysis) ALLIANCE BUSINESS SCHOOL Page 89
Questionnaire Name: Age : Qualification: Place: 1. Duty shifts:
2. Vehicle Number: 3. Vehicle belongs to: 4. Model of the vehicle: 5. License validity;
6. License issuer :
7. Accommodation: 8. Experience in driving: 9. Marital status: 10. Vehicle condition: 11. Salary : 12. Working in swarnalatha from: 13. Problems in job:
14. Problems related to vehicle: ----------------------------------------------------------------------------------------------------------ALLIANCE BUSINESS SCHOOL Page 90
-------------------------------------------------------------------------------------------------------------------15. Personal habits:
16. Demands/Requirements :
REFERENCES
WEBSITES 1. www.ril.com 2. www.reliancefresh.info 3. Retailindustry.about.com 4. www.indiaretailing.com 5. www.wikipedia.com BOOKS REFERRED AND ARTICLES READ 1. B.Mahadevan, Operations Management Theory and practice , second edition, 2010, ISBN 978-81-317-3070-6. 2. Sunil Chopra, Peter Meindl, D.V. Kalra, Supply Chain Management Strategy, Planning and Operation, fourth edition, 2010, ISBN 978-81-317-3071-3. 3. Stock outs in Online Retailing. By: Jing, Xiaoqing; Lewis, Michael. Journal of Marketing Research (JMR), Apr2011. 4. A Realistic Approach to Inventory Reduction by Jon Schreibfeder. 5. Controlling Open-Stock Inventory by Jon Schreibfeder. In addition to websites visited and books referred, little additional information are gained from the store manager and added in the report.
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SUMMER PROJECT/ INTERNSHIP REPORT ON RELIANCE RETAIL STORE OPERATION AT

ALLIANCE BUSINESS SCHOOL

Master of Business Administration Industry Internship Programme (IIP) Declaration

Signature of the Student

Name of the Student (in Capital Letters) : SANKA KRISHNA BHASKAR

ALLIANCE BUSINESS SCHOOL

Master of Business Administration Certificate

ALLIANCE BUSINESS SCHOOL

SANKA KRISHNA BHASKAR, MBA, 2ND SEM.

ALLIANCE BUSINESS SCHOOL

1. EXECUTIVE SUMMARY ALLIANCE BUSINESS SCHOOL Page 5

2. INTRODUCTION ALLIANCE BUSINESS SCHOOL Page 7

ALLIANCE BUSINESS SCHOOL

Hard goods (hardliner retailers ) appliances, electronics, furniture, sporting

ALLIANCE BUSINESS SCHOOL

Discount Stores. As the name suggests, discount stores or factory outlets,

Specialty Store. These formats focus on a specific product category, Medium

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

Major formats of in-store retailers

Format Branded Stores

Description Exclusive owned showrooms or franchised by

manufacturer Specialty brand) Stores

between brands possible

Extremely retail outlets

self-service One-stop shop catering to varied consumer needs

ALLIANCE BUSINESS SCHOOL

supermarket, Low prices, vast choice

located in crowded urban areas Shopping Malls

extended operating hours

(DRTV) Advertising Including television, Infomercials

prominent introduce a new product or

are Cost of logistics is low

ALLIANCE BUSINESS SCHOOL

Global players planning entry in India are

SALES(USD BN) 235 63 58 55 55 52 48

COUNTRY OF OPERATION ARGENTINA,USA,UK,CHINA HUNGARY,UK,USA,MALYSIA CHILE,CHINA,FRANCE,UAE CANADA,MEXICO,USA USA USA,TAIWAN,HUNGARY UK,ITALY,VIETNAM,TURKEY

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

Itinerant Salesman Haats Melas Kiosks

Kirana shops Convenience/Department stores PDS Pan/Beedi shops Post Office

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

Mom and Me (infant and maternity care)

More (supermarket and hypermarket formats,earlier known as Trinethra)

Vishal Mega Mart (multiproduct stores)

ALLIANCE BUSINESS SCHOOL

COMPANY OVERVIEW RELIANCE GROUP

ALLIANCE BUSINESS SCHOOL

7th largest producer of Polypropylene (PP)

FOOTWEAR ALLIANCE BUSINESS SCHOOL Page 31

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

ALLIANCE BUSINESS SCHOOL

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ABOUT RELIANCE FRESH: ALLIANCE BUSINESS SCHOOL Page 40

Founded Headquarters Key people Industry Website

30Th October,2006 Mumbai, India Mukesh Ambani, CEO Retail www.ril.com

ALLIANCE BUSINESS SCHOOL