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Introduction:
Reliance Retail Limited (RRL) has started its retail business in India from 2006. The
reliance retail limited is one of the top ranking retail company in India function under the
giant Reliance industries Ltd.
RRL increased its footprint to more than 900 stores in 80 cities across 14 states in India.
Keeping in sync with its big super and hyper store strategy, RRL added new formats to
its spectrum in the last years to form of specialty store such as Reliance Fresh,
Reliance Digital , Reliance Trends , Reliance Wellness (health, wellness & beauty),
Reliance Footprint (footwear), Reliance Timeout (books, music & entertainment),
(automotive products & services) and Reliance home furnishing .
The objective of this report is to analysis external retail business environment in India
and notice business strategy of company that will affect the business operation in future.
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• Ambivalence between political groups.
• Tremendous resistance between enchanted groups for
any changes brought by government
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The Indian technology is growing very fast but the distribution of technology in India is
not uniform. It mean the maximum customer is not able access these technology. That
create problem to reliance retail of connect with customer.
The reliance retail is not working in customer relationship especially in rural area than
other retailer, like ITC group, Nestle etc. These retailers have been adopt new strategy (
E-choupal) in which they connect the rural area customer through internet to teach
them about new agriculture practices, market and weather report .
3.1.Opportunities:
The Reliance retail wants to build a high-profitability business from different specialty
store .There are some points that seem to be more profitable in future business of
reliance retail. They are as follows:
• The company has strong infrastructure and management.
• The company has got strong brand image in the market.
• Joint venture with international players and strong linkage with first tier supplier
• Sufficient fund to investment in the market
3.2. Threats:
There some important point has noticed in during last couple years in the strategic
business planning that could be a threat for RRL future performance.
• High market capturing policy: due to this policy company has faced problem in
the Uttar Pradesh (Name of a state). They acquired stores in the Uttar Pradesh
but due to political reason company has closed their operation in this state.
• Recruitment of employees on high salary
• Poor back hand linkage with supplier such as farmer etc.
• No self or contract manufacturing practice
• Fully dependent on other manufacturers
•
4. Five Force’s Analysis
The external environment of Reliance retail ltd (RRL) definitely looks competitive.
Although RRL uses its clout around and bargains at the best possible lowest prices
stretching suppliers beyond the limit, moreover some giant FMCG supplier like
Hindustan uniliver Ltd, P&G, Godrej etc are trying to join RRL for increasing the market
share. Thus the bargaining power of supplier is very low in market.
The Buyer are more sensitive toward the price, they usually buy cheap product from
intense bargaining. They are much local option present in the market.
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• Supplier like Godrej and HUL (Hindustan uniliver Ltd) are
welling to integrate forward
• More option available in the market
Power of Buyer • Customer are more price sensitive propensity to pay low
•
The recent change in the FDI in Indian retail sector has become more problem for RRL.
The international players are entering in Indian market through joint venture, e.g. Tata
and Tesco, Bharti and Wal-Mart etc. Some domestic players are looking to start retail
business in the local market.
The local Indian market is full of mom and pop stores. They sell product on credit to
local customer without taking any extra charge. In addition, some producer like former,
bakeries etc. are selling product directly to the local maker on cheap price. They do not
have any overhead expense to sell that product so that they give stiff competition to
Reliance.
The other giant retailer such as Bhatri, ITC group and Nestle has started new concept
like E-choupal, E-procuring etc. in the market. They are not only procuring the product
from local market but also helping the local producer in their production. These types of
new business concept are giving more completion to RRL.
High Low
Market share
• Home base daily use
H FMCG product
ig
h • Apparels and
From the observation of last couple years performance of RRL in the market. it seems
that RRL has been not achieve the market pace, what they want. The current down turn
in the market RRL has done massive change in its business strategy. The concept of
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specialty store such as jewellery store, mobile store, etc. would be the power full in the
future of RRL business.
Moreover, RRL should give more attention to strengthen its backhand process with first
and second tier supplies, through contact farming, joint venture etc. this type of
integration would definitely give extra potential to RRL to grow in the market.
Conclusion:
In the conclusion, it seems that the future of retail business of India is bright. The India
has got high customer base in different segment and the product demand in the market
is also growing very fast. The RRL is very strong business group in India. They have
also got strong brand image in the market. But in retail business Reliance is not very
expertise. So RRL has to change some of its business strategies in the current
operation to get edge over others in retail business.