Assignment No.

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1) How would you characterise the competitive strategies of organized retail store such as Reliance Fresh? What are the key customer needs that Reliance Fresh aims to fill? A) Organised Retail stores like Reliance Fresh have the supply chain as follows: Product Range: Vegetables and fruits House hold items Food and beverages All premiere brand + Private label Groceries only private label Dairy products Non veg food items Ready to eat items

The trends are optimistic. 1) Popular in urban working women 2) Popular in studying bachelors due to convenience 3) Convenient for high working class whose most of the time is spent in travelling 2) With the emergence of organized retailing, the power structure is likely to shift over a period of time. What do you think are the implications on manufacturing firms? A) There are many types of organized retails.

Supermarkets & Convenience stores Department Stores Hypermarkets Cash and carry Specialty stores Single brand Exclusive stores Discount Stores/Factory outlets

Organized retail in India is 6% but growing fast. Global range: 2% in Pakistan 35% Brazil 55% Malaysia 85% USA Organized Retail in India

Future group Pantaloon, Big Bazaar, food bazaar, eZoneetc Reliance Reliance Fresh, Trends, Jewels etc RPG Spencer's Aditya Birla More Cash and Carry Metro AG, Bharti Wal-Mart

Indian Retail Key Issues: Low sales per outlet Rs 1000 1200 per day Rural Rs 7000 Rs 8000 per day Urban Low productivity of Labor 6% of USA levels Long Supply chain 5 to 6 intermediaries Vs 2-3 in USA/Europe Inefficient supply chain Poor infrastructure Roads, Storage etc Low percentage of processed food Organized retail has high potential in India due to following points: Urbanization and growth of middle class Increase in % of working women Exposure to modern retail experience (Malls) Increased demand for branded/Processed food High growth in turnover Potential impact: Infusion of cash for cash Intensive business Infusion of technology and practices Boost to supply chain and logistics Cold storages and processing units Will require change in APMC Partnership with Indian players Local knowledge and global expertise Boost to Indian Suppliers 30% sourcing from Indian SME Sourcing from India for global operations Impact on urban small retailers Loss of business and potential closure FDI allowed in 51 cities For Farmers Should get better prices Impact may be limited to Medium/Large farms Better seeds, technology and farm practices Multiple options for farmers Loss of bio diversity For Small retailers Loss of business, but most will survive Impact high in proximity to Modern stores

Will have to adapt and might need support For consumers Better prices, larger variety, Better shopping exp Convenience for working families Would increase consumption expenditure Purchase of processed food, impulse items For Manufacturers 30% rule would benefit SMEs Large manufacturers margins squeezed Employment Loss of unorganized sector jobs at small retail Creation of organized sector jobs Net Growth in employment if Consumption Inc Additional jobs in supply chain/Food processing Government Higher tax revenues through organized retail May boost agri exports from India

3) Most Indian firms have increased their varieties over time. What are the implications of these varieties on SCM practices in these firms? A) Increasing product variety (number of titles) at a store leads to more misplaced titles. This can also lead to better inventory management. It is also possible that some varieties may not sell at all because there is no demand. Transportation may cause some confusion because of lot of varieties storing while travelling can cause problems. Consider the impact of higher variety on misplaced titles. Higher variety leads to more complexity and confusion at a store and hence, leads to more misplaced titles. For example, salespeople are required to move more units to storage areas when a store has more titles. The process of moving merchandise to storage areas and replenishing merchandise from storage areas, like most operational processes, is prone to errors. In other words, higher variety leads to additional steps in the process, and because each of these steps is prone to errors, higher product variety leads to more misplaced titles. When there are more units of a title, salespeople are more likely to move units to the storage areas. Like other operational processes, shelving merchandise in the storage areas is prone to errors. For example salespeople might shelve title in the wrong place in the backroom. When there are more units of a title in the store, it takes longer to detect these errors. At Borders stores, consumers are often looking for specific titles and thus salespeople for help when they cannot find what they are looking for. Consequently, consumers are constantly auditing or inspecting a store for titles that are misplaced at the store. The lapse between an employee s placing a title in the storage areas and a customer requesting that title is longer when a store has more units of the title.