walmart & bigbazaar

8/4/2019 walmart & bigbazaar

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vis-à-vis

CULTURE,VALUES as key forces in shaping STRATEGY

and developing

COMPETENCIES …





WALMART• Sam Walton started as a

specialty store owner of Ben

Franklin franchise stores.

• He was forty‐four when weopened first Wal‐Mart in

1962.



Opening the first WalMart

•

We really had only two choices left: stay in thevariety store business; or open a discount store.

•Many of our best opportunities

were created out of necessity.

The things that we were forced

to learn and do, because we

started out in these remote,small communities.



EarlyTimes

• In the early days of Wal‐Mart the emphasis on item

promotion helped us to make up for a lot of

shortcomings we had—an unsophisticated buying

program, a less than ideal merchandise assortment,and practically no back‐office support.

• Early periods were marked by extensive benchmarking

to such a level that managers lived half of the time in

competitors stores.



StrategicNotes

• I think that misunderstanding worked to our advantagefor a long time, and enabled Wal‐Mart to fly under

everybody's radar until we were too far along to catch.

• But while the big guys were leapfrogging from largecity to large city, they became so spread out that theyleft huge pockets of business out there for us.

• Our growth strategy was born out of necessity, but atleast we recognized it as a strategy pretty early on. Wefigured we had to build our stores so that our

distribution centers, or warehouses, could take care of them, but also so those stores could be controlled



OperationsManagement

Getting an early start on all

these systems, building a

foundation for our

distribution centresdevelopment, starting to put

data processing into the

stores, really saved our bacon

later on.



CreatingCulture

• Wal‐Mart is not a big success merely because we

grew up out here in the country, where peopleare just naturally friendly and therefore make

great retail employees. It's true that we havemany fine associates from the country, but theyhave had to enter our culture and learn retailing

just like anybody else, and we have spent a good

deal of time teaching many of them to overcometheir natural shyness and learn to speak up andhelp our customers.



NEXT THE INDIAN CONTEXT





•

Born in a middle class tradingfamily, Kishore Biyani startedhis career selling stone washfabric as trader.

• His objective is to capture

every rupee in the wallet of Indian consumer.

• He is concentrating not just onretail but his ambitions span

over full consumer space.• With the launch of Pantaloons,

Big Bazaar, Food Bazaar,Central he has redefined theretailing business in India

Raja of Indian Retail



• There are three kinds of entrepreneurs - Creators,preservers and destroyers.

• He considers himself as both creator and destroyer at thesame time. Preserving the status-quo has never been the

cup of his tea.

• He strongly believes none of his business will ever cater tothe elitist class.

• In the current era of knowledge economy Ideas will be the

greatest assets of a company. Organizations that allowinsights and information to flow freely will be the ones tocome out as winners.

Kishore Biyani KB Views, Value and Vision.



• The changing demographic profiles, globalization,increasing income levels, urbanization,technology, and a free flow of ideas from within

and outside is bringing about dramatic shift inconsumer tastes and preferences.

• Underlying these trends there are towundercurrents that are sweeping through young

India – CONFIDENCE & CHANGE.• These two have the potential to tweak an

unprecedented era of CONSUMPTION.

Indian Consumer and 3C’s



• The younger India is expected to embrce the

values of family and continue and live the Indian

way.

• Therefore it is imperative to attract and deliver

the consumer understanding and interpreting

the ‘Indian-ness’ quotient of the consumer.

Indian Consumer



Consuming class [ 14% ] – High disposable income

Serving class [ 50%] – Drivers, cleaners etc. They

serve the consuming class.

Struggling Class – Live a hand to mouth existence.

•Also the consumer class and serving class never shop at the same

stores.

•Serving class feels comfortable in crowds and chaos and hesitates

even to enter the specialty stores.

Indian Consumer Space



• By 2010, almost half of our citizens will be workingage group of twenty to fifty four years . A youthful,

exuberant generation, bred on success will not only

drive productivity but also set a spiraling effect on

consumption and income generation

• As retailers, we have not only to acknowledge this

change but remain ahead of evolution curve, not tomention be an agent of change.

Indian Consumer Space continued



• Indian consumer needs indigenous solutions to her

shopping needs –that give her best value for money

in an environment she is comfortable with..

While designing our Big Bazaarthe core idea was to merge the

look and feel of ‘mandis’ with

modern retail’s features like

quality, choice and convenience.

Catering the Indian Consumer



• The Indian consumer has her

peculiar preferences when it

comes to staple food. She

would like to touch, feel the

grains for herself before she

would buy them. It is hence

at Food Bazaar staples aresold loose.





• Abroad hypermarkets are typically designed on box

type formats, shoppers abroad usually shop aloneand it isn't considered an exciting activity.

• For Indians shopping is entertainment, they come

with entire family and move in groups.

The U shaped sections

proved to be more

appropriate than the long

aisles of western

hypermarket.





• Retail stores need to drive sales and not be sales

driven.

• KB is of a strong philosophy that the retailers job is to

create demand and the supply chain will follow outof necessity.

• By focusing on customers we have managed to keep

our business simple and agile.

• Local sourcing has been adopted as centralized

processes may not be viable of a diverse country as

India.

Modus Operandi



• Although because of the value proposition and

scarcity of organized retail might have given Big

Bazaar the luxury to sideline operations, it is

expected to take the center stage as the formatscales up.

Modus Operandi



• Central

A mall with virtually no walls to

separate different store. The

brands pay a percentage of their

sale to proprietor and the owner

gets to decide which brands to

keep.

• Specialty retail stores.• KB’s Wholesale Market.

New Formats



Allied ventures



• Buyer’s switching

cost is low

• Firm can adjust

prices quickly• Price elasticity of

demand demand

Five Force Analysis : Competitors



• FDI

• Big Business houses

Five Force Analysis : Entrants

• Use strong cash flowsfrom other sectors.

• Have network capabilities.

• Sourcing capabilities.



• Local Supplies

provide flexibility.

•

Contracts with largefirms provides

efficiency.

Five Force Analysis : Suppliers

•Locally sourced suppliers.

•Big companies like P&G &

HUL.

•Home grown brands likeD&G John Miller.



• Low switching cost

• Transportation cost

• Because of wider product offering the customer will not

have options in every segment.

Five Force Analysis : Customers



SWOT Analysis

STRENGHT

• High Brand Equity

• Every Day Low price [ EDLP ]

• Real estate and Infrastructure

•Understanding Consumer

Preferences

WEEKNESS

• Falling Revenue/ Sq Ft.

• Unable To Meet Store Opening

Target

• Perception Amongst Consumers

OPPORTUNITIES

•Targeting Area More Prone To

Development•In Store Experience Improvements

•New formats and consumption

space

THREATS

• Competitors domestic and foreign

• Economic Conditions



• IT Happened In India : Kishore Biyani.

• Made In America : Sam Walton.

•

Flowingdata.com .• Google Image Search.

References

Documents

walmart & bigbazaar