Thursday, October 31, 2019

You have to make your own topics up. It is on sinaltrainal v Essay

You have to make your own topics up. It is on sinaltrainal v. coca-cola company - Essay Example Yet, more than ascribing blame to a multinational firm that has perhaps broken the law and behaved in a highly egregious manner, understanding the logic behind why such a set of actions might have taken place, the way in which they occurred, and the different resources available to Coca Cola as a means of understanding the limits to which a given corporate entity will go to in order to protect its profit margins and maintain dominance at the expense of traditional corporate responsibility, civic behavior, and common morality. Furthermore, the way in which the court trial in Miami proceeded is also of special interest due in no small part to the fact that this too exhibited the level to which corruption in power and the cronyism of mega multinationals seemingly held all the cards in such a legal battle (Rostin 2001, p. 35). As a way of briefly encapsulating what lay at the core of the court case mentioned above, it is worth briefly laying out what the claimants brought against Coca Cola. Among other things, the claimants brought evidence that union organizers complaining about unfair treatment, poor wages, brutal conditions, and the alleged murder to several workers over a period of time that were heavily involved in the union agitation that had plagued the Coca Cola plant in Carepa, Colombia. The background to the instance was the fact that Colombian workers at the factory had been seeking to leverage the Coca Cola Corporation for a higher level of remuneration, benefits, and union representation by the Sinaltrainal Union which represented workers in Colombia. Obviously such an action would have not been in the best interests of Coca Cola Corporation as it would have weakened the position of the employer and given a stronger voice to the employees as a function of the collective bargaining that they w ould have been able to achieve. As a function of stopping such an

Tuesday, October 29, 2019

The pedagogic theories as for the basic essence of achieving Research Paper

The pedagogic theories as for the basic essence of achieving sustainability of education - Research Paper Example Pedagogy is the professional and preparatory mode of delivering teaching to educators and through proper instructions. There are several theories concerning the interpretation of pedagogy in educative circles. Various theorists have detailed cohesive reports on the efficiency of pedagogies in attaining the overall mandate of ensuring successful teaching practices. Some of the included theorists are Paulo Freire, Peter McLaren, Joseph Jacotot and Benjamin Bloom, among others. Some of the methods to be discussed are effective in teaching students and the gaining of new knowledge. However, some of them are not ordinary teaching methods and they incorporate different strategies to enhance learning. There has been a confrontational relation between paradigm and pedagogy. Two categories of paradigm enhance the affiliation: zero-paradigm and critical paradigm. Basically, the ‘zero’ paradigm describes conventional teaching approaches while ‘critical’ paradigm descri bes the sanctioning loom to pedagogy. These paradigms are important in the learning process, but the critical paradigm is the key paradigm. This is because it empowers education to learners. Therefore, pedagogical theories work at empowering the literacy level of learners through the assistance of the educators, formal and informal. They have also presented dominant cultures of education and also encompass initiatives of promoting learning technologies in support of pedagogy. This paper discusses four theories to assist in explanation and approval of these facts.... There has been a confrontational relation between paradigm and pedagogy. Two categories of paradigm enhance the affiliation: zero-paradigm and critical paradigm. The ‘zero’ describes conventional teaching approaches while ‘critical’ describes the sanctioning loom to pedagogy. The critical paradigm is the key paradigm in empowering education to learners. Informed by educators such as Dewey and Freire, the critical paradigm recognizes participation as a necessary condition for empowering education (Mulcahy, 2010, p 60). Some of the theories discussed below will assist in developing personal pedagogic creed. I have engaged in making my own pedagogy creed that invokes the ideas of some theorists, whose contributing information describes my idealistic creed as discussed below. Theory 1 Paulo discusses his theory of ‘Pedagogy of the Oppressed’ addressing contagious issues to learners a little deprived of freedom. It follows the Marxist theoretic analy sis of education. The oppressed in this context are psychologically or mentally suppressed. They include individuals physically challenged or in good physique condition but undermined a specific aspect of their life. The theory discusses the psychological point of view of the oppressed learners. He asserts that the theory contains two phases. The oppressed through their practices reveal out the world they survive in as brought out in the first stage of transformation. The second stage changes the pedagogy of the oppressed to pedagogy of all men. This process liberates the permanency of the pedagogy. Dominance of culture is the most reflected action being confronted by the said pedagogy of the oppressed.

Sunday, October 27, 2019

How portfolio diversification can minimize or eleiminate exposure risks to portfolios

How portfolio diversification can minimize or eleiminate exposure risks to portfolios Portfolio diversification is the means by which investors minimize or eliminate their exposure to company-specific risk, minimize or reduce systematic risk and moderate the short-term effects of individual asset class performance on portfolio value. In a well-conceived portfolio, this can be accomplished at a minimal cost in terms of expected return. Such a portfolio would be considered to be a  well-diversified. Although the concepts relevant to portfolio diversification are customarily explained with respect to the stock markets, the same underlying principals apply to all types of investments. For example, corporate bonds have specific risk that can be diversified away in the same manner as that of stocks. In investment Risk and Return, it is assumed that all investors are rational and will therefore hold portfolios that are diversified to the point where specific risk has virtually been eliminated and their only exposure to risk is to that which is inherent in the market itself . Thus, the residual risk of a portfolio should be equal to market risk, which is systematic risk, and unsystematic risk. Unsystematic risk can be reduced by investing over a broader market, i.e., a larger universe. Portfolio diversification provides a good example of the effects of diversifying across asset classes. A portfolio invested 50% in domestic large-cap stocks and 50% in international large-cap stocks would have approximately half the residual risk of a portfolio comprised solely of domestic large-cap stocks, assuming that the investments in each market were sufficiently diversified to eliminate specific risk. CAPM and the Market Price Risk: The theory that investors are not rewarded for holding any diversifiable risk is taken to its logical limit in the Capital Asset Pricing Model (CAPM). This model is based on the evidence that all investors will hold portfolios which are invested in every single asset in existence. The rationale behind this is that if an investible asset is not included, then an opportunity for diversification, and therefore risk reduction, has been missed. According to the theory, investors will combine the market portfolio with a risk free asset (e.g. a short term government debt instrument). The proportion of the risk free asset held will increase the greater the investors risk aversion. The CAPM, which is concerned with pricing market risk, when determining what additional expected return is required for additional market risk. The only risk considered by a rational investor is market risk; we need to measure each securitys risk in these terms. The key elements here are as follows: The higher the weighting a security has, the greater will be its influence on the market return. The risk if measured in terms of market risk, the greater must be the compensating expected return. The higher the risk free rate, the higher will be the required expected return. http://www.investing-in-mutual-funds.com/portfolio-diversification.html http://www.investorwords.com/3083/modern_portfolio_theory.html Diversification works in the long run, despite rising correlations during extreme financial crises. From 1970  through 2007, a portfolio of 60 percent  SP 500 Index  and 40 percent  MSCI EAFE  returned 11.3 percent per year with an annualized  standard deviation of 13.75 percent. For the same time period, the SP 500 returned 11.1  percent per year with an annualized  standard deviation of 15.07 percent. Even when you throw a devastating and volatile year like 2008 in the mix, the benefits are still apparent. From 1970 through June 2009, the diversified portfolio had higher returns with less volatility than the SP 500 alone. The diversified portfolio returned 9.6 percent per year with an annualized  standard deviation of 14.6 percent, while the SP 500 returned 9.4 percent per year with an annualized  standard deviation of 15.6 percent. The conclusion from this data is not that diversification didnt work in 2008 and that it came back in 2009. The conclusion is that even though diversification is not a panacea for financial crises,  its the winning strategy for the long run. http://moneywatch.bnet.com/investing/blog/wise-investing/international-diversification-does-it-still-work/637/ How Does Diversification Work The concept is based on the fact that returns for certain types of investments, or asset classes, tend to move in opposite directions. As a result, poor stock returns may be counterbalanced by investments in bonds, and vice versa. You can diversify your portfolio by spreading your investments among different types of asset classes, such as U.S., international and emerging market stocks, bonds and also short-term money market investments. Exchange traded funds are an effective way to provide diversification since each individual fund holds hundreds of stocks and/or bonds. Diversification can substantially reduce the variability of returns without an equivalent reduction in expected returns. This reduction in risk arises because worse than expected returns from one asset are offset by better than expected return from another. But there is a minimum level of risk that cannot be diversified any way and that is the systematic portion. In volatile markets relationship among investments can become highly correlated, meaning returns for both types of investments move in the same direction, which reduces the effectiveness of diversification. Thats why a portfolio diversified among stocks and bonds still lost value during both recent bear markets. Its also why investments spread across U.S., international and emerging-market stocks didnt fare well either. All major investment sectors but one, government securities, declined. Its a good idea to see if your diversified portfolio still reflects your financial situation and goals.. If youve set up a 60/40 stock/bond investment mix but havent changed it in a year, you may need to rebalance your portfolio since your equity-oriented mutual funds likely fell in price more than your income-oriented mutual funds in the past year. In this case, if you want to maintain your 60/40 mix, youll have to sell some of your bond funds and invest the proceeds into equity funds. Diversification does help, however, and it always has even if, during extreme times, it hasnt been able to prevent losses entirely. Its true that, with the exception of government securities, all investment sectors were hit by the 2008-2009 declines. But investors with a diversified portfolio of stocks and bonds lost a lot less than those with an all-stock portfolio even one that included international or emerging market stocks. Diversification also worked for investors during the first bear market of this decade: the 2000-2002 dot-com declines. The chart above is relatively easy to interpret; we consider the risk-free asset Rf with its corresponding Beta of zero and return of 8% and our stock with its Beta of 1.6 and its expected return E(RA) of 20%. When we connect the dots and measure the slope of the line (rise/run), we get a slope of 7.5%. From this graph, we can ascertain that our stock has a reward to risk ratio of 7.5% meaning that our stock has a risk premium of 7.5% for each unit of systematic risk. Obviously, the higher the reward to risk ratio, the better, meaning wed want to see higher E(RA) and/or lower Beta; either of which would increase the slope. In a final example, let us now compare our stock in the previous example (called Stock A) with a second stock (Stock B). Stock B has a Beta of 1.2 and an expected return E (RB) of 16%. When we construct our Security Market Line, we end up with a slightly different picture than we had with Stock A. The reward to risk ratio (or slope of the line) for Stock B is 6.67%. What this tells us (all other things equal) is that in essence, Stock A is a better choice than Stock B simply because it generates more reward for each unit of systematic risk undertaken. This analysis is especially useful when one is selecting portfolio components and wants exposure to a particular industry or sector, has multiple candidates, but doesnt want to include them all for fear of being overweight that particular area. In this manner, the candidates may be lined up and compared to see both visually and quantitatively where the best bang for the buck lies. http://www.marketoracle.co.uk/Article12274.html http://www.moneychimp.com/articles/risk/efficient_frontier.htm A closer look at the investment returns of a 100% U.S. stock index compared with a diversified investment mix of 60% stocks and 40% bonds between December 31, 2007, and June 30, 2009, shows that diversification was effective over that period. An investor in a diversified 60/40 mix lost 18%, or about half as much as the all-stock index, which lost 35%. International investors were hit hard as well: The MSCI ACWI (All Country World Index) ex USA, which doesnt include the U.S. market, lost 37% and the MSCI Emerging Markets Index declined 36%. For the 2000-2002 bear market, an all-stock portfolio fell 47.4% while the 60/40 mix declined only 16.8%. In fact, a diversified portfolio has helped investors weather market volatility over several different time periods. For the past three years, an all-stock portfolio lost 22.7% while the 60/40 mix declined only 5.4%. During the past five years, the stock portfolio lost 10.7% while the mix increased 4.7%. And as of June 30, 2009, over a full 10-year period, the stock portfolio lost 20.1% while the diversified mix gained 19.4% an almost 40% advantage over stocks. http://www.management-hub.com/portfolio-modern-theory.html As a conclusion I would say portfolio will work as long as the assets in the portfolio are negatively correlated and they are being taken from different markets and different kind of assets. Because if one asset returns drops still other assets return can increase. So portfolio diversification is still working. 2) The relationship between risk and return is a fundamental financial relationship that affects expected rates of return on every existing asset investment.   The Risk-Return relationship is characterized as being a positive or direct relationship meaning that if there are expectations of higher levels of risk associated with a particular investment then greater returns are required as compensation for that higher expected risk.   Alternatively, if an investment has relatively lower levels of expected risk then investors are satisfied with relatively lower returns. This risk-return relationship holds for individual investors and business managers.   Greater degrees of risk must be compensated for with greater returns on investment.   Since investment returns reflects the degree of risk involved with the investment, investors need to be able to determine how much of a return is appropriate for a given level of risk.   This process is referred to as pricing the risk. http://uwf.edu/rconstand/5994content2003/T1-Overview/T1-OverviewP04.htm http://gbr.pepperdine.edu/091/realestatemarkets.html Return Characteristics of  Public and Private Real Estate   Public and private equity real estate has been the relationship between these two markets in terms of risk and return characteristics. The most well-known private real estate performance benchmarks around the world are the NCREIF (U.S.), the PCA (Australia), and the IPD indices in various European countries. Pubic real estate benchmarks include NAREIT (U.S.), SP/ASX200 LPT Index (Australia), GPR (Global), and FTSE EPRA/NAREIT (Global). Taking these total return indices at face value, public and private real estate markets in the past have behaved differently, with public real estate showing greater volatility. Furthermore, correlation studies of private and public real estate indices show that, while both have low correlations with bonds and large-cap stocks, they also have low correlations with each other, and in general, public real estate displays a higher correlation with small stocks. As for the portfolio diversification effects of publicly listed real estate securities, the private real estate portfolios with 10 percent mixes of REITs resulted in higher risk-adjusted returns for all three countries (see below). The results imply that a holding in U.S. REITs would lead to improvements in portfolio performance even if the optimal portfolio already contains private real estate. Several other studies show similar results. According to a portfolio diversification study performed by Ibbotson Associates in 2006, adding REITs to a wide selection of diversified portfolios, from 1972 to 2005, enhanced risk-adjusted returns as compared with portfolios without REITs. Furthermore, research sponsored by the European Public Real Estate Association showed significant portfolio benefits to using real estate securities from six European countries GOLD. Risk in relation to gold is very high as it is a volatile asset as changes take place rapidly and its expected to have a high return. It can be seen that gold is more negatively correlated to U.S. stocks than any of the other asset classes. If an investor has a safe and physical gold, the cost of keeping the gold will be practically nothing. One other quality that makes gold a sound investment is its ease to liquidate. It is common that most businesses that sell gold will usually also buy gold, making gold one of the easiest assets out there to sell. One last characteristic that makes gold one of the greatest  investments  out there is golds intrinsic value and lack of counterparty risk. Other assets like a stock can become worthless overnight if the company was not run correctly or if its goods or services for any reason becomes obsolete; but because of golds intrinsic value and its lack of counterparty risk. Gold is unlikely to become worthless overnight. http://www.articlesbase.com/franchise-articles/gold-the-characteristics-of-gold-1374624.html#ixzz12gAMsAf8   http://www.articlesbase.com/franchise-articles/gold-the-characteristics-of-gold-1374624.html

Friday, October 25, 2019

Analysis of the Physician Assistant Suicide Debate Essay -- Euthanasia

Medical science, beginning in the last half of the twentieth century, began to achieve the remarkable ability to prolong life. In most cases, this is beneficial; however, in regards to prolonging the dying process, sometimes indefinitely, this is frequently viewed by patients and their families as cruel, rather than life-giving, and they petition the courts for the right to die. Despite the legitimacy of this position, a variety of forces have repeatedly endeavored to limit the rights of individuals in shaping the dying process for themselves and their loved ones. This is a particularly problematic area for health professionals and the following examination of the issues that this entails demonstrates that the most ethical position for society is to respect the autonomy and decisions of individuals. To die of cancer is frequently a drawn-out process. Terminal patients are frequently in tremendous pain despite the use of opiates. It seems perfectly logical to many people that individuals who wish to forego such torture, when they know that this inevitable, should be allowed to painlessly end their lives rather than suffer a slow, painful death. Yet, there are those who disagree. Stein (2004) reports that before stepping down as the country's Attorney General, John Ashcroft asked the US Supreme Court to overrule the nation's only assisted-suicide law. A previously held lower court ruling held that the federal government did not have the power to punish Oregon doctors who legally prescribed lethal doses of federally approved drugs (Stein, 2004). Oregon's Death With Dignity Act allows patients who have been diagnosed with less than six months to live to request such a lethal dose if their diagnosis has been confirmed by two do... ...out, this objection can be overcome through the institution of strict guidelines, such as were instituted in Oregon in accordance with their physician-assisted euthanasia law. Works Cited Feinberg, B. "The Court Upholds a State Law Prohibiting Physician Assisted Suicide." . Journal of Criminal Law and Criminology 88.3 (1998): 847-76. Web. . Harris, J. "Consent and End of Life Decisions." Journal of Medical Ethics 29.1 (2003): 10. Web. . Singer, P. "Freedom and the Right to Die." Free Inquiry 22.2 (2002). Web. . Stein, L. â€Å" Right to Die†. U.S. News & World Report 18.137 (2004, November 22) Print. Sunstein, Cass R. "The Right to Die." Yale Law Review (1997): 1123-163. Web. .

Thursday, October 24, 2019

Project Report on Retail

EXECUTIVE SUMMARY Retailing consists of all activities involved in selling goods and services to consumers for their personal, family or household use. It covers sales of goods ranging from automobiles to apparel and food products and services ranging from hair cutting to air travel and computer education. Sales of goods to intermediaries who resell to retailers or sales to manufacturers are not considered a retail activity. Retailing can be examined from many perspectives. A manufacturer of white goods like washing machine and refrigerators has many options to reach out to consumers. It can sell through dealers, the company showrooms (Sony World, Videocon Plaza) or hypermarkets (Big Bazaar). The retail sector in India is highly fragmented with organized retail contributing to only 2% of total retail sales. The retail sector in developed countries was also highly fragmented at the beginning of the last century but the emergence of large chains like Wal Mart, Sears, and Mc Donald’s led to rapid growth of organized retail and growing consolidation of the retail industry in the developed countries. Today, in India we see a rise in the purchasing power and growth of a middle class which follows the western lifestyle. Hence, conditions are conducive for the rapid growth of organized retail in India. Organized retail is growing rapidly and we see the emergence of large organized retail chains like Shoppers’ Stop, LifeStyle and Westside. We also find retail malls mushrooming all over the country. The opportunities in retail industry in India will increase since Indian retailing is on the threshold of a major change. However, with the rapid growth in organized retail and increased emphasis of manufacturers on understanding sales at the retail level, the study of retailing has become increasingly relevant. -1- OBJECTIVE OF PROJECT v To understand the concept of retailing. v To understand the role and relevance of retailing for business and economy. v To identify the activities associated with retailing v To understand the operational structures associated with retail organizations v Understanding consumer behaviour in retailing v Understanding the importance of store location for retailer v To understand the nature of merchandise budgeting and unit planning v To understand the concept of relationship marketing and how does it apply to the retail sector. -2- METHODOLOGY This project is the mixture of theoretical as well as practical knowledge. Also it contains ideas and information imparted by the guide. The secondary data required for the project was collected from various websites and books of re puted authors. The project started with sorting all the raw data and arranging them in perfect order. To add value to the project and to understand the practicality of retailing business, I have visited various stores who are the best ones in retailing business. Further, to understand the consumers better, a field survey was also conducted to find out the tastes and preferences, purchasing habits, expectations of the consumers etc. Analysis of this primary data has been done to actually understand the survey in a better way. -3- ORIGIN OF RETAILING Although retailing does not enjoy the status of an Industry, the sheer size this behemoth will develop into, is grabbing attention. The origin of retail in India dates back to ancient times when the melas and mandis made heir presence felt. The changing socio economic patterns coupled with the consumption increase led to the emergence of the convenience stores, which became a par of the civic planning. The next step was the commercial plazas, which comprised merely shops offering a variety of goods and services clubbed together. The inconveniences caused by lack of parking place, toilets and maintenance, ushered in the entry big international brands opening their exclusive showrooms. The opening up of the economy only fueled this globalization. There are, however, certain bottlenecks as well; the scarcity of space, coupled with the stringent provisions of the Rent Control Act, act as a dissuasive factor for many players to initiate operations in the main markets. This also explains why the Raheja’s forayed into their retail venture- Shoppers’ Stop. CURRENT SCENARIO The Indian population is whooping 1 billion with 75% of the people living in villages and small towns. It is only natural that the agricultural sector is the biggest employer with its contribution to GDP pegged at 26. %. Retail is India’s larges industry after Agriculture with around 20% of the economically active population engaged in it and generation 10% of our country’s GDP. The growth of the efficient small store culture can be attributed to the 6 million villages distributed across the length and breadth of the country. The 12 million retail outlets in India are the hi ghest in the world, and cater to the purchase need of its pole. It is interesting to note, that the Urban Population although just 25% of the total, is an astounding 250 million in size and is growing at a healthy rate of 7% per annum. The chief driver of growth in the retail sector has been the consumer, with the spending increasing at an average of 11% per annum. The Core and the Lower middle have increased their share in the Growth. -4- The Indian consumer’s shopping needs are and traditionally have been fulfilled by Kirana sores (corner stores), Kiosks, street vendors, weekly bazaars and high-street shops for consumer durables and luxury goods. To cater to this, each city developed its own identity and shopping cluster, for instance in Pune there is MG Road, Bangalore has Brigade Road and Commercial Street, Delhi has Connaught Place, Karol Bagh and South Extension. India will have 358 shopping malls by 2007. Droves of middle-class Indians have broken off their love of traditional stand-alone shops that have no ACs, organized parking lots and other public amenities, according to a study by fashion magazine Image. At present (September 23, 2005), In India we have 96 malls, covering an area of 21. 6 million sq ft. And by year end the count will shoot up to 158 malls. It will cover 34 million sq ft area. Currently estimated at $205 billion to grow to $400-500 million, over the next 2-3 years. v Smaller cities will have about 12. 8 million sq ft of mall space by 2007. Ludhiana to account for 2. 5 million sq ft. v Ahmedabad about 3. 4 million sq ft. v Delhi and Mumbai now have maximum number of shopping centres. v Gurgoan saw the largest development in terms of retail outlet. v North region has 39% of India’s retail share. v East region has 10% of India’s retail share. v West region has 33% of India’s retail share. v South region has 18% of India’s retail share. v Government and co-operative sector is also making their steps in retailing. For example, Kendriya Bhandar, Apna Bazar, Mother Dairy, Super Bazar etc. -5- MAJOR RETAILER SPACE HOLDERS IN INDIA ORGANIZATION Bata RPG Raymond Area Sq. ft 10,00,000 6,00,000 5,42,000 Pantaloon/Big Bazaar 5,00,000 Metro cash-n-carry Spencer LifeStyle Shoppers Stop Trent Globus Piramyd 3,00,000 2,80,000 2,50,000 2,00,000 2,00,000 1,75,000 1,50,000 The 2nd Annual Images Retail Awards (September 22, 2005):v Retail Face of the Year: Kishore Biyani, MD, Pantaloon Retail India Ltd. v Retail Destination of the year: Shoppers’ Stop v Retail Launch of the Year: Pantaloon Central. v Shopping Centre of the Year: Inorbit Mall v Retail Brand of the Year: Titan v Retail Concept of the Year: Reliance Truck Stop. Retailer of the Year: Value Retailing: Big Bazar v Retailer of the Year: Catering Service: McDonald’s. v Retailer of the Year: Food & Grocery: Food Bazaar. v Retailer of the Year: Health & Beauty: VLCC. v Retailer of the Year: Entertainment: PVR. v Retailer of the Year: Department Store: Westside. v Retailer of the Year: Forecourt Retailing: Bharat Petroleum Corp. Ltd. v Retailer of the Y ear: Leisure: Crossword Bookstore. -6- SWOT OF THE MARKET STRENGTH 1. Organized retailing at US$ 3. 31 billion, growing at 8%. 2. 2nd largest contributor to GDP after agriculture at 20%. . Pattern of consumption changing along with shopping trends. 4. A Growing population will translate to move consumers. 5. Consumer spending increasing at 11% annually. 6. Almost 25 million sq. ft. retail space available. 7. Paradigm shift in shopping experience for consumers pulling in more people. 8. Most of the entrants to organized retail come from 3 main categories, and have ventured into retail as their business extension. v Real Estate Developers v Corporate Houses v Manufacturers/Exporters WEAKNESSES 1. Shortage of quality retail spaces at affordable rates. 2. Government regulations on development of real estate(Urban Land Ceiling Act) 3. Need to provide Value for Money-squeezing margins 4. Lack of industry status. 5. Retail revolution restricted to 250 million people due to monolithic urban-rural divide. 6. Footfalls not a clear indicator of sales as actual consumers lower in number. 7. Lack of huge investments for expansion. OPPORTUNITIES 1. Increasing urban population-more participants in retail revolution. 2. Increase in consuming middle class population. 3. Social factors like dual household income has enhanced spending power. 4. Spends moving towards lifestyle products and esteem enhancing products. 5. Availability of old industrial lands-prime real estate locked in sick industrial units. -7- 6. Average grocery spends at 42% of monthly spends-presents a huge opportunity. 7. Increase in use of credit cards. THREATS 1. Rising lease/rental costs affecting project viability 2. FDI restrictions in the retail sector 3. Poor monsoons and low GDP Growth could affect consumer spending drastically. 4. Archaic labour laws are a hindrance to providing 24/7 shopping experience 5. Personalized service offered by Mom-&-Pop stores. 6. Unavailability of qualified personnel to support exponential growth in retail. 7. Differentiate taxation laws hindering expansion. RETAIL VIABILITY As per the CII McKinsey report, based on a GDP growth rate of 6-7% per annum, by 2010 the retail sector is expected to be US $ 300 Billion industry. Some of the major factors hindering the growth of this sector are as follows: v The non-industry structure and status v The lack of adequate infrastructure v FDI restrictions in this sector v The huge investments required in expanding their markets, v Problems associated with working Capital funding from lending Institutions. 8- BIG BAZAAR: THE INDIAN WAL-MART Pantaloon Retail (India) Limited is today recognized as one of the poneers in the business of organized retailing in the country with a turnover of over RS 400 crores in the financial year ending June 2003. The company is headquartered in Mumbai with zonal offices at Kolkata, Bangalore and Gurgaon (Delhi). It has 4 kinds of stores; 14 P antaloon Family Stores, 7 Big Bazaar discount hypermarkets, 6 Food Bazaar Stores with over 6. 5 lakh sq ft retail space across Kolkata, Mumbai, Thane Pune, Hyderabad, Bangalore, Bagpur, Ahmedabad, Kanpur, Chennai and Gugaon (Delhi). Pantaloon Retail India Limited is the flagship company of the Pantaloon group promoted by Mr Kishore Biyani. It has been one of the pioneers in organized retailing in India. It began its retailing operations in India way back in 1987. Currently, it manufactures and sells ready-made garments through its own retail outlets and two discounting stores. The company plans to diversify into the business of discounting in a big way, which is targeted at the growing middle class segment. It has India’s second largest retail chain with 17 retail outlets and two discounting stores branded as Big Bazaars across the country at an estimated retail space of ,01,300 sq. ft. The company plans to double its retail space in the next couple of years. Pantaloon has come up with an excellent revenue model, focusing on ‘value for money’ segment. Pantaloon plans to target the upper middle and the middle class segment, which forms the large chunk of Indian population. This segment is very price conscious and always looks out for value for money. Pantaloon successfully launched its discount store chain, which targets the large and growing upper-middle and middle class of Indian society. This is totally in contrast to the other organized retail players, which focus on high net-worth of individuals. Big Bazaar has strong own brand names in its portfolio across product categories. The brands include Pantaloon, John Miller and Bare. Higher percentage of ‘own brand’ sales improves margins, thus reducing the breakeven level of sales. Big Bazaar has diversified from apparels to household items in its discount stores. This has enabled them to enlarge their basket of offerings. -9- RETAIL CONCEPT The distribution of consumer products begins with the producer and ends at the ultimate consumer. Between the producer and the consumer there is a middleman—the retailer, who links the producers and the ultimate consumers. Retailing is defined as a conclusive set of activities or steps used to sell a product or a service to consumers for their personal or family use. It is responsible for matching individual demands of the consumer with supplies of all the manufacturers. The word ‘retail’ is derived from the French work retaillier, meaning ‘to cut a piece off’ or ‘to break bulk’. A retailer is a person, agent, agency, company, or organization which is instrumental in reaching the goods, merchandise, or services to the ultimate consumer. Retailers perform specific activities such as anticipating customer’s wants, developing assortments of products, acquiring market information, and financing. A common assumption is that retailing involves only the sale of products in stores. However, it also includes the sale of services like those offered at a restaurant, parlour, or by car rental agencies. The selling need not necessarily take place through a store. Retailing encompasses selling through the mail, the Internet, doorto-door visits—any channel that could be used to approach the consumer. When manufacturers like Dell computers sell directly to the consumer, they also perform the retailing function. Retailing has become such an intrinsic part of our everyday lives that it is often taken for granted. The nations that have enjoyed the greatest economic and social progress have been those with a strong retail sector. Why has retailing become such a popular method of conducting business? The answer lies in the benefits a vibrant retailing sector has to offer— an easier access to a variety of products, freedom of choice and higher levels of customer service. As we all know, the ease of entry into retail business results in fierce competition and better value for customer. To enter retailing is easy and to fail is even easier. Therefore, in order to survive in retailing, a firm must do a satisfactory job in its primary role i. e. , catering to customers. Retailers’ cost and profit vary depending on their type of operation and major product line. Their profit is usually a small fraction of sales and is generally about 9-10%. Retail stores of different sizes face distinct challenges and their sales volume influences 10- business opportunities, merchandise purchase policies, nature or promotion and expense control measures. Over the last decade there have been sweeping changes in the general retailing business. For instance, what was once a strictly made-to-order market for clothing has now changed into a ready-to-wear market. Flipping through a catalogue, picking the right colour, size, and type of clothing a person wanted to purchas e and then waiting to have it sewn and shipped was the standard practice in the earlier days. By the turn of the century some retailers set up a storefront where people could browse, while new pieces were being sewn or customized in the back rooms. Almost all retail businesses have undergone a similar transition over the years. DRIVERS OF CHANGE IN RETAILING v Changing demographics and industry structure v Expanding computer technology v Emphasis on lower costs and prices v Emphasis on convenience and service v Focus on productivity v Added experimentation v Continuing growth of non-store retailing. In today’s competitive environment retailers have redefined their role in general, and in the value chain in particular. Retailers act as gatekeepers who decide on which new products should find their way to the shelves of their stores. As a result, they have a strong say in the success of the product or service launched by a business firm. kA product manager of household appliances claimed, ‘Marketers have to sell a new product several times, first within the company, then to the retailer and finally to the user of the product. ’ It is a well-established fact that manufacturers need to sill their products through retail formats that are compatible with their business strategy, brand image, and market profile in order to ensure a competitive edge. The role of retailers in the present competitive environment has gained attention from manufacturers because external parties such as market intermediaries and supplying partners are becoming increasingly powerful. It is necessary for -11- marketers of consumer products to identify the need and motivations of their partners in the marketing channel. This is especially true in the case or new products. The increasing numbers of product categories followed by multiple brands in each category complicate decision-making for both manufacturers and market intermediaries. Retailers want of optimize sales within the limited shelf space, governed by their individual sales philosophy. Retailers undertake risk in selecting a portfolio of products or brands to offer to their customers. Retailers have to make optimum selection of goods to be sold given the following major concerns: v Selling space available is relatively fixed and must return maximum profits. If such space is occupied by merchandise that is not moving, it will not result in profit. The retailer may have to resort to substantial price reductions in order to get rid of the unsold stock. There is always the risk of non-performance in terms of quality, supplies etc. , which in turn harms the image of the retail outlet. Retailing is a dynamic industry—constantly changing due to shifts in the needs of the consumers and the growth of technology. Retail formats and companies that were unknown three decades ago are now major forces in the economy. Therefore, the challenges for retail managers the world over are increasing—they must take decisions ranging from setting the price of a bag of rice to setting up multimillion dollar stores in malls. Selecting target markets, determining what merchandise and services to offer, negotiating with suppliers, training salespeople—these are just a few of the many functions that a retail manager has to perform on a perpetual basis. The world over retail business is dominated by smaller family run chain stores and regionally targeted stores but gradually more and more markets in the western world are being taken over by billion dollar multinational conglomerates, such as Wal-Mart, Sears, McDonald’s, Marks and Spencer. The larger retailers have managed to set up huge supply/distribution chains, inventory management systems, financing pacts and wide-scale marketing plans. In the backdrop of globalization, liberalization and highly aware customers, a retailer is required to make a conscious effort to position himself distinctively to face the -12- competition. This is determined to a great extent by the retail mix strategy followed by a company to sell its products. GLOBAL RETAIL-INDUSTRY-RELATED FACTS v Worldwide retail sales are estimated at US $7 trillion. v The top 200 largest retailers account for 30% of the worldwide demand. The money spent on household consumption worldwide increased by 68% between 1980 and 1998. v Retail sales are generally driven by people’s ability (disposable income) and willingness ( consumer confidence ) to buy. v The 1998 UNDP Human Development Report points to the fact that global expenditures on advertising are ( including in developing countries ) increasing f aster than the world economy, suggesting that the sector is becoming one of the major players in the development process. REGIONAL FACTS v Some two-thirds or US $6. 6 trillion out of the US $10 trillion American economy is consumer spending. About 40% or that ($3 trillion) is spent on discretionary products and services. v Retail turnover in the EU was almost 2,000 billion in 2001 and the sector’s better than average growth looks set to continue in the future. v Retail trade in Europe employs 15% of the European workforce (3 million firms and 13 million workers). v The Asian economies (excluding Japan) are expected to have 6% growth rates in 2005-06. -13- CONSUMER EXPECTATIONS v Time and quality of life are becoming relatively more important than money; 60% of Americans want to lead a simple life. Product performance was found to be the top purchasing criterion, while environmental features were a close second in a survey conducted by the Alliance for Environmental Innovation in conjunction with SC Johnson Wax. CHARACTERISTICS OF RETAILING Retailing can be distinguished in various ways from other businesses such as manufacturing. Retailing differs from manufacturing in the following ways: v There is direct end-use r interaction in retailing. v In is the only point in the value chain to provide a platform for promotions. v Sales at the retail level are generally in smaller unit sizes. Location is a critical factor in retail business. v In most retail businesses services are as important as core products. v There are a larger number of retail units compared to other members of the value chain. This occurs primarily to meet the requirements of geographical coverage and population density. Direct Interaction with Customers Retail businesses have a direct interaction with end-users of goods or services in the value chain. They act as intermediaries between end-users and suppliers such as wholesalers or manufacturers. Therefore, they are in a position to effectively communicate the response and changing preferences of the consumers to the suppliers or sales persons of the company. This helps the manufacturers and markets to redefine their product and change the components of its marketing strategy accordingly. Manufacturers require a strong retail network both for reach of the product and to obtain a powerful platform for promotions and point-of-purchase advertising. Realizing the importance of retailing in the entire value chain, many manufacturers have entered into retail business by setting up exclusive stores for their brands. This has not only provided direct contact with customers, but has also acted as advertisement for the companies and has provided -14- the manufacturers with bargaining power with respect to other retailers who stocked their product. Retailing provides extensive sales people support for products which are information intensive, such as in the case or consumer durables. Lower Average Amount of Sales Transaction The average amount of sales transaction at retail point is much less in comparison to the other partners in the value chain. Many consumers buy products in small quantities for household consumption. Due to lower disposable incomes, some consumer segments in India even buy grocery items on a daily basis rather than a weekly or a monthly basis. Inventory management becomes a challenge for retailers as a result of the many minor transactions with a large number of customers. Hence, retailers must take care of determining average levels of stock, order levels and the retailer has to keep a tight control on costs associated with each transaction in the selling process. Credit verification, employment of personnel, value-added activities like bagging, gift-wrapping and promotional incentives all add up to the costs. One way to resolve this is for the retail outlets to be able to attract the maximum possible number of shoppers. Point-of-purchase Display and Promotions A significant relevant chunk of retail sales comes from unplanned or impulse purchases. Studies have shown that shoppers often do not carry a fixed shopping list and pick up merchandise based on impulsive or situational appeal. Many do not look at ads before shopping. Since a lot of retail products are low involvement in nature, impulse purchases of the shopper is a vital area that every retailer must tap into. Therefore, display, point-of-purchase merchandise, store layou8t and catalogues become important. Impulse goods like chocolates, snack foods and magazines can sell much more quickly if they are placed in a high visibility and high traffic location. Larger Number of Retail Business Units Location of retail store plays an important role compared to other business units. Manufacturers decide the location on the basis of availability of factors of productions -15- and market. Similarly, retailers consider factors like potential demand, supply of merchandise and store image-related factors in locating the retail outlet. The number of operation units in retail is the highest compared to other constituents ot the value chain, primarily to meet the needs for geographic reach and customer accessibility. THEORIES AND MODELS OF RETAILING 1. DIALECTIC PROCESS: – An evolutionary theory based on the premise that retail institutions evolve. The theory suggests that new retail formats emerge by adopting characteristics from other forms of retailers in much the same way that a child is the product of the pooled genes of two different individuals. 2. GRAVITY MODEL: – A theory about the structure of market areas. The model states that the volume of purchases by consumers and the frequency of trips to the outlets are a function of the size of the store and the distance between the store and the origin of the shopping trip. 3. RETAIL ACCORDION THEORY:- A theory of retail institutional changes that suggests that retail institutions go from outlets with wide assortments to specialized, narrow, line store merchants and then back again to the more general, wide-assortment institution. It is also referred to as the generalspecific-general theory. 4. RETAIL LIFECYCLE THEORY:-A theory of retail competition that states that retailing institutions, like the products they distribute, pass through and identifiable cycle. This cycle can be partitioned into four distinct stages: i. Innovation, ii. Accelerated development, iii. Maturity, and iv. Decline. 5. WHEEL OF RETAILING THEORY: – A theory of retail institutional changes that explains retail evolution with an institutional life cycle concept. 6. NATURAL SELECTION THEORY: – A theory of retail institutional changes that states that retailing institutions that an most effectively adapt to environmental changes are the ones that are most likely to prosper or survive. -16- 7. CENTRAL PLACE THEORY: – A model that ranks communities according to the assortment of goods available in each. At the bottom of the hierarch are communities that represent the smallest central places (centres of commerce). They provide the basic necessities of life. Further up the hierarchy are the larger central places, which carry all goods and services, found in lower-order central places plus more specialized ones that are not necessary. FUNCTIONS OF RETAILING Retailers play a significant role as a conduit between manufacturers, wholesalers, suppliers and consumers. In this context, they perform various functions like sorting, breaking bulk, holding stock, as a channel of communication, storage, advertising and certain additional services. SORTIONG Manufacturers usually make one or a variety of products and would like to sell their entire inventory to a few buyers to redu7ce costs. Final consumers, in contrast, prefer a large variety of goods and services to choose from and usually buy them in small quantities. Retailers are able to balance the demands of both sides, by collection an assortment of goods from different sources, buying them in sufficiently large quantities and selling them to consumers in small units. The above process is referred to as the sorting process. Through this process, retailers undertake activities and perform functions that add to the value of the products and services sold to the consumer. Supermarkets in the US offer, on and average, 15,000 different items from 500 companies. Customers are able to choose from a wide range of designs, sizes and brands from just one location. If each manufacturer had a separate store for its own products, customers would have to visit several stores to complete their shopping. While all retailers offer an assortment, they specialize in types of assortment offered and the market to which the offering is made. Westside provides clothing and accessories, while a chain like Nilgiris specializes in food and bakery items. Shoppers’ Stop targets the elite urban class, while Pantaloons is targeted at the middle class. -17- BREAKING BULK Breaking bulk is another function performed by retailing. The word retailing is derived from the French word retailler, meaning ‘to cut a piece off’. To reduce transportation costs, manufacturers and wholesalers typically ship large cartons of the product, which are then tailored by the retailers into smaller quantities to meet individual consumption needs. HOLDING STOCK Retailers also offer the service of holding stock for the manufacturers. Retailers maintain an inventory that allows for instant availability of the product to the consumers. It helps to keep prices stable and enables the manufacturer to regulate production. Consumers can keep a small stock of products at home as they know that this can be replenished by the retailer and can save on inventory carrying costs. ADDITIONAL SERVICES Retailers ease the change in ownership of merchandise by providing services that make it convenient to buy and use products. Providing product guarantees, after-sales service and dealing with consumer complaints are some of the services that add value to the actual product at the retailers’ end. Retailers also offer credit and hire-purchase facilities to the customers to enable them to buy a product now and pay foe it later. Retailers fill orders, promptly process, deliver and install products. Salespeople are also employed by retailers to answer queries and provide additional information about the displayed products. The display itself allows the consumer to see and test products before actual purchase. Retail essentially completes transactions with customers. CHANNEL OF COMMUNICATION Retailers also act as the channel of communication and information between the wholesalers or suppliers and the consumers. From advertisements, salespeople -18- and display, shoppers learn about the characteristics and features of a product or services offered. Manufacturers, in their turn, learn of sales forecasts, delivery delays, and customer complaints. The manufacturer can then modify defective or unsatisfactory merchandise and services. TRANSPORT AND ADVERTISING FUNCTIONS Small manufacturers can use retailers to provide assistance with transport, storage, advertising and pre-payment of merchandise. This also works the other way round in case the number of retailers is small. The number of functions performed by a particular retailer has a direct relation to the percentage and volume of sales needed to cover both their costs and profits. As a result of these functions, retailers are required to perform the following activities: ACTIVITIES PERFORMED BY RETAILERS Retailers undertake various business activities and perform functions that add value to the offerings they make to their target segments. Retailers provide convenient location, stock and appropriate mix of merchandise in suitable packages in accordance with the needs of customers. The four major activities carried out by retailers are: 1. Arrange for assortment of offerings 2. Breaking quantity 3. Holding stock 4. Extending services ARRANGING ASSORTMENT An assortment is a retailer’s selection of merchandise. It includes both the depth and breadth of products carried. Retailers have to select the combination of assortments from various categories. The assortments must include substitutable items of multiple brands and price points. They should be distinguished on account of physical dimensions and attributes e. g. , colour or flavour. The small retailer takes assortment decision on the basis of his experience; -19- on the other hand retailers from organized retailing depend on a detailed study of past trends and future projections. Retailers need to consider certain factors while devising assortment plans for their stores: profitability associated with particular merchandise mix, store image, layout and the level of compatibility between the existing merchandise. For example, FoodWorld, a leading food supermarket positioned as a one-stop shopping centre, deals in multiple product categories along with all possible variants of brands, stock keeping units, and physical attributes in order to meet the expectations of their consumers and survive in the business. Whereas, Subhiksha, a grocery chain in south India has impressive assortments of only the fast moving brands rather than all available variants in the market. Their assortment plan is governed by location, size and store image of their stores. BREAKING BULK Breaking bulk means physical repackaging of the products by retailers in small unit sizes according to customer’s convenience and stocking requirements. Normally, retailers receive large quantities of sacks and cases of merchandise from suppliers to reduce their transportation costs. In order to meet their customers’ requirements retailers have to break or arrange the bulk into convenient units. This entire function of the retailers adds value to the offerings not only for the end customers but also for the suppliers in the value chain. Even in the earlier days of generic and commodity-based trading most of the retailers used to perform this important function in the value chain. This function receives negligible attention from the retailers now due the introduction of new product categories, such as FMCG and readyto-wear apparel. HOLDING STOCK To ensure the regular availability of the offerings retailers maintain appropriate levels of inventory. Consumers normally depend on the retailers directly to replenish their stocks at home. Therefore, retailers, on periodic basis, maintain the required levels of stock to meet the regular or seasonal fluctuations in the demand. Retailers need to maintain equilibrium between the range or variety carried and the sales which it gives rise to. Retailers have to face the negative consequences of holding unwanted levels of stock—for instance, too little stock -20- ill hamper the sales volume, whereas, too much stock will increase the retailer’s cost of operation. Generally, in small towns of India most retailers have arrangements with the nearby warehouses to stock the goods. Some are so small that they have to stock only on the shop floor. Retailers in the organized sector, to a certain extent, are using effective software packages for maintaining adequate leve ls of inventory. At the same time, retailers avail of just-in-time deliveries with the help of efficient consumer response systems, which reduces the burden of maintaining high levels of stocks. EXTENDING SERVICES Retailing provides multiple services to immediate customers and other members of the value chain. The set of services extended by particular retailers may be part of their core product offerings or it may be ‘add on’ to their product or service. Retailers offer credit, home delivery, after-sales services and information regarding new products to their customers, thereby making the shopping experience convenient and enjoyable. At the same time, they provide stocking place, reach to the ultimate customers, and information about the oncerned target segment to the suppliers. For example, Time Zone, the first organized retail chain of wristwatches in India, started by leading watch manufacturers Titan, set up in all its stores, service centres with proper equipment and trained manpower. This has not only diluted the relevance of service providers in the unorganized sector but has also enhanced the confidence of the customers in the retai9l services provided by the particular retail chain, as after-sales service is considered to be an integral ingredient of the watch purchase. CATEGORIZING RETAILERS Categorizing retailers helps in understanding the competition and the frequent chandes that occur in retailing. There is no universally accepted method of classifying a retail outlet, although many categorization schemes have been proposed. Some of these include classifying on the basis of v Number of outlets v Margin Vs Turnover v Location v Size. -21- The number of outlets operated by a retailer can have a significant impact on the competitiveness of a retail firm. Generally, a greater number of outlets add strength to the firm because it is able to spread fixed costs, such as advertising and managers’ salaries, over a greater number of stores in addition to acquiring economies of purchase. While any retailer operating more than one store can be technically classified as a chain owner, for practical purposes a chain store refers to a retail firm which has more than 11 units. In the United States, for example, chain stores account for nearly 95% of general merchandise stores. Small chains can use economies of scale while tailoring merchandise to local needs. Big chains operating on a national scale can save costs by a centralized system of buying and accounting. A chain store could have either a standard stock list ensuring that the same merchandise is stocked in every retail outlet or an optional stock list giving the outlets the advantage of changing the merchandise according to customer needs in the area. Because of their size, chain stores are often channel captains of the marketing channel—captains can influence other channel partners, such as wholesalers, to carry out activities they might not otherwise engage in, such as extended payment terms and special package sizes. Big stores focus on large markets where their customers live and work. They use technology to learn more about their customers and target them with point-of-sale machines interactive kiosks, and sophisticated forecasting and inventory systems. They tend to stock a narrow range of inventory that sells well and maintain an extensive inventory of the fast selling products. Branding is important to them. Pricing is often a key area of focus for these retailers. Big stores have many strengths, including regional or national reputation, huge buying power, vast inventory and hassle-free return and exchange policies. Their prime locations, the consistency in their products and services, the fact that they are open when people can and want to shop and the clear consistent image and identity they develop and maintain challenge the abilities and resources of many small retailers. Perhaps their biggest advantage is their knowledge in every aspect of their business, from inventory selection to store layout. However, large retailers are not perfect. They have competitive weaknesses that small retailers can exploit. Most offer the same standardized assortments of products nationally. Local managers have little say in inventory selection. Often, sales staff has minimal product knowledge. Staff turnover is extremely high. Most large retailers have little connection with -22- the community they serve. They usually do not offer special services. Larger companies are often slow to recognize and react to changes in their local markets. Independent retailers can co-exist and flourish in the shadow of the big chains by developing a niche within the diverse market. The niche should be developed on the basis of new or unusual product offerings, superior service and overall quality. While value is important, price may be less important. Efficient operations, including precise buying practices, are a must. Customer contact within the niche market must be characterized by ‘high-touch’ service. The key factor is innovation: stores that do not change will perish. The road to success for the independent retailer lies in doing all the things those big chain stores can not or will not do. The successful independent retailers embrace the following principles: v Be prepared for change. v Move to a narrower niche market and stop competing directly with the big retailers. v Learn more about customers and include best customers in a database. Invest appropriately in advertising and promotion. v Charge regular prices and avoid discounting (ensure requisite mark-up). v Buy with precision and search out speciality suppliers. v Maintain essential inventory. v Focus on profit instead of volume (be ready to lose an occasional sale). v Provide extraordinary service. v Employ the best possible staff. v Understand the signi ficance of the Internet. Gross margin and inventory turnover is another means of classifying retailers. Gross margin is net sales minus the cost of goods sold and gross margin percentage is the return on sales. A 30% margin implies that a retailer generates Rs 30 for every Rs 100 sales that can be used to pay operating expenses. Inventory turnover refers to the number of times per year, on average, a retailer sells his inventory. On the basis of this, retailers are classified as low margin low turnover—those that cannot survive the competition—and low margin high turnover, exemplified by Amazon. com. Jewellery stores and appliance stores are examples of high margin low turnover stores and only a few retailers achieve high margin high turnover. These -23- etailers are in the best position to combat competition because their high turnover allows them to withstand price wars. The drawback of the classification by this method is that service retailers who have no inventory turnover cannot be encompassed. One of the old means of classification of retailers is by location, generally within a metropolitan area. Retailers are no longer satisfied with traditional locations within a cit y’s business district but are on the constant lookout for alternate locations to reach customers. Besides renovating old stores, retailers are testing unorthodox locations to expand their clientele. With the advent of the Internet, this area of retailing is likely to undergo tremendous changes in the coming years. Size is often used as a yardstick to classify retailers because costs often differ on the basis of size, with big retailers having lower operational costs per dollar than smaller players. However, in this sphere too, the Internet may make size an obsolete method of comparison. TRENDS IN RETAIL FORMATS Retail industry is continuously going through changes on account of liberalization, globalization and consumer preferences. While multinational retail chains are looking for new markets, manufacturers are identifying, redefining, or evolving new retail formats. The existing retail houses are also gearing up to face the emerging competition from the organized sector and the changing outlook of the consumers. For example, consumer spending is shifting from goods to services. Accordingly the retailers too are fast adjusting to the changing consumer preferences. Consumers are not only looking for the core products or functional benefits from the retailers but also the non-functional benefits, which need to be compatible with their lifestyles. For example, most of the traditional eating joints in India such as Haldiram, Bikaner and Sagar Ratna have revised their product offerings and atmospherics on the lines of the multinational chains to compete with them and to serve changed expectations of the consumers. Mom-and-pop Stores and Traditional Kirana Stores The retail sector is changing as new store categories have started dominating the marketplace. Mass merchandisers (Wal-Mart, Big Bazaar), discount clubs (Subhiksha), -24- so-called category killers (Home Depot, Vishal chain), and speciality retailers (Time Zone, Tanishq) have all developed a successful retail models. At the same time, the small mom-and-pop stores and the traditional department stores, are finding the competition intense. In 2002, while Wal-Mart and Target saw revenues grow (by 12% and 10%, respectively), department stores such as Saks and Federated experienced declining revenues (down 3% and 1% respectively). But even in the mass-merchandising segment, the competition is fierce, as is evidenced by Kmart’s bankruptcy announcement in 2002. Small independent stores, across product categories, is a very common retail formats they are also undertaking large scale renovations to appeal and attract their target consumer segments. E-commerce The amount of retail business being conducted on the Internet is growing every year. Indeed, Forrester Research Agency projects e-commerce revenue to rise to $123 billion in 2004, an increase of some 28% over the previous year and for e-tailing to comprise a bigger slice of the overall retail pie (5. 6%, up from 4. 5% in 2003). Many major retail organizations and manufacturers have online retail stores. Companies like Amazon. com and First and second. com, which helped pioneer the retail e-commerce concept, are now being followed by bricks-and-mortar and catalogue retailers like J. Crew, which are expanding retail e-commerce into new markets. Department Stores A few years ago, names like Sears, J. C. Penney, Macy’s, and Montgomery Ward dominated malls and downtowns all over America. Over the last decade or so, however, these department stores have suffered badly. In part, this is a result of changing shopping patterns and increased competition from discount stores. It has also come from financial burdens incurred by companies that acquired competing companies and grew too fast. It is unlikely that these players will disappear from the market. However, they should be ready to expect more bumps as the strong get stronger and the weak get absorbed. -25- Discount Stores These are giants such as Wal-Mart (the largest retailer in the world, with more than a million; employees), Target and Kmart, as well as membership warehouses, such as Costco. These, along with the category killers, have changed the landscape of both the retail industry and America. Where once mom-and-pop and department stores dominated retail, now the discount retailers and category killers are at the top of the heap. And where once shopping malls, anchored by at least one major department store, ;used to be the dominant retail presence lining the nation’s roads, now it is the behemoth Wal-Marts and Home Depots. Category Killers These are the giant retailers that dominate one area of merchandise (e. g. , Office Depot, Tower Records and The Sports Authority). They are able to buy bathroom tiles, file cabinets, electronic goods or pet food in such huge volumes that they can then sell them at prices even fairly large competitors cannot match. The future of this category is better than that of many of the more general discounters, but the same employment caveats apply. For most job seekers, these companies offer earn-and-learn experiences with vendors and distributors before they move onward and upward. Speciality Stores These include Crate & Barrel, the Body Shop, and Victoria’s Secret. These stores concentrate on one type of merchandise and offer it in a manner that makes it special. Some are very high-end (Louis Vuitton) while others cater to the price-conscious masses (Old Navy). Many are so successful that department stores have started to emulate their buying, marketing, and merchandise display strategies. Industry experts predict growth in this segment, particularly in home furnishings and home improvement, and it seems to attract many of the best and brightest in retail. Promotion and responsibility come quickly to those willing to work hard, and in many of these stores the hand of bureaucracy is not heavy. -26- E-tailers While most retailers have online storefronts, strictly online purveyors with no bricksand-mortar counterparts are hoping to snare a percentage of the retail profit. Major players, such as Amazon. com, have generated enough business to cause top brick-andmortar competitors to come up with their own Internet sites. Traditional retailers like Wal-Mart and Starbucks, hugely successful in their own right, have also set up online stores so as not to miss out on the revenue opportunities that the Interned offers. -27- BARISTA Barista positioned its outlets as a place where people meet each other in an environment, which fulfills both their social and intellectual needs. The music is not too loud and encourages conversation, and the person behind the counter is non-intrusive and friendly. Any consumer knows that even when it is crowded at Barista, you will have your share of privacy. This is because the other consumer is not listening in; he is too involved in himself. MARGIN FREE MARKETS Margin Free Markets is the largest retail chain in the state of Kerala and one of the leading retail chains in India. The first outlet of this chain started functioning on 26 January 1994 at Thiruvananthapuram. There are currently more than 275 franchisees of Margin Free Markets spread all over south India. The outlets are franchises and are not actually owned by the chain. The Consumer Protection and Guidance Society currently control Margin Free Markets, which is registered charitable institution that started functioning in 1993. The consumers are assured of quality, quantity and fair price of the goods sold through the Margin Free Markets. Any retailer can upgrade his shop to a Margin Free outlet by sending in an application to the society. If his application is accepted, he has to make the necessary investment as required. These shops deal in the enter gamut of foods required by a home for its monthly onsumption, grocery, food and non-food FMCG items, fruits and vegetables, consumer goods and household articles. Margin Free outlets are typical discount stores, offering one-stop-shop convenience and self service facility at significant discount to its customers. Most of these customers, in time, turn out to be its permanents customers by taking discounts cards, which permit them to obtain larger discounts than the non-card holders. The necessity to o ffer protection against the rising prices gave birth to the idea of Margin Free Markets. An enthusiastic entrepreneur, named Mr N. Ravikumar, conceived the idea. The idea turned out to be an instant success in Kerala especially because Kerala is more of, a ‘consumer’ state than a ‘producing’ state Kerala depends on her neighbouring states for her consumer needs. Due to the large number of intermediaries involved and the transportation costs, the prices are high and there is a wide fluctuation in the prices of groceries, fruits and vegetables. -28- RETAIL ORGANIZATION The term retail organization refers to the basic format or structure of a retail business designed to cater to the needs of the end customer. Recently, some scholars have started referring to India as a nation of shopkeepers. This epithet has its roots in the huge number of retail enterprises in India, which were over 12 million in 2003. About 78% of these are small family businesses utilizing only household labour. Retail firms may ;be independently owned, parts of a retail chain, operated as a franchisee, leased departments, owned by manufacturers or wholesalers, consumersowned or co-operative society. A retail unit could be owned by: v Manufacturer (e. g. , company owned retail outlets) v Wholesaler (e. g. Vastra outlet in Rajouri in New Delhi) v Independent retailer (Chanakya Sweet Shop near Hazratganj in Lucknow) v Consumer (consumer owned grocery stores in man y residential societies) v Co-operative society (e. g. , Mother Dairy milk booths in Delhi) v Government (e. g. , Cottage Emporia) v Ownership shared among franchiser and franchisee (e. g. , Archies Gallery) Although most Indian retailers fall in the category o f small-scale units, there are also some very big retailers. Organized retail stores are generally characterized by large, professionally managed store formats providing goods and services hat appeal to customers, in an ambience that is conducive for shopping and provides a memorable experience to customers. From positioning and operating perspectives, each ownership format serves a marketplace niche and presents certain advantages and disadvantages. Retail executives must not lose sight of this in playing up their strengths and working around their weaknesses. THE CHANGING STRUCTURE OF RETAILING All dynamic developments in retailing, from the birth of departmental stores in the last century to the recent emergence of warehouse clubs and hypermarkets, have been -29- responses to a changing environment. Changing customer demand, new technologies, intense competition, and social changes create new opportunities even as they shake up existing business. The retail business formats have been changing very fast mainly due to technological influences. The Internet and the Web technologies have created a myriad f opportunities for the Web-based business model of retailing. This has created a competition for the retailer with its own self. Besides, the challenge for the retailer now is to keep abreast of these latest formats in order to maintain and grow its share of market and compete within its band of retailers. A key impact of technology has been provision ;of greater information to the customer. Hence, a big challenge for the retailer in the information savvy world of today is that the opportunities for price differentiate itself qualitatively by superior customer services or better value for money to the customer. CLASSIFICATION OF RETAIL UNITS Conceptual classification of a business unit provides the marketers with strategic guidelines, useful in the design of retailing strategy. Besides, retail businesses are extremely diverse and there are quite a few types of retail units. Therefore, retail units are classified on multiple of ownership, geographical locations, kind of customer interaction level of services provided etc. Retailers Classified on the Basis of Ownership One of the first decisions that the retailer has to make as a business owner is how the company should be structured. This decision is likely to have long-term implications, so it is important to consult with an accountant and attorney to help one select preferred ownership structure. There are four basic legal forms of ownership for retailers: 1. Sole proprietorship: – The vast majority of small businesses start out as sole proprietorships. These firms are owned by one person, usually the individual who has the day-to-day responsibility for running the business. -30- 2. Partnership: – A partnership is a common format in India for carrying out business activities (particularly trading) on a small or medium scale. In a partnership, two or more people share ownership of a single business. 3. Joint venture: – A joint venture is not well defined in the law. Unless incorporated or established as a firm as evidenced by a deed, joint ventures may be taxed like association of persons, sometimes at maximum marginal rates. It acts like a general partnership, but is clearly for a limited period of time or a single project. 4. Limited liability Company (public and private):- The Limited Liability Company (LLC) is a relatively new type of hybrid business structure that is now permissible in most states. The owners are members, and the duration of the LLC is usually determined when the organization papers are filed. Classification of Retailers on the basis of Operational Structure Retail businesses are classified on the basis of their operational and organizational structure. Operational structure defines the key strategic decision of retail entity, whether to hire employees and manage the distributed sales function internally or to reach customers though franchised outlets owned and operated by local entrepreneurs. Retail firms can be classified into five heads on the basis of their respective operational structures: 1. Independent retail unit: – The total number of retailers in India is estimated to be over 5 million in 2003. About 78% of these are small family businesses utilizing only household labour. An independent retailer owns one retail unit. 2. Retail Chain: – A chain etailer operates multiple outlets (store units) under common ownership; it usually engages in some level of centralized (or coordinated) purchasing and decision making. 3. Franchising: – Franchising involves a contractual arrangement between a franchiser (which may be a manufacturer, a wholesaler, or a service sponsor) and a retail franchisee, which allows the franchisee to conduct a -31- given form of business under and establishments name and according to a given pattern of business. 4. Leased Department or Shop-in-shop:-It refers to department in a retail store that are rented to an outside party. Usually this is done in case of department and speciality stores and also at times, in discount stores. 5. Co-operative Outlets: – Co-operative outlets are generally owned and managed by co-operative societies. In this context the detailed example of Kendriya Bhandar in India. Classification of Retailers on the basis or Retail Location Retailers have also been also been classified according to their store location. Retailers can locate their stores in an isolated place and attract the customers to the store on their own strength—such as a small grocery store or paan shop in a colony, which attracts the customers staying close by. Classification of retailers on the basis of location is discussed below: 1. Retailers in a free-standing location:- Retailers located at a site which is not connected to other retailers depend entirely on their sore’s drawing power and on the various promotional tools to attract customers. This type of location has several advantages including no competition, low rent, better visibility from the road, easy parking and lower property costs. For example the Haldiram’s outlet on the DelhiJaipur highway and the McDonald’s outlet on Delhi-Ludhiana highway. 2. Retailers in a Business-associated Location:-In this case, a retailer locates his store in a place where a group o retail outlets, offering a variety of merchandise, work together to attract customers to their retail area, and also compete against each other for the same customers. 3. Retailers in Specialized Markets: – Besides the above location-based classification, we also have in India-retailers who prefer specialized markets, particularly traditional independent retailers or chain stores. -32- In India, most of the cities have specialized markets famous for a particular product category. For example, in Chennai, Godown Street is famous for clothes, Bunder treet for stationery products, Usman street for jewellery, T Nagar for ready-made garments, Govindappan naicleen street for grocery, Poo Kadia for food and vegetables. 4. Airport Retailing: – For quite some time, duty-free shops and newsstands dominated the small amount of commercial space provided at airports. Lately, serious efforts are being made to design new airport facilities in order to incorporate substantial amounts of retail space. The key features of airport retailing are: v Large groups of prospective shoppers v Captive audience v Strong sales per square foot of retail space v Strong sales of gift and travel items v Difficulty in replenishment v Longer operating hours v Duty-free shopping possible. ` -33- VARIETY OF MERCHANDISE MIX The retail merchandising has come a long way in India since the days when general stores (kirana) that stocked everything from groceries to stationery and small shops that sold limited varieties of products (such as clothes, furniture, medicines) reigned supreme. There are many different retail stores in India—convenience stores, supermarkets, hypermarkets, department stores, brand stores and discount stores characterized by the variety of merchandise mix offered by a respective retail format. The consumer can choose between different stores for different needs. Retail units, on account of variety of merchandise mix, can be classified as follows: . Department Stores: – It is a large retail store organized into a number of departments, offering a broad variety and depth of merchandise, commonly part of a retail chain. Usually, department stores are located within the planned shopping centres or traditional up market downtown centres. The leading fashion department stores in India are Ebony, Globus, LifeStyle, Pantaloon, Shoppers’ Stop and Westside. All of them are multiproduct stores, Ebony has 7 stores, Globus has 4 stores, LifeStyle has 3 stores and there are 12 Pantaloon Family Stores. Discount Stores: – Retailers offering a broad variety of merchandise mix, limited or no service and low prices are characterized by low margins, heavy advertising, low investments on fixtures, limited support from sales people etc. Discount stores prefer shopping centres that provide space at lower rents as they attract customers from other adjoining stores in the shopping centre. Speciality Stores: – Speciality stores stress on one or a limited number of complementary product categories and extend a high level of service to their customers. In India, the traditionally independent retailers in the specialized market centres operate in a particular product category, at these centres attract large crowds. Such specialized retail operations provide expertise economies of scale, bargain and image to the particular stores. Supermarkets and Hypermarkets:- A hypermarket is a very large retail unit offering merchandise at low prices. Superstores have a sales area of over 50,000sq. ft. Hypermarkets are characterized by large store size, low operating costs and margins, low prices and comprehensive range of merchandise. -34- RETAIL IN INDIA The retail industry in India is largely unorganized and predominantly consists of small, independent, owner-managed shops. Retailing is India’s largest industry in terms of contribution to GDP and constitutes 13% of the GDP (Gross Domestic Product). There are around 5 million retail outlets in India. There are also an unaccounted number of low cost Kiosks (tea stalls, snack centres, barber shops) and pushcarts mobile vendors. Total retail sales area in India was estimated at 328 million sq. mt. in 2001, with an average selling space of 29. 4 sq. mt. per outlet. In India, the per capita retailing space is about 2 sq. ft. , which is quite low in comparison to the developed economies. In 2000, the global management consultancy AT Kearney put retail trade at Rs 400,000 crore, which is expected to increase to Rs 800,000 crore by the year 2005—an annual increase of 20%. According to a survey by AT Kearney, an overwhelming proportion of the Rs 400,000 crore retail markets is unorganized. In fact, only a Rs 20,000 crore segment of the market is organized. There is no integrated supply chain management outlook in the Indian traditional retail industry. Food sales constitute a high proportion of the total retail sales. The share was 62. 7% in 2001, worth approximately Rs 7,039. 2 billion, while non-food sales were worth Rs4189. 5billion. However, the non-food retailing sector registered faster year-on-year growth than the food sales sector. The trend to market private labels by a specific retail store is catching on in India as it helps to improve margins. The turnover from private labels by major retail chains was estimated at around Rs 1200 million in 2000. Growth in retail outlets (millions) Year 1978 1984 1990 1996 Urban 0. 58 0. 75 0. 94 1. 80 Rural 1. 76 2. 02 2. 42 3. 33 Total 2. 35 2. 77 3. 36 5. 13 Source: indiainfoline -35- Composition of urban outlets Retail Outlet Grocers Cosmetic stores Chemist Food stores General stores Tobacco, pan stores others Source: indiainfoline Composition 34. 7% 4. % 6. 3% 6. 6% 14. 4% 17. 0% 17. 0% Composition of rural outlets Retail Outlet Grocers Composition 55. 6% General stores 13. 5% Chemists Others 3. 3% 27. 6% Source: Indiainfoline EMERGENCE OF ORGANIZED RETAILING Organized retailing in India repres

Wednesday, October 23, 2019

An Experience of a life time

â€Å"Get to bed, Dharam,† my mother shouted. The excitement, the adrenaline pumping in me, kept me awake all night. I was trying to imagine myself in India, wondering what it was going to be like: the people, the country, the weather, I couldn't keep the energy inside of me; I just wanted to get there and see it for myself. The following morning, I gave my love and best wishes to my family and departed from Manchester International Airport. I then found myself on air India Flight heading to my destination Delhi. It was 5:00 am when we arrived in India. The smell hit me straight in the face, the heat firing at 36'Celsius came gushing at me; the people were rushing around like ants on a summer's day! I was in the fourth dimension it was nothing like I had imagined. The hooters and revving engine of the cars that cluttered the busy streets merged in a great cacophony of sound. There were people begging for money, there were people making food on stoves on streets having lived in England it was a sight I was not familiar with. Music came from all directions not just of songs it was the engines of cars and there hooters. I was amazed how different it was compared to England; it was hot, sticky, and noisy and overpopulated. Although I was extremely tired, I was also excited because this was a different atmosphere from what I had seen before, it wasn't just another holiday; it was my first time out of the country. At that time I didn't really think about England, I was too concerned about what my dad's family were going to think about me because this was the first time I had seen them in my life. Then questions started to come into my mind like will they like me? Will I like them? What do they look like? Would I fit in with them? As I got out of the airport I heard someone shout my dads name I didn't have a clue who it was but I realized it was someone from my dad's family I didn't ask who it was because I was too concerned about what was going on, but one thing I noticed straight away was that the people and animals were walking on the roads without a care in the world. My first reaction was, â€Å"God, where have you bought me†? That was the first time I missed home but as my journey progressed I was then fascinated with the way the country was. As the week ended I had settled in and got used to the environment. In one hot week I visited most of New Delhi and all the temples in New Delhi, but as the week ended my heart started to pound just as it was when I arrived at the airport. I knew the time had come to visit my other relatives. As I sat on the train staring out of the window, the sun was hitting me straight in my face. I started to think what I going to say to them. As the train stopped at Kurukshetra, we caught a taxi to my aunt's house. I took a deep breath and went in. There were my cousins sitting down watching cricket; they got up and greeted me. I felt like I had met them before, I got a warm feeling from them. My cousins introduced me to all their friends and showed me one of the biggest zoos in India where you could a touch baby lion. At first I didn't touch it because I thought to myself that it was a lion. But my cousin finally persuaded me too. My two days in Kurukahetra went so fast but I knew that I would return. My next stop was at Patiala in the northwest in the state of Punjab, to see my dad's grandmother. This time I wasn't as nervous as I was before. As I came off the bus I felt different. I was used to the road and cars everywhere. Patiala was different from Delhi and Kurukshetra, it was cleaner and there were no animals running around there was also no pollution. I stayed in Patiala for a week because I found it clean compared to the other cities. I visited my Dad old school and saw where he had worked. As he was showing me I could see that he felt very emotional leaving his home country. After a week in Patiala, I headed back for Delhi to visit my mum's parents who were visiting from England I couldn't wait to see them because I new they could speak the same language as me. Two days later we went to Agra to see the TajMahal; I was so amazed to see how magnificent the marble brickwork was and by the stunning architecture. There were people visiting from all over the world. As we went inside the TajMahal, it was dark the guide with a torch came over and told the story behind the TajMahal. He told us that Shah Jahan made this for his beautiful wife as a memorial; Shah Jahan chopped the hands off his workers after the building was completed so that they couldn't make another building like the TajMahal. I was beginning to realize why Shah was so obsessed with the TajMahal and why he didn't want it duplicated. As I went to my hotel I then thought to myself, â€Å"Now I can understand why so many people visit the TajMahal† Before, I'd thought it was just another building. I was now my third week in India time had passed by very quickly. As I was looking out of the window I was thinking about England, thinking, â€Å"What are they doing back at home? † I was missing my bed and fish and chips also the toilets, the Indian toilets were just like a whole in the ground. In that week I didn't want to stay in India, I was home sick, I was fed up looking at people with no legs or no arms and families with children who were only five or four years old asking for money, the poverty was too great, I just wanted to go home. As the week ended my dad and I decided to go back to Kurukshetra where my cousins lived. I stayed there for two weeks and went to the golden temples in Amritsar. As we got to Amritsar it was dusty and had animals all over. As we walked in side the golden temples it was amazing and peaceful, you could not hear any of the noises from outside. I felt like I was in heaven I was amazed with the beauty I hadn't seen anything better before in my life this also made be proud to be a Sikh. My dad woke me up at five o'clock in the morning to have a Shannon (which is a bath). It is said to purify you of your sins. We stayed there for two days and went to Patiala. As we got to Patiala it was holy this was a festival of colours happens once a year on March 3. As I was new, the town people decided to get me, to show how they play hoily. One man came from behind and threw a bucket full of colours. After 12 o'clock hoily was finished so I decided to have a bath. As I went in no water came I then started too appreciate that I was from a richer country, they told me the water comes on at five o'clock. As time went on the colours started to dry and crumble, it made me feel itchy and irritable. As the week ended there were two weeks left for me to go home. I knew time was coming up to go back. One part inside of my wanted to stay and the other didn't. 48 hours! The clock was ticking. I looked at the calendar and my emotions ran I had the feeling that someone was taking pieces of my heart away. Will I ever come back? Will I ever see these people again? I felt depressed. I didn't want to go home, well not yet. I enjoyed myself so much that I didn't want to leave. I sat in the room where I slept and looked at all four walls of the room and said,† Dharam you're going home to your family. † I checked again to see if I was missing anything. I then went out and spent the rest of the day with my friends also enjoyed the Indian food. I bought some gifts for my family and got ready for my journey to Delhi airport. I said my final farewells and realized the adventure was over and I was returning back to reality, back to England. When I got into the aeroplane, my tears ran down my face as I looked out of the window all I could manage was a wave.