CHAPTER 1 GENERAL INTRODUCTION INTRODUCTION OF THE STUDY Retailing in India is receiving global recognition and attention and this emerging market is witnessing a significant change in its growth and investment pattern. It is not just the global players like Wal-Mart, Tesco and Metro group are eying to capture a pie of this market but also the domestic corporate behemoths like Reliance, K K Modi , Aditya Birla group, and Bharti group too are at some stage of retail development. Reliance, announced that it will invest $3. 4 billion to become the country’s largest modern retailer by establishing a chain of 1,575 stores by March 2007.
The last couple of years have been rosy for real estate developers and the retailers are finding suitable retail space in prominent locations. The industry is buoyant about growth and the early starters are in expansion mood. There is increased sophistication in the shopping pattern of consumers, which has resulted in big retail chains coming up in most metros; mini metros and towns being the next target. Consumer taste and preferences are changing leading to radical alteration in lifestyles and spending patterns which in turn is giving rise to new business opportunities.
Companies need to be dynamic and proactive while responding to the ever-changing trends in consumer lifestyle and behavior. Retailing consists of the sale of goods or merchandise from a fixed location, such as a department store, or by post, in small or individual lots for direct consumption by the purchaser. Retailing may include subordinated services, such as delivery. Purchasers may be individuals or businesses. In commerce, a “retailer” buys goods or products in large quantities from manufacturers or importers, either directly or through a wholesaler, and then sells smaller quantities to the end-user.
Retail establishments are often called shops or stores. Retailers are at the end of the supply chain. Manufacturing marketers see the process of retailing as a necessary part of their overall distribution strategy. The term “retailer” is also applied where a service provider services the needs of a large number of individuals, such as a public utility, like electric power. Shops may be on residential streets, shopping streets with few or no houses or in a shopping mall. Shopping streets may be for pedestrians only. Sometimes a shopping street has a partial or full roof to protect customers from precipitation.
Online retailing, a type of electronic commerce used for business to consumer (B2C) transactions and mail order are forms of non shop retailing. Shopping generally refers to the act of buying products. Sometimes this is done to obtain necessities such as food and clothing; sometimes it is done as a recreational activity. The retail industry in India is currently growing at a great pace and is expected to go up to US$ 833 billion by the year 2013. It is further expected to reach US$ 1. 3 trillion by the year 2018 at a CAGR of 10%.
As the country has got a high growth rates, the consumer spending has also gone up and is also expected to go up further in the future. In the last four year, the consumer spending in India climbed up to 75%. As a result, the India retail industry is expected to grow further in the future days. By the year 2013, the organized sector is also expected to grow at a CAGR of 40%. 1. 1 OBJECTIVE OF ORGANISATIONAL STUDY * To understand the role and relevance of retailing for business and economy. * To understand the different departmental functions associated with Aditya Birla Retail Ltd. Understanding the importance of store location for a outlet * To Study
It is only in the recent past that the buying and selling of goods have become more of format and a brand dominated activity . The traditional form of independently owned businesses co-exist along with the organized retail. Organized retail has emerged in a big way since 2000 onward and with that we are witnessing the emergence of new forms of retailing. Aditya Birla Retail Limited is the retail arm of Aditya Birla Group, a USD 28 billion Corporation. The Company ventured into food and grocery retail sector in 2007 with the acquisition of a south based supermarket chain.
Subsequently Aditya Birla Retail Ltd. expanded its presence across the country under the brand “more. ” with 2 formats Supermarket ; Hypermarket. Supermarket Conveniently located in neighbourhoods, more. supermarkets cater to the daily, weekly and monthly shopping needs of consumers. The product offerings include a wide range of fresh fruits ; vegetables, groceries, personal care, home care, general merchandise ; a basic range of apparels. Currently, there are over 600 more. supermarkets across the country. Hypermarket More. MEGASTORE – is a one-stop shopping destination for the entire family.
Besides a large range of products across fruits ; vegetables, groceries, FMCG products, more. MEGASTORE also has a strong emphasis on general merchandise, apparels ; CDIT. Currently, nine hypermarkets operate under the brand more. MEGASTORE in Mysore, Vadodara, Aurangabad, Indore, Bengaluru, Mumbai, New Delhi, Hyderabad and Vashi. Aditya Birla Retail Limited. currently has an employee strength of over 11,000. Key functions are headed by professionals with vast retail experience in India ; globally. Quality ; Value through own labels:
Aditya Birla Retail Ltd provides customers a wide choice of products under its own labels. The objective is to provide quality products at attractive price points to customers. Since quality of the products is of prime importance, stringent quality norms have been set and are followed. All manufacturing partners are the best in their class. TYPES OF RETAIL FORMAT * Convenience store * Chain of stores * Franchise * Speciality store * Departmental store * Supermarket * Hypermarket * Shopping mall * Shopping plaza * Factory outlet 2. 1 ORIGIN AND DEVELOPMENT OF THE INDUSTRY Retail is India’s largest industry.
It accounts for over 10 per cent of the India’s GDP and around eight per cent of the employment. Retail sector is one of India’s fastest growing sectors with a 5 per cent compounded annual growth rate. India’s huge middle class base and its untapped retail industry are key attractions for global retail giants planning to enter newer markets. Driven by changing lifestyles, strong income growth and favorable demographic patterns, Indian retail is expected to grow 25 per cent annually. It is expected that retail in India could be worth US$ 175-200 billion by 2016. The organized retail industry in India had not evolved till the early 1990s.
Until then, the industry was dominated by the un-organized sector. It was a sellers market, with a limited number of brands, and little choice available to customers. Lack of trained manpower, tax laws and government regulations all discouraged the growth of organized retailing in India during that period. Lack of consumer awareness and restrictions over entry of foreign players into the sector also contributed to the delay in the growth of organized retailing. Foundation for organized retail in India was laid by Kishore Biyani of Pantaloon Retails India Limited (PRIL).
Following Pantaloon’s successful venture a host of Indian business giants such as Reliance, Bharti, Birla and others are now entering into retail sector. Retailing is the most active and attractive sector of last decade. While the retailing industry itself has been present since ages in our country, it is only the recent past that it has witnessed so much dynamism. The emergence of retailing in India has more to do with the increased purchasing power of buyers, especially post-liberalization, increase in product variety, and increase in economies of scale, with the aid of modern supply and distributions solution.
Indian retailing today is at an interesting crossroads. The retail sales are at the highest point in history and new technologies are improving retail productivity. though there are many opportunities to start a new retail business, retailers are facing numerous challenges. A number of factors are driving India’s retail market. These include: increase in the young working population, hefty pay-packets, nuclear families in urban areas, increasing working-women population, increase in disposable income and customer aspiration, increase in expenditure for luxury items, and low share of organized retailing.
India’s retail boom is manifested in sprawling shopping centers, multiplex- malls and huge complexes that offer shopping, entertainment and food all under one roof. But there is a flip side to the boom in the retail sector. It is feared that the entry of global business giants into organized retail would make redundant the neighbourhood kiryana stores resulting in dislocation in traditional economic structure. Also, the growth path for organized retail in India is not hurdle free. The taxation system still favours small retail business.
With the intrinsic complexities of retailing such as rapid price changes, constant threat of product obsolescence and low margins there is always a threat that the venture may turn out to be a loss making one. MANAGEMENT TEAM OF ADITYA BIRLA RETAIL LTD * Thomas Varghese, CEO – Aditya Birla Retail Ltd. * Russell Berman, CEO – Hypermarket * Satendra Aggarwal, CEO – Supermarket * Atul Daga, Head Finance * Ramesh Mitragotri, CPO * Manoj Krishnan, CIO * Shiv Murti, Chief Merchandising Officer * T V. Venkataraman, Head – Internal Audit * V. Gopalakrishnan, Head – Quality 2. GROWTH & PRESENT STATUS OF THE INDUSTRY Retailing is emerging as a sunrise industry in India and is presently the largest employer after agriculture. In the year 2004, the size of Indian organized retail industry was Rs 28,000 Crore, which was only 3% of the total retailing market. Retailing in its present form started in the latter half of 20th Century in USA and Europe and today constitutes 20% of US GDP. It is the 3rd largest employer segment in USA. Organized retailing in India is projected to grow at the rate of 25%-30% p. a. and is estimated to reach an astounding Rs 1,00,000 Crore by 2010.
The contribution of organized retail is expected to rise from 3% to 9% by the end of the decade. The projection for the current year ie 2005 is Rs 35,000 Crore. In India it has been found out that the top 6 cities contribute for 66% of total organized retailing. With the metros already been exploited, the focus has now been shifted towards the tier-II cities. The ‘retail boom’, 85% of which has so far been concentrated in the metros is beginning to percolate down to these smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%.
In the year 2004, Rs 28,000 Crore organized retail industry had Clothing, Textiles & fashion accessories as the highest contributor (39%), where as health & beauty had a contribution of 2%. Food & Grocery contributed to 18% whereas Pharma had a contribution of 2%. Globally, the retail industry has grown at a brisk pace with a Compounded Annual Growth Rate (CAGR) of 7. 77% during the period 2001-2006. The growing expanse of the top global retailers has ensured globalization of the industry; however the opportunity for growth of organized retail is immense in countries such as India, S.
Korea, and Vietnam etc. where organized retailing is still at an ascent stage. The Indian retail industry has witnessed a massive transition during the last few decades. The Indian retail has grown at a CAGR of 11. 2% during the period FY04-FY07, with food and grocery accounting for the major share. Despite the industry being dominated by the unorganized retailers, the organised retailing revenues have soared at a CAGR of 19. 5% during the period FY04-FY07. The apparel & footwear segment occupies the major share in the organised retail pie.
The Indian retail industry has strong linkages with the economic growth and Development of the economy. It is primarily characterized by its hierarchical growth structure, high working capital requirements etc. The factors such as rising urbanization, growing consumer class, growing per capita expenditure, greater interest evinced by the Venture capitalists / Private equity firms in the industry etc. have been driving the growth of organised retail. The growth of modern retailing has led to the emergence of varied formats such as Departmental stores, Supermarkets etc.
In addition, few other formats such as rural retailing, E-retailing, luxury retailing etc. too have found favours with the Indian retailers. Each format being distinct from the other, the viability of their operations depends upon various factors such as average footfalls, sales per sq. ft etc. However the numerous licensing requirements as compared to other countries have proved to be a bottleneck in the growth of Indian retailing. We have identified further requirements, advantages and disadvantages associated with the organized as well as unorganized retailing in India.
On the basis of a detailed analysis incorporating the experience of other retailing locations across the globe, We feel that the co-existence of the organized and unorganized retailing in the Indian context cannot be denied. To estimate the size of the Indian retail industry and the penetration levels of organized retail in the urban and rural Indian markets for the period FY08-FY11, we have evolved an industry model incorporating three different scenarios i. e. Optimistic , Most Likely & Pessimistic. We expect that with the growing reach of modern retailers in the rural and urban reas, the penetration level of organized retailing would continue to grow, thereby resulting in the organized retail growth, surpassing the growth of total Indian retail during the period FY08-FY11. The Indian retail though largely dominated by the unorganized retailers has witnessed a massive transition in the last decade. Of the total retail sales, the food & grocery segment constitutes the major chunk. However in case of organized retail, the apparel & footwear segment stands as the major contributor. With varied segments of retailing i. e.
Food & Grocery, Clothing & Footwear, Furniture & Furnishing, Jewellery, Beverages . 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. 7%. 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 highest 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 2. 3 FACTORS AFFECTING THE INDUSTRY * Demographic * Psychological Environmental * LifeStyle DEMOGRAPHIC FACTORS Demographic factors are unique to a particular person. They are objective, quantifiable and easily identifiable population data such as sex, income, age, marital status etc. It also involves identification of who is responsible for the decision-making or buying and who is the ultimate consumer PSYCHOLOGICAL FACTORS Psychological factors refer to the intrinsic or inner aspects of the individual. An understanding of consumers’ psychology guides the marketers’ segmentation strategy. ENVIRONMENTAL FACTORS
Environmental factors cover all the physical and social characteristics of a consumer’s external world, including physical objects, spatial relationships, the social factors , customers, reference groups, social class . The environmental factors influence consumers’ wants, learning, motives, which in turn influence effective and cognitive responses and among other things the shopping behaviour of the individual. LIFESTYLE Lifestyle refers to an individual’s mode of living as identified by his or her activities, interests and opinions.
Lifestyle variables have been measured by identifying a consumer’s day-to-day activities and interests. Lifestyle is considered to be highly correlated with consumer’s values and personality. An individual’s lifestyle is influenced by, among other things, the social group he belongs to and his occupation. For example, double-income-no-kids (DINKS) families in metros shop very regularly at the super malls because of the limited time at their disposal and they also look for entertainment while shopping on weekends. At the same time, they are higher spenders than, for e. . , single-income families. A study by imagesfashion. com highlights that Indian working women have to balance their wardrobe collection based on requirements of different occasions related to professional workplace or family gathering. CHAPTER 3 COMPANY PROFILE COMPANY PROFILE Aditya Birla Retail Limited is a part of the Aditya Birla Group. The Group has named it ‘More’. It offers products such as fruits, vegetables, grocery, frozen food, bakery, homecare, personal care and pharmacy. It also provides FMCG products and house brands.
Aditya Birla Retail Limited has acquired Trinethra to assist it in creating a retail stronghold in south India. Trinethra, with its own chain of stores, will enable the company to expand its operations all over the country. The roots of the Aditya Birla Group date back to the 19th century in the picturesque town of Pilani, set amidst the Rajasthan desert. It was here that Seth Shiv Narayan Birla started trading in cotton, laying the foundation for the House of Birlas. Through India’s arduous times of the 1850s, the Birla business expanded rapidly.
In the early part of the 20th century, our Group’s founding father, Ghanshyamdas Birla, set up industries in critical sectors such as textiles and fibre, aluminium, cement and chemicals. As a close confidante of Mahatma Gandhi, he played an active role in the Indian freedom struggle. He represented India at the first and second round-table conference in London, along with Gandhiji. It was at “Birla House” in Delhi that the luminaries of the Indian freedom struggle often met to plot the downfall of the British Raj.
Ghanshyamdas Birla found no contradiction in pursuing business goals with the dedication of a saint, emerging as one of the foremost industrialists of pre-independence India. The principles by which he lived were soaked up by his grandson, Aditya Vikram Birla, our Group’s legendary leader. | A formidable force in Indian industry, Mr. Aditya Birla dared to dream of setting up a global business empire at the age of 24. He was the first to put Indian business on the world map, as far back as 1969, long before globalisation became a buzzword in India.
In the then vibrant and free market South East Asian countries, he ventured to set up world-class production bases. He had foreseen the winds of change and staked the future of his business on a competitive, free market driven economy order. He put Indian business on the globe, 22 years before economic liberalisation was formally introduced by the former Prime Minister, Mr. Narasimha Rao and the former Union Finance Minister, Dr. Manmohan Singh. He set up 19 companies outside India, in Thailand, Malaysia, Indonesia, the Philippines and Egypt. Interestingly, for Mr. Aditya Birla, globalisation meant more than just geographic reach.
He believed that a business could be global even whilst being based in India. Therefore, back in his home-territory, he drove single-mindedly to put together the building blocks to make our Indian business a global force. Under his stewardship, his companies rose to be the world’s largest producer of viscose staple fibre, the largest refiner of palm oil, the third largest producer of insulators and the sixth largest producer of carbon black. In India, they attained the status of the largest single producer of viscose filament yarn, apart from being a producer of cement, grey cement and rayon grade pulp.
The Group is also the largest producer of aluminium in the private sector, the lowest first cost producers in the world and the only producer of linen in the textile industry in India. At the time of his untimely demise, the Group’s revenues crossed Rs. 8,000 crore globally, with assets of over Rs. 9,000 crore, comprising of 55 benchmark quality plants, an employee strength of 75,000 and a shareholder community of 600,000. Under the leadership of our Chairman, Mr. Kumar Mangalam Birla, the Group has sustained and established a leadership position in its key businesses through continuous value-creation.
Spearheaded by Grasim, Hindalco, Aditya Birla Nuvo, Indo Gulf Fertilisers and companies in Thailand, Malaysia, Indonesia, the Philippines and Egypt, the Aditya Birla Group is a leader in a swathe of products — viscose staple fibre, aluminium, cement, copper, carbon black, palm oil, insulators, garments. And with successful forays into financial services, telecom, software and BPO, the Group is today one of Asia’s most diversified business groups. MR. KUMAR MANGALAM BIRLA CHAIRMAN, THE ADITYA BIRLA GROUP Mr. Kumar Mangalam Birla is Chairman of the US$ 28 billion Aditya Birla Group and India’s first truly multinational corporation.
An iconic figure, Mr. Birla holds several key positions on various regulatory and professional boards. MANAGEMENT The Aditya Birla Management Corporation Private Limited, is the Group’s apex decision making body and provides strategic direction to Group companies. Its Board of Directors comprises:| | * Mr. Kumar Mangalam Birla, Chairman * Mr. S. Aga * Mr. D. Bhattacharya * Mr. S. K. Jain * Dr. S. Misra * Mr. S. Misra * Dr. B. K. Singh * Mr. K. K. Maheshwari * Mr. Vikram Rao * Mr. Ajay Srinivasan 3. 1 FUTURE PLANS OF THE ORGANISATION
After acquiring south based Trinethra and plans to buy Pyramid Retail, the Aditya Birla group doesn’t want itself to be left behind in the race for getting their pie in the pecializ retail market. Instead of tying with Tesco, Carrefour, Woolworth, they have decided to go all alone. They plan to open 172 hypermarkets and supermarkets starting from Pune. While Subhiksha is mainly into neighbourhood stores, Future Group has a strategy of having single brand outlets to multi-brand seamless malls, similarly Reliance Retail has started with Fresh stores and Reliance Digital to be followed by opening up of hypermarkets and pecialized stores.
Birla’s business style is perceived to be a little conservative, and they are investing Rs. 9,000 crores in this venture which will enable it to establish a pan-India footprint. The retail venture would be aided by the group’s companies like Madura Garments (a key component of retail sales), IDEA cellular (for technical and communication requirements of stores), financial services (for providing consumer loans on its goods). Organised retail sector’s growth is expected to be rapid, thus making it a valid and natural choice for AVB group to diversify in this sector.
But, competition and late entry may somewhat derail the company’s retail growth rate to the overall industry rate. The sector may also face hurdles as owing to non-clarity of FDI in retail, foreign chains have postponed their plans of entry into India. “Our Mission is to Change the Way People Shop. We Will Give Them More. ” 3. 2 PRODUCT ; SERVICE PROFILE At more. for you are committed to deliver quality ; value to our customers and have a range of private label brands as well as commercially branded products, offering – 100% satisfaction on the quality of the products ; services offered. ore. for you hosts a range of private label brands across various categories that follow stringent quality norms, and are available in attractive prices and packaging. Our premium products give you the opportunity to enjoy the difference and quality that is equal to or better than the market’s leading brands, but at competitive prices. Recently our private label brands received the coveted “The Most Admired Private Label” Golden Spoon award at the Food Forum India. We offer a wide range of assortment of over 4000 products, ranging from fresh food to beverages, grocery to household care products.
Our range covers everything, from day-to-day essentials to traditional favorites, from delicious treats, to healthy alternatives. To ensure the freshest supply of fruits and vegetables for you, we have built direct linkage with the farmers. MORE provide some private labels also, More. label Food Brands : •Feasters •Kitchen’s Promise •Best of India HYPERMARKET HYPERMARKET Apparels – Men/ Women Bakery Beverages Books and Audio ; Video Computer ; Accessories Do it yourself Auto Accessories Electronics FMCG Products Footwear Frozen ; Dairy Products Fruits ; Vegetables
Furniture General Merchandise Apparels – Men/ Women Bakery Beverages Books and Audio ; Video Computer ; Accessories Do it yourself Auto Accessories Electronics FMCG Products Footwear Frozen ; Dairy Products Fruits ; Vegetables Furniture General Merchandise Bakery Beauty Concepts Beverages Basic Apparels Cutlery ; Cookware Fruits ; Vegetables Frozen ; Dairy Products FMCG Products Grocery Home Care Products Home Needs ; Home Upkeep Home Decor Products Personal Care ; Cosmetics Processed Food Ready to Cook/Prepared Food Bakery Beauty Concepts
Beverages Basic Apparels Cutlery ; Cookware Fruits ; Vegetables Frozen ; Dairy Products FMCG Products Grocery Home Care Products Home Needs ; Home Upkeep Home Decor Products Personal Care ; Cosmetics Processed Food Ready to Cook/Prepared Food Following is the range of products offered by MORE stores to its customers. There are various products and services offered by MORE supermarket and hypermarket. SUPERMARKET SUPERMARKET SERVICES For customers additional benefit, Consumer Finance on electronics products such as: •Friendly Return ; Exchange Policy. Hassle free Return ; Exchange policy at more MEGASTORE. 3. 3 MARKET PROFILE OF THE ORGANIZATION Birla group instead of setting up its own retail outlets apart from their own Madhura garment outlets, are trying to enter into the retail business by acquiring already established retail chains. The company is mainly concentrating to establish its foot in Southern India than competing with others in most affluent metro and northern regions. To start with Birla group acquired Trinethra Super Retail chain that mainly operated in Andhra Pradesh with some presence in Kerala and Karnataka.
Trinethra started retail business much before anyone could imagine the growth of the sector as it is today. Trinethra started in way back 1986 in the twin cities of Hyderabad-Secunderabad had revenues of Rs 250 crores from its 172 stores which are mostly the size of Reliance Fresh groceries stores [2,500 sft – 3,000 sft]. Apart from its grocery retail chain, Trinethra has also brought online shopping portal Fabmall to the fold of AV Birla group. Birla’s acquiring march does not stop here. The company is planning to acquire Piramid Retail and Niligiris.
The latter will give Birla Retail, pan south-India presence. They are also planning to open 172 hypermarkets and supermarkets starting from Pune. Apart from operating two hypermarket stores under the umbrella brand name of “More.. for you” at Mysore and Vadodara, the retail arm of the group operates around 670 supermaket format, neighbourhood food, grocery, and general merchandise, stores across the country. These stores include the erstwhile stores of Trinethra retail chain, which after the acquisition were also rechristened as ‘More’ stores.
More, under the stewardship of its new CEO Thomas Varghese, an old Birla hand, who was roped in after the Sumant Sinha, has taken several initiatives to revamp the operations of the loss making chain. Some of the initiatives include: Close some of the non performing stores. Take a re-look at the design, positioning and merchandise offered by the retail chain. Focus more on large sized stores. The retailer will set up hypermarts of 30,000 to 40,000 sq. ft. spce each. Aggressively expanding the retail network;add 200 Supermarket stores and 12 Hyper Ymart stores in 2009- 10.
Renegotiation of property rentals for almost all leased properties with their landlords. The rents in some cases have come down by 30 to 40 percent. Introduction of private labels, mostly in fast moving consumer products category, to increase share of private labels to 40 per cent in the next 4 to 5 years. Look for earning rent from ’shop-in-shop’ opportunities. Recently, ‘Dial for Health’ wellness retail chain owned by Zydus group has inked an agreement to set up such outlets in Gujarat and Maharashtra. Look for a financial partner. “We are not looking at a strategic partner. We will be happy to have a financial partner.
We have received lots of preliminary interest from investors. We would be open to this idea,” said Kumar Mangalam Birla. Some private equity firms like Warburg Pincus are believed to have shown interest equity stake in the company. Aditya Birla group, incidentally, also operates 340 apparel stores across the country of brands like Louis Phillippe, Van Heusen, Allen Solly and Esprit in the lifestyle and value fashion segments. These stores are operated by Madura Garments Lifestyle ; Retail and Peter England Fashions ; Retail, which are part the group’s flagship company Aditya Birla Nuvo.
The garments business, which clocked Q4 turnover of 273. 3 crore (2008-09) and a nett loss of Rs. 82. 2 crore during the quarter, has also embarked on several measures to stem the rot, including closure of 30 stores that will save around Rs 100 crore a year COMPANY’S VISION To consistently provide the Indian consumer complete and differentiated shopping experiences and be amongst India’s Top retailers, while delivering superior returns to all stakeholders COMPANY’S MISSION To deliver superior value to our customers, shareholders, employees and society at large.
COMPANY’S VALUES 0 Integrity 1 Commitment 2 Passion 3 Seamlessness 4 Speed COMPANY’S MILESTONES The Aditya Birla Group, India’s first multinational corporation, traces its origins back to the tiny village of Pilani in the Rajasthan desert, where Seth Shiv Narayan Birla started cotton trading operations in 1857. Today, the Group’s footprint extends to 25 countries and its revenues are US$ 28 billion. We retrace the highlights of this remarkable journey, starting from the present: 2011- Retail Icon Award 2010- Most Admired Retail Face of the Year 009- Reid & Taylor Awards 2008 – The President of India, Mrs. Pratibha Patil conferred the much coveted Rotary International Polio Eradication Champion Award on Mrs. Rajashree Birla in an elegant function at the Rashtrapati Bhavan (Delhi), attended by the Chairman, select Rotarians and WHO officials 2007- The Aditya Birla Group was honoured with the India Today Group’s Readers Digest Gold award in recognition of the work that truly exemplifies the highest values of society as well as those of Reader’s Digest. 2006- Hindalco in a joint venture with Almex USA Inc.
Hindalco awarded the Greentech Safety Silver Award for its outstanding safety performance during 2005-06. 2005 -Indian Rayon re-christened as Aditya Birla Nuvo. 2004 -Board reconstituted with Mr. Kumar Mangalam Birla taking over as Chairman. .2003 -Mr. Kumar Mangalam Birla, Chairman of the Group, is selected as Business India’s Businessman of the Year – 2003. 2002 -The Grasim board approves an open offer for purchase of up to 20 per cent of the equity of L;T, in accordance with the provisions and guidelines issued by the Securities ; Exchange Board of India Regulations, 1997. 001 -Grasim acquires 2. 50 crore shares — representing just over 10 per cent of the equity — in L&T from Reliance Industries Ltd. 2000 -Indian Rayon acquires Madura Garments and selected overseas brand rights, taking the Group to the top of the league in the branded apparels sector. 1999 -A joint venture with financial services major Sun Life of Canada is inked, as part of the overall restructuring of the Group’s financial services business. 1998 -The Group forms a 50:50 joint venture company with Tembec Inc. of Canada, called A. V. Cell Inc. , to supply pulp for the Group’s VSF operations. 996 -To honour the memory of the late Aditya Birla, a new corporate logo – Aditya, the rising sun – is launched. 1995 -The Group enters the telecommunications sector through a joint venture with AT&T (USA). 1994 -The Birla Growth Fund is renamed Birla Global Finance Limited, as its span of operations expands.. 1992 -Thai Epoxy and Allied Products commences production of Epoxy Resins in Thailand. 1991 -Pan Century Oleochemicals commences production of fatty acids and glycerine in Malaysia. 1990 -Mr Kumar Mangalam Birla gets actively involved in the Group’s operations. 989 -Thai Peroxide commences manufacturing of hygrogen peroxide solutions in Thailand. 1988 -The government liberalises the petroleum industry. The Aditya Birla Group enters into a joint venture with Hindustan Petroleum Corporation Ltd to set up a three-million-tonne refinery, Mangalore Refineries and Petrochemicals Ltd (MRPL), at Mangalore, Karnataka. 1987 -Indian Rayon is renamed as Indian Rayon and Industries Limited (IRIL), to reflect its wide horizon of activities. 1986 -The Birla Growth Fund is set up to finance industrial equipment, plant and machinery and consumer durables, as well as for stock market operations. 985 -India’s first gas-based fertiliser plant in the private sector – Indo Gulf – goes on stream at Jagdishpur, UP. 1984 -Thai Polyphosphates and Chemicals commences production of sodium phosphates in Thailand. 1982 – Indo Bharat Rayon is established. It is the first producer of Viscose Staple Fibre in Indonesia. CHAPTER 4 DEPARTMENTAL PROFILE FUNCTIONAL DEPARTMENT OF THE ORGANISATION * HR AND TRAINING * PROJECT AND BUSINESS DEVELOPMENT * COMMERCIAL AND ACCOUNTS * ADMINISTRATION * IT * LOSS PREVENTION AND RISK MANAGEMENT * MARKETING * SUPPLY CHAIN 4. 1 FUNCTIONAL AREAS IN BUSINESS
In a large organisation, it is usually easier to identify separate functional areas because people work together in departments. Each department carries out the tasks that relate to its particular area. The purposes of functional areas- The main purpose of functional areas is to ensure that all important business activities are carried out efficiently. This is essential if the business is to achieve its aims and objectives. In addition, specific areas will be responsibility for supporting specific types of aims and objectives, 4. 1. 1 HR AND TRAINING DEPARTMENT
The human resources (HR) and training function- HR is responsible for recruiting new employees and ensuring that each vacancy is filled by the best person for the job. This is important because the recruitment process is expensive and time-consuming. Hiring the wrong person can be costly and cause problems both for the individual and the firm.. HR aims to ensure that the business retains good, experienced staff. Analysing staff-turnover figures will show the rate at which people leave the organisation The department includes-Human resources functions such us: Advertising job vacancies * Notifying staff of promotion opportunities * Receiving and recording all job applications, arranging interviews and notifying candidates of the result * Sending a contract of employment and other essential information to new staff * Arranging staff training and encouraging continuous professional development * Monitoring the working conditions of staff * Checking health and safety and keeping accident records * Recording sick leave and reasons for absence * Carrying out company welfare policies, e. g. long-service awards and company loans Advising managers on the legal rights and responsibilities of the company and its employees * Keeping records of grievances and disciplinary actions and their outcome * Monitoring the terms and conditions of employment, including wage rates * Maintaining staff records * Liaising with staff associations or trade unions which represent the workforce 4. 1. 2 PROJECT AND BUSINESS DEVELOPMENT DEPARTMENT The field of commerce, business development comprises a number of techniques and responsibilities which aim at attracting new customers and at penetrating existing markets.
Techniques used include: •Intelligence gathering on customers and competitors • Generating leads for possible sales •Advising on, drafting and enforcing sales policies and processes •Follow-up sales activity •Formal proposal and presentation management and writing •Business model design •Account planning and performance monitoring •Proposition development and campaign development The department includes:- 1). Business research – gathering, studying, analyzing information This is one of the main functions of business development department.
Team of analysts, statisticians and experts work at regular studying and monitoring of external environment – clients, industry, market, company’s image, macro economy etc. in order to find potential opportunities and determine their feasibility, expediency and prospect, to analyze different scenarios and support elaboration of business development strategies. 2) Short-term and long-term business planning When certain business opportunity is defined and well-grounded it should be discussed with specialists of concerning departments and company management.
Information obtained by business development department is a background for elaborating of short-term and long-term business plans. When opportunity and objectives are considered and agreed with all participants of the process the plan of opportunity realization can be developed and development project initiated. As a result of cooperation of a cross-department team the plan is elaborated into specific tasks that can be assigned to executers and controlled by specialists of business development department, so they can be aware about progress of development plan realization. ). Collaboration with other departments One of the functions of business development department is to give recommendations and consultations regarding questions of development of other departments and general company organization. For effective performance of this function good internal communications should be established. Analysts from business development department should be able to share and discuss documents, tasks and projects with specialists from other departments. 4. 1. 3 COMMERCIAL AND ACCOUNTS DEPARTMENT MANAGEMENT ACCOUNTANTS
Management accountants perform three functions. Scorekeeping-accumulate data and report reliable results to all levels of management Attention-directing-make visible opportunities and problems on which managers need to focus Problem-solving-conduct comparative analysis to identify the best alternatives in relation to the organization’s goals FINANCIAL ACCOUNTANTS They are concerned with the preparation of the statutory accounts. All outlets must provide a Balance Sheet and Profit and Loss Account each year, and most produce a cash flow statement as well.
The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an entity that is useful to a wide range of users in making economic decisions. Financial statements prepared for this purpose meet the common needs of most users. Financial statements do not provide all the information that users may need to make economic decisions since they largely portray the financial effects of past events and do not necessarily provide non-financial information.
A credit controller- Finance staff support the accountants by keeping financial records, chasing up late payments and paying for items purchased. Use computer accounting packages to record financial transactions and prepare their accounts as well as spreadsheets to analyse financial data. Finance departments prepare the payroll and pay staff salaries 4. 1. 4 ADMINISTRATION DEPARTMENT Senior administrators carry out a wide range of tasks, from monitoring budgets to interviewing new staff for their departments. Routine administrative tasks include opening the mail, preparing and filing documents, sending emails and faxes.
Others require more creativity and flexibility, such as arranging travel or important events, from staff meetings to visits by foreign customers. Administrators also deal with external customers who judge the business on the way their enquiry is handled. Administrative function includes:- * Collecting, distributing and dispatching the mail * Storing and retrieving paper and electronic records * Organising meetings and preparing meetings documents * Responding promptly to enquiries * Preparing documents using word processing, spreadsheet and presentation packages, such as PowerPoint * Researching information Sending and receiving messages by telephone, fax and email * Making arrangements for visitors. * Making travel arrangements * Purchasing supplies of office stationery and equipment * Making arrangements for events, such as interviews or sales conferences 4. 1. 5 IT DEPARTMENT The Functions are: * IT department carry out strategically important projects which are intended for improving of company’s IT infrastructure. Such projects are performed by IT specialists of different professions and are controlled not only by IT department managers, but supervised by company management as well. IT department supervisors fulfill the technological management according to their duties and business supervisors control the financial, time and strategic part of the project and need to be in touch with project performance. * System administrators perform a number of periodical tasks which are required for stable and effective work of IT systems and for informational security. * Ensuring that the network infrastructure is up and running, applying operating system updates, patches, and configuration changes, performing backups and restores, hardware monitoring and troubleshooting, etc. . 1. 6 LOSS PREVENTION AND RISK MANAGEMENT DEPARTMENT Functions performed in this department are: * Frequent checking of stock * Provides security against man made loss theft (Alarm system) * Look after the arrangements in the warehouse * They are concerned with the returning of the expired products 4. 1. 7 MARKETING DEPARTMENT Marketing is all about identifying and meeting customer needs. Many businesses consider this so important that they are said to be marketing led. In this case, everyone in the organisation is trained to put the ustomer first from the production worker, who has to produce high quality goods, to the accounts clerk, who must respond to a customer enquiry promptly and accurately. Marketing function includes:- * Carrying out market research to obtain feedback on potential and existing products and/or services * Analysing market research responses and advising senior managers of the results and implications * Promoting products and services through a variety of advertising and promotional methods * Obtaining and updating a profile of existing customers to target advertising and promotions appropriately Producing and distributing publicity materials, such as catalogues or Brochures * Designing, updating and promoting the company website 4. 1. 8 SUPPLY CHAIN DEPARTMENT Supply chain department function include: • Supply Planning and Sales ; Operations Planning (S;OP) • Distribution Requirement Planning (DRP) • Supply Chain Operations – Warehousing ; Transportation • Materials Requirement Planning (MRP) • Purchasing • Imports ; Exports 4. 2 ORGANISATIONAL STRUCTURE OF ADITYA BIRLA RETAIL LTD Chairman Chairman CEO CEO SUPERMARKET SUPERMARKET
HYPERMARKET HYPERMARKET REGIONAL HEAD REGIONAL HEAD ZONAL HEAD ZONAL HEAD TERRITORY MANAGER TERRITORY MANAGER CLUSTER MANAGER CLUSTER MANAGER STORE MANAGER STORE MANAGER SUPERVISOR SUPERVISOR CSA CSA CHAPTER 5 SWOT ANALYSIS 5. 1 STRENGTH * Pattern of consumption changing along with shopping trends. * A Growing population will translate to move consumers. * Consumer spending increasing at 11% annually. * Paradigm shift in shopping experience for consumers pulling in more people. 5. 2 WEAKNESSES * Shortage of quality retail spaces at affordable rates. Government regulations on development of real estate(Urban Land Ceiling Act) * Need to provide Value for Money-squeezing margins * Lack of industry status.. * Footfalls not a clear indicator of sales as actual consumers lower in number. * Lack of huge investments for expansion. 5. 3 OPPORTUNITIES * Increasing urban population * Increase in consuming middle class population. * Social factors like dual household income has enhanced spending power. * Spends moving towards lifestyle products and esteem enhancing products. * Average grocery spends at 42% of monthly spends-presents a huge opportunity. Increase in use of credit cards. 5. 4 THREATS * Personalized service offered by other stores. * Unavailability of qualified personnel to support exponential growth in stores * Differentiate taxation laws hindering expansion. * Competed stores * Lake of development infrastructural needs * Dissimilarity in consumer groups * Shortage of trained manpower * Low retail management skill CHAPTER 6 FINDINGS, SUGGESTIONS AND CONCLUSION 6. 1 FINDINGS * The current contribution sector of retail sector 14% and its expected to climb up in the coming years. The different depts. of Aditya Birla ltd are functioning smoothly * Understood the factors regarding the location of business outlet. * Consumers generaly not satisfied with product range. They need more variety of products. 6. 2 SUGGESTIONS * People generally search for the product on offer so the high margin product should be up fronted that means those item should be in such a way that it easily catches customers attention and generate impulse purchase. * Some of the measures taken by Loss and Prevention department are not applicable. The IT Department should provide solutions for basic problems to the store managers in outlets. * New outlets should be open at convenient locations. * The outlet should introduce new and attractive promotional offers. * The retail outlet should new products range. * The outlet should have enough parking spaces for vehicles. 6. 3 CONCLUSION Through my ORGANISATION STUDY and job responsibilities I handled in the organization, I came to a conclusion that the company should provide information to stores to concentrate more on the fruits and vegetables section as it is perishable in nature and has a short shelf life.
The company should be flexible to adapt to the changes which occurs in the retailing industry. Store should take more care on promotional activities because all other retail stores are giving more promotional activities than More. Most people are not aware about the seasonal offers in More stores. BIBLIOGRAPHY SOURCES OF DATA 1. RETAIL MANAGEMENT BY S. G SHARMA 2. INTERNET SITES www. info. com www. morestore. com