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UK COUNTRY REPORT ANALYSIS AND COMPARISION OF TWO MAJOR HYPERMARKETS TESCO IN UK AND BIG BAZAAR IN INDIA
INDEX
CHAPTER 1: INTRODUCTION ..3 CHAPTER 2: REVIEW OF LITERATURE ....4 CHAPTER 3: OBJECTIVES AND METHODOLOGY.5 3.1: OBJECTIVIES.5 3.2: RESEARCH METHODOLOGY..5 CHAPTER 4: BRIEF ABOUT TESCO AND BIG BAZAAR.6 4.1: TESCO.6 4.2: BIG BAZAAR..6 CHAPTER 5: COMPARISION OF UK AND INDIA RETAIL INDUSTRY.7 CHAPTER 6: SWOT ANALYSIS ....8 6.1: SWOT ANALYSIS OF TESCO..8 6.2: SWOT ANALYSIS OF BIG BAZAAR.9 CHAPTER 7: MARKTING 4PS OF TESCO AND BIG BAZAAR10 CHAPTER 8: PORTERS FIVE FORCE MODEL11 8.1: TESCO PORTERS FIVE FORCE MODEL.11 8.2 BIG BAZAAR PORTERS FIVE FORCE MODEL....12 CHAPTER 9: ANALYSIS.13-15 CHAPTER 10: FINDINGS AND RECOMMENDATION..16-17 10.1: FINDINGS..16 10.2 RECOMMENDATIONS FOR TESCO AND BIG BAZAAR....17 CHAPTER 11: CONCLUSION..18 CHAPTER 12: BIBLIOGRAPHY AND REFERENCE..19 CHAPTER 13: ANNEXURE20-21
CHAPTER.1 INTRODUCTION
Tesco is the worlds 3rd largest and UKs no. 1 hypermarket and big bazaar Indias 1st hypermarket, and being a student of marketing and international business so that I took 2 major player of retail industry Tesco and Big Bazaar of UK and India. Now days retail industry is into spotlight because there are two reasons behind of this, liberalization of the world economy and large players of the industry have entered into the retail business. Earlier FDI in retail industry have been permitted by the Indian government so that large numbers of international retailers interested to enter into Indian retail industry because the retail business of India is more than 450 US$ and one of the top 5 retail market in the world and 84% of Indias retail industry is unorganized. In the world almost all the customers are very price conscious. The main motive of all the hypermarkets is to provide products and services at very low price than the others hypermarkets. Indian retail industry environment is totally different from UK. The main difference I found is in India customer are very price conscious, every item is with MRP by the marketer of the particular product but in UK customer arent very much price conscious and on the product there is no MRP by the marketer or manufacturer of any product, the price decided by Tesco itself, there is no MRP restrictions. In India, increasing in the disposable income of middle class people and increasing the purchasing power of the people and conditions for growth of organized retail, the large players of retail industry like Wal-Mart, Carrefour, and Tesco etc keep an eye on Indian retail business and they are ready to enter into Indian retail business. Retail industries play a major and very important role in virtually all economies the world over, in this report I have research on customers perception about the Tesco and I did a primary research for this. I asked 13 questions about the Tesco to the 30 peoples of London. And I also have done this research according to my objectives. The research is being done in the area of marketing. In this research I also have done SWOT analysis, PESTLE analysis and porters 5 force model of Tesco and Big Bazaar. I compared the UK and Indian Retail industry which is totally different from each other. Its very clear that in UK and India the retail sectors operate differently. So I tried to analyze and comparison of UK and India Retail Industry and customers perception about Tesco and according to my objectives.
USA UK INDIA
CHAPTER.5
COMPARISION OF RETAIL INDUSTRY OVERVIEW OF UK AND INDIA
1. UK 1. In UK 11% of all VAT-registered business are retailers. And organized retail is 70% and 30% is unorganized or traditional. 2. The retail industry of UK generates almost 8% of the GDP. 3. Hypermarkets dominate the UK food retail market, with 56.0% of its sales. 4. The retail industry of UK gives employment of 2.9 million people. 5. The UK retail sector makes up approximately 10% of its all employment. It is more than half of people who work part time in the retail sector and its compared to less than a 3rd across the whole economy. 6. UK is the most international retail market with the highest proportion of international retailers trading.
India 1. In India only 16% retail industry is organized and rest 84% is unorganized. 2. The retail industry of India generates almost 14 to 15% of its GDP. 3. The Indian retail market is US$ 450 billion and comes one of the top five retail markets in the world. 4. Its poised to become $1.3 trillion opportunity by 2020. 5. The Indian government recently took a decision to allow up to 100% FDI in multi-brand retail and raise the limit for overseas investment in single-brand retail to 100%. 6. In November 2011, India's central government announced retail reforms for both multi- brand stores and single-brand stores.
Strengths 1. Tesco is the number 1 supermarket chain in UK. 2. Tesco has strong brand name. 3. Financial power is very strong. 4. Presence of Tesco is internationally. 5. Tesco is worlds Third largest retailer.
Weakness 1. Tesco is more dependent on UK market. 2. In UK transport costs is very high. 3. The strategy is single point to serial acquisitions. 4. The main difficulty is Increasing geographical spread makes focus on specific markets. Threats 1. The main threat is International expansion of the business. 2. Lowest price war between hypermarkets is main threat. 3. The competition is very high from Asda & Wal-Mart. 4. Raw material cost is rising day by day. 5. Innovation by other super markets is a highly threat.
Opportunities 1. The main opportunity is to open new stores. 2. Asian market has huge retail industry and in growing stage so Tesco must enter into Asian markets. 3. Tescos opportunity is in strategic alliance with other companies. 4. Tesco should try into non-food retail because theyve strong financial power. 5. Tesco should also try in Health & Beauty.
Strengths 1. Big Bazaar offers a wide range of products and services. 2. Big Bazaar is affordable for middle class & upper middle class. 3. Big Bazaar provides attractive Promotional offers. 4. The strategy of Big Bazaar is low price guarantee which attract customers. 5. Big Bazaar has high brand equity. Opportunities 1. Theyve opportunity to expand globally by tieups other multinational companies. 2. They must enter into high premium segment. 3. Indian organized business is only 16% so that there is a lot of scope in Indian retail industry. 4. In the rural area the whole retail business are unorganized so theyve a chance to enter into rural markets of India 5. Mall culture is increasing in India so theyve chance to expand their retail business widely.
Weakness 1. Big Bazaar is restricted to Indian market only it isnt globally. 2. Big Bazaar keep very thin margin. 3. There are long lines at billing counters of Big Bazaar which is very time consuming. 4. Because they believe in low price guarantee so that high branded products are still missing from big bazaars line of products.
Threats 1. India is developing country and their policies change randomly so changing in government policies is threat for Big Bazaar. 2. After the FDI in retail industry the main player of retail industry like Wal-Mart, Tesco have entered into Indian retail industry. 3. The competition of Big Bazaar is now with Wal-Mart and other international stores so that the threat is competitors global presence. 4. High competition.
BIG BAZAAR
Big Bazaar offers maximum variety of each product it also include own product of Big Bazaar. Big Bazaar with its range of products and services offering reflects the aspirations of millions of Indian. Big Bazaar believes in low cost guarantee. Big Bazaar considers its discounted price its USP. Price of product is low and they give average 7-8% discount on all items on their MRP. Big Bazaar targets semi-urban population. Big Bazaar strategy is to find out a cheap location Big Bazaar is situated near transportation hubs to attract maximum customers. Big Bazaar use 2 types of promotional strategies of Big Bazaar One is the holistic advertisement promotion like Sabse Sasta Din are a very successful strategy to get footfall and the second is the particular store oriented promotion like buy 2 get 1 free etc. There are loyalty schemes which reward customers.
PRICE
Tesco sell best quality product at a low price in order to have a large audience to target.
PLACE
Tesco has a store of every Pin code of London they have 6 multi format stores to have a better geographic cover of market.
PROMOTION
Tesco emphasize on the ethical things like green, the supplier care and social issues. Tesco promotes their store every little help the tagline of Tesco. Tesco also provide their customers loyalty scheme as club card to reward their customers.
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CHAPTER.8 PORTERS FIVE FORCE MODEL Ch.8.1 Tescos Porters five force model
Competitors
Rivalry Among
(High)
(Low)
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Competito rs
Rivalry Among
(High)
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CHAPTER.9 ANALYSIS
According to the questionnaire I found this result. Q.1:- How often do you visit Tesco? How often visit to tesco?
Daily Twice in a week Once in a week 3% 47% 17% Twice in a month
33%
Q.2:- Are you satisfied with Tescos services (in store)? Satisfied with Tesco Services (in stores)
No 20%
Yes 80%
Q.3:- Range of products available in Tesco satisfactory? Product available in tesco satisfactory?
Yes 23% 77% No
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83%
Customer Service
Excellent 10% 10% 77% Good 3% Average Poor
Q.6:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store?
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Q.7:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Price Reasonables?
Yes 30% 70% No
Q.8:- Are you a loyalty program (Club card) member of Tesco? Clubcard Member?
Yes No 47% 53%
Rate Tesco
Excellent 23% 67% Good 10% 0% Average poor
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Opposite of this Tesco has a competitive benefit, Tesco has its store at every pin code of UK, Tesco has huge network. So that people find Tesco very easily. In India price of any product decided by the manufacturer or marketer of the particular product, no one can sell a product more than the MRP decided by the manufacturer but in UK things are totally different price of any product decided by the seller, so Tesco has right to sell a product as he want but Big Bazaar cant sell any product of maximum of the MRP. Retail industry play a very important role in both countries, retail industry of UK generates 8% GDP and in India its 14 to 15% of its GDP. Main difference is that UKs retail industry is 70% organized and Indian retail industry is only 16% organized which makes a huge difference. Indian retail industry comes in top 5 of the world, and the chances of growing of this retail business is very high in India because mall culture is growing in India, Indian customers are more price conscious than the UK, and Indian government allows 100% FDI in retail business and there are so many reasons so that we can say Indian retail industry will grow faster than the UK retail industry.
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Ch.10.2 RECOMMENDATION
Recommendation for Tesco:
More dependency on UK market isnt good for Tesco. Competition is very high so they should get competitive advantage because of their network. Tesco needs to focus on his club card loyalty program so that customer can get benefit of that and they can retain the customer again and again.
and employees so that customers do not face any problem regarding their purchase goods and waiting long queues which force them to leave their purchased goods. Big Bazaar must do something new than others, must bring technologies, new innovations and different offers. They need to focus their CRM.
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CHAPTER.11 CONCLUSION
Tesco and Big Bazaar is no.1 hypermarkets of UK and India, the strategy of both the stores to give best product at best price, price war has been begun between all the hypermarkets and the profit of this getting to the customers directly. There are the many government policies which affects these stores different from each others. Big Bazaar is limited to India while Tesco is globally and worlds 3rd largest hypermarket so that the working style, marketing strategy are different. Tesco stores were developed at different locations which was a serving advantage to different consumer demands. These out of town, edge of town super stores offer one-stop shopping services for weekly outings, the smaller in town stores offer top up shopping facilities. Thus the Tescos portfolio was complemented. And Big Bazaar is situated near transportation hubs of India to attract maximum customers. Big Bazaars strategy is only for the middle class customers of India by giving those attractive offers and low price guarantee. The main weakness of both the stores is that Tescos dependency only on UK markets and as well as Big Bazaar is depends only on India market. Tesco has its strength is very constructive and competitive against his competitors Asda and Sainsburys etc. In India after the 100% FDI investment in retail industry, competition is going to very high for the Big Bazaar, because the big players like Wal-Mart, Carrefour is ready to enter into Indian retail industry. My conclusion after all my research work is Tesco and Big Bazaar is big player of retail industry of UK and India, and retail industry play a very important role for the growth of economy of any country. And low price war between all the hypermarkets is benefited to the customer ultimately.
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CHAPTER.12
CHAPTER.13
ANNEXURE
Questionnaire:
I'm making a country specific research report for Master of Business Administration in International business and I am interested in analyzing your thoughts and opinion about Tesco. May I kindly take few minutes of your time and ask you to fill out this? Your answers will be kept confidential and would be used only for my educational purpose. I must appreciate your participation and honest answer for the survey. Name: ____________________________Contact Gender: _________________ no.:________________ Age: _____________
Q.1:- How often do you visit Tesco? Daily Once in a week Twice in a week Twice in a month
Q.2:- Are you satisfied with Tescos services (in store)? Yes No
Q.3:- Why do you prefer Tesco over the other retail store?
Q.5:- Does the Tesco provide quality standard products? Yes Q.6:- Are the locations easily accessible? Yes No No
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Q.7:- Rate the customer service according to your experience. Excellent Average Good poor
Q.8:- Are you aware about all the product line offered by Tesco? Yes No
Q.9:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Yes No
Q.10:- Are you a loyalty program (Club card) member of Tesco? Yes Q.11:- Are the staff friendly & helpful of Tesco? Yes Q.12:- How much would you rate Tesco? Excellent Average Good Poor No No
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