Académique Documents
Professionnel Documents
Culture Documents
September 2010
Vol. 1, Ed. 4
TABLE OF CONTENTS
Last
month’s winners
are Movin Jain (PGP-
II) and Arvind R (PGP
- II)
niche@iimahd.ernet.in
[1]
The marvellous misadventures of Wal-Mart
- Rachit Kumar
In
1962
when
Sam
Walton
opened
have
a
much
shorter
buying
cycle
as
by
acquisiDon
of
two
exisDng
retail
the
first
Wal-‐mart
discount
city
store
compared
to
their
American
chains
namely
Wertkauf
and
Spar.
in
Rogers,
Arkansas
he
wouldn’t
have
counterparts.
They
value
the
The
acquisiDon
of
Spar
is
considered
imagined
in
his
wildest
dreams
that
proximity
of
the
shopping
desDnaDon
by
many
to
be
a
strategic
blunder
as
he
was
laying
the
foundaDon
for
what
over
lower
prices
and
they
are
fairly
it
was
one
of
the
weakest
players
in
would
go
onto
become
the
world’s
quality
conscious,
thereby
eliminaDng
the
highly
compeDDve
German
largest
public
corporaDon
with
the
possibility
of
them
switching
market.
In
the
American
market,
Wal-‐
operaDons
in
more
than
a
dozen
brands
for
lower
prices.
The
Wal-‐
mart
is
strictly
a
non-‐union
player,
countries.
Bulk
purchases
ensured
mart
stores
in
Korea
were
not
something
that
it
tried
to
replicate
in
that
Wal-‐mart
could
deal
with
strategically
well
posiDoned
in
terms
Germany
without
any
success
and
manufacturers
directly
thereby
of
locaDon
and
as
a
result
could
not
ended
up
being
branded
as
a
“union
making
it
possible
for
it
to
woo
the
generate
sufficiently
large
customer
basher”.
It
could
not
live
up
to
its
American
public
by
adopDng
the
traffic.
Also,
Customer
service,
which
promise
of
offering
the
lowest
prices
EDLP
(Every
Day
Low
Price)
strategy.
is
a
strong
purchase
driver
in
the
case
in
the
highly
compeDDve
German
It
was
able
to
replicate
its
success
in
a
of
Korean
consumers,
is
something
retail
sector
which
operates
on
the
number
of
countries
worldwide
with
that
Wal-‐mart
did
not
offer.
Thus,
concept
of
ultra
low
profitability.
two
notable
excepDons
namely
Wal-‐mart
could
not
sustain
sales
Also,
it
managed
to
garner
a
lot
of
Germany
and
South
Korea. large
enough
for
it
to
conDnue
negaDve
publicity
because
of
its
operaDng
in
the
country
and
had
to
infringement
of
a
large
number
of
Wal-‐mart
suffered
losses
to
the
tune
make
an
early
exit. German
laws.
It
can
be
concluded
of
$10
million
in
South
Korea
in
the
that
Germany
was
not
the
ideal
year
2005
and
as
a
result
had
to
exit
Germany
is
another
country
where
market
for
Wal-‐mart
to
launch
its
the
Korean
market
by
selling
its
Wal-‐mart’s
operaDons
ended
up
in
a
operaDons
because
it
already
had
a
stores
in
May
2006.
This
failure,
in
major
fiasco.
A]er
an
eight
year
large
number
of
well-‐established
and
part,
can
be
aXributed
to
its
inability
struggle
in
the
German
market
it
had
highly
compeDDve
players
in
the
to
understand
the
buying
preferences
exit
by
selling
its
85
supercenters
to
organised
retail
sector.
of
the
Koreans.
Korean
consumers
Metro
AG.
It
had
entered
the
country
[2]
Rise of Retail in China
- Atreyi Bose
When
we
think
of
China
we
typically
These
global
giants
have
led
the
way
compeDDve.
Chinese
consumers
are
think
of
export
with
all
the
cheap
in
opening
hypermarkets
across
increasing
brand
aware.
But
with
Chinese
goods
flooding
the
market.
China.
As
this
form
of
retail
has
seen
growing
choices
they
are
not
brand
However
with
the
global
economic
great
success
in
the
Der-‐1
ciDes,
loyal
and
this
has
been
a
challenge
to
slump
affecDng
demand
from
hypermarkets
are
now
being
built
in
the
retail
industry.
Western
markets,
the
Chinese
smaller
ciDes
as
well.
However
other
government
is
now
looking
to
boost
types
of
stores
such
as
supermarkets,
Dissimilar
consumpDon
paXerns
in
domesDc
demand
in
order
to
shield
departmental
stores,
convenience
the
domesDc
market
are
also
another
itself
from
export
dependency.
The
stores
are
sDll
fragmented
and
key
challenge
faced
by
retailers.
retail
appeDte
of
the
Chinese
dominated
by
domesDc
players.
China
is
the
fastest
growing
market
consumer
has
also
grown
with
rise
in
Foreign
retailers
are
focusing
on
for
luxury
premium
goods.
Wealthy
income
and
urbanizaDon.
The
discount
stores
in
Der-‐1
ciDes
with
consumers
in
China
are
typically
20
Chinese
middle
class
will
account
for
Carrefour
starDng
the
trend
in
2003. younger
than
their
counterparts
33%
of
the
populaDon
by
2020,
and
across
the
world.
But
China
also
has
a
60%
of
the
urban
populaDon
by
2016.
Only
5%
of
China’s
retail
currently
has
vast
segment
of
the
market
which
is
This
middle
class
is
expected
to
drive
foreign
investment.
This
is
also
due
to
extremely
price
sensiDve
and
looks
the
story
of
retail
in
China. China’s
government
policy
which
for
value
in
purchases.
lacks
clarity
as
well
as
changing
With
the
signing
of
WTO,
foreign
regulaDons
to
suit
domesDc
retailers.
By
2015
China
is
supposed
to
be
the
investment
in
the
retail
sector
was
The
Chinese
government
has
recently
third
largest
consumer
market,
a]er
opened
up
in
China
from
2001
over
a
implemented
policy
decisions
USA
and
Japan.
It
already
houses
25
period
of
5
years.
This
paved
the
way
requiring
most
enterprises
to
be
of
the
world’s
largest
retailers.
for
giants
like
Carrefour,
Wal-‐Mart,
majority
Chinese
owned.
Learning
from
the
successes
of
the
Tesco
to
build
stores
across
the
retail
story
in
India
and
avoiding
its
naDon.
These
companies
have
The
domesDc
retail
market
in
China
mistakes
would
be
criDcal
to
the
modernized
the
retail
sector
in
China
needs
consolidaDon.
M any
o f
t he
success
of
Indian
retail.
through
well
managed
logisDcs
and
brands
are
regional
and
need
to
build
technology. a
naDonal
presence
in
order
to
be
Source:
BRIC
Spotlight
Report
–
Retail
Sector
in
China:
The
Next
Big
Thing?
[3]
Retailing to the Ten Rupees Man
- Aditya Garg
There
has
been
a
lot
of
buzz
about
development.
The
per
capita
income
and
purchase
of
ferDlizers,
seeds
and
the
entry
of
global
retail
giants
such
in
rural
India
has
grown
by
over
50%
tractors.
as
Walmart,
Carrefour
and
Metro
in
the
last
10
years.
The
paXern
of
Cash
and
carry
in
the
Indian
Retail
employment
in
rural
India
is
also
Various
corporate
houses
have
Space.
Most
of
the
din
is
about
how
seeing
a
gradual
change.
With
the
approached
rural
retailing
along
the
entry
of
these
‘Needle
to
Home
conversion
of
rural
places
to
SEZs
and
these
lines.
ITC
has
launched
the
theatre
system’
hyper
markets
is
development
of
industries
in
rural
country's
first
rural
mall
'Chaupal
going
to
transform
the
face
of
areas,
more
rural
people
are
involved
Sagar',
offering
a
diverse
product
shopping
experience
in
urban
India.
in
manufacturing
sector.
This
has
led
range
from
FMCG
to
electronic
But
the
Indian
retail
story
is
not
to
higher
disposable
income.
Besides,
appliances
and
automobiles.
Godrej
restricted
to
the
metros
and
Der
one
the
urban-‐rural
road
connecDvity
has
Agrovet
is
in
the
process
of
seqng
up
ciDes.
Various
corporate
groups
such
also
shown
improvement
which
has
1,000
Aadhar
stores
across
rural
as
ITC,
Godrej,
Aditya
Birla
and
led
to
easier
retailing
to
rural
places.
India.
These
stores
sell
FMCG
Mahindra
groups
have
aggressive
products,
ferDlisers
and
services
like
plans
to
capture
the
rural
retail
In
order
to
understand
retailing
to
banking,
insurance,
pharmacy
and
market,
which
is
expected
to
be
rural
India,
it
is
important
to
postal
services.
DCM
Hariyali
Kisaan
around
half
of
the
overall
domesDc
understand
that
how
are
its
needs
bazaar
will
provide
access
to
bank
retail
market
of
around
350
billion
different.
Contrary
to
popular
financing,
tractor
purchase
and
dollars.
All
these
retailers
are
vying
to
percepDon,
rural
consumers
can
electronic
shops.
catch
the
aXenDon
of
an
average
prove
to
be
brand
loyal
provided
the
right
value
is
provided
to
them.
They
The
much
touted
boom
in
Indian
rural
consumer
whose
daily
earning
is
do
not
want
swanky
gadgets,
retail
space
is
not
just
restricted
to
barely
10
rupees.
expensive
apparel
and
food
joints
in
urban
India.
It
is
not
too
difficult
to
The
promise
shown
by
the
rural
these
retail
outlets,
rather
a
one
stop
imagine
how
these
rural
retail
outlets
market
is
on
account
of
various
desDnaDon
for
all
their
needs
would
will
change
the
way
the
ten
Rupees
factors
such
as
growing
aspiraDons
of
do
the
trick.
Thus
we
see
rural
retail
man
shops
for
his
groceries
and
farm
rural
India,
access
to
satellite
outlets
acDng
as
a
hub
providing
needs.
television
leading
to
more
informed
mulDtude
of
services
such
as
farm
buyers
and
the
overall
economic
produce
insurance,
bank
financing
[4]
Private Label Brands
- Rahul Anand
Private
label
brands
are
retail
brands
fully
owned,
From
the
retailers’
perspecDve,
the
factors
which
have
managed
and
controlled
by
the
retailer.
Earlier
these
given
a
high
boost
to
private
label
brands
(PLBs)
are:
-‐
brands
were
considered
as
low
cost
alternaDves
to
manufacturer
brands
and
were
the
hot
shot
products
1.
Change
in
consumers’
percepDon
towards
for
a
recession
period
or
for
people
who
could
not
private
labels
–
Decrease
in
perceived
afford
the
manufacturer
brands.
difference
between
private
label
and
manufacturer
brands.
Owing
to
their
lower
prices
to
the
customers
and
higher
margins
to
the
retailer,
these
brands
were
a
profitable
2.
Retailers’
gaining
higher
margins
from
private
enDty
to
have
in
a
retail
chain.
labels.
However
over
the
last
4
decades,
the
retail
chains
have
3.
Private
labels
used
as
a
tool
to
improve
grown
big
and
have
gained
the
trust
of
consumers.
consumers’
percepDon
of
the
retail
store
–
This
Consumers’
percepDon
about
the
private
label
brands
improved
percepDon
enables
the
retailer
to
have
changed
from
being
a
low
price
alternaDve
to
a
bring
the
customer
more
to
the
store
and
in
high
quality
variety
offering
brand
provided
by
the
the
process
gain
a
greater
share
of
his/her
retailer. wallet.
Research
shows
that
private
label
loyalty
leads
to
store
patronage.
[5]
Specific
(addiDonal)
drivers
of
PLBs
in
the
Indian
retail
a.
For
instance,
an
Apollo
stamped
nail
scenario:
-‐ cuXer
would
appeal
to
me
as
much
as
any
other
one.
This
is
a
case
in
which
1.
In
India
modern
retail
has
set
its
ground
almost
the
product
is
not
highly
a
brand
at
the
same
Dme
as
have
the
big
manufacturer
acknowledged
one.
In
such
categories,
brands.
This
makes
it
possible
for
the
modern
the
retail
chain
itself
creates
a
brand.
trade
retailers
to
establish
themselves
as
a
brand
as
big
as
a
manufacturer
brand. b.
Consider
the
Archies
case
again:
one
more
reason
for
going
for
an
Archies
a.
For
example
consider
a
box
of
chocolate
gi]
pack
might
be
variety
chocolates
under
the
Archies
brand.
seeking
behavior
shown
by
the
When
one
is
gi]ing
a
chocolate
box,
he
customers.
In
a
not
so
cluXered
might
consider
this
opDon
as
good
as
a
category,
private
labels
provide
new
Cadbury
CelebraDons
or
a
Ferrero-‐ branded
opDons
to
the
customers!
rocher.
This
is
because
he
might
want
to
gi]
a
premium
chocolate
to
his
Private
labels
offer
aXracDve
choices
in
various
product
colleague
and
Archies
fits
that
premium
categories
like
apparels,
fast
food
etc.
With
private
labels
image
as
much
as
a
Ferrero-‐rocher! forming
40%
sales
of
Wal-‐Mart
and
around
50%
for
Tesco
(
approximately
USD
162
billion),
the
stage
is
set
2.
There
are
several
product
categories
in
our
for
the
Indian
retail
to
witness
a
vast
range
of
private
country,
where
branded
variety
is
limited.
In
label
shopping!
such
cases
the
chances
of
private
labels
gaining
acceptance
is
higher.
[6]
ZARA!
-Toshe Prasad
So
we
all
know
that
retail
margins
are
idenDfying
trends,
and
puqng
it
in
beneficial
effect
of
increasing
its
high
when
it
comes
to
clothes.
But
in
store
within
30
days.
Zara
boasts
of
a
desirability.
In
fact,
it
is
directly
linked
Zara’s
business
line,
when
you
are
not
chain
of
designers
keeping
a
sharp
with
profits
as
there
is
a
lower
just
selling
clothes
but
fashion,
your
eye
for
the
hoXest
trends
as
they
chance
of
a
product
going
out
of
goods
are
perishable!
One
season
make
it,
and
geqng
the
latest
fashion
fashion
when
there
are
only
a
few
with
sales
deviaDng
from
your
plan
is
way
ahead
of
its
compeDtors.
A
quick
pieces
that
sell
quickly,
and
hence
enough
to
move
your
financials.
It
is
and
lean
supply
chain
ensures
its
there
are
no
discounts.
Ever.
very
true
that
most
fashion
supplies
pioneering
posiDon.
get
sold
at
huge
discounts
because
DiversificaDon:
So
diversificaDon
does
they
are
out
of
season.
So
what
does
The
scarce
good
trick:
Producing
low
not
just
work
on
your
financial
Zara
do
to
keep
its
profitability
so
quanDDes
of
its
products
gives
the
poruolio;
more
the
number
of
high
that
its
stock
skyrockets? double
advantage
to
Zara.
For
one,
it
designs,
the
higher
the
chance
of
reduces
the
risk
of
loss
from
a
hiqng
the
bull’s
eye.
Zara
produces
ZARA’S
MAGIC
MANTRAS parDcular
design/product
not
picking
more
than
12000
styles
every
year,
up
in
popularity.
On
the
other
hand,
and
with
supplies
to
stores
twice
Short
lead
Dmes,
leading
to
a
fresh
it
creates
an
arDficial
scarcity
of
the
every
week,
every
store’s
collecDon
supply
of
fashion!
Zara
specializes
in
product,
which
has
the
singularly
looks
brand
new
every
4
days!
[7]
COUNTER-‐INTUITIVE
ZARA PredicDng
fashion
can
be
a
very
However,
it
has
not
been
immune
erraDc
process,
and
Zara’s
shi]
to
to
criDcism.
Several
designers
are
In
order
to
achieve
its
lean
machine
reacDng
to
changes
in
fashion
rather
of
the
opinion
that
Zara
typically
structure,
Zara
has
taken
some
rather
than
trying
to
predict
it
gives
it
the
makes
rip-‐offs
of
the
creaDons
of
counter-‐intuiDve
steps-‐
differing
from
certainty
that
no
other
has.
Zara
is
the
top
line
of
designers,
thereby
the
industry
in
general.
Firstly,
while
hence,
never
wrong.
Coupled
with
in-‐
most
compeDtors
rely
heavily
on
spending
much
less
on
design
and
house
producDon,
these
synergisDc
outsourcing
producDon
to
countries
sDll
geqng
creaDve
styles.
But
ideas
help
Zara
execute
it
Mantras.
it
is
cheaper
in
(typically
Asian
t h e n ,
Z a ra
c l a i m s
t o
o n l y
E x te n s i ve
u s e
o f
i n fo r m aD o n
countries),
Zara
keeps
all
producDon
technology
further
helps
keeping
‘interpret’
fashion,
and
who
is
to
to
itself.
Despite
the
much
higher
extraneous
costs
at
bay. differenDate
between
creaDon,
costs,
it
succeeds
in
what
its
business
interpretaDon
and
inspiraDon!?
model
requires-‐
geqng
complete
VIEW-‐COUNTERVIEW
flexibility
and
control.
Secondly,
Zara
Editors:
has
not
employed
the
tradiDonal
There
is
no
debate
that
Zara
has
Saurab Vivek Nair
method
of
predicDng
the
fashion.
been
successful
as
a
brand.
Srikanteaswaran T K
Ayshwarya R. Vikram
[8]