1. Pricing policy
The margin on essential goods is low and is about 10%, but possibly losses are
compensated by mark-up on goods categorized as luxuries.
Comparative characteristics of competitors' prices
The price of the goods, in KZT (VAT) DEVIATION
Ltd.
Product name "Metro TN"Ramstore JSC JSC
TN"Ramstore"
Cash & " «Stolichny» «Stolichny»
Carry"
Apples “Голден”,
252,94 265,10 279,05 4% 10%
caliber 70., 1 kg.
Milk «Домик в
деревне» 3,2%, 1 115,6 124,5 123,58 7% 6%
package
Bread
Далич 83,71 87,20 94,67 4% 13%
800 g.
Tooth paste «Новый
119,5 144,5 139,5 20% 16%
жемчуг»
Beer
144,5 147,4 184,37 20% 27%
«Балтика 3», 0,5 l.
Doctoral sausage
488,34 627,87 647,8 28% 32%
«Кокент», 500 g.
Dishwashing liquid
209,29 249,15 239,18 19% 14%
«Pril», 400 ml.
On the provided comparative analysis of the prices of the three stores, we could see the price
leadership of METRO. This is due to a high level of purchases from suppliers in comparison
to retail stores.
Tools of price promotions:
Price incentives, which mean selling goods at a special price. (Discounts, coupons,
blue-light specials, anything that reduces the cost of an item.) Price reduction is used

2. to attract customers into the store and encourage making the first purchase of certain
goods. You can give a discount as a percentage, you can deduct a certain amount, or
you can just simply specify the new price with an explanation of the reasons for
its decline. Reduced prices are also effective if you want in a short time to get rid
of stale goods or create an attention to the particular brand brand.
Service incentives, when retailer simplifies the buying process or offer free extra
services.
Supermarkets offer additional services, such as the ability to pay for cellular services,
the availability of a watchmaker, etc. These services are not related to the
specific store, but customers perceive these factors as carrying attitude towards them by
the store.
Additional services can facilitate the buying process, for example: staff
helping customer to pack the goods and bring them to the car or electronic boards with
the necessary information about location of department and the availability of goods.
Retailers have a stock number of retail 'mechanics' that they regularly roll out or rotate for new marketing
initiatives.
 Buy x get y free a.k.a. BOGOF for Buy One Get One Free
 Three for two
 Buy a quantity for a lower price
Purchase and sale of goods
With the purchase of goods there is a process of harmonization of prices with the supplier. To
provide customers with products for reasonable prices of "Metro Cash & Carry Russia" seeks to
purchase goods in bulk, because it benefits the seller to sell their goods with a substantial
discount.
Selling price on the shelf formed by taking into account the prices of competitors. Especially for
it "Metro Cash & Carry» monitors competitors' prices and then adjust their own prices. The
profitability of product sold is analyzing.
"Metro Cash & Carry" has a list of factors that influence on the process of selecting
goods( for purchase)
- quality of the goods;
- purchase price;
-compliance with the requirements of buyers (especially professional);
- size of the individual procurements;
- conditions of payment;
- conditions of supply;
- delivery time;
- reliability of supplier;
- accuracy of delivery.

3. After analyzing the profitability of the sold product there is a process of adjusting the volume of
next purchases. Adjusting process is divided on two methods.
Method of increasing amount of procurement
1. Considering the demand for specific types of products for making decisions about their
purchases.
2. Analyzing the demand for at least 12 months to take into account all possible types of
seasonal variations.
3. Determining the sufficient volume of demand over the 12 months to create reserves for
particular type of product.
4. Decisions are taken on the establishment of reserves depending on the number of orders
for specific products rather than on the number of sold products.
Method of reducing amount of procurement
1. Every month company analyzes the sales of goods that are not in demand
2. Goods which amount of reserves should be reduced is determining by sales statistics.
3. Creating criteria on the basis of which is determined the need to reduce or eliminate
specific types of product reserves.
4. The share of slow selling types of products reduces to a minimum based on the data
of stored product.
The policy of procurement of products based on the ABC-analysis:
The ABC analysis provides a mechanism for identifying items that will have a significant impact on overall
inventory cost, while also providing a mechanism for identifying different categories of stock that will
require different management and controls.
The ABC analysis suggests that inventories of an organization are not of equal value. Thus, the inventory
is grouped into three categories (A, B, and C) in order of their estimated importance.
'A' items are very important for an organization. Because of the high value of these ‘A’ items, frequent
value analysis is required. In addition to that, an organization needs to choose an appropriate order
pattern (e.g. ‘Just- in- time’) to avoid excess capacity.
'B' items are important, but of course less important, than ‘A’ items and more important than ‘C’ items.
Therefore ‘B’ items are intergroup items.
'C' items are marginally important.
1. Procurement of “A” items realizing from more reliable suppliers, than “C” items.
2. Company more closely control the physical storage of “A” items than “B” and “C”
items, A items possibly placed in the most secured places."A" items subject to more
frequent inspections for an accurate record.

4. 3. Forecasting the demand for “A” items carries out more carefully, than forecasting
demand for the other group of items.
Logistics
Goods must be in the right place at the right time, in the required quantity and quality
Logistics - source of competitive advantage LLC "METRO". This is because the company
complies with the following rule: goods must be in the right place at the right time, in the
required quantity and quality.
The company's logistics system consists of distribution centers - platforms, working with the
following product groups: non-food products, dairy products and frozen foods, fruits and
vegetables.
The company is also engaged in direct import of consumer goods. Imported goods are moving to
a central warehouse. Company is using modern logistics technologies in processing products.
Distribution Centers LLC "METRO" working on becoming the popular in Kazakhstan, the
principle of cross-docking (receipt and dispatch of goods within the warehouse directly, without
actually putting it on the storage area, using a transshipment platforms), which reduces the time
for delivery and costs for warehousing.
Consolidation of goods to the fully loaded machine in the company's distribution centers and the
use of the principle of reverse logistics offer a good savings on transportation.
Optimizing the use of motor vehicles reduces the damage to the environment by exhaust fumes
of cars.
"METRO» logistics provides timely delivery of goods on the shelves, control over product
quality at all stages of transport, decrease production costs by reducing the number of
intermediaries in the supply chain.
"Direct delivery" - channel, in which the goods from the producer delivering to the trade center
of the company «Metro Cash and Carry», by passing warehouses and intermediaries. This type
of supply is characterized by a high speed of shipments, which is especially important for food
products with little shelf life, such as fresh meat and fish.
manufacturer Buyer
Consumer
(supplier) (“Metro Cash
and Carry”)
The scheme of direct supply of goods
Advantages of direct delivery:
1. All the concerns of sending goods supplier takes over.
2. The supplier ships the goods to many trading centers, thus minimizing the load of
company warehouses.

5. 3. Exclusion of intermediaries from the supply chain, thus reducing the cost of goods.
Disadvantages of direct delivery:
1. Supplier may not be available in the goods which the customer has ordered. In that case,
occurring situations of unavoidable delays and delivery failures.
2. The quality of the goods may not meet the company expectations due to objective or
subjective reasons, thereby causing a disruption in supplies.
3. At the stage of orders delivery may be problems "in transit", which also lead to
disruptions in the supply and delays in the timing of order execution.
Despite the disadvantages of direct delivery, this system is applying in many companies, in
fact the responsibility, risk and cost of delivery specified by the contract, which gives
certainty and stability to the company.
Delivery through “cross-docking”
Cross-docking - is logistics operation within the supply chain at which the shipment of goods to
the warehouse and its subsequent delivery to the recipient timely agreed in such a way, in order
to exclude the storage of goods in warehouse. As a result, the shipment delivered to the seller in
the shortest time period. The company creating order for different types of goods after
information is sending to one or more suppliers. In the order company noted the exact date of
delivery - the day X. Supplier packages goods, part of the order, to the shipping container,
pointing each unit of packaging with order number, and delivers it to the warehouse. Pallets of
goods that come to the warehouse should be packed very securely, so that any access to the
product has been completely eliminated. To meet this requirement, vendors often use stretch
film, as well as special packing tape with the logo of his company with the seals and twine. At
the same time warehouse employees are not responsible for the goods contained in a transport
container. The task of the stock - just check the integrity of the packaging film. All parts of order
are delivered to a warehouse in a single day, which we denote by X1. After delivering they are
completed in a single unit. And then ready order is shipped to the buyer designated by the term -
the day X. Cross-docking - a set of operations with orders, not with the goods. Order is not
completed in a warehouse, it completed by seller of goods during shipping. This can
significantly reduce the cost of its processing, and complete responsibility for the safety of the
goods delegate to the supplier.

6. Advantages of cross-docking:
1. Streamlines the supply chain from point of origin to point of sale
2. Reduces handling costs, operating costs, and the storage of inventory
3. Products get to the distributor and consequently to the customer faster
4. Reduces, or eliminates warehousing costs
5. May increase available retail sales space.
Disadvantages of cross-docking:
1. Potential partners don't have necessary storage-capacities or an adequate transport fleet to
operate Cross-Docking
2. Need of adequate IT-System
3. Additional freight handling can lead to product damage
Despite the shortcomings of the system, such a channel is especially important for goods
movement of most goods, both food and nonfood, such as household chemicals, textiles, for
goods with low shelf life. In most cases, providers are taking the decision to use cross-docking,
focusing it on the variety of product and its shelf life. But not all products can be processed in
the system of cross-docking. The best is characterized by a high level of predictability,
maximum demand and large amounts of transportation. These factors must be determined for
each product by analyzing the data of previous periods. In addition, cross-docking is ideal for:
1. Perishable products that require immediate shipment.
2. High-quality products that do not need a thorough quality check upon receipt.
3. Products equipped with a label and ready for sale.
4. Products for promotional activities and pre-promotion.
5. Products which has continuous and constant demand, such as consumer goods, for
example milk or toilet paper.
Manufacturer Distribution Buyer Consumer
warehouse
(supplier) (Ltd. «Metro Cash
and Carry»)
The scheme of supply of goods through cross-docking
Type of transport is based on the distance from the supplier to warehouse and geographical
location, etc. Products from Asia, shipped by cars and airplanes, products from the Europe
brought in ships, airplanes and by the rail, fresh products from Europe shipped by air.

7. Organizational structure of the company.
Type of the overall organizational structure of the company "Metro Cash & Carry" is divisional.
Divisional management structure is the most perfect kind of organizational structure of the hierarchical
type. Divisional structure characterized by the full responsibility for the results of the activities by
Department Heads. In this regard, an important place in the management of companies with a divisional
structure is not occupied by the managers of functional departments, but by the managers of the
production departments.
Divisional level solve everyday problems, such as:
- Forecasting of the market;
- Increasing the share of sales;
- Yhe study of the activities of competitors;
- Providing reports of the results to the head, etc.
Advantages of divisional structures
The use of divisional structures allows the company to pay as much attention to a particular
product, consumer or geographic region as small specialized company pays to a particular
product, as a result company might respond more quickly to changes - occurring in the
environment, adapt to changing conditions
This type of management structure is oriented towards final results of the company
activity(satisfaction the needs of a consumer, saturation a regional markets with variety of goods),
reducing management complexities faced by senior managers
Separating operational management from strategic, resulting in a top management focusing on
strategic planning and management
Transfer of responsibility for the profit to the divisions‟ level, the decentralization of operational
decision-making, such a structure helps managers to pay attention to the problems of the market,
improve communications
Development of the latitude of thinking, perception and flexibility of enterprise management
units (divisions).
Disadvantages of divisional structures
• Divisional management structures have led to an increase in the hierarchy, ( chain of
command). They demanded the formation of intermediate levels of management to
coordinate the work of departments, groups, etc.
• Contrasting objectives of departments to overall objectives of the company, the
divergence of interests of "uppers" and "bottoms" in a multi-level hierarchy;
• The possibility of conflicts between departments
• Inefficient use of resources, they cannot be fully utilized because of consolidating
resources for specific subdivision, and increase maintenance costs due to duplication of

8. the administrative apparatus of the same functions in the units and the corresponding
increase in staff quantity;
• Difficulty in controlling from the top to the down, multi-level hierarchy within
departments (divisions)
• Possible limitation of professional development of subdivisions „specialists, because
their teams are not as big as in the case of linear-functional structures at the firms‟ level.
The organizational structure has several levels of management. The highest one includes a
meeting of the Parties of the Company and general manager, and the lowest one - executors.
The highest level of management making decisions regarding the strategic issues and challenges,
control all subordinate units and providing general management of the company.
Organizational structure meets the needs of the company, giving the opportunity for career
growth, respecting the principle of unity of command, as well as an emphasis on the principle of
subordination and delegation of authority, because it is so important for a such large company as
«Metro Cash & Carry».
The main body of the management of "Metro Cash & Carry" is the general meeting of players,
headed by the CEO. The powers of governing bodies, as well as their composition and
competence enshrined in the Charter of the organization.
The structure of government is a meeting of the Parties of the Company and CEO. General
Meeting of the Parties shall be convened by the CEO (in accordance with Ltd «Metro Cash and
Carry» Charter.)
The Board of Directors of "Metro Cash & Carry Russia" includes the CEO, HR Manager, Sales
Manager, Customer Service Manager and Marketing Manager, Director of Development,
Administration Department, Director of Procurement of food, Director of Procurement of non-
food items. Each of them has several subordinate departments.
Metro Shopping Centre has a linear-functional structure.
1. In the company «Metro Cash & Carry» there is a provision of the structural
department, which includes:
1. General Provisions.
2. The main objectives of department.
3. Functions of department.
4. The organizational structure of the department.
5. Department‟s rights.
6. The relationship (service connections) with other departments.
7. Liability of the department.

9. On the basis of such Provision, together with the opening of the shopping center in 2009 was established
the Department of Human Resources SC "METRO».
Department of Human Resources.
Schedule of work in the department is 5/2 day from 9.00 to 18.00. But knowing the specifics of
the business and the inevitability of non-normal working day, the company adds three more
days of vacation; vacation of the employee is 31 calendar days.
Every two years company provides complete renewal of the staff. Either the employees going
up (vertical movement), or transferred to other shopping centers (horizontal movement), or
change the present job.
The Department has the following organizational structure:.
Head of the
Department
Department
Operator
CC-manager CC-manager CC-manager CC-manager CC-manager
It is important to note the dual subordination of the department. Head of
Department subordinate by the Store-manager (Supervisor) TC METRO Cash & Carry
and to the Head of Central Department of Human Resources, located in the central
office.
Human Resource Management Ltd. "Metro Cash & Carry."
Human Resource Management – activity realizing by admistrative staff, head of the
departments and specialists of HR Department, aimed for improving organizational
performance by improving the efficiency of its employees by psychological, legal, economic
and other methods.

10. HR Management include:
- Creating the system of HR management;
- Planning of human resource management;
- In the definition of human resources’ potential and staffing needs of the organization.
The main staff of «Metro Cash & Carry» is more than 280,000 people.