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  1. International Business Analysis of Business strategies Academic Group 13 : Bhavik Shah Ridhi Gupta Rajvi Mittal Mukesh Kumar P Rounak Taysheti PGP-22-015 PGP-22-057 PGP-22-054 PGP-22-037 PGP-22-062
  2. Company and Market overview Save money. Live better. Mission statement : ”Purpose to be an innovative grocery store by providing friendly service, clean stores, quality merchandise, and speedy check-out lanes throughout our locations.” Mission statement : “We save people money so they can live better.” Products : Electronics, Movies & Music, Home and Furniture, Clothing, Footwear, Jewelry, etc. Products : Groceries and household essentials, Clothing, shoes, and accessories, Electronics, Home and kitchen appliances, Furniture and home décor, Health and wellness products, Automotive supplies and services, Sports and outdoor gear, Beauty and personal care products, Pet supplies, Jewelry and watches, Party and seasonal items TOTAL REVENUE 2021 : $588.6 Billion TOTAL REVENUE 2021 : $2.5 Billion Naye India Ka Bazaar
  3. Global landscape of the Retail Chain Industry Key Industry driver and trends Artificial Intelligence : AI is being used to optimize retail operations, from supply chain management to inventory optimization to personalized marketing. E-commerce and online shopping : For convenience and affordable price, consumers are turning more and more to online businesses. As a result, direct-to-consumer companies and online marketplaces like Amazon have grown and emerged. Sustainability and social responsibility: Retailers are making investments in environmentally friendly strategies, such as lowering waste and carbon emissions, as well as giving to charitable organizations. Personalization : Retailers are leveraging data and artificial intelligence to customise their goods to meet the increasingly individualized demands of their customers. This extends to marketing messaging, individualised product suggestions, and even specialised goods.
  4. Retail Industry in India With a predicted CAGR of 10.5% between 2021 and 2026, India is one of the retail marketplaces with the greatest growth rates in the world. E-commerce is a key factor in the Indian retail sector's expansion. The e-commerce market is anticipated to grow from $90 billion in 2021 to $200 billion by 2026. Millions of new employment are anticipated to be created in the Indian retail sector in the upcoming years, with a predicted growth of 25 million jobs by 2026.
  5. Uses a "Everyday Low Prices" strategy, offering low prices on products consistently. Big Bazaar and Walmart strategies comparison Big Bazaar Walmart Large shops run by Big Bazaar and Walmart are often found in suburban or rural locations. These establishments are intended to serve as one-stop shops where clients can get all of their needs met. Both of these stores sell a large variety of goods, including food, electronics, furniture, apparel, and other items. They are able to expand revenue and draw in a sizable consumer base as a result. Offers discounts and deals to attract customers. Operates on a low-margin, high-volume business model. Pricing Emphasizes efficiency and convenience in its store design, focusing on easy navigation and quick checkout. Offers a wide range of products, including groceries, electronics, and clothing. Focuses on creating a family-friendly, welcoming atmosphere. Offers a wide range of products and services, including food, fashion, and home goods. In-store experience Has invested heavily in e-commerce capabilities, including same- day delivery and pickup options. Recently launched Walmart+ subscription service for free delivery and other benefits. Has a strong online presence, offering online ordering and delivery services. Ecommerce
  6. High level Buckets Rationale: Fast growing market with a large expatriate population Southeast Asia Rationale: Growing middle class and a large population, which could offer a significant growth opportunity Africa Rationale : Growing middle class and a high demand for affordable retail options. Latin America High demand for affordable retail options. Country Popula tion Major players Nigeria 21.34 Crore Shoprite 25 Spar 13 Park N Shop 10 South Africa 5.94 Crore Shoprite 1000 Pick & pay 800 Spar 950 Kenya 5.3 Crore Naivas 70 Tuskys 50 Quickmart 30 Country Population Major players UAE 1 Crore Carrefour -50 Lulu - 150 Spinneys - 30 SAUDI 3.6 Crore Carrefour- 30 Danube - 50 Panda - 200 QATAR 27 lakhs CarreFour- 10 Al-Meera- 50 Lulu - 15 Country Populati on Major players Indonesia 27.38 Crore Indo-mart – 18000 Alfamart- 17000 Super indo – 150 Malaysia 3.36 Crore Giant 122 Mydin 81 Tesco 296 Banglades h 17 Crores Meena Bazar -20 Agora 15 Shwapno 80 Coun try Popul ation Major players Brazil 21.4 Crore CarreFour 600 GPA 1000 Walmart 500 Arge ntina 4.58 Crore Coto 120 Carrefour 580 Walmart 100 Colu mbia 5.15 Crore Grupo 600 D1 3000 Oympica 350 Middle East
  7. The Three Main Question
  8. Distance India Bangladesh Indonesia Nigeria Kenya UAE Cultural Dominated by small retailers. Growing modern retail, price sensitive customer Price sensitive, good shopping experience, brand conscious, preference for local products Price sensitive, relationship focused, family oriented shopping experience, brand conscious, and convenience oriented customer Price sensitive, family oriented shopping experience, brand loyalty, relationship focused, preference for locally sourced products Quality conscious, brand conscious, Price sensitive, preference to locally sourced products, convenience of shopping Administrative Former British colony Former British colony. Share historical past. Good trade & political relations. No govt hostility towards FDI Former Dutch colony. Good trade relations spanning thousands of years. Govt policies favor FDI. Good political and trade relations. Both part of NAM, G- 20 etc. Former British colony. Good trade relations between the host nation and target nation. Commonwealth nations. Share good political and trade relations. Former British colony. Good trade relations for centuries. Commonweath nation. Share good trade and political relations. Govt welcoming of FDI Former British colony. Good trade relations for centuries. Good political and trade relations. Govt welcoming towards FDI Geographic NA Common border. Well connected by sea and land, densely populated, population = 16.8 cr, good supporting infrastructure Well connected to host via sea. Good internal infrastructure. Population = 27. 38 cr Well connected to host via sea. Good supporting infrastructure. Population = 21.34 cr Well connected to host via sea. Supporting infratructure available. Population = 5.3 cr Well connected to host via sea. Supporting infratructure available Population = 1cr Economic GDP/capita 2256 USD GDP/capita 2,846.84 GDP/capita 4332 USD GDP/capita 2065 USD GDP/capita 2081 USD GDP/capita 44,315 USD CAGE Framework
  9. Political Factors The current political climate in Bangladesh is not stable. Cultural Factors Economical Factors Demographic Factors International Level 80 20 55 60 47 20 77 48 56 40 51 26 Bangladesh India Bangladesh has a hybrid party model. In the most recent World Bank rankings for the ease of doing business, Bangladesh is placed 168 out of 190 economies.due to its excessive bureaucracy. According to the Transparency 2021 Corruption Perceptions Index, the country is placed 147th out of 180 countries. Metric Figure GDP Growth 6.9% Inflation Rate (%) 8.71% Unemployment Rate (%) 5.23% Economic Freedom Index 137/178 Bangladesh's economy ranks 25th globally in terms of purchasing power parity and 35th globally in nominal terms. Metric Figure Population 17 Crore Literacy Rate 74.91 % Dependency Rate 47.67 % Life Expectancy 71.97 years Urban Population (%) 38.18 % • One of the biggest producers and exporters of ready-made clothing is Bangladesh. • A large variety of leather and leather goods, including shoes, purses, belts, and jackets, are produced in Bangladesh and sold to several nations throughout the world. National Level • In 2020, the retail market in Bangladesh will be valued $16 billion. Just 1.6% of this amount, or around $256 million, was attributed to the superstore sector. Industry Level • In the worldwide list, Bangladesh is rated 46th in terms of e-commerce revenue. Company Level • No presence in Bangladesh Source: EAF-Bangladesh
  10. Political Factors Indonesia's government is stable. Cultural Factors Economical Factors Demographic Factors International Level 78 14 46 48 62 38 77 48 56 40 51 26 Indonesia India According to the Transparency 2021 Corruption Perceptions Index, the country is placed 96th out of 180 countries. Indonesia is ranked 73 out of 190 economies in the most current World Bank rankings for business accessibility. It is characterised by power sharing among political parties often characterised as "cartel parties". Metric Figure GDP Growth 5.1% Inflation Rate (%) 5.28% Unemployment Rate (%) 5.86% Economic Freedom Index 63/178 A newly industrialised country, it will be the world's 17th biggest by nominal GDP and 7th largest by purchasing power parity in 2020. Metric Figure Population 27 Crore Literacy Rate 96% Dependency Rate 47.61 % Life Expectancy 72.3 years Urban Population (%) 55.8 % • Indonesia's biggest exports include oil, gas, minerals, electrical goods, crude palm oil, and rubber goods.In Indonesia, the most common imported goods are telephones, refined and unrefined petroleum, aircraft, and helicopters.VAT is 10% and import duty is 7.5%. National Level • In 2020, the retail market in Indonesia will be valued $159 billion. A growing preference for local brand is a key trend. Industry Level • Indonesia is 10th largest market for e- commerce with a revenue of USD 56 billion in 2021. Company Level • Big bazaar currently does not have any presence Source: EAF - Indonesia
  11. Factors Competiti veness Suppliers Barrier to entry Political Climate Bangladesh 2 3 3 2 UAE 4 5 5 5 Indonesia 5 5 5 4 Nigeria 1 2 2 1 Countr y Low Income Middle Income High Income Banglad esh 20% 56% 24% Indonesia 9% 61% 30% Nigeria 40% 48% 12% UAE NA 61% NA HOW : Modes of Entry Country Mode of Entry Banglad esh Umbrella Holding UAE Int- Franchise Indonesia No-go Nigeria JV Kenya JV* Trade off- Matrix
  12. When to Enter ? Early Mover Advantage • We will gain early mover advantage in geographies such as Africa Late Mover Advantage • In this particular case we cannot recognize any late mover advantages Macro-Analysis, Country Analysis International Franchise in UAE Franchise Expansion in UAE Start Acquiring Subsidiaries in Bangladesh Timeline Joint venture in Nigeria with Shop Rite Expand Business in Nigeria
  13. Pressures for Global Integration • Globalization of Markets: Brings in economies of scale. Ideal spot for the companies trying to be cost leaders in their particular industry. • Efficiency Gains of Standardization: A few companies might sacrifice on efficiency gains to serve a more niche market which has a preference for customized products. Example : Organic farm products. Pressures for Local Responsiveness • Consumer Divergence : Consumers preference vary across geographies due to culture climate and economic factors. • Host Government Policies: Every government has its policy regarding the distribution of consumables. TRANSNATIONAL GLOBAL INTERNATIONALIZATION MULTIDOMESTIC Pressure for National Responsiveness Pressure for Global Integration Walmart Walmart adjusts its operational, marketing, and product strategies to suit the particular requirements of each local market. Global Integration versus Local Responsiveness Integration Responsiveness Grid Walmart operates in Mexico under the Bodega Aurrera brand, which has compact, handy stores. Walmart China is the moniker under which it conducts business in China, although it also has a 49% part in a joint venture with, a local business..
  14. Country Bangladesh Kenya Nigeria Adaptation Big Bazar will have to choose those brands that give value for money, focus on the customer experience, and also focus on local sourcing and sale. Big Bazar will have to choose those brands that give value for money, focus on the customer experience, and also focus on local sourcing and sale. Also, they will have to make sure that the location of the stores is convenient to the consumer. Big Bazar will have to choose those brands that give value for money. They will have to source locally to attract customers. For Nigerians, shopping is a family experience. Company will have to take care of this aspect to maintain loyalty. Also, they will have to make sure that the location of the stores is convenient to the consumer. Aggregation The company can leverage the existing supply chain into Bangladesh. It need not setup new manufacturing facilities. Sourcing of local materials will do the job. Company will have to set up plant in Kenya (JV preferred). JV will work on local sourcing, setting up retail locations and distribution. Company will have to set up plant in Kenya (JV preferred). JV will work on local sourcing, setting up retail locations and distribution. Arbitrage Bangladesh has a lower valued currency and a very large potential market ( 50% population staying in and around Dhaka) Kenya is a strategic hub to expand into the east African market. Also, it has tax advantages. Tax rates in Nigeria are lower than India. Also, Nigeria, being rich in natural resources has the potential to decrease the cost of the product. AAA Framework
  15. Strategic Recommendations Entry into Africa Entry into Bangladesh Entry into Indonesia Entry into UAE • Leverage the large Indian Diaspora living in UAE. • Relatively a smaller and developed market. • Entry through a franchise is financially less riskier. • Leverage Reliance’ group’s network in the Middle East. • Enter in 1st year. • Market is in growth stage. • Joint venture is required to handle the political barriers to set up business. • Early mover advantage might pay off. • First Setup a JV in Nigeria and based on that setup JV in Kenya based on similarity in the type of markets. • Enter in 4th Year. • Leverage the Indian Supply chain operations and export relations. • Rapidly Growing middle income segment. • Lack of big players with more than 100 stores. • Mode of entry through Acquisition of multiple small players. • Threat from the local Kirana stores. • Enter in 3rd year. • Market is saturated. • Large number of competitors. • Entry through wholly subsidiary will lead into a price war. Well entrenched competitors with more than a thousand stores. • Adopt No- Go Strategy
  16. Appendix & reference
  17. Political Factors Indonesia has remarkable stability even when neighbouring countries aren't. Cultural Factors Economic Factors Demographic Factors International Level 70 25 60 50 0 0 77 48 56 40 51 26 Kenya India The nation is ranked 123rd out of 180 nations in Transparency 2021 Corruption Perceptions Index. In the most recent World Bank rankings for the ease of doing business, Indonesia is placed 56 out of 190 economies. Current key issues in Kenya include Refugee rights, forced evictions, abuses by security forces and abuses related to Covid-19 pandemic. Metric Figure GDP Growth 4.7 % Inflation Rate (%) 9 % Unemployment Rate (%) 6.6 % Economic Freedom Index 138/178 Kenya's mixed economy is growing, and in 2020 it will be ranked 95 internationally in terms of purchasing power parity and 61 globally in terms of nominal GDP. Metric Figure Population 5.5 Crore Literacy Rate 82.62 % Dependency Rate 70.18 % Life Expectancy 62.68 years Urban Population (%) 28.49 % • Horticultural products and tea are Kenya's top exports. Others include coffee, tobacco, iron and steel products. • Its main imports are machinery and transportation equipment, petroleum products, motor vehicles, iron and steel etc. • Standard VAT of 16 % is levied on all imported goods. National Level Industry Level • Kenya's supermarket business has experienced substantial growth over the past several years. Company Level • Big bazaar has no presence in Kenya. Source: EAF-Kenya Due to the quick development of local and foreign firms, the retail market in Kenya saw increasing activity. Despite a decline in rental returns, the sector has remained steady.
  18. Sources Sources
  19. Sources Australia GDP per Capita | Economic Indicators | CEIC Economy of Kuwait Australia GDP per capita - 2022 Data - 2023 Forecast - 1960-2021 Historical - Chart Economy of Saudi Arabia UAE Retail Market to Grow at a CAGR of 5.88% through 2027 UAE Retail Market Size, Growth, Trends, Price, Forecast 2027 Bangladesh Population (2023) - Worldometer India: national income per capita 2022 | Statista GDP per capita (current US$) - India | Data GDP per capita (current US$) - United Arab Emirates | Data GDP per capita (current US$) - Indonesia | Data GDP per capita (current US$) - Nigeria | Data Kenya - United States Department of State Indonesia Foreign Direct Investment - 2022 Data - 2023 Forecast - 2010-2021 Historical
  20. Sources India–Indonesia relations India–Nigeria relations High Commission of India, Abuja, Nigeria Foreign direct investment (FDI) in Kenya - International Trade Portal Setting Up and Operating an Investment in Kenya Foreign direct investments surge after three-year lull - Kenya Investment Authority grocery-chains/ Retail-Market-Report-2021-with-Profiles-of-Shoprite-Pick-n-Pay-Woolworths-Massmart-Food-Lovers-
  21. Sources FMCG Purchases: Consumer Behavior in Kenya - GeoPoll,india/

Notes de l'éditeur

  2. The distances will be measured from the home nation (India)