Business case competition on Retail and Pharma Industry. Author benchmarks both the industry and final provides reason to choose retail industry for technology services.
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Retail or pharma business case competition
1. Case study
IT Pitch for
Retail and
Pharma
Dhruvajyoti Roy
159773
Engineering Services
2. Content
Problem statement
Overview of the Retail and Pharma Industries
Business Model Analysis
Financial Analysis
Final Decision
30 Sec
60 Sec
120 Sec
120 Sec
30 Sec
Agenda of Presentation Time limit
3. Problem statement
“To do an analysis of the Retail and Pharma sector
in India and pick & Pitch for the sector which will
be more favorable for business and potential to be
a good opportunity for the use of IT applications/
services/ products”
4. Parameters Retail Industry Pharma Industry
Market size and
Industry CAGR till
2020
• By 2015, the total market size is
estimated to be around US$ 600
billion.
• CAGR of 7.45 per cent since
2000
• Expected to grow to US$ 1.3
trillion by 2020, CAGR of 9.7
per cent between 2000-2020
• US$ 6 billion in 2005 and is
expected to expand at a CAGR
of 15.92 per cent to US$ 55
billion by 2020.
Global Industry
Market size
• 22 Trillion USD • 1.3 Trillion USD
Global IT Spend 2015-
Gartner
• 179.538 Billion USD • 141 Billion in 2015
Major Players • Vmart
• Pantaloon
• Provogue
• Bharti
• Reliance
• Spencer
• Cipla
• Dr Reddy
• Lupin
• Aurobindo
• Sun
• Cadilla
Source : http://www.gartner.com/newsroom/id/3135718, http://www.statista.com/statistics/309466/global-r-and-d-expenditure-for-
pharmaceuticals/
Overview of the Retail and
Pharma Industries
6. Business Model Analysis
Porter’s Five Forces
•Bargaining
power of
suppliers
•Bargaining
Power of
customers
•Threat of
substitute
•Threat of
new
entrants
Competition
• Local IT Vendors
• Start up culture
Porters Five Forces Pharma Retail
Competition High Medium
New Entrants Low Medium
Substitutes High Low
Customers-BP Low High
Suppliers -BP Low Low
7. Business Model Analysis
SWOT Analysis
Strength Weakness Opportunities Threat
Retail
• Rise in Income
• Changing
consumer mindset
• Entry of large
global players
• Growth of Mobile
• E-commerce as
substitute.
• Hyper competition
• FDI
investment
• Global
Brands
entering
India
• Political
opposition to
protect
unorganized
sector.
Pharma
• Low cost
production
• Good in generics
• Tough regulations
in
• Dependence on
exports
• High competition
• Generics
market
increasing
• India as an
alternative to
China
• Quality issues
• Penalties by
large Indian
firms
8. Financial Analysis
IT Sector
2012
2013 2014 2015 2016 CAGR (2012-2016) %
Hardware 9.1 9.5 10.9 12.5 14.3 7.5
Software 3.5 4.0 4.5 5.2 6.0 11.4
Services 9.2 10.3 11.9 13.8 16.1 8.9
Telecom 44.7 47.8 51.5 54.6 59.5 3.6
Total 66.4 71.5 78.9 86.2 95.9 5.3
• IT spending in India is projected to total $71.5 billion in 2013,
a 7.7 percent increase from the $66.4 billion forecasted for
2012.
• Software will record the strongest revenue growth at 15 per
cent, IT services will grow at 12 percent.
Average CAGR of 10% for software,
Hardware and services.
http://www.rediff.com/business/slide-show/slide-show-1-tech-indias-it-spend-to-rise/20121010.htm#1
9. Financial Analysis
http://www.rediff.com/business/slide-show/slide-show-1-tech-indias-it-spend-to-rise/20121010.htm#1, Capitaline
Companies Sales in Cr Average IT spend of 1%
Aditya Bir. Fas. 1,850.73 18.5073
Arshiya Lifest - 0
Arvind Lifestyle 2,192.72 21.9272
Arvind Retail 506.29 5.0629
Baazar Retail - 0
Brandhou.Retail 512.02 5.1202
Cantabil Retail 138.68 1.3868
Devinder Text 0.06 0.0006
Future Lifestyle 3,310.19 33.1019
Future Ret. DVR 5,355.79 53.5579
Future Retail 10,994.03 109.9403
Hypercity Retail 1,056.14 10.5614
MW Unitexx 4.42 0.0442
Provogue (India) 545.46 5.4546
Shoppers St. 3,202.94 32.0294
Smart Retail - 0
Store One Retail 134.37 1.3437
Trent 1,440.04 14.4004
V2 Retail 286.77 2.8677
V-Mart Retail 720.5 7.205
Welspun Global 2,396.15 23.9615
Ind.Composite 34647.3 346.473
Total IT spend
in 2015 57.7455
Total IT spend
considering
10% CAGR 92.99970521
Sales in Cr
Pharmaceuticals -
Indian - Bulk Drugs
& Formln Lrg
69801.1
Total IT spend in
2015
29.08379
Total IT Spend
2020
46.83974
10. Final Decision
Parameters Weightage Retail
High -5
Medium-3
Low-1
Pharma
High -5
Medium-3
Low-1
IT Spend 30% 5 3
Industry
Growth rate
30% 5 3
Competition 20% 5 5
IT Adoption 20% 5 3
Cumulative
score
6 4
Final choice is Retail Industry due to its high market size ,
cumulative growth rate for the future , a good need for faster
IT adoption and intense competition.