THE INVESTMENT POTENTIAL OF RETAIL BUSINESS: STUDY OF THE DEHRADUN CITY

Submitted in partial fulfillment of the requirements for the award of degree of Master of Business Administration

Guided By:Dr. Sudhanshu Joshi Assistant Professor School of Management Studies Doon University

Submitted To: Dr. Gajender Singh Head of Department School of Management Studies Doon University

Submitted By:Sumit Suri SMS-073 M.B.A Doon University

INTRODUCTION:
Retail means sale of goods in small quantities, it is concerned with buying of goods in small quantities from the wholesaler and selling them in small quantities to the ultimate consumers as per their requirements. The person engaged in this trade is called the retailer. He acts as a link between the wholesaler and the customers. In retail trade goods are sold to the ultimate consumers for personal use and for the use of the business in small quantities only. The retailer does not specialize in a particular line or a particular product. Rather he maintains a large variety of goods. Generally, sales are limited to a local and on a small scale. The Retail Industry is the sector of economy which is consisted of individuals, stores, commercial complexes, agencies, companies, and organizations, etc., involved in the business of selling or merchandizing diverse finished products or goods to the end-user consumers directly and indirectly. Goods and products of the retail industry or sector are the finished final objects/products of all sectors of commerce and economy of a country. Retail industry can be classified into two broad categories organized retail and unorganized retail. 1. Organized retail - Those traders/retailers who are licensed for trading activities and registered to pay taxes to the government. 2. Unorganized retail It consists of unauthorized small shops - conventional Kirana shops, general stores, corner shops among various other small retail outlets - but remain to be the radiating force of Indian retail industry. Some sectors that occupy a prominent position with the retail industry are: Apparel Retail: Everybody understands the impact of fashion and textiles on the environment. Fashion & Lifestyle Retail: In India the vast middle class and its almost untapped retail industry are the key attractive forces for global retail giants wanting to enter into newer markets, which in turn will help the retail to grow faster. Food & Beverage Retail: Backed by huge potential and changing lifestyles, the food and beverage retail market is growing at a robust 30-35 per cent per year.

 Pharmaceutical Retail: Driven by therapies like anti-diabetic, vitamin, antiinfectives and dermatology, it accounted for a robust 15% growth in 2011. E-commerce or E-tailing the next big revolution: With the advent of ecommerce in the retail industry, retail stores are facing stiff competition from e-stores. The rising demand for e-shopping has lead to a new debate cropping up in the world.

It is also pertinent to identify the factors driving growth in retail business, especially in emerging cities like Dehradun. Some of them are:

Growing trend of double-income households Increase in disposable income and customer aspiration Increase in expenditure for luxury items Large working population Low share of organized retailing Growing liberalization of the FDI policy

The above factors are expected to strengthen in the coming times and thereby contribute towards the profitability of business units. Another aspect that needs attention for ensuring the profitability of Retail sector is the skill required for meeting the growing competition. The industry employs a staggering number of people, and given its rapid proliferation, this number is always on the rise. The backbone of the sector are the operations and supply chain management jobs but there are various other options as well, from sales executives and store managers to merchandise planners and buyers. The Industry employs a staggering number of people, and given its rapid proliferation, this number is always on the rise. The backbone of the sector are the operations and supply chain management jobs but there are various other options as well, from sales executives and store managers to merchandise planners and buyers. Some of them are: Conceptual understanding of Investment Risks and Retail Business Analytical skills Detail-orientation Fair understanding of customers psychology Observations skills Project Management

 Operational Skills In-depth product knowledge Having emphasized the profits potential in retail business, it is also important to mention the likely bottlenecks. However, these bottlenecks are more of challenges to the Retail business units rather than threats of profits dilution. They, in fact, expose the retail units to the global environment thereby making the Investment opportunities a long-standing phenomenon, given the growth potential in retail business. We list the well known bottlenecks below: A long way to meet international standards Lack of efficient supply-chain management Lack of required retail space No fixed consumption pattern Shortage of trained manpower Lack of proper infrastructure and distribution channels Availability of working capital at competitive Interest rates.

The Retail sector of India is vast, and has huge potential for growth and development, as the majority of its constituents are un-organized. The retail sector of India handles about Rs.13500 billion every year, and is expected by veteran economists to reach to Rs.36640 billion by the year 2015. Here, it is noteworthy that the retail sector of India contributes about 15% to the national GDP, and employs a massive workforce of it, after the agriculture sector. India's growing economy with a rate of approximately 6-8% per year, makes its retail sector highly fertile and profitable to the domestic and foreign investors of all sectors of commerce and economy, of all over the world. Increased competition and shrinking profit margins in the retail industry have necessitated a demand for sophisticated predictive analytics. Organizations want to know what they can expect from a new or existing location over the long term, and what strategic investment is required to maintain a profitable market share. Market Potential Analysis is used to forecast the potential sales for a location within a given trade area. The forecast is based on the analysis of critical information, such as historic purchasing behavior, current market conditions, local demographics, consumer expenditures and competitive activity. Retail Predictive Analysis can deliver a clear picture of who the ideal customers are and can show where to find more just like them.

Review of Literature
B.S Nagesh (2007) Describes that Indian retailing will see a sea of change in the next five years, driving consumption boom never seen in the history of any country. From a drout situation we will see a flood of modern retail, So Indian retail will be on a steady ground of sustained growth year after year and thereafter. India is being seen as a potential goldmine for retail investors from over the world and latest research has rated India as the top destination for retailers for an attractive emerging retail market. Indias vast middle class and its almost untapped retail industry are key attractions for global retail giants wanting to enter newer markets. Even though India has well over 5 million retail outlets, the country sorely lacks anything that can resemble a retailing industry in the modern sense of the term. This presents international retailing specialists with a great opportunity. The organized retail sector is expected to grow stronger than GDP growth in the next five years driven by changing lifestyles, burgeoning income and favorable demographic outline. K. Biyani (2007) Describes that we are on the cusp of change wherein a huge, multicultural India is transforming from a socialist economy to a consumption-led, creative economy. The scope and depth of change that is taking place due to the revolutionary retail market with a gigantic opportunity for marketers and retailers, not only in large cities but also in small towns. So retailing can play a significant role in creating the India of tomorrow. A.T Kearney (2007) Explains that the retail sector provides a unique platform to India .Government, both central and state, need to engage with the sector and utilize its potential for social development. So the Indian market and its consumers poised for a retail consumption explosion that will continue for future.It is in the context of the contemporary studies that we found that there was a wide scope for further study, especially in specific areas. One important ingredient for the growth of Retail sector is the availability of required finance and other resources. With the background provided by researchers on the subject, we decided to study the

investment potential in Retail Business especially in the light of recently announced Government policy to open up FDI in retail trade. Keeping in view the limitation of time, we decided to study the investment opportunities in the city of Dehradun and attempt to fill the gap. Mohanty & Panda (2008) Opines about retailing as a sector of India occupies important place in the socioeconomic growth strategy of the country. India is witnessing retailing boom being propelled by increasing urbanization, rising purchasing power parity (PPP) of ever growing Indias middle class, changing demographic profiles heavily titled young population, technological revolution, intense globalization drive etc. Opines that according to a study the size of the Indian Retail market is currently estimated at Rs 704 corers which accounts for a meager 3% of the total retail market. As the market becomes more and more organized the Indian retail industry will gain greater worth. However, the future is promising, the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. S.B Akash: (2009) Said that Retail business in India, as anywhere else in the world, plays a crucial role in an economy. Retail in India has the potential to add value over Rs 2,00,000 crore, generating employment for some 2.5 million people in various retail operations and over10 million additional workforce in retail support activities including contract production and processing, supply chain and logistics, retail real estate development and management. Gibson, CEO Retail Association 0f India opines.

R.P Sahu (2010) Describes that a rise in consumer confidence, improvement in profitability and aggressive expansion plans signal better tidings for listed players in the organized retail space. Moreover, analysts believe listed retailers could attract foreign investments by spinning off their subsidiaries into separate companies which can provide a great opportunity for the improvement of this sector. There is a hectic activity in the sector in terms of expansion, entry of international brands and retailers as well as focus on technology, operations, infrastructure and processes. All these present a tremendous opportunity in this high growth industry.

Objectives
The purpose of the present study is to contribute to an understanding of the actual and potential Investment opportunities for Retail Business in the city of Dehradun. This would help in addressing the impact of FDI policy on Retail in India and also highlight one of the potential areas for economic growth in the city of Dehradun. The aim is to highlight the role of retail business in investment growth in Dehradun. Specific objectives are: 1. To quantify the magnitude of Investment opportunities in Retail Business in Dehradun. 2. To identify specific segments of Retail industry that has potential for growth and therefore provides investment opportunities in Dehradun. 3. To study the impact of FDI policy on the Retail business sector in Dehradun.

Hypothesis
1. The retail business sector in the city of Dehradun does not indicate any Investment growth opportunities. 2. The Policy on FDI in Retail business in India will not have any impact in the city of Dehradun, in terms of increased Foreign Direct Investment.

Research Methodology
This part explain the methodology used in this study. The methodology includes data and sources of data, sample size, area of the study and framework of analysis. The study will be based on primary and secondary data. Primary data will be collected from respondents through a structure questionnaire covering Retail Business people of Dehra Dun. The secondary will be collected from various books, magazine, journals, news papers and websites. 1. Sample Size: 60 2. Sampling Method: Simple random sampling 3. Sample Population: Retail Business Units and Retail Consumers in the city of Dehradun. 4. Sampling Data: Primary field survey data 5. Sampling Area: Dehradun

References:Akash, S.B. (2009). Opportunities and challenges of retailing Business In India-An explanatory Study. KAIL Journal of Management And Research, Vol. 2(1), pp.5-45. Biyani, K. (2007).Retailing in the creative economy. F&R Research,Vol.(9), pp.330-333. Gellner, A. (2007). The sportswear Retail segment: Problems & Prospects, India Retail Report.An Images F& R Research,Vol.(2), pp.202-204. Kearney, A.T. (2007). India: The next retail growth story. F&R Research, Vol.(5),pp.228 233. Mohanty, A.K.& Panda, J. (2008). Retailing in India: Challenges and Opportunities. The Orissa Journal of Commerce, Vol.(24), pp. 69-79. Nagesh, B.S (2007). Indian Retail The Way Forward. F & R Research, Vol.(5), pp.246-248. Panda,A.K.&Mohanty,S.(2008). Emerging Retail Trends in India. The Orissa Journal of Commerce, Vol.(24), pp.81-89. Sahu, R.P. (2010). Higher Sales Boost Retail.Vol.(21),pp.3-34. Shivkumar, S(2009). Retail and Consumer Practices Price Warehouse Cooperative., F&R Research,Vol.(8) pp.6-25. Yuvarani, R. (2010). Future Trends of Retail in India. Edited article (Ed.) ,Vol.(34), pp.4-45.