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AMITY INTERNATIONAL BUSINESS SCHOOL

UK COUNTRY REPORT ANALYSIS AND COMPARISION OF TWO MAJOR HYPERMARKETS TESCO IN UK AND BIG BAZAAR IN INDIA

RESEARCH TO BE SUBMITTED BY ANKIT KUMAR AGRAWAL A1808711024 MBA-3C, 2011-2013

INDEX
CHAPTER 1: INTRODUCTION ..3 CHAPTER 2: REVIEW OF LITERATURE ....4 CHAPTER 3: OBJECTIVES AND METHODOLOGY.5 3.1: OBJECTIVIES.5 3.2: RESEARCH METHODOLOGY..5 CHAPTER 4: BRIEF ABOUT TESCO AND BIG BAZAAR.6 4.1: TESCO.6 4.2: BIG BAZAAR..6 CHAPTER 5: COMPARISION OF UK AND INDIA RETAIL INDUSTRY.7 CHAPTER 6: SWOT ANALYSIS ....8 6.1: SWOT ANALYSIS OF TESCO..8 6.2: SWOT ANALYSIS OF BIG BAZAAR.9 CHAPTER 7: MARKTING 4PS OF TESCO AND BIG BAZAAR10 CHAPTER 8: PORTERS FIVE FORCE MODEL11 8.1: TESCO PORTERS FIVE FORCE MODEL.11 8.2 BIG BAZAAR PORTERS FIVE FORCE MODEL....12 CHAPTER 9: ANALYSIS.13-15 CHAPTER 10: FINDINGS AND RECOMMENDATION..16-17 10.1: FINDINGS..16 10.2 RECOMMENDATIONS FOR TESCO AND BIG BAZAAR....17 CHAPTER 11: CONCLUSION..18 CHAPTER 12: BIBLIOGRAPHY AND REFERENCE..19 CHAPTER 13: ANNEXURE20-21

CHAPTER.1 INTRODUCTION
Tesco is the worlds 3rd largest and UKs no. 1 hypermarket and big bazaar Indias 1st hypermarket, and being a student of marketing and international business so that I took 2 major player of retail industry Tesco and Big Bazaar of UK and India. Now days retail industry is into spotlight because there are two reasons behind of this, liberalization of the world economy and large players of the industry have entered into the retail business. Earlier FDI in retail industry have been permitted by the Indian government so that large numbers of international retailers interested to enter into Indian retail industry because the retail business of India is more than 450 US$ and one of the top 5 retail market in the world and 84% of Indias retail industry is unorganized. In the world almost all the customers are very price conscious. The main motive of all the hypermarkets is to provide products and services at very low price than the others hypermarkets. Indian retail industry environment is totally different from UK. The main difference I found is in India customer are very price conscious, every item is with MRP by the marketer of the particular product but in UK customer arent very much price conscious and on the product there is no MRP by the marketer or manufacturer of any product, the price decided by Tesco itself, there is no MRP restrictions. In India, increasing in the disposable income of middle class people and increasing the purchasing power of the people and conditions for growth of organized retail, the large players of retail industry like Wal-Mart, Carrefour, and Tesco etc keep an eye on Indian retail business and they are ready to enter into Indian retail business. Retail industries play a major and very important role in virtually all economies the world over, in this report I have research on customers perception about the Tesco and I did a primary research for this. I asked 13 questions about the Tesco to the 30 peoples of London. And I also have done this research according to my objectives. The research is being done in the area of marketing. In this research I also have done SWOT analysis, PESTLE analysis and porters 5 force model of Tesco and Big Bazaar. I compared the UK and Indian Retail industry which is totally different from each other. Its very clear that in UK and India the retail sectors operate differently. So I tried to analyze and comparison of UK and India Retail Industry and customers perception about Tesco and according to my objectives.

CHAPTER.2 REVIEW OF LITRATURE


Role of Retail in the worldRetail play a very important and major role worldwide in increasing productivity across a wide range of consumer goods and services. Retail means to sale of goods and services from businesses or individuals to end users. Retailers purchased goods in large quantities from manufacturers or directly to wholesalers. Retailers are part of an integrated system that is called Supply chain. Retailing can be done by door to door, online or fixed locations like markets and stores. Retail can be identified into two forms; one is organized retail and other unorganized retail. Organized retail is like supermarkets, mall, and hypermarkets, unorganized like small shop, street shop, general stores etc. Retail is classified by type of products like Food products, durable goods (electronics, sporting goods appliances etc), consumables goods (clothing, fabrics apparels etc) and types of retailers by marketing strategy is department stores, warehouses stores, supermarkets, hypermarkets, general stores, malls, Online business etc. Retail can be identified into two forms; one is organized retail and other unorganized retail. Organized retail is like which are registered, licensed like supermarkets, mall, and hypermarkets, unorganized like small shop, street shop, general stores etc. Rising in GDP growth, increasing population, increasing in disposable income, and increasing consumer purchasing power are combining to drive the Global Retail industry and opportunities for retail segment players. The retail market is forecast to reach an estimated $20,002 billion in 2017 with a CAGR of 3.9% over the next six years (20122017).
Country Total Retail Sales (USD) 2012 $2,983,000,000,000 $515,000,000,000 $450,000,000,000 Share of organized retail (%) 85% 70% 16% Share of unorganized retail (USD) 2012 15% 30% 84%

USA UK INDIA

CHAPTER.3 OBJECTIVES AND METHODOLOGY


Ch.3.1 OBJECTIVES:
It is very clear that being in two different countries the retail sectors operate differently. India and United Kingdom both are huge nations with a lot of available resources. And the retail industry is a very huge market of both the nations. There is a huge scope for hypermarkets to establish a big feet in market share, if strategies are in line. In the report I will try to analyze UK and Indias hypermarkets, their culture impact on hypermarkets and various aspects that influence consumer decisions in both the countries. 1. To analyze the 2 major player of retail industry of UK and India by keeping an eye on strategies used by Big Bazaar in India & Tesco in London. 2. To study the UK and India retail industry. 3. Comparison of marketing strategies adopted by Tesco and Big Bazaar. 4. To study the perception of customer about Tesco. 5. To study the different marketing strategies used in the organized sector in both the countries & the kind of clients they serve. Ch.3.2 METHODOLOGY: In order to achieve my objectives I used this longitudinal exploratory study took into account both qualitative and quantitative research strategies. The research is to achieve the objectives is qualitative and as well as exploratory in nature, and is meant to provide the basic information required by research objectives. Quantitative is being done, and also and qualitative research is being done both using primary and secondary information that is gathered and assembled specifically for this study. Qualitative secondary information from a variety of sources is gathered like Tesco Case Studies, Tesco Brochures, Tesco Website, books, online journals, Newspaper and Magazine (The Grocer) Articles, Primary data has been collected for the customers perception about Tesco by making a questionnaire and visit in Tesco stores. The Study is done in the area of marketing.

CHAPTER.4 BRIEF ABOUT TESCO AND BIG BAZAAR


Ch.4.1 TESCO:
Tesco was founded in 1919 by Jack Cohen from a market stall in Londons East End. Over the years Tescos business has grown and Tesco now operate in 14 countries around the world, employ over 500,000 people and serve tens of millions of customers every week. They have always been committed to providing the best shopping experience. Today they continue to focus on doing the right thing for their customers, colleagues and the communities they serve. Tesco Is a UKs grocery and merchandise retailer and the biggest hypermarket of UK, headquarter of Tesco in Cheshaunt, United Kingdom. Tesco stores are the subsidiary of Tesco PLC in UK. Tesco stores are divided in 6 formats like Tesco express, Tesco Metro, Tesco superstores etc. The vision of Tesco is to be the most highly valued by the customers they serve and the community in which they operate and their staff and the shareholders, a modern and innovative co. and applying their skills globally. In India Tesco is a joint venture with TATA group and the stores named as Star Bazaar. Tesco segments its store portfolio six four different store formats. Express, Metro, Superstore, Extra, One-stop, Tesco and Home plus.

Ch.4.2 BIG BAZAAR:


Big Bazaar was founded in October 2001 by Kishore Biyani the Chairman Pantaloon retail India limited, future group. Big Bazaar works on the same economy model as Wal-Mart. And Big Bazaar had considerable success in many Indian cities and small towns. The main vision of the Big Bazaar is Everything at every place at every time for each Indian customer at a very profitable manner. Big Bazaar is Indias number 1 hypermarket and there are 214 stores in 90 cities of India till June 2, 2012. Big bazaar is the fastest growing hypermarket of India. The tagline of Big Bazaar isse sasta aur kuch nahi! which itself shows that Big Bazaar focus only those customers who are very price conscious and they believe in low price. They provide best product at the best price. Big Bazaar is situated near transportation hubs to attract maximum customers. Big Bazaar with its range of products and services offering reflects the aspirations of millions of Indian.

CHAPTER.5
COMPARISION OF RETAIL INDUSTRY OVERVIEW OF UK AND INDIA

1. UK 1. In UK 11% of all VAT-registered business are retailers. And organized retail is 70% and 30% is unorganized or traditional. 2. The retail industry of UK generates almost 8% of the GDP. 3. Hypermarkets dominate the UK food retail market, with 56.0% of its sales. 4. The retail industry of UK gives employment of 2.9 million people. 5. The UK retail sector makes up approximately 10% of its all employment. It is more than half of people who work part time in the retail sector and its compared to less than a 3rd across the whole economy. 6. UK is the most international retail market with the highest proportion of international retailers trading.

India 1. In India only 16% retail industry is organized and rest 84% is unorganized. 2. The retail industry of India generates almost 14 to 15% of its GDP. 3. The Indian retail market is US$ 450 billion and comes one of the top five retail markets in the world. 4. Its poised to become $1.3 trillion opportunity by 2020. 5. The Indian government recently took a decision to allow up to 100% FDI in multi-brand retail and raise the limit for overseas investment in single-brand retail to 100%. 6. In November 2011, India's central government announced retail reforms for both multi- brand stores and single-brand stores.

CHAPTER.6 SWOT ANALYSIS


Ch.6.1 SWOT ANALYSIS OF TESCO:

Strengths 1. Tesco is the number 1 supermarket chain in UK. 2. Tesco has strong brand name. 3. Financial power is very strong. 4. Presence of Tesco is internationally. 5. Tesco is worlds Third largest retailer.

Weakness 1. Tesco is more dependent on UK market. 2. In UK transport costs is very high. 3. The strategy is single point to serial acquisitions. 4. The main difficulty is Increasing geographical spread makes focus on specific markets. Threats 1. The main threat is International expansion of the business. 2. Lowest price war between hypermarkets is main threat. 3. The competition is very high from Asda & Wal-Mart. 4. Raw material cost is rising day by day. 5. Innovation by other super markets is a highly threat.

Opportunities 1. The main opportunity is to open new stores. 2. Asian market has huge retail industry and in growing stage so Tesco must enter into Asian markets. 3. Tescos opportunity is in strategic alliance with other companies. 4. Tesco should try into non-food retail because theyve strong financial power. 5. Tesco should also try in Health & Beauty.

Ch.6.2 SWOT ANALYSIS OF BIG BAZAAR:

Strengths 1. Big Bazaar offers a wide range of products and services. 2. Big Bazaar is affordable for middle class & upper middle class. 3. Big Bazaar provides attractive Promotional offers. 4. The strategy of Big Bazaar is low price guarantee which attract customers. 5. Big Bazaar has high brand equity. Opportunities 1. Theyve opportunity to expand globally by tieups other multinational companies. 2. They must enter into high premium segment. 3. Indian organized business is only 16% so that there is a lot of scope in Indian retail industry. 4. In the rural area the whole retail business are unorganized so theyve a chance to enter into rural markets of India 5. Mall culture is increasing in India so theyve chance to expand their retail business widely.

Weakness 1. Big Bazaar is restricted to Indian market only it isnt globally. 2. Big Bazaar keep very thin margin. 3. There are long lines at billing counters of Big Bazaar which is very time consuming. 4. Because they believe in low price guarantee so that high branded products are still missing from big bazaars line of products.

Threats 1. India is developing country and their policies change randomly so changing in government policies is threat for Big Bazaar. 2. After the FDI in retail industry the main player of retail industry like Wal-Mart, Tesco have entered into Indian retail industry. 3. The competition of Big Bazaar is now with Wal-Mart and other international stores so that the threat is competitors global presence. 4. High competition.

CHAPTER.7 MARKETING 4 PS OF TESCO AND BIG BAZAAR


4 PS PRODUCT TESCO
Tesco provides a wide range of quality products like Food, Nonfood, personal finance, telecom, online services, major brands, and also include Tescos own brand product.

BIG BAZAAR
Big Bazaar offers maximum variety of each product it also include own product of Big Bazaar. Big Bazaar with its range of products and services offering reflects the aspirations of millions of Indian. Big Bazaar believes in low cost guarantee. Big Bazaar considers its discounted price its USP. Price of product is low and they give average 7-8% discount on all items on their MRP. Big Bazaar targets semi-urban population. Big Bazaar strategy is to find out a cheap location Big Bazaar is situated near transportation hubs to attract maximum customers. Big Bazaar use 2 types of promotional strategies of Big Bazaar One is the holistic advertisement promotion like Sabse Sasta Din are a very successful strategy to get footfall and the second is the particular store oriented promotion like buy 2 get 1 free etc. There are loyalty schemes which reward customers.

PRICE

Tesco sell best quality product at a low price in order to have a large audience to target.

PLACE

Tesco has a store of every Pin code of London they have 6 multi format stores to have a better geographic cover of market.

PROMOTION

Tesco emphasize on the ethical things like green, the supplier care and social issues. Tesco promotes their store every little help the tagline of Tesco. Tesco also provide their customers loyalty scheme as club card to reward their customers.

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CHAPTER.8 PORTERS FIVE FORCE MODEL Ch.8.1 Tescos Porters five force model

Threat of New Entrants (Medium)

Bargaining power of suppliers


(Low)

Competitors

Rivalry Among

Bargaining power of buyers (Medium)

(High)

Threats of Substitute products

(Low)

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Ch.8.2 Big Bazaar Porters five force model

Threat of New Entrants (High)

Bargaining power of suppliers (Low)

Competito rs

Rivalry Among

Bargaining power of buyers (Medium)

(High)

Threats of Substitute products (High)

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CHAPTER.9 ANALYSIS
According to the questionnaire I found this result. Q.1:- How often do you visit Tesco? How often visit to tesco?
Daily Twice in a week Once in a week 3% 47% 17% Twice in a month

33%

Q.2:- Are you satisfied with Tescos services (in store)? Satisfied with Tesco Services (in stores)
No 20%

Yes 80%

Q.3:- Range of products available in Tesco satisfactory? Product available in tesco satisfactory?
Yes 23% 77% No

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Q.4: Does the Tesco provide quality standard products?

Quality standard product?


Yes 17% No

83%

Q.5:- Rate the customer service according to your experience.

Customer Service
Excellent 10% 10% 77% Good 3% Average Poor

Q.6:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store?

Locations easily accessible?


Yes 17% 83% No

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Q.7:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Price Reasonables?
Yes 30% 70% No

Q.8:- Are you a loyalty program (Club card) member of Tesco? Clubcard Member?
Yes No 47% 53%

Q.9:- How much would you rate Tesco?

Rate Tesco
Excellent 23% 67% Good 10% 0% Average poor

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CHAPTER.10 FINDINGS AND RECOMMENDATION


Ch. 10.1 FINDINGS:
After all the research work Ive done I found some interesting facts about Tesco and Big Bazaar, If we talk about Tesco and Big Bazaar marketing strategies than these are different in many ways: Tesco operates globally but Big Bazaar is in India only, so t hat Tescos strategys is different for different countries, Tesco has more than 5000 stores in UK but Big Bazaar has only 300 stores in India. At Big Bazaar waiting time in terms of Billing is a concern and more so during the weekends. And during my personal observation when I saw in India (Though it was for 3-4 hours which is a short period of time),it was noted by me that few customers who had little to purchase, left their trolleys due to long queue at the counter.

Opposite of this Tesco has a competitive benefit, Tesco has its store at every pin code of UK, Tesco has huge network. So that people find Tesco very easily. In India price of any product decided by the manufacturer or marketer of the particular product, no one can sell a product more than the MRP decided by the manufacturer but in UK things are totally different price of any product decided by the seller, so Tesco has right to sell a product as he want but Big Bazaar cant sell any product of maximum of the MRP. Retail industry play a very important role in both countries, retail industry of UK generates 8% GDP and in India its 14 to 15% of its GDP. Main difference is that UKs retail industry is 70% organized and Indian retail industry is only 16% organized which makes a huge difference. Indian retail industry comes in top 5 of the world, and the chances of growing of this retail business is very high in India because mall culture is growing in India, Indian customers are more price conscious than the UK, and Indian government allows 100% FDI in retail business and there are so many reasons so that we can say Indian retail industry will grow faster than the UK retail industry.

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Ch.10.2 RECOMMENDATION
Recommendation for Tesco:
More dependency on UK market isnt good for Tesco. Competition is very high so they should get competitive advantage because of their network. Tesco needs to focus on his club card loyalty program so that customer can get benefit of that and they can retain the customer again and again.

Recommendation for Big Bazaar:


At Big Bazaar they should they should be increased billing counters

and employees so that customers do not face any problem regarding their purchase goods and waiting long queues which force them to leave their purchased goods. Big Bazaar must do something new than others, must bring technologies, new innovations and different offers. They need to focus their CRM.

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CHAPTER.11 CONCLUSION
Tesco and Big Bazaar is no.1 hypermarkets of UK and India, the strategy of both the stores to give best product at best price, price war has been begun between all the hypermarkets and the profit of this getting to the customers directly. There are the many government policies which affects these stores different from each others. Big Bazaar is limited to India while Tesco is globally and worlds 3rd largest hypermarket so that the working style, marketing strategy are different. Tesco stores were developed at different locations which was a serving advantage to different consumer demands. These out of town, edge of town super stores offer one-stop shopping services for weekly outings, the smaller in town stores offer top up shopping facilities. Thus the Tescos portfolio was complemented. And Big Bazaar is situated near transportation hubs of India to attract maximum customers. Big Bazaars strategy is only for the middle class customers of India by giving those attractive offers and low price guarantee. The main weakness of both the stores is that Tescos dependency only on UK markets and as well as Big Bazaar is depends only on India market. Tesco has its strength is very constructive and competitive against his competitors Asda and Sainsburys etc. In India after the 100% FDI investment in retail industry, competition is going to very high for the Big Bazaar, because the big players like Wal-Mart, Carrefour is ready to enter into Indian retail industry. My conclusion after all my research work is Tesco and Big Bazaar is big player of retail industry of UK and India, and retail industry play a very important role for the growth of economy of any country. And low price war between all the hypermarkets is benefited to the customer ultimately.

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CHAPTER.12

BIBLIOGRAPHY AND REFERENCE


Websites:
Web1: philip clarke. (may 2011). Tesco strategy. Available: http://www.tescoplc.com/index.asp?pageid=12. Last accessed 27th feb 2012. Web 2:Tesco PLC - About us - Our history. 2013. Tesco PLC - About us - Our history. [ONLINE] Available at: http://www.tescoplc.com/index.asp?pageid=11. [Accessed 19 March 2013]. Web 3: India's retail industry to grow to $1.3 trillion by 2020: FICCI - Economic Times. 2013. India's retail industry to grow to $1.3 trillion by 2020: FICCI Economic Times. [ONLINE] Available at:http://articles.economictimes.indiatimes.com/2012-1118/news/35185252_1_back-end-infrastructure-retail-industry-fdi. [Accessed 20 March 2013]. Web 4: Future Group's key managers moving out: D Mall joins Reliance Retail Economic Times. 2013. Future Group's key managers moving out: D Mall joins Reliance Retail - Economic Times. [ONLINE] Available at:http://economictimes.indiatimes.com/news/news-by-company/corporatetrends/future-groups-key-managers-moving-out-d-mall-joins-relianceretail/articleshow/18823192.cms. [Accessed 20 March 2013] Web 5: India Leading Retailer, Million Square Feet Retail Space Pantaloon. 2013.India Leading Retailer, Million Square Feet Retail Space Pantaloon. [ONLINE] Available at: http://www.pantaloonretail.in/about-us/overviewretail.html. [Accessed 20 March 2013]. Web 6: Big Bazaar, Indias Hypermarket Chain: Can its Ambitious Future Plans Succeed? Case Study | Vision, Mission and Goals Case Studies. 2013. Big Bazaar, Indias Hypermarket Chain: Can its Ambitious Future Plans Succeed? Case Study | Vision, Mission and Goals Case Studies. [ONLINE] Available at:http://ibscdc.org/Case_Studies/Strategy/Vision,%20Mission%20and%20Goals/V MG0015IRC.htm. [Accessed 20 March 2013]. Web 7: The Indian Retail Industry 2012 - Research and Markets. 2013. The Indian Retail Industry 2012 - Research and Markets. [ONLINE] Available at:http://www.researchandmarkets.com/reports/2126249/the_indian_retail_industr y_2012. [Accessed 20 March 2013]. Web 8: Profile: Tesco - the UKs largest retailer | Analysis | Retail Week. 2013. Profile: Tesco - the UKs largest retailer | Analysis | Retail Week. [ONLINE] Available at: http://www.retail-week.com/home/profile-tesco-the-uks-largestretailer/5046179.article. [Accessed 20 March 2013].
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CHAPTER.13

ANNEXURE
Questionnaire:
I'm making a country specific research report for Master of Business Administration in International business and I am interested in analyzing your thoughts and opinion about Tesco. May I kindly take few minutes of your time and ask you to fill out this? Your answers will be kept confidential and would be used only for my educational purpose. I must appreciate your participation and honest answer for the survey. Name: ____________________________Contact Gender: _________________ no.:________________ Age: _____________

Q.1:- How often do you visit Tesco? Daily Once in a week Twice in a week Twice in a month

Q.2:- Are you satisfied with Tescos services (in store)? Yes No

Q.3:- Why do you prefer Tesco over the other retail store?

Q.4:- Range of products available in Tesco satisfactory? Yes No

Q.5:- Does the Tesco provide quality standard products? Yes Q.6:- Are the locations easily accessible? Yes No No

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Q.7:- Rate the customer service according to your experience. Excellent Average Good poor

Q.8:- Are you aware about all the product line offered by Tesco? Yes No

Q.9:- Do you think the price range fixed by Tesco for its products reasonable compared to other retail store? Yes No

Q.10:- Are you a loyalty program (Club card) member of Tesco? Yes Q.11:- Are the staff friendly & helpful of Tesco? Yes Q.12:- How much would you rate Tesco? Excellent Average Good Poor No No

Q.13:- Any recommendation or comment.

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