Recommendation:

Based on analysing all the alternatives we suggest Alternative 3.

 The pros of this option outweigh the cons by far.
 Definite purpose motor is right fit for market for long term strategic reasons.
 This promises huge potential for growth along with increase in market share.
 First mover advantage in this category would yield significant benefits.
 It has higher revenues and profits than both cases of alternative 2. Even it would
exceed the revenues and profits from option 1 post first year, as it is very short-term
strategy to protect present year volumes.
 Breakeven quantity is low and quickly all fixed costs are recovered.
 This option lets DMC stick to industry’s policy of not publicizing operating
characteristics in excess of NEMA standards. This option takes care of that and
doesn’t lead to technical inflation

1. General Trade (GT)

 Lower overheads and offer convenience of free home delivery and credit
purchases
 Dominance because of shopping and consumption practices in India – strong
preference for fresh produce (purchased 3 times a week), Shopping for staples
done weekly rather than monthly, less than 10% have vehicle and hence
everybody visits in 3-5 km radius.
2. Modern Trade (MT)
 Growth driven by metro customers who wanted all grocery under one roof
 Large assortment offered along with global merchandise
 Private Label – to attract value conscious customers
 Retailers acquiring produce directly from farms to shorten supply chain – cater
to customers having strong preference towards fresh produce
 Offered value added products – cut vegetables and freshly made batter to
attract busy health -conscious customers.
 Small supermarkets near residential area – convenience and home delivery
Most food brands and retail chains were regional rather than national. To meet diverse
needs of customers, stores across country varied their merchandise mix
Future retail expanding – offering convenience of proximity to its customers
Challenges:
 By expanding its network of stores, would future retail be able to attract more
customers moving to online retailers?
 Can it match the convenience of home delivery offered by small neighbourhood
stores?
How would Future Retail attract customers to its store given the strong competition from
small neighbourhood stores and online retailers