Beruflich Dokumente
Kultur Dokumente
Entry Strategy to
the United Kingdom Market
For Shoppers Stop (India)
May 2010
Entry to the UK Market
4 Bibliography 16
5 Shoppers Stop 17
5.1 Shoppers Stop First Citizen - a loyalty programme and a virtue 17
i
Entry to the UK Market
Executive Summary
The Shopper’s Stop is a prime retailer in India and is the only member of the prestigious
organisation IGDS. The Shopper’s Stop has become a household name since opening in 1991.
This technical paper discusses the potential for Shopper’s Stop to enter the UK market and the
strategy aspects that the Shopper’s Stop should focus on.
The analysis of the UK market suggests that the recent economic downturn has had a huge
impact on the country’s GDP. Also, the spending power was reduced which has now increased,
giving a good sign of recovery. The political situation does appear to be favourable and the
relationship (be it business or education or general) the two countries – India and United
Kingdom – share is also favourable.
The entry strategy suggested in this paper suggests that the Shopper’s Stop should enter the UK
market as a ‘sole’ entrepreneur and that the pre and post marketing is crucial to the overall
success in the business operation. Also, Shoppers Stop is advised to meet the regulators to
completely understand their requirements and how Shoppers’ Stop can meet these and still
ensure the business in the first year of its operation and many more to come.
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Entry to the UK Market
1
Shopper’s Stop – Official Corporate Website (http://corporate.shoppersstop.com)
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Entry to the UK Market
The United Kingdom (UK) was created out of kingdoms of England, Wales, Ireland and Scotland. The
UK is a constitutional monarchy. The Queen Elizabeth II is head of state for the UK and other 15
Commonwealth Countries.
Figure 2.1 illustrates the location of the chosen countries in the context of the rest of the world.
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Entry to the UK Market
2.2.1 Languages
The UK’s national language is English. Although, the mostly spoken language is English, the country
also has some population speaking Irish, Ulster Scots, Scottish Gaelic, Scots, Welsh, and Cornish.
Overwhelming proportion of people speak English and this is considered as a positive note for the local
and international business who have either established or being considering doing business with the UK.
1% UKReligion Distribution
1%
0%
3% 0% Christianity
None
8%
Not stated
Islam
15%
Hinduism
Sikhism
Judaism
72%
Buddhism
Geert Hofstede
Cultural Dimensions
UK World Average
89
66 64
55 50
43 45
35 35
28
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Entry to the UK Market
PopulationChange(2008)
300
250
200
150
Natural Change
100
Net migration & other changes
d
(h
s
)tinP
p
u
o
la
50
0
1998 2000 2002 2004 2005 2006 2008
The UK population is arguably ageing. The percentage of the population of 65 years old has gone up by 1
percent between 1983 and 2008. This is an increase of 1.5 million people for this age group. Over the
same period, surprisingly, there has been a 2 percent reduction is the population of people aged 16 and
under. The trend is projected to continue over the next couple of decades. It is predicted that by 2033,
there will be an 18 to 23 percent increase in the population aged 16 & under and aged 65 respectively. It
is noted that the population aged 85 and over has seen the fastest increase. The number of people aged 85
is estimated to double to reach 3.2 million.
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Entry to the UK Market
7
Entry to the UK Market
The households in the United Kingdom spent an average of just over £470 in a week in 2008 compared to
an average spending of approximately £460 in 2007.
The analysis of household spending is undertaken as per agreed classification system (i.e. the
Classification of Individual Consumption by Purpose). In this 2008, using this classification, the
household spending was highest in commuting (i.e. transport). On an average the house hold spent £63
per week. This includes approximately £21 on the personal transport operations (i.e repairs and servicing)
and approximately £11 on services such as rail and underground trains.
The second highest spending was in the category of recreation and culture at £60 per week. This includes
entertainment and media such as newspapers, TVs, computers, books and package holiday activities. On
average, the holidays in UK contributed just £1.10 per week compared to holidays abroad with £13.60 per
week. The population in UK spent nearly £25 per week on clothing and footwear.
Education
Communication
Transport
0 10 20 30 40 50 60 70
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Entry to the UK Market
Over the past 6 months, the INR is boasting strength against British Sterling. This will provide additional
opportunity to business wishing to establish themselves within the UK market.
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Entry to the UK Market
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Entry to the UK Market
“We will make it easier for people to set up new enterprises by cutting the time it takes to start a new
business. Our ambition is to make the UK one of the fastest countries in the world to start up a new
business. We will reduce the number of forms needed to register a new business, and move towards a
‘one-click’ registration model.
We will support the creation of Local Enterprise Partnerships – joint local authority-business bodies
brought forward by local authorities themselves to promote local economic development – to replace
Regional Development Agencies (RDAs). These may take the form of the existing RDAs in areas where
they are popular.”
2
The Coalition: our programme for government
(http://www.direct.gov.uk/prod_consum_dg/groups/dg_digitalassets/@dg/@en/documents/digitalasset/dg_187876.pdf)
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Entry to the UK Market
The United Kingdom has seen a steady inbound flow of skilled workers. However, the relationship
between India and United Kingdom is not limited to this, but extends its horizon to education and
business. India is the second largest investor in Britain, while UK is the fourth in India. Approximately
over 500 Indian companies undertake business operations in London and generate revenue of around £16
billion, comparing with the UK investment in India of £4 billion.
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Entry to the UK Market
3.3 UK Market Entry Strategy and Plan for the Shopper’s Stop
(i) Establishment
The shoppers stop is advised to enter the UK market as a ‘sole’ entrepreneur, and not as a joint venture.
This is because of the fact that due to various factors such as political status of promoting small
businesses and also likeliness of requiring less capital.
(ii) Pricing
The pricing will be derived based on detailed analysis of various costs incurred. The pricing should be
based on the price at other retailers and should also comply with competition standards and regulations
set by the Government of United Kingdom.
3
Shoppers Stop Official Corporate Site (http://corporate.shoppersstop.com/uploaded_files/575d0de-d30a.pdf)
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Entry to the UK Market
(ii) Timing
The strategy should clearly identify the exact time of various activities. This is to ensure that the company
enters the market at the right time. This is very important some factors such as government policy,
seasonal sales gain, may not be same throughout the year.
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Entry to the UK Market
In addition to the above two points, the company should ensure that they are not rushing into the market
and the strategy should not underestimate the risks involved and should not over estimate the potential
return. Should the strategy show a ‘rosy picture’, it should be revisited as in most cases this ‘rosy’ looking
image of the foreign market is due to the ignorance about various risks that may have gone unnoticed
while the business formulates the strategy.
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Entry to the UK Market
4 Bibliography
Clothing Market Research in the United Kingdom. Article Available online at:
http://www.infomat.com/research/infre0000282.html
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Entry to the UK Market
PROFILE
Shopper’s Stop Limited
Shopper’s Stop Ltd is a professionally managed and systems driven organisation promoted by
the K Raheja Corp Group (Chandru L Raheja Group), one of the leading players in the country
in the business of real estate development and hotels.
Pioneer of modern retail in India, Shopper’s Stop Limited has been instrumental in bringing
about retail revolution in India. Since it opened its doors, the chain has become the highest
benchmark for the Indian retail industry. Since it’s inception in 1991, Shopper’s Stop Ltd has
introduced various retail formats in India. Apart from the flagship business of department stores,
there are also specialty stores for books, home decor, cosmetics and maternity care & infant
care.
Symbolizing the era of global recognition for Indian retailers, Shoppers Stop Ltd is the only
Indian retailer to be shortlisted in the Retail Advertising Award category for its in-store marketing
at the retail industry’s globally recognized event – World Retail Congress. It is also the only
Indian retailer to be nominated across all the categories this year. Shoppers Stop had been
named the ‘Emerging Market Retailer of the year’ at the prestigious World Retail Awards, which
took place on 10th April '08, in Barcelona. The World Retail Congress is the most influential and
highest profile gathering of the retail industry across all retail segments across the globe.
5 Shoppers Stop
Shoppers Stop is India’s largest retail chain of large format department stores with 30 stores in
13 cities across the country occupying an aggregate area of over 1.97 million sq.ft with an
offering of more than 400 finest international and national brands.
India’s premier fashion and lifestyle destination, Shoppers Stop currently has 30 stores in 12
cities viz. Bengaluru (3 stores), Chennai, Delhi (3 stores), Ghaziabad, Gurgaon, Hyderabad (3
stores), Jaipur (2 stores), Kolkata (3 stores), Lucknow, Mumbai (8 stores), Noida, Pune (2
stores) and Amritsar.
Shoppers Stop is also the only Indian member of the Inter Continental Group of Department
Stores (IGDS) along with 29 other experienced retailers from all over the world. This has helped
the company gain insight into the new and emerging practices followed internationally.
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Entry to the UK Market
HomeStop
HomeStop is the first-of-its-kind premium home concept store at Bengaluru, Mumbai – Malad
and Vashi and New Delhi offering a wide range of products and some of the most reputed
national and international brands.
It is a one-stop-shop for all home needs ranging from home décor to furniture, bath accessories
to bedroom furnishings, mattresses to draperies, carpets to modular kitchens & health
equipment all under one roof.
Its unique product mix of books, magazines, CD-ROMs, music, stationery and toys is further
enhanced with services like Dial-a-book and Email-a-book and facilities like gift vouchers and
‘Return, Exchange & Refunds’ policy.
Early Learning Centre (ELC), UK's number one educational toy brand for children aged 0-6
years, is now available at Shoppers Stop stores in Mumbai - Malad & Juhu, and Hyderabad –
Cyberabad, Amritsar and now in Bengaluru - Malleswaram.
HyperCity
Shopper’s Stop Ltd. has a 19% stake in HyperCity with the option to acquire 51% in the
company by June 30, 2010. HyperCity operates 6 stores of which two are in Mumbai – Malad
and Vashi, one each in Jaipur, Hyderabad, Amritsar. And now also in Bengaluru.
HyperCity has redefined the experience of the Indian consumer in the big store format. Its
offering includes food and grocery, general merchandise and apparel. The business operates a
“More to Discover” by-line and delivers quality product at great value in a bright, spacious,
modern environment.
Airport Retailing
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Entry to the UK Market
Shopper’s Stop Ltd.’s foray into airport retailing is marked by a joint venture with The Nuance
Group AG of Switzerland, the world’s leading airport retailer. Shopper’s Stop Ltd will handle the
retail operations in the domestic terminals while the joint venture company will handle the
operations at the duty free zones in international terminals.
Shopper’s Stop Limited currently operates 1 store in Hyderabad domestic airport and 2 stores in
Bengaluru domestic airport. And 4 duty free stores are run by the JV Company in the
international airports at Bengaluru and Hyderabad.
TimeZone Entertainment
Shopper’s Stop Ltd. believes that the Indian consumers are looking for multiple options to
entertain themselves and their families. It has forayed into the Entertainment sector by acquiring
a 45% stake in Time Zone Entertainment Private Limited which is in the business of operating
Family Entertainment Centres (FECs). It has 7 doors in Mumbai, Ahmedabad, Kolkata and
Hyderabad.
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