JSW-SHOPPE- A unique distribution

Model for Branded steel

Everything in Steel Under One Roof

Submitted by-
Group C
1.Amit Umredkar
2.Jay kumar Garg
3.Srikanth
4.Amruth
AGENDA

Company Overview
Background of the case
Marketing objectives of the company
Mahendras Hypothesis on the concept.
Current issues in the Existing distribution structure.
Challenges and issues in implementing the proposed Model.
Risks in proposed model and solutions .
Our stand for approaching the objectives of management.
Actions to be taken by JSW in next 12 months to support
dsitribution strategy
Company Overview:-

JSW has business interests in steel production, steel products, power

generation, mining, sponge iron, ferrochrome and heavy machinery.
JSW Steel is among the worlds most illustrious steel companies and is India's
leading primary integrated steel producer.
The flagship company of the over $11 billion JSW Group, JSW Steel is
testament to decades of experience and a dynamic culture that have
culminated in the company becoming the leading manufacturer of value
added and high end steel in India.
JSW steel has its plants located across 6 strategic locations in South and West
India, namely, Karnataka, Tamil Nadu and Maharashtra.
Background :-

JSW Steel Ltd. Indias largest private sector steel maker, owned by JSW
Group based in Mumbai Maharashtra, manufactures a wide range of grade
of steel.

With wide range of products available, company had garnered a solid trust
and reputation over a period of time through solid support of large
network of buyers.

Initially, JSW sold products through its large network of dealers. However,
to increase its market penetration, JSW management team members
thought of building a brand reputation.

JSW Steel felt that the present distribution model did not serve the
purpose and then they come up with a unique concept called JSW
Shoppe A model where a company would partner with existing as well as
new dealers to achieve their objectives.
Background :-JSW SHOPPE
A unique nationwide retail network, JSW Shoppe is a one stop shop catering to
end-users and small and medium enterprises
Marketing objectives

Creating JSW Shoppe across India as exclusive retail outlet of the company which
displays all the JSW products. So that it attracts end consumers ,
Building of the distribution network for establishing the JSW as premium brand.
Formation of the organized retail chain for distribution of products and strong
partnership with dealers.
Conversion of the existing dealers into JSW Shoppe dealers by changing the Business
model.
Expansion of the dealer network in all over the country.
Monitoring the sales and performance of the dealers and distributors .
Direct approach to the end user customer by eliminating the middleman concept
Attracting the end user customers by displaying the all JSW steel products at one single
stop retail outlet of the company.
Presented the SHOPEE concept for growing the Brand and boosting the product sales .
Capture the small customers market as well as the big giant like OEMs for boosting the
product sales.
 Mahendras Hypothesis on the Proposed Model.

As per interaction with dealers network he found that JSW is not well known brand to end users
into the market so this model can be bolster the brand in the Market.
He was aware that Tata steel and Essar steel had de-commoditized their steel through branding.
As per his Marginal cost analysis he found the collaboration with dealer more efficient then
directly venture into the market.
He observed in the current business scenario the dealer was dependent on the steel companies
due to limited manufacturing.
Dealers faced the problem to supply the products as per demand due to non-availability of the
products so proposed model can be better option to capture the market.
He planned to presented the JSW Shoppe as an exclusive steel retail outlet which will display all
the products from Hot rolled to colour coated sheets and long products.
This model will be long run partner ship with dealers.
It will attract the end user customers to visit , understand and appreciate the various
applications of the products.
Investment from company will attract the dealer for partnership.
Certificates will be issued to dealer for sensing the pride as being the business partners.
 . Distribution Structure
Current issues in the Existing

Dependency of business on relationship between company and dealers.

No interrelation between company and the dealer business goals.
Dealers were the distributors of various brands like Tata, essar etc. and not
bounded for loyalty to Particular Brand.
Dealers were free to keep stock of any company as per customer Demand and
supply.
Non-availability of the Management information systems for measuring the
dealer sales and performance.
No relation between the company sales department, field and end user
market.
Dealers focused for selling of the one variety of the steel product.
Demotivation of the skilled man-force working in dealers prospective .
Less supply of the steel from manufacturers to dealer created the problem for
their existence.
 Challenges and issues in implementing the proposed
Model

General acceptance of the model within the company for the sales and marketing
workforce due to expansion of their roles and responsibilities.
Acceptance of the New model by existing dealers as they were unaware with the
advantages and philosophy of the concept.
Designing of the sophisticated ordering process for the shoppers to steady supply of
material.
Training of the executives to target the audience for creating the awareness of the
business model.
Building confidence in dealers for long-run partnership.
Insecurity in Dealers for the Heavy investment due to this concept.
Availability of the customized steel products in-time instead of standard products as per
end user demands.
Resistance from dealers for interference in their day to day business affairs and adoption
of corporate culture and environment.
Resistance from dealers for Employment of trained and skilled staff .
 Risks associated with the JSW strategy

Increase in the Dealer inventory.

Sales cannibalization by the dealers in close
proximity.

Risk Forecasting of the manpower planning in all

distribution channels.
Manpower training towards new business
dynamic changes.

It should be monitored on time basis with flexible

returnable process for building confidence.
Strategy to Ensuring the Sales area and product range variety
to dealers .
Continuous monitoring the manpower flow on
mitigate quarterly basis.
It should be monitored on changes to the market .
 Our stand for approaching the objectives of
management.
Expansion of the Distribution channel to rural areas as a sublet unit to Shoppe.
Retaining the employees for the long run through training and education
programs.
Rewards and incentives to the dealers for achieving the sales targets .
Conducting Customer surveys for the searching and generating new
customized Products demands for the end user into market.
Searching the market to replacing other metals products by low-cost steels
products through innovation.
Ensuring the Dealers for the supply and serviceability of the products.
Conducting the training of dealer employees to aware with market changes
and innovation for reaching the end user .
determining a strategy to counter emerging competition.
Searching of new dealers in market working with competition for expansion to
grab the market.
 ACTIONS TO BE TAKEN BY JSW IN NEXT 12 MONTHS TO SUPPORT DISTRIBUION
STRATEGY
Most essential ingredient JSW Shoppe was missing thorough its business growth : having the
right people in place.

To meet its Distribution strategy and enhance sales growth, JSW Steel to focus on following -

1. Establish a Beachhead Team - Hire a new Senior Sales Management team with deep domain
expertise in sales and marketing allowing the company to hit the ground running, quickly
validate assumptions, and drive key readiness .

2. Perform a Deep Dive Due Diligence Although JSW had varied range of Steel products
available, JSW should analyse the market available.

Prepare a market segmentation analysis to determine if product will sell in the local market
though JSW Dealer Shoppes.
Prepare a product gap analysis against local products. Is there a demand that is not satisfied by
a local company?
Perform a SWOT analysis against competition. Product will likely be higher priced than local
products. Will the market buy JSW Steel product?
Consider market opportunity/sizing. How big is the market and how long will it take JSW to
capture your targeted sales?
ACTIONS TO BE TAKEN BY JSW IN NEXT 12 MONTHS TO SUPPORT DISTRIBUION
STRATEGY
3. Develop a Strategy and Business Plan - Develop a localized strategy and
business plan that drives local JSW Shoppe Dealers success while remaining
integrated with the overall corporate strategy and objectives.

JSW should Define short, medium, and long-term strategy with local JSW
Shoppe dealers by setting reasonable goals to measure progress and
cost/benefits.
Define goals, objectives, and success metrics.
Complete the business model and structure. Decide if local JSW Shoppe needs
to set up a branch, or a sales office based on demand for the product.

4. Product Readiness - Based on the results from product gap analysis, JSW Steel
should take the necessary steps to market-ready their offerings to achieve high-
impact product differentiation.

Review government- and industry-specific regulations to ensure that compliance

and certifications are obtained if needed.
Initiate testing and quality assurance review based on local standards.
Consider a local logistics and distribution network.