ASSIGNMENT

In

BUSINESS STRATEGY

GROWTH STRATEGIES OF
PANTALOON RETAIL (INDIA) LTD.

Submitted by:
ANUJA AGARWAL
COMPANY PROFILE

Pantaloon Retail (India) Limited, is India’s leading retailer that operates multiple retail formats in
both the value and lifestyle segment of the Indian consumer market. Headquartered in Mumbai
(Bombay), the company operates over 16 million square feet of retail space, has over 1000 stores
across 73 cities in India and employs over 30,000 people.

The company’s leading formats include Pantaloons, a chain of fashion outlets, Big Bazaar, a
uniquely Indian hypermarket chain, Food Bazaar, a supermarket chain, blends the look, touch
and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality and
Central, a chain of seamless destination malls. Some of its other formats include Brand Factory,
Blue Sky, aLL, Top 10 and Star and Sitara. The company also operates an online
portal,futurebazaar.com.

Future Value Retail Limited is a wholly owned subsidiary of Pantaloon Retail (India)
Limited. This entity has been created keeping in mind the growth and the current size of the
company’s value retail business, led by its format divisions, Big Bazaar and Food Bazaar.

The company operates 120 Big Bazaar stores, 170 Food Bazaar stores, among other formats, in
over 70 cities across the country, covering an operational retail space of over 6 million square
feet. As a focussed entity driving the growth of the group's value retail business, Future Value
Retail Limited will continue to deliver more value to its customers, supply partners, stakeholders
and communities across the country and shape the growth of modern retail in India.

A subsidiary company, Home Solutions Retail (India) Limited, operates Home Town, a large-
format home solutions store, Collection i, selling home furniture products and eZone focussed on
catering to the consumer electronics segment.

Pantaloon Retail is the flagship company of Future Group, a business group catering to the entire
Indian consumption space.
GROWTH OF A COMPANY

An investor likes to see a company grow because, if profits grow, so do returns to the investor.
The important thing for the investor, however, is that the company increases the returns to
shareholders. A company that grows, at the expense of shareholder returns, is not generally a
good investment.

When a company grows, the growth may be either organic or inorganic. Organic growth means
that the company itself has grown from its own business activity, while inorganic growth means
that the company has grown by merger or take-over. Organic growth is also sometimes known as
internal growth and inorganic as external growth.
Companies may want to grow for various reasons:
• To gain economies of scale
• To spread risk - diversification can often help spread risk
• To gain market share
• To increase profits and therefore returns for shareholders
But, for every organization, it is important to control its activities and measure its performance so
that the stakeholders of the company can get a true picture of the company.
Growth of Pantaloon Retail (India) Ltd. (2000-2009)
The balanced scorecard is a strategic planning and management system that is used
extensively in business and industry, government, and nonprofit organizations
worldwide to align business activities to the vision and strategy of the organization,
improve internal and external communications, and monitor organization
performance against strategic goals. It was originated by Drs. Robert Kaplan
(Harvard Business School) and David Norton as a performance measurement
framework that added strategic non-financial performance measures to traditional
financial metrics to give managers and executives a more 'balanced' view of
organizational performance.
The typical Balanced Score Card focuses on four different perspectives that are linked in a cause
and effect relationship and are referred to as the Financial, Customer, Learning and Growth and
Internal Business Processes.

Using Balanced Score Card to measure the performance and growth of Pantaloon Retail (India)
Ltd.
• FINANCIAL MEASURES
The financial perspective highlights how the company appears to shareholders. Profits are
the major concerns for the shareholders. So, we use the profitability ratio to measure the
efficiency of the firm’s activities and its ability to generate profits.

1. Net Profit Margin

This ratio shows the earnings left for shareholders as a percentage of sales. It measures
the overall efficiency of production, administration, selling, financing, pricing and tax
management.
The following graph shows the growth of net profit margin of Pantaloons Retail(India)
Ltd. in past ten years.

2. Asset Turnover Ratio

This ratio indicates the number of times, total assets is being used for generating
assets in a year. Hence, it shows how effectively and productively assets are being
used in the company.
• CUSTOMER
Financial results are heavily dependent on customers. The customer perspective
highlights how customers perceive our company. Sales figures are very important in
measuring customer perspective quantitatively.
1. Sales Growth
The following graph shows the percentage growth in sales of Pantaloon Retail(India)
Ltd. compared to the growth in sales of competitors such as Shoppers Stop and Trent
Ltd.(Tata Group).

It can be seen that the sales growth for Pantaloons in less than that of Shoppers Stop
but is much high than that of Trent Ltd.

2. Market Share
The following graph shows the market share of the three companies.

From the graph, it can be seen that Pantaloon and Shopper’s Stop have a neck-to-neck
market share.
• INTERNAL BUSINESS PROCESSES
The internal business perspective is designed to focus on internal activities across the entire
value chain. This starts with the innovation process (identifying current and future needs),
through the operations process (delivering existing products and services to customers), and
ends with post-sales services.
For, Pantaloons Retail (India) Ltd, we see the line of business the company is running in
accordance with the Company’s Vision- “Future Group shall deliver Everything,
Everywhere, Everytime for Every Indian Consumer in the most profitable manner.”

1. E-Tailing
Having pioneered the retailing business in India, Pantaloon Retail (India) Ltd has now
decided to revolutionize the consumer e-commerce business in India through company
owned website- Futurebazaar.com
2. Food
Brew Bar, Café Bollywood, Food Bazaar and Sports Bar are a food outlets started by
Pantaloon Retail India Ltd.
3. Fashion
The company entered the fashion segment with a wide range of apparels and accessories
for both men and women. Various home brands, company brands and foreign brands are
sold through their various retail outlets.
4. Home Solutions
This segment caters to the vast varieties of consumer durable goods such as electronic
items and furniture’s that a consumer would require to convert his house to his home.
5. Telecom & IT
This segment takes care of all the gizmos and the gadgets and various telecom needs of
the consumers.
6. General Merchandise
Pantaloon Retail (India) Ltd. operates on various retail formats such as departmental
store, super-market, hyper-market, mall, etc.
7. Leisure & Entertainment
The company also operates on few entertainment zones as part of providing some form
of leisure to its customers.
8. Wellness & Beauty
This segment lays stress on providing health and beauty to its customers.
9. Books & Music
Pantaloon Retail (India) Ltd. offers Depot (a form of a library) to its customers where it
offers a huge range of books along with music CDs, DVDs, Cd-Roms, etc.
• LEARNING & GROWTH

This perspective includes employee training and corporate cultural attitudes related to both
individual and corporate self-improvement. Increasingly companies are realizing the
importance of linking employee performance to the overall objective and vision of the
company. And employee performance is not merely achieving the financial objective, but
also matching up to the internal processes, knowledge gathering and also customer
satisfaction.
Although the concept itself is not new, Pantaloon Retail (India) Ltd. has devised its
implementation to tailor it to some of its specific needs. For example, in the run up to the
implementation, the focus which was outlined was to do away with subjectivity associated
with measuring the performance of employees. Prashant Desai, senior manager-
knowledge management, Pantaloon Retail India Ltd said that pay per performance had a
lot of subjectivity and the focus was only on rewarding the employees if he/she met the
financial targets. “The crux is to capture the health of the company holistically taking all
parameters into consideration. Therefore the balanced score card factors in all considerations
which go on to measure the employee’s performance,” said Mr. Desai. He added that the
Balanced score card aimed at moving into variable pay or bonuses on the basis of the
company’s performance, but the challenge was to communicate the vision to the lowest
denominator at Pantaloon.
•
STRATEGIES ADOPTED FOR SUCCESS

The following Joint Ventures and Mergers of Pantaloon Retail (India) Ltd. led to the growth of
the company. They played a major role in helping the company acquire its current position in
the market.

1. Lee Cooper India Ltd.

Lee Cooper Group Ltd entered India forming a 50%-50% joint venture with Indus
League Limited, a subsidiary of the Pantaloon Retail (India) Limited, ("Pantaloon") to
hold an exclusive license to market Lee Cooper's denim apparel products and
accessories in India. The venture will engage in brand management, franchising, and
wholesale and retail activities in India. The motive behind this venture was to bring
foreign brands into the Indian market at an affordable price.

2. Joint Venture with Staples

In 2001, the company entered into a joint venture with Staples, who was the industry
leader in office products. Pantaloon Retain (India) Ltd spotted the opportunity in the
Indian Territory and grabbed it by entering into this joint venture.

3. Joint Venture with Axiom Telecom

Pantaloon Retail India Ltd entered into a joint venture agreement with
Axiom Telecom of the United Arab Emirates to distribute mobile
handsets. India is the world’s fastest growing telecom market and Mr.
Kishore Biyani spotted the opportunity that soon mobiles would be the
single largest electronic product to be retailed in the country.

4. Home Solutions Merger with Pantaloon Retail (India) Ltd.

Pantaloon Retail's (PRIL) board has approved the merger of the consumer durable and
home improvement business from Home Solutions Retail (HSRIL) into itself. HSRIL
key formats are Home Town, E‐zone, Home Bazaar, Furniture Bazaar and
Electronics Bazaar.