Scribd Upload a Document

profit marg

Search Documents

Explore

Sign Up | Log In

/ 2 Download this Document for Free

Reliance Fresh SWOT (3rd May,07) The Indian retail market accounted for $ 200 billions. Food accounts for over twothirds of the $200-billion Indian retail market. Yet, it has seen less than 1 per cent penetration by modern retail so far. Reliance industries which always looking for new business opportunities just started a new era with its introduction of new concept stores named Reliance Fresh with opening convince store in high streets of Banjara hills of Hyderabad. Reliance Fresh is very different from what modern retail has offered in India so far and with this reliance is planning to establish strong retail network in India in food and farm sector. They have started with new eleven stores in the last week and they are thinking to add 100 more stores to their feather by the end of this year. Lets do a SWOT analysis on the Reliance Fresh. Strengths: Reliance is the first into enter into this unorganized sector of vegetables and fruits. According to them its intentions to have100% farm fresh foods in their new retail stores. It is also adding shortly a juice bar, and even a large counter for puja flowers. In fact, over 60 per cent of the floor space has been dedicated to fresh fruits and vegetables, the rest to other food products like staples, spices, bakery, etc. But reliance has decided not to add any bar soap or toothpaste and detergent in its shelves. So by using this strategy they are positioning themselves different from other players of the industries like Food world, Big Bazaar and Nilgiris. But over come the short comings of these specialized stores they are also introducing new Reliance full-fledged supermarket called Shakhari

Bhandar which offers each and everything from the staple to soap. Most of the staples are under its own private label brand Reliance Select. There is a 500g channa dal pack priced at Rs 28, a 500g urad dal pack for Rs 39, all under Reliances own brand. Excepting a few packets of Nestles Maggi, or MTRs masalas or Pepsis Lays chips, there is very little shelf space given to the big brand owners in the country. Reason: private labels offer far better profit margin to the retailer than branded products of FMCG companies. Most of these outlets will need only 2,000-5,000 sq. ft. A supermarket may need as much as 8,00010,000 sq. ft. Weakness: This is definitely an interesting business venture but it may miss out on the opportunity to capture a greater share of the customers wallet. For customers, too, this could be irksome, as they would have to visit another store to pick up essentials. Reliance could easily fix this problem by adding a few small counters for some basic non-food products. According to their official this format is not final one they are accepting the new changes which are required to attract the large number of customers. Opportunities Reliance wants to build a high-profitability business and food is, perhaps, the best venture to start. That is because the Indian food supply chain is grossly inefficient. There are several intermediaries, each of whom adds his own profit margin to the cost. Besides, there is huge wastage in transit. This offers potential for savings and profits. To reduce the cost and increase the profit it has been sourcing out its requirements from the farmers. For example, the leafy vegetables, brinjals, tomatoes and green chilies in the Banjara Hills outlet were sourced directly from farmers in Vantimamdi, Chevella and nearby mandals in Ranga Reddy district of Andhra Pradesh. The supply chain already has been backed by few hundred farmers the number is estimated to touch million in next five years. The main aim of the reliance is to eliminate the intermediaries in the sector and reduce the cost. Smaller stores have two advantages. They bring down the cost of real estate (and increase profits). It is easier to find space for small convenience stores in a quiet neighborhood than for supermarkets in high streets. Threats:

This model is engineered to clock a faster turnover of inventory Reliance expects consumers to visit the store at least twice a week for their top-up groceries. Each store will have an investment of Rs 50 lakh to Rs 60 lakh. Unlike global retailers who operate on thin margins, Reliance Retail is looking at a fairly high-margin business model. Deliberately stopped short of being a full-fledged supermarket rather, it has limited itself to a food and grocery convenience store. They also have a threat from the existing supermarkets which provides all the services to its customers. For Example Food world and Nilgiris also provides food and beverages with other personal care products. These convince are not existed in the present Reliance retail stores.

Reliance Fresh SWOT

Download this Document for FreePrintMobileCollectionsReport Document

Info and Rating

Follow joslin46

Share & Embed Related Documents

PreviousNext 1.

p.

p.

p.

2.

p.

p.

p.

3.

p.

p.

p.

4.

p.

p.

p.

5.

p.

p.

p.

6.

p.

p.

p.

7.

p.

More from this user

PreviousNext

1.

12 p.

9 p.

78 p.

2.

7 p.

2 p.

Add a Comment

Upload a Document
profit marg

Search Documents

Follow Us! scribd.com/scribd twitter.com/scribd facebook.com/scribd About Press Blog Partners Scribd 101 Web Stuff Support FAQ Developers / API Jobs Terms

Copyright Privacy

Copyright 2011 Scribd Inc. Language: English