Report on diversifying the business to Airlines sector or Retail sector or Telecom sector

BRM ASSINGMENT

3/1/2012 Shanti Business School Prof. Shubhasis Dasgupta

Name of Group Member 1. 2. 3. 4. 5. 6. 7. Bhola Jaiswal Dipesh Mehta Dixit Nagar Dharmesh Patel Ashwin Iyenger Sameer Mahajan Praveen K

Introduction
We have selected Three Sector for analysis For BRM and we want to know that how these three sectors is growing now a days in a Particular Country. Those three sectors are Airline Industry, Retail Sector and Telecom Industry How it is Helpful for a Particular Country. How it is affect countrys growth rate.

The Indian Airline Industry

Developing Tourism
Because of growth of Indian Business and Many Indian and Foreigners is going different Country in the world, and also Indian Historical Places and tourism sector. There has been an increase in number of the international and domestic passengers. In the financial year 2006-07 there has been a significant 22.3 percent growth in passenger traffic in the domestic airports while the aircraft movement recorded a growth by 14.2 percent. Airline plays an important role in international tourism. Developing airline services helps the nation to cash on tourism as more than 85% of the foreign tourist arrives by Air.

Type of Airlines:
 Scheduled air transport service, which includes domestic and international airlines.  . Non-scheduled air transport service, which includes charter operators and air taxi operators.  Air cargo service, which includes air transportation of cargo and mail. Advantages in Airlines:  Foreign equity allowed: Foreign equity up to 49 per cent and NRI (Non-Resident Indian) investment up to 100 per cent is permissible in domestic airlines without any government approval. However, the government policy bars foreign airlines from taking a stake in a domestic airline company.  Attraction of foreign shores: Jet and Sahara have gone international by starting operations, first to SAARC countries, and then to South-East Asia, the UK, and the US.  Rising income levels and demographic profile: Though India's GDP (per capita) at $3,100 is still very low as compared to the developed country standards, India is shining, at least in metro cities and urban centres, where IT and BPO industries have made the young generation prosperous. Demographically, India has the highest percentage of people in age group of 20-50 among its 50 million strong middle class, with high earning potential.  Untapped potential of India's tourism: Currently India attracts 3.2 million tourists every year, while China gets 10 times the number. Tourist arrivals in India are expected to grow exponentially, especially due to the open sky policy between India and the SAARC countries and the increase in bilateral entitlements with European countries, and US.

Description about Graph: As we can see the above the diagram how Indian Airlines growth is Increasing in yearly bases you can see that in 2007 it was only 4 % but it is increasing every year now in 2011 it becomes 13% So it is Constantly increasing in India. And also we can see that in a near future it will be increased.

Retail Industry in India

The Retail scenario is one of the fastest growing industries in India over the last couple of years. India retail sector comprises of organized retail and unorganized retail sector. Traditionally the retail market in India was largely unorganized; however with changing consumer preferences, organized retail is gradually becoming popular. Quick facts on Indian Retail sector     Indian Retail sector is the fifth largest global retail destination. India retail market is dominated by the unorganized sector. The top five companies in retail hold a combined market share of less than 2%. The Indian retail market has been ranked by AT Kearney's eighth annual Global Retail Development Index (GRDI), in 2009 as the most attractive emerging market for investment in the retail sector.  Currently the share of retail trade in India's GDP is around 12 per cent, and is estimated to reach 22 per cent by 2010.

 According to Government of India estimate the retail sector is likely to grow to a value of ` 2,00,000 Crore (US$45 billion) and could yield 10 to 15 million retail jobs in the coming five years; currently this industry employs 8% of the working population.  India continues to be among the most attractive countries for global retailers.

Description about Graph: Here, we can see that in India retail sector is increasing very fast because in India population is very high therefore more customers are available. And also there is the largest industry growth rate is 39.4 occurring. In China there is not much largest industry of retail sector as in India have there are also few (Japan, China, Singapore, Thailand etc.)Countrys but among all those country Indian retail Sector is increasing very fast. In future also it will be create huge retail sector in india. Types of retail sector to invest:  Food and Grocery Retail  Apparel Retail  Gems and Jewellery Retail  Pharmaceutical Retail  Music Retail  Book Retail  Consumer Durables Retail Key Players in Indian Retail Sector  AV Birla Group has a strong presence in apparel retail and owns renowned brands like Allen Solly, Louis Phillipe, Trouser Town, Van Heusen and Peter England. The company has investment plans to the tune of ` 8000 9000 Crores till 2010.

 Trent is a subsidiary of the Tata group; it operates lifestyle retail chain, book and music retail chain, consumer electronics chain etc. Westside, the lifestyle retail chain registered a turnover of ` 3.58 mn in 2006.  Landmark Group invested ` 300 crores to expand Max chain, and ` 100 crores on Citymax 3 star hotel chain. Lifestyle International is their international brand business.  K Raheja Corp Group has a turnover of ` 6.75 billion which is expected to cross US$100 million mark by 2010. Segments include books, music and gifts, apparel, entertainment etc.  Reliance has more than 300 Reliance Fresh stores; they have multiple formats and their sale is expected to be ` 90,000 crores ($20 billion) by 2009-10.  Pantaloon Retail has 450 stores across the country and revenue of over ` 20 billion and is expected to touch 30 million by 2010. Segments include Food & grocery, e-tailing, home solutions, consumer electronics, entertainment, shoes, books, music & gifts, health & beauty care services. Critical issues in Indian retail sector:  Supply Chain: Improving supply chain and logistics will enable retailers in India to significantly enhance overall competitiveness and successfully deploy growth initiatives.  Innovation and Marketing: The importance of branding is imperative in todays increasingly crowded retail marketplace which not only comprises several brands but is also cartelized by the consumer's fickle mindedness about choosing products.  Private Label products: a major growth driver for retailers: Indias major retailers expect to embark upon the following strategies for their private label products Increase the range of offerings derive an increased share of revenue from the sales of products embark upon promotional offers and sales increase the visibility of products in store outlets offer selected products through other retailers outlets.  GST will benefit Retailers: The key benefits of the GST for the retail sector are as follows Enhanced competitiveness through efficiencies in procurement and distribution enhanced competitiveness through full and complete offset of all input taxes ability to offer lower prices for goods through increased off set efficiencies as also lower compliance cost lower cost on compliance from an accounting and reporting stand point enhanced government revenues from retail sector through higher CGST, SGST and IGST collections.  Sustainability and green marketing: Sustainability is becoming a business imperative and involves securing businesses for the future. Sustain ability issues are affecting retailers across every point of the business model. Converging influences are forcing sustainability issues to the top of the corporate agenda and are impacting every function and business unit.

Future Trends
 Lifestyle International, a division of Landmark Group, plans to have more than 50 stores across India by 201213.
 Shoppers Stop has plans to invest ` 250 Crore to open 15 new supermarkets in the coming three years.  Pantaloon Retail India (PRIL) plans to invest US$ 77.88 million this fiscal to add up to existing 2.4 million sq ft retail space. PRIL intends to set up 155 Big Bazaar stores by 2014, raising its total network to 275 stores.  Retailing Industry in India is estimated at INR 15.5 trillion growing at CAGR of 15 to 20 %. Organized Retail accounts for 5-8% which is lowest compared to its peers in BRIC countries Brazil (38%), Russia (33%) and China (20 %.) The Organized Retail has been growing at 35%

CAGR. The retail and wholesale sector in India are accounts for approx 14% of GDP. In terms of employment, the sector is second largest employer providing over 10% of all formal jobs  72.2% of Indias population resides in rural areas. High agriculture growth rate offers huge potential Households forming rich class have grown at CAGR of 35% during and that of Major consuming class have grown at a CAGR of 11 % One of the most challenging, dynamic and exciting Indian Retail sector has led most global retailers look towards India to grow and access new customers.

Telecom Sector in India

The Indian Telecommunications network is the third largest in the world and the second largest among the emerging economies of Asia. Today, it is the fastest growing market in the world. The telecommunication sector continued to register significant success during the year and has emerged as one of the key sectors responsible for Indias resurgent Indias economic growth. The Telecom Industry consists of two segments:  Telecom Service Providers  Telecom Equipment Manufacturers Telecom Services can be divided into the following segments: y y y Wireless Segment consisting of Global System for Mobile Communications (GSM) & Code Division Multiple Access (CDMA) (Mobile) Wireline Segment (Fixed Line) Internet and Broadband Segment Growth This rapid growth has been possible due to various proactive and positive decisions of the Government and contribution of both by the public and the private sector. Wireline Vs Wireless It has also undergone a substantial change in terms of mobile versus fixed phones and public Vs private participation. The preference for use of wireless phones has also been predominant in the sector. Wireline Services With increasing penetration of the wireless services, the Wireline services in the country are becoming stagnant. On the other hand, Broadband demand has picked up and promises to stabilize fixed line growth. GSM Sector In terms of the Global System for Mobile Communication (GSM) subscriber base this now places India third after China and Russia. China had 401.7 million GSM subscribers. CDMA Services CDMA technology was introduced in India as a limited mobility solution. The introduction of CDMA services has created competition, lowered tariffs and offered many citizens access to communication services for the first time

Internet Services Internet services were launched in India on August 15, 1995. In November 1998 the government opened up the sector to private operators. A liberal licensing regime was put in place to increase Internet penetration across the country.

Description: As we can see that in India the Telecom industry is Increasing As compare to last two, three year. In 2006 it was only very (10 to 15%) but in 2010 is increased as the graph indicates. Regulatory Initiatives and Policies: TRAI facilitates rollout of new technologies and applications keeps check on tariffs, allocates spectrum and recommends improvement to the Government and Industry alike.  The Cabinet Committee on Economic Affairs (CCEA) has adopted new guidelines for computation of foreign equity holding in Indian companies. The new norm is expected to allow companies to raise the level of foreign investment and which will benefit all such companies that have touched their Foreign Direct Investment (FDI) ceiling.  The Government is implementing a program for connecting 66,822 hitherto uncovered villages under the Bharat Nirman Programme. The Government also intends to invest Rs.10, 000 crs. In setting up 1.12 lakh Community Service Centers in rural India to provide broadband connectivity.  TRAI has slashed the termination fee paid by operators by 33%, which will help Telecom companies reduce their Local as well as National Long Distance (NLD) tariffs by up to 20%. 3G Services in India: In India, 3G handset proliferations would be the single biggest driver of 3G services, at least in the preliminary phase, as it would widen the target base for 3G service providers. Currently, 20-30% of the total handsets in the market are capable of accessing 3G services and approximately 8% of incremental handsets sold every month are 3G enabled. Growth Drivers: Growth in mobile services has been driven by a sharp fall in subscription costs and rising incomes which have increased the affordability of mobile services. Following are the major factors which are expected to drive the growth of the industry:  Decreasing Cost of Subscription

 Favourable Regulatory Environment  IPTV and DTH  Low Penetration Levels Average Revenue per user (ARPU): With the rapid pace of subscriber additions, the industry is also characterized by declining ARPU. Industry wide GSM and CDMA ARPUs have declined (since 2004) at an annual rate of 12% and 20%, respectively. Key Concern Areas:  Spectrum allocation  Price wars  License fee Investments Outlay:  Unitech Wireless backed by Telenor Norway has announced a Telecom Infrastructure Project with an investment Rs.10, 000 crs. Spread over 3 years. The Company plans to initially roll out in eight circles.  Idea Cellular has announced an infrastructure development project in Orissa, involving a cost of Rs.1, 000 crs. The Company had also announced an Rs.1, 000 crs. GSM Expansion Project in Tamil nadu  Tata Teleservices intends to go in for an Rs.1, 000 crs. GSM expansion project. Telecom Equipment Manufacturers India, being the world's fastest-growing telecom market, is also making steady progress in telecom equipment manufacturing. Continuous capacity additions by the existing players and network rollouts by new players have made India a telecom destination for global telecom vendors. Network sharing has taken many forms, ranging from passive sharing of cell sites and towers to sharing of Radio Access Networks (RANs) and other active elements. Passive infrastructure sharing however is most common due to the relative technical and commercial simplicity. There has also been a surge in demand for equipment such as batteries, towers, shelters and cables.