HR Strategies in Retail Industry
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Transcript of HR Strategies in Retail Industry
CHAPTER -1
INTRODUCTION
1
An Overview of B-CITIES Retail Sector
The retail sector has helped in giving strong impetus to overall
economic growth as a significant driver of the growth of services
sector, which contributes as much as 54 per cent of GDP. It has
strong backward and forward linkages with other sectors like
agriculture and industry through stimulating demand for goods and
through mass marketing, packaging, storage and transport.
Moreover, it creates considerable direct and indirect employment
in the economy. Also, the consumers have benefited in terms of
wide range of products available in a market.
Size of the B-CITIES Retail Sector
The emergence of new formats and the evolution of modern retail
in B-CITIES has attracted attention in recent years. [The data sets
published by different authorities are not strictly comparable as
they are based on surveys, but they give some idea of the trends
and prospects.] The retail sector, currently, is said to contribute 10
2
per cent of India’s GDP (Confederation of Indian Industry), and is
expected to grow at a robust rate of 36 per cent per annum by the
end of 2008 (Associated Chambers of Commerce and Industry of
India, ASSOCHAM). This growth would expand the size of the
market to over Rs 14, 79,000 crore from its current level of Rs 5,
88,000 crore. The B-CITIES retail market is estimated at Rs 9,300
billion and is expected to grow at a compounded rate of 30 per cent
over the next five years (Retailers Association of India). Moreover,
the retail sector employs over 7 per cent (21 million) of the
national workforce (Aggarwal, 2000), the second only to
agriculture. The retail density more than doubled between 1978
and 1996 and the number of outlets per 1000 people at an all India
level, increased from 3.7 in 1978 to 5.6 in 1996. For the urban
sector alone, the shop density increased from 4 per 1000 people in
1978 to 7.6 per 1000 people in 1996 (Venugopal, 2001). Because
of their small size, Indian retailers have very little bargaining
power with manufacturers, unlike in the case of retailers in
developed countries, (Sarma, 2000).
3
Structure of B-CITIES Retail Sector
The retail sector is classified broadly into two: Organised Retail
sector and, Unorganised Retail Sector
\
ORGANIZED RETAIL SECTOR
The organised segment is mainly characterized by typically large
number of retailers, greater enforcement of taxation mechanisms
and better labour law monitoring systems. It is not just a stocking
and selling, but is more about efficient supply chain management,
developing vender relationships, quality customer service, efficient
merchandising and timely promotional campaigns. It, however,
constitutes a very little share of at around 3 per cent (Rs 300
billion) of the total retail market. (In China 20 per cent of the retail
is organized and in the ASEAN countries it is more than 40 per
4
cent - Ministry for Commerce & Industry, February 2005)
According to the Retailers Association of India, the share of
organised sector to the overall retailing market in India is expected
to grow from 3 per cent to 20 per cent in the next 10 years. The
KSA Technopak’s estimate is that by 2005, the organised retail
sector would be employing in excess of 2, 50, 000 individuals
directly and perhaps 8-10 times as many indirectly in the supply
chain.
The organised retailing has been successful in metropolitan cities
so far, more so in the south and west India. It is expected that the
tier II cities would take another 5 years to absorb modern retailing
opportunities. Moreover, the case for Indian retailers to explore
rural markets is also strong due to the size of rural population and
agricultural income growth in last couple of years. A clear
indicator of this potential is the share of rural market across most
categories of consumption.
UN-ORGANIZED RETAIL SECTOR
5
The unorganised sector, on the other hand, which represents 97 per
cent of the total retail market is mainly characterised by typically
small retailers, more prone to tax evasion and lack of labour law
supervision. India is one of the largest unorganised retail markets
in the world and more than 96 per cent of the retailers work in less
than 500 sq ft of area.
Components of Retail Sector in B-CITIES
The major components of the retail sector are:
Food and Grocery, Fast Moving Consumer Goods (FMCGs),
Consumer Durables, Apparel, Footwear and leather, Watches,
Jewellery, and Health and Beauty
The anatomy of the retail market has shown that the clothing and
textiles constitutes 39 per cent of the organised retail pie, followed
by food and grocery, which accounts for 11 percent of the total
retail market.
6
However, according to the survey conducted by KPMG for
Federation of Indian Chamber of Commerce and Industry (FICCI),
among these, the food and grocery is expected to witness the
fastest growth followed by clothing as the second-fastest growing
segment.
7
Key Players in the B-CITIES Retail Sector
The main players in the sector are classified as big corporate
houses, dedicated brand outlets and multi-brand outlets. Some of
the market leaders are:
1) Corporate Houses: Tata’s (Tata Trent), RPG Group (Food
World, Health & Glow), ITC (Life Style), Rahejas (Shoppers’
Stop), Hiranandani (Haike)
2) Dedicated Brand Outlets: Arrow, Nike, Reebok, Zodiac, Louis
Phillip etc.
3) Multi Brand Outlets: Vijay Sales, Apana Bazaar, Videos etc.
4) Manufacturers/ Exporters: Pantaloons, Bata, Weekender etc.
Among these, the formats like supermarkets (e.g. Food Bazaars)
have the highest potential for growth in India followed by
hypermarkets (e.g. Big Bazaar, Spencer’s).
8
Rural-Urban Share in Retail Sector
A distinctive feature of organised retailing in India is that it is
largely an urban phenomenon. Organised retail has been more
successful in metros and cities, more so in the south and west of
India. The reasons for this regional variation range from
differences in consumer buying behaviour to cost of real estate and
taxation laws. Nonetheless, the case for Indian retailers to explore
rural markets is strong. Factoring the size of the rural population
and agricultural income share of rural market across major growth
in rural India, the rural market is certainly an opportunity for
retailers with an innovative retail proposition. A clear indicator of
this potential is the current categories of consumption.
9
Growth and Future Prospects
With the economy growing at a robust rate at near 8 per cent, the
retail sector has also been witnessing notable growth due to an
unprecedented consumption boom. The multiple factors driving
this boom are:
First, favourable demography with roughly 60 per cent of the total
population below 30 years of age group.
Higher disposable incomes of young middle class consumers due
to employment in IT, management and increasing number of
working women,
10
Table 1: Share in Retail Market: Urban vs. Rural (per cent)
Segment Rural Urban Food 64 36 Clothing and Footwear 61 39 Misc Consumer Goods 57 43 Consumer Durables 50 50 Consumer Services 44 56 Entertainment 33 67 Source: NSSO and KPMG Analysis
Change in consumption pattern with high aspiration levels. The
AC Nielsen Online Omnibus Survey 2005 has rated India in the
highest category of Aspiration Index (especially in consumer
durables segment) in Asia along with China, Indonesia and
Thailand.
Easier consumer credit with low interest rates and,
Aggressive marketing by companies
A notable growth in the retail sector is characterised by the
performance of various retail segments:
Growth in Major Retail Segments
(i) Apparel Industry
The robust performance of an apparel industry has been largely an
outcome of a buoyant growth of the textile industry. The Indian
textile industry has increasingly benefited since the post-quota
regime [The multi-fibre arrangement (MFA), which governed
global trade in textiles and clothing since 1974, came to an end in
December 2004)] in terms of higher textiles export, especially due
11
to the demand from UK and US retailers. Though, according to
Directorate General of Commercial Intelligence and Statistics
(DGCIS), the textiles and apparel exports have decelerated in
2005, according to the import data from US and UK , the exports
have grown by 15 per cent in 2005 to about US $ 15 billion.
Nevertheless, currently the overall apparel market is worth Rs
88,000 crore and though the share of branded segment may be
limited, is growing at a healthy 25 per cent. Moreover, in the home
textile market, India currently exports about Rs 21,000 crore of
home textile products to the US alone and the share of domestic
market is about one third of it.
( ii) Food and Grocery
The food industry is the second largest
growing industry after the clothing
segment. According to the FICCI study, the size of the food and
beverages industry is Rs 3,58,000 crore and it is expected to grow
between 8 to 8.5 per cent in value terms during 2005-06. The
12
highest growth is expected in the semi-processed or readymade
food segment, which is estimated, to grow by 22 per cent. Other
segments, which are expected to expand rapidly, are fruit juices,
pulp and concentrate (18 per cent), followed by sauces (17 per
cent) and branded milk products (15 per cent). The FICCI has
urged the government to have pro-active approach for helping the
industry to achieve the lower cost, quality improvement and better
performance in the competitive environment.
(iii) FMCG (Fast Moving Consumer Goods)
In the last couple of years, the FMCG segment has grown at a
rapid pace, especially due to increasing number of big FMCG
outlets like Big Bazaar. According to the AC Nielsen India study,
the Rs 48,000 crore FMCG industry grew by 5.3 per cent in value
terms in 2005 over the previous year. A rise in food and personal
care categories is fuelling this growth in value terms, with biscuits
growing at 13.8 per cent, shampoos by 17.5 per cent as against 9.8
per cent and 8.6 per cent, respectively, registered in 2004.
Interestingly, the FMCG growth (in value terms) in rural markets
has far outpaced the sector’s growth in urban markets during April-
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December 2005. The products, which have shown significant
growth in rural markets, are toothpaste, hair oils and shampoos.
Shampoo sales, for eg., in rural areas have gone up by 30.8 per
cent as compared to just 11 per cent in urban areas. The reasons
attributed to such buoyant growth in rural markets are highly
saturated urban markets (tier I and II cities), successive good
monsoons and a resultant growth in farm income coupled with
increasing awareness towards better lifestyle in rural areas.
(iv) Consumer Durables
The size of the Indian consumer goods industry is at around Rs
20,000 crore. After three years of buoyant performance, the
consumer durables industry has shown a moderate growth (in
terms of production) of 13.6 per cent during the period April-
January 2006 as compared to 14.8 per cent over the corresponding
period in the previous year (Ministry of Statistics and Programme
Implementation). According to the study by Investment and Credit
Rating Agency (ICRA), based on recent trends, the Indian colour
television (CTV) market is estimated to increase from 8.3 million
14
numbers of units during 2003-04 to 10.1 million during 2005-06.
Similarly, the refrigerator and washing machine markets are also
expected to increase by 13.5 per cent and 14.2 per cent,
respectively, in the same period.
Investment in B-CITIES Retail Sector
According to the KSA Technopak’s Retail Summit 2005,
investment in the Indian retail sector is estimated at Rs 2000 crier
to Rs 2,500 crore in the next two to three years and over Rs 20,000
crore by the end of 2010. Large Indian corporate houses like Tata,
Reliance, Area, ITC, Bombay Dyeing, Murugappa Group and
Primal Group have continued to show interest in huge investments
in organised retailing. The buying volumes for many of these
players are in the range of Rs 1000 to Rs 2000 crore per year with
the plans to increase it to Rs 10,000 to Rs 15,000 crore within the
15
next three four years. Similarly, foreign investors and private
equity players are also firming up plans to identify investment
opportunities in the Indian retail sector.
The medium to long-term prospects for the Indian retail industry
appears positive. The growth prospects for individual items,
would, however, depend on specific demand drivers.
Effects of retail boom:
As we have seen earlier in the report, the retail boom has some
specific implications on various aspects of the country. This aspect
can be negative as well as positive. The retail sector as a whole has
made tremendous changes in the country which shows the effects
of it on functions such as consumers, other retailers, government,
farmers as well as the economy as a whole.
Thus the following are the effects of the retail
boom on these various aspects of the country:
16
Consumers:
The consumer is the function that is most affected by the retail
boom. Consumers include all the major classes such as upper,
middle and lower class. Also they include various genders, age
groups, races and people having different perceptions.
o Positive effects:
The retail boom has brought in a vast change in consumer
behaviour. The entrance of organized retail has given the
consumers more number of options to choose from and hence they
can be more satisfied with there purchases.
Also more number of competitors in the industry has increased the
bargaining power of the consumers. Thus the consumers are able
to purchase at a comparatively low price.
17
The organized retail has given the opportunity to the consumers to
buy several products under a single roof. Thus major cost and time
of the consumers is saved which enhances there satisfaction.
Even the lower end consumers get a chance to purchase high
quality goods at comparatively lower costs which otherwise is not
available.
Due to high competition, the consumers get various discounts as
well as offers.
The organized retail provides the consumers with better services
which otherwise was not possible.
o Negative effects:
Due to various options available to the consumers, they keep on
shifting from one service provider to another. This shows a
decrease or negative effect on consumer loyalty.
Due to organized retail getting a foot-hold in the market, the
consumers can be exploited if the forerunners get a glimpse of
monopoly setting in.
18
Small retailers:
The small retailers form the second major group which is affected
by the retail boom. There are various reasons for this which are
explained below:
o Positive effects:
Small retailers get a chance to understand various complexities of
retailing. Thus they have to compete with major players.
Small retailers can exploit the vast industry by becoming organized
themselves. Thus they can form unions or groups to compete with
the organized sector.
The retail boom has brought in various new products to the market
including newer and better technologies which was otherwise not
available. Hence they have the opportunity to adopt these
technologies in their business.
19
Young entrepreneurs are now attracted towards retail sector as a
whole due to its boom. Thus they start up with small retail shops
that are modern in nature and fully equipped to compete with
major players. Thus the small retail sector also gets a boost.
o Negative effects:
The threat posed by new entrants in the form of organized retailers
is a big concern for the small retailers. Hence the competition has
increased.
Due to various new competitors and services being made available
to the consumers by the organized retailers, the customer base for
the unorganized retailers has decreased.
Other major negative effect of the entrance of organized sector is
that it has forced some of the smallers players to shut down their
business due to increasing competition.
20
The small retailers are not able to provide the high quality at
competitive cost which is done in the organized sector.
The expectations of the consumers from the small retailers (lorries,
kirana stores) has increased which poses negatively to the retail
Government:
Government is the body that decides on the rules and regulations
in any particular industry. Thus the government has to control the
working of the economy, standard of living, various industries and
there working cycles etc. and to control these aspects, the
government needs to impose policies and laws. Thus the boom in
the retail sector has made the government think on various aspects
and redefine and re-evaluate the rules and regulations.
o Positive Effects:
The retail boom requires the government to increase its
expenditure on the infrastructure. This has been the major concern
21
for the government as well as the industry itself. Thus the economy
has seen drastic changes in the infrastructure.
The government has to enact laws that reduce the tax evasions to
increase the attraction for new entrances. Thus the new laws will
enable new entrepreneurs to indulge in retailing.
The retail sector has brought in more income to the entrepreneurs.
This shows in the increased tax paying population in the economy
which increases the government income. This income in turn can
be utilized to finance retail as well as other sectors.
The government has to keep better control over law and order due
to opening of new 24 hr retail shops. Also the government needs to
safeguard the interest of the retailers as a whole.
o Negative effects:
The retail sector has shown a boom in recent years. This has
increased government expenditure towards this sector to maintain
22
stable growth. Hence some of the other sectors that actually require
major capital investments are overlooked.
The government has played a major role in the retail boom by
supporting the small retailers. This has shown a negative effect in
states where in the organized retail has been banned.
The major concern for the government is consumer interest. Thus
the government has to enact laws which favour consumers more.
This proves to be an hindrance in the expansion process. Since the
government has liberalized the policies for foreign entrance in this
sector, these foreign majors might drain money out of the
economy, which is a negative concern for the government.
Economy:
The retail boom has the biggest effect on the economy as a whole.
Since the above factors together contribute to the economy, the
economy is affected in a larger sense.
Thus the retail boom’s effect on the economy can be summarized
as follows:
o Positive effects:
23
Due to high growth in the retail sector, the GDP of the economy
has risen. Thus there is an increase in investments through stocks
and savings.
The retail boom has attracted foreign direct as well as portfolio
investments. Thus the economy has more foreign exchange to
support other transactions.
Employment opportunities in the economy has increased manifold.
Thus the overall productivity of the economy has increased which
shows a better standard of living for the population at large.
Due to increase in infrastructure, other sectors get a boost and thus
economy as a whole prospers.
The boom has brought in newer and better technologies in the
country which helps the economy to develop such better
technologies in the long run. Also the economy is able to compete
with other developed countries.
24
o Negative effects:
The retail boom has in functionality no real negative effects in the
economy as a whole. This means that individual functions of the
economy are affected but not the economy as a whole in negative
terms.
CHALLENGES
1. LOCATION- “Right Place”, Right location choice is the
most important ingredient for any business that relies on
customers, and is typically the prime consideration in a
customer store choice. Locations decisions are harder to
change because retailers have either to make suitable
investments to buy and develop Real estate. While
formulating decision about where to locate, the retailer must
refer to the strategic plan by focusing on following aspects:
25
Investigate alternative trading areas.
Determine the type of desirable store location.
Evaluate alternative specific store sites.
2 MERCHANDISE- The primary goal of most retailers is
to sell the right kind of merchandise. Merchandising
consists of activities involved in acquiring goods and
services and making them available at place, time and
quantity that enable the retailer to reach its goals.
Merchandising is perhaps, the most important function for
any retail organization, as it decides what finally goes on
shelf of the store.
3
4 PRICING- Pricing is a crucial strategic variable due to its
direct relationships with other retailing elements. The
importance of pricing decisions is growing because today’s
customers are looking for good value when they buy and
merchandise. Price is the easiest and quickest variable to
change.
26
5 TARGET AUDIENCE- “Consumer Pull”, however
seems to be the most important driving factor behind the
sustenance of the industry. The purchasing power of the
customers has increased to great extent with the influence on
the retail industry relating to fuel the retailing boom.
6 SCALE OF OPERATIONS- Scale of operations
includes all the supply chain activities, which are carried
out in the business. It is one of the challenges that Indian
retailers are facing. The cost of business operations is very
high in India.
\
CHAPTER 2
27
OBJECTIVES
&
SCOPE OF THE STUDY
OBJECTIVE OF STUDY
Retail is clearly the sector that is poised to show the highest growth
in the next five years. The sector is set for a revolution as both the
present players and the new entrants are gearing up to explore the
market. This sector contributes 10% of India’s GDP and the
current growth rate is 8.5%. The present size of the Organized
retailing sector is approximately 3% and is expected to grow to 25-
28
30%. There are about 300 new malls, 1500 supermarkets and 325
departmental stores currently under construction.
1.)The research study assists solving various operations and
planning problems of the retail industry. It also helps to
develop social relationships.
2.)Transform ideas into viable and creative solutions of the
retail industry.
3.) Analysis of the existing marketing conditions for retailing
activities.
4.) Finding the new opportunities for retail business.
5.) To analyze the growth of retail industry in B-CITIES.
SCOPE OF THE STUDY
1.) Evaluation of existing HR strategies
2.) Competition may be less in markets.
3.) A retailer may be able to offer goods & services or
technology not yet available in the existing market.
29
4.) Market may represent growth opportunities if HR strategies
are properly implemented.
PAST/ PRESENT/ FUTURE OF RETAIL INDUSTRY
Before the decades of 80’s, India with hundreds of towns and cities
was a nation striving for development. In this evolution the people
of India played different roles as businessmen and consumers.
Retail which literally means to put on the market, is a very
important aspect of every city. Without a well organized retail
industry the people would not have their necessities and luxuries
fulfilled, whether it may be our daily groceries or fashion
accessories and everything in between, retail industry brings us the
blissful experience of shopping.
Though organized retailing industry began much earlier in
the developed nations, India had not actively participated.
However with its vast expanse and young population, India in the
30
21st century emerges as a highly potential retail market. The
journey of retailing in B-CITIES has been reviting and the future
promises further growth. It is widely accepted that the retail
industry has undergone a drastic change in the last five years and
there is yet more to come.
The beginning for B-CITIES has been emerged that the
sector will see the rosy days in the future. This confidence has
helped India to acquire the No.1 position among 30 most attractive
retailing destinations in the world according to Global Retail
Development Index, Among emerging markets India holds the 2nd
position after china in the list of most favored retail destinations
PAST RETAIL INDUSTRY IN B-CITIES
The foundation for a strong economy was being laid in past
retailing in B-CITIES. Youths were beckoning new awareness in
all spheres, and this brought in an opportunity for retail industry to
flourish. First in the metros and major cities and later to the sub
urban and rural market as well. Retailing in B-CITIES at this stage
was completely unorganized and it thrived as separate entities
operated by small entrepreneurs’ in their own territories. There was
31
a lack of International exposure and only a few Indian companies
explored the retail platform on a larger scale.
From overseas only companies like Levi’s, Pepe, Marks
and Spencer etc., had entered targeting upper middle and rich
classes of Indians. However as more than 50% population was
formed by lower and lower middle class people, the market was
not completed captured. This
Was later realized by brands like Big Bazaar and Pantaloons who
made their products and services accessible to all classes of people
and today the success of these brands proves the potential of Indian
retail market.
The B-CITIES retail Revolution was the eruption of malls across
all regional markets. Now at its peak, the mall culture actually
brought in the organized format for retailing in B-CITIES which
was absent earlier. It was surprising that there was not a single
mall in B-CITIES a decade before and just a few years ago only a
handful of them were striving, today there are many malls across
different cities and 2 years from now around 500 malls are
predicted to come up.
32
PRESENT- RETAIL INDUSTRY IN B-CITIES
At present the Retail industry in B-CITIES is accelerating. Though
B-CITIES is still not at an equal pace with other Asian
counterparts, but geared to become the major player in the Retail
market. B-CITIES secure a high position in the International
market. Also with a highly diverse demography, B-CITIES provide
immense scope for companies bringing in different products
targeting different consumers.
According to the Global Retail Development Index, B-CITIES is
positioned as the foremost destination for the retail investment and
business development. The factor that is presently playing a
significant role is the fact that the large section of the Indian
population is in the age
33
Group of 20-34 with a considerably high purchasing power, this
has caused the increase in the demand in the urban marketing
resulting into the consistent growth in the retail business.
And though the metros and other tier 1 cities continue to
sustain retail growth, the buzz has now shifted from the big cities
to the lesser known ones. As the spending is no longer limited to
metros, every tier 2 city in the country has good market for almost
every product or service.
Due to this tier 2 cities like Chandigarh, Coimbatore, Pune,
Kolkata, Ahmadabad, Baroda, Hyderabad, Cochin, Nagpur,
Indore, and Trivandrum etc. provide a good platform for a brand to
enter Indian market.
However, there are a few precautions for every brand that
explores B-CITIES market. As B-CITIES consumers are very
curious and have a broad perspective, they respond well to a new
product or concept and there are very fair chances of a brand
surviving well. But every B-CITIES consumer whether urbanite or
a small town dweller possess the feeling of value of money.
34
Although labeled as tight fisted, B-CITIES consumers are large
spenders once they realize that they are getting the value for their
money. Also new product/service concepts from the western world
are better adopted first by the Indian urban Indians, the smaller
markets respond well to the need based retailing rather than luxury
concepts. As the Indian retailing is getting more & more organized
various retail formats are emerging to capture the potential of the
market.
Mega Malls
Multiplexes
Large and small supermarkets
Hypermarkets’
Departmental stores are the formats which flourishing in both
the big and small regional markets.
As the major cities have made the present retail scenario
pleasant, the future of the B-CITIES Retailing
industry lies in the rural regions. Catering to these consumers
will bring tremendous business to brands from every sector.
35
However as the market expands companies entering B-
CITIES will have to be more cautious with their strategic
plans.
FUTURE RETAIL INDUSTRY IN B-CITIES
According to a study, the size of Indian retail market is
currently estimated at Rs.704 crores which accounts for a
meager 3% of the total retail market. As the market becomes
more and more organized the Indian retail Industry will gain
greater worth. The retail sector in small towns and cities will
increase by 50 to 60% pertaining to easy and inexpensive
availability of demand among consumers.
Growth in B-CITIES of the Real estate sector is also
complementing the retail sector and has become a strong
feature for the future trend. Over a period of next 4 year there
will be a retail space demand of 40 million sq. ft. However,
the growth in the retail sector is also caused by
36
the development of retail specific properties like malls and
multiplexes. According to a report the retail sales are
growing at a rate of 8.3% per annum. With the organized
retail which currently has the 15.8% of the total market will
acquire 18-20% of the market share in the coming years.
Factors that are playing the vital role in fulfilling the bright
future of the Retail in B-Cities:
The income of an average Indian is increasing and thus there
is proportional increase in the purchasing power.
The Infrastructure is improving greatly in all regions is
benefiting the market.
Indian economy and its policies are also becoming more &
more liberal making way for a wide range of companies to
enter Indian market.
Indian consumers have learnt to become good consumers and
all National and International brands are benefitting with this
new awareness.
37
Another great factor is the internet revolution, which is allowing
foreign Brands to understand Indian consumers and influence them
before entering the market. Due to the reach of media in the
remotest of the markets, consumers are now aware of the global
products and it helps the brands to build themselves faster in a new
region.
However, despite of these factors contributing to
the growth of B-CITIES retail industry, there are few challenges
that the industry faces, there are few challenges that the industry
faces which are need to be dealt in order to realize the complete
scope of growth in B-CITIES market. Foreign direct investment is
not allowed in the retail sector which can be a concern for many
brands but Franchise agreements can avoid this problem, and with
good planning, timely implementation and a media campaign that
touches B-CITIES consumers any brand can go far ahead in the B-
CITIES Retail Revolution.
RECENT TRENDS AND CHANGES
Retail in B-CITIES is witnessing a huge revamping exercise.
38
India is rated the fifth most attractive emerging retail market;
a potential goldmine.
Multiple drivers leading to the consumption boom.
Favorable Demographics.
Growth in Income
Increasing population of women.
There are many problems faced by Retail industry in
Indian market. They are as following:
The format does not suit Rural India: While the format
suits the urban areas, it does not suit the rural areas in a
country like India. Today in India, Organized retailing is
confined to class A cities i.e. the 23 largest cities. About 82% of
organized retailing comes from the top six cities and another
12% from the next four. Thus the top 10 cities accounts for 94%
of all organized retailing in India.
39
Purchasing patterns not very conducive: Even in the urban
areas, the purchasing pattern of Indian consumers differs
from those of Westerners. Whereas in the West, the
purchases are by and large made in the first week of the
month. Purchasing patterns differ also because of the
difference in the eating habits of people.
Inadequate growth of brands: Inadequate growth of brands
is another factor in B-CITIES, until recently; branding was
almost non-existent in convenience products. Supply chain
problems, as Suppliers are not properly organized in the
country, replenishment of stock poses problems for large
chains.
Being family businesses retailing enterprises have
limitation in expansion: Yet another reason for the slow
pick up of the mega retailing idea in B-CITIES is that all retail
enterprises have been family concerns. And family business
usually has the limitation in expansion,
40
Real estate problems: Real estate is an integral requirement
of large scale chain store operations. Also big chains have to
operate in several cities. Real estate thus becomes crucial,
that is why groups that have been in Real estate and hotel
businesses are more comfortable in branching off into
retailing. From other firms, Real estate development is a
problem which is major.
INTRODUCTION TO HUMAN RESOURCE
DEPARTMENT OF RETAIL INDUSTRY
41
In retail industry the job of HR manager can be compare with
the job of conductor, whose job is to instruct and direct all of the
various musicians so that they can perform well together. But
before a conductor can direct a beautiful performance, all of the
individual musicians must be able to play their instruments well.
What kind of performance could one can expect if the violinists
did not know how to play their instruments or the flutists could not
read music?
So it is in the hospitality industry, before a manager can
direct and shape employee’s individual contributions into an
efficient whole, he or she must first turn employees into competent
workers who know how to do their jobs. Employees are the
musicians of the orchestra that the members of the audience-the-
guests-have come to watch performance. If employees are not
skilled at their jobs, then the performance they give will get bad
reviews. Just as an orchestra can have a fine musical score from a
great composer and still perform poorly because of incompetent
musicians, so a hotel can have a finest standard recipes, service
procedures and quality standards and still have dissatisfied guests
because of poor employee performance.
42
That is why properly managing human resources is so
important. No other industry provides so much contact between
employees and customers and so many opportunities to either
reinforce a positive experience or create a negative one.
As in the retail sector and in different sector there are around lots of employee are involved in different jobs in different fields there
is dire need to look and control on them. No doubt different
department’s heads are present to look their department employee,
but HRD is a place, which supervise and effectively communicate
with these departments head and communicate with the top
management. Thus there function is very large and diverse as
compared with respect to different
Fig: A Typical Organization of Personnel Department
43
Personnel Policies of HR
The personnel function in retail includes many activities such as:
44
General Manager
Personnel Director
Personnel Manager
Personnel Officer
Personnel Research & Development Officer
TrainingDepartment
PersonnelDepartment
Operative TrainingSupervisory TrainingManagement TrainingTraining Instruction
Training Aids & Equipments
WelfareTrainingRecruitmentMaintaining Payroll
≈ Consideration of leadership style
≈ Relationship
≈ Responsibilities
≈ Philosophy
≈ Social orientation
≈ Organizational structure
In most of the retail the personnel policies are put in writing. These
policies are distributed to key and responsible executive to provide
guidance and ensure consistent application. Periodically the HRD
review these policies.
Arrears of personal policies
The personal policies are concern with each of the following
areas:-
Employment
≈ Recruitment
Process
45
Fig: HRP Process
Organizational Objectives & Policies
HR plans need to be based on organizational objectives. In
practice, this implies that the objectives of the HR plan must be
derived from organizational objectives. Specific requirements in
46
OrganizationalObjectives & Policies
HR Demand Forecast HR Supply Forecast
HR Programming
HRP Implementation
Control and Evaluation of Program
Environment
Surplus Shortage
terms of number and characteristics of employees should be
derived from the organizational objectives.
HR Demand Forecast
Demand forecasting must consider several factors – both
external as well as internal. Among the external factors are
competition, economic climate, laws and regulatory bodies,
changes in technology and social factors. Internal factors
include budget constraints, production levels, new products and
services, organizational structure and employee separations.
HR Supply Forecast
The next logical step for the management is to determine
whether it will be able to procure the required number of
personnel and the sources for such procurement. This
information is provided by supply forecasting. Supply
forecasting measures the number of people likely to be available
from within and outside an organization, after making
allowance for absenteeism, internal movements and promotions,
wastage and changes in hours and other conditions of work.
47
HR Programming
Once an organization’s personnel demand and supply are
forecast, the two must be reconciled or balanced in order that
vacancies can be filled by the right employees at the right time.
HR programming is the third step in the planning process,
therefore, assumes greater importance.
HR Plan Implementation
Implementation requires converting an HR plan into action. A
series of action programmes are initiated as a part of HR plan
implementation. Some such programmes are recruitment,
selection and placement; training and development; retraining
and redeployment; the retention plan; the redundancy plan; and
the succession plan.
Control and Evaluation
Control and evaluation represents the fifth and the final phase in
the HRP process. The HR plan should include budgets, targets
and standards. It should also clarify responsibilities for
implementation and control, and establish reporting procedures
48
which will enable achievements to be monitored against the
plan. These may simply report on the numbers employed
against establishment and on the numbers recruited against the
recruitment targets. But they should also report employment
costs against the budget, and trends in wastage and employment
ratios.
Consequences of Inadequate Planning
One example of inadequate planning is the case of an
organization caught in a severe budget crisis for which
management sees only one solution – to lay off large numbers of
employees. Careful planning for such a crisis during better times
might have resulted in a series of alternatives, making layoffs
unnecessary.
Many other problems can occur if human resources planning
are haphazard or neglected. For example, planning should take into
account staff reductions in all parts of the organization and should
be tried into any system for transferring employees. Top
management because of declining sales or increased automation,
49
including the use of computers and latest technology, might
contemplate staff reductions.
JOB DESIGN
Job design is a process of determining the specific tasks and
responsibilities to be carried out by each member of the
organization. In simple words, the logical sequence to job analysis
is job design. Job analysis provides job-related data as well as the
skills and knowledge expected of the incumbent to discharge the
job. Job analysis, then, involves conscious efforts to organize
tasks, duties and responsibilities into a unit of work.
50
Factors Affecting Job Design
Job design is affected by organizational, environmental,
behavioural factors. A properly designed job will make it
productive and satisfying. If a job fails on this count, the fault lies
with the job designers who, based on the feedback, must redesign
the job. (See Fig)
51
Feedback
Organizational FactorsCharacteristics of taskWork flowErgonomicsWork practices
Environmental FactorsEmployees abilities and availability Social and cultural expectations
Behavioral FactorsFeedback AutonomyUse of abilitiesVariety
Job Design
Productive & satisfying job
Techniques of Job Design
Fig: Techniques of Job Design
≈ Work Simplification: In this technique, the job simplified or
specialized. A given job is broken down into small sub-parts
and each part is assigned to one individual.
52
Work Simplificatio
n
JobRotation
Autonomous Teams
High Performance Work Design
Job Enrichment
Job Enlargemen
t
JobDesign
≈ Job Rotation: Job rotation implies movement of employees
from job to job. Jobs remain unchanged, but incumbents shift.
With job rotation, a given employee performs different jobs, but
more or less, jobs of the same nature.
≈ Job Enlargement: Job enlargement involves expanding the
number of tasks or duties assigned to a given job. Job
enlargement is naturally opposite to work simplification.
Adding more tasks or duties to a job does not mean that new
skills and abilities are needed to perform it.
≈ Job Enrichment: Job enrichment seeks to improve both task
efficiency and human satisfaction by building into people’s
jobs, quite specifically, greater scope for personal achievement
and recognition, more challenging and responsible work, and
more opportunity for individual advancement and growth.
≈ Autonomous or Self-directed Teams: A self-directed work
team is an intact group of employees who are responsible for a
whole work process or segment that delivers a products or
service o an internal or external customer.
53
≈ High-Performance Work Design: It is a means of improving
performance in an environment where positive and demanding
goals are set.
Role of Human Resource Department
The human resources department’s role in job design is
usually indirect, although job design influences almost every
aspect of human resources management. The department diagnoses
organizational problems that suggest job redesign, incorporate
information on job design in training and management
development programs, and help plan job redesign programs to
ensure that sound human resources policies and practices are
developed. Further, the department is needed to prepare to modify
job descriptions and job specifications and to an object modify
recruitment, selection, training, compensation and other practices
to be consistent with any job redesign program.
54
RECRUITMENT
In simple terms, recruitment is understood as the process of
searching for and obtaining applicants for jobs, from among whom
the right people can be selected. Recruitment is the process of
finding qualified people and encouraging them to apply for work
with the firm.
Managerial Roles
Responsibility for the overall recruitment process is assigned
to human resources managers. They are responsible for designing
and implementing a recruitment program that will meet the hotel
industry’s personnel needs while complying with all legal
requirements. This responsibility includes finding sources of
applicants; writing and placing advertisements; contacting schools;
agencies and labor unions; establishing procedures to guarantee
equal employment opportunity; and administering the funds the
firm has budgeted for recruitment.
55
Factors Governing Recruitment
The given fig. represents the factors that normally affect the
recruitment process. These factors add additional function to that
of HR manager.
Fig: Factors influencing recruitment
Types of Recruitment
In hotel industry, the types of recruitment are:
Internal Recruitment
Internal recruitment seeks applicants for positions from those
56
External ForcesSupply & DemandUnemployment rateLabor MarketPolitical-socialSons of soilImage
Internal ForcesRecruitment PolicyHRPSize of the firmCostGrowth & Expansion
Recruitment
who are currently employed. Internal sources include present
employees, employee’s referrals, former employees, and former
applicants.
External Recruitment
Finding qualified applicants from outside the organization is the
most difficult part of recruitment. The success of an expanding
hotel industry or one with many positions demanding
specialized skills often depends on the effectiveness of the
organizations recruitment program. Specifically, sources
external to an organization are professional or trade
associations, advertisements, employment exchanges,
college/university/institute placement services, consultants,
displaced persons, radio and television, acquisitions and
mergers and competitors.
Recruitment Process
HR practices its function in each and every stages of recruitment.
The process comprises five interrelated stages, viz. (i) Planning,
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(ii) Strategy development, (iii) Searching, (iv) Screening, and (v)
Evaluation and control.
The function of HR is to make the selection procedure an ideal
one. The ideal recruitment programmed is the one that attracts a
relatively larger number of qualified applicants who will survive
the screening process and accept positions with the organization,
when offered
ORIENTATION AND PLACEMENT
Orientation
Orientation is called as induction. It is the planned process of
introducing new employees to their jobs, their co-workers and the
organization. The main purpose of induction is to relieve the new
employee from possible anxiety and make him or her feel at home
on the job.
These orientation programmes are carried out formally as well as
individually/collectively in the hotels. These programmes are
carried from 1 weak – 2 weak.
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Organizational Issues
History of employer Product line or services
provided
Organization of employer Overview of production
process
Names & titles of key
executives
Company policies & rules
Employee’s title &
department
Disciplinary regulations
Layout of physical facilities Employee handbook
Probationary period Safety procedure &
enforcement
Employee Benefits
Pay scales and pay days Insurance benefits
Vacations and holidays Retirement programme
Rest breaks Employer-provided services
to employees Training & education
benefits
Counseling Rehabilitation programmes
Introduction
To supervisor To co-workers
To trainers To employee counselor
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Job Duties
Job location Overview of job
Job tasks Job objectives
Job safety requirements Relationship to other jobs
Placement
After orientation comes placement. Placement refers to the
assignment of a new employee to his or her job. The jobs of HR
are simple where the job is independent, but where the jobs are
sequential or pooled, HR specialists use assessment classification
model for placing newly hired employees. For example the job of
placing a waiter to its position is quite simpler as compared with
that of the placing the employee at managerial level. The job of
placing a waiter to its position is called an independent job but the
job of placing employee at managerial level can be considered as
sequential or pooled job.
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TRAINING AND DEVELOPMENT
Training and development activities are designed in order to
impart specific skills, abilities and knowledge to employees.
Effective training is basic ingredient of success in the hotel
industry. The concept of training is endorsed my most managers in
the hotel industry, yet managers often give little thought to the
training function in the context of their own business or
departmental responsibilities until something goes wrong! One of
the main problems in hotel industry is that investment in training
and development of employees is a reactive process for many
companies. Frequently, training and development arises as the
result of significant change in the operational environment or as a
consequent of crisis such as staff turnover or major departmental
problems. Training is then used to cope with the immediate
difficulty. This process may be proved costly to hotel. Whereas
development refers to learning opportunities designed to help
employees grow and evolve a vision about the future.
Here the job of HR is to identify the training need and then
accordingly to design the suitable programme for that. Training
within a hotel provides the best opportunity to influence the
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attitude and performance of employees. The training programmes
include is such as introduction, fire, food hygiene, control of
substances hazardous to health, manual handling first-aid,
technical skills, product knowledge, and customer service.
Methods and Techniques of Training
A multitude of methods of training are used to train employees.
Training methods are categorized into two groups and they are:
1. On-the-job training (OJT)
2. Off-the-job training
1. On-the-job training: On-the-job training is primarily learning
by doing and, as such, is probably the most used and most
abused approach to training. Like other form of training, OJT
requires planning, structure and supervision to be effective for
developing a variety of practical and customer-oriented
capabilities. When done correctly, OJT is a sensible and cost
effective method for training and assessing trainees’ progress in
jobs such as retail sales, food and beverage operatives, and
check-in and check-out positions. Some of the On-the-job
methods of training are orientation training, job-instruction
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training, apprentice training, internships and assistantships, job
rotation etc.
For example, at Domino’s Pizza, approximately 85% of
employee training is OJT, delivered by store managers using
extensively by Ramada Inns, Inc., which has developed an OJT
training aid. It also provides trainees with a list of sequential
steps that should be followed to perform the task correctly, as
well as the list of tools, materials, and equipment needed to do
the task. Finally, the training aid provides an evaluation form
for providing feedback to the trainees.
2. Off-the-job training: Off-the-job training allows for the
development of broader and more conceptual skills while
providing a practice environment in which error need not be so
costly. There are three main forms of off-the-job training: In-
house, External, and Independent.
In-house off-the-job training may take several formats
including lectures and other classroom techniques, discussions,
demonstrations, case studies and role plays, and simulations.
What distinguishes in-house off-the-job training from other type
of off-the-job training is that in-house training is conducted
63
away from the physical location where the job is actually carried
out, but still on company premises.
Like in-house off-the-job training, external off-the-job
training can also take a variety of forms. Such training may be
tailored to the company’s specific need or it may be offered on a
more general basis; it may focus on special disciplines related to
hospitality.
Independent off-the-job training refers to training
methods that are controlled and managed by the learner. A
number of these training options which are becoming
increasingly important to employees in the hotel industry are:
≈ Distance/open learning or training (may involve
correspondence teaching, use of television or radio, video-
conferencing, etc.)
≈ Computer-assisted learning
≈ Interactive-video learning
≈ A combination of the above method
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The Training Process
Assessing Training Needs
Preparing the Training Plan
Specifying Training Objectives
Designing the Training Programs
Selecting the Instructional Methods
Completing the Training Plan
Conducting the Training
Evaluating the Training
Planning Further Training
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PERFORMANCE APPRAISAL
Performance appraisal refers to the assessment of an employee’s
actual performance, behavior on jobs, and his or her potential for
future performance. It is done generally for the purpose of
assessing training needs to employee, to effect his promotions and
to give him pay increase, retention or termination.
Though there are different methods of performance appraisal only
one method that is commonly used in this industry is Rating Scale
Method.
For Example: In most of the hotels that I visited the performance
appraisal is done on yearly basis but in Hotel Imperial Palace on
day to day basis the briefing of employee is done. In Orchid Hotel,
the rating scales method is used by the way of Questionnaire (1-
10).
Challenges of Performance Appraisal
Create a culture of excellence that inspires every employee to
improve or lend himself or herself to be assessed.
Align organizational objectives to individual aspirations.
Clear growth paths for talented individuals.
66
Provide new challenges to rejuvenate careers that have reached
the plateau stage.
Forge a partnership with people for managing their careers.
Empower employees to make decisions without the fear of
failing.
Embed teamwork in all operational processes.
Debureaucratise the organization structure for ease of flow of
information.
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Performance Appraisal
Process
Fig: Performance Appraisal Process
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Objectives of Performance Appraisal
Establish Job Expectations
Design an Appraisal Programme
Appraise Performance
Performance Interview
Use Appraisal Data for Appropriate Purposes
JOB EVALUATION
Job evaluation refers to the process of determining the relative
worth of each job for purpose of establishing satisfactory wage and
salary differentials. Jobs are evaluated on the basis of their content
and are placed in the order of their importance. In a job evaluation
programme, the jobs are ranked and not the job holders.
Methods of Job Evaluation
Fig: Methods of Job Evaluation
69
Job Evaluation
Analytical Non-Analytical
Point-Ranking Method
Factor Comparison
Method
Ranking Method
Job-Grading Method
Though there are different types of methods available but the most
common method practiced in this industry is analytical method and
in analytical method point ranking methods is the most appropriate
one.
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Process of Job Evaluation
Fig: Job Evaluation Process
71
Objectives of Job Evaluation
Job Analysis
Job Evaluation Programme
Wage Survey
Employee Classification
Job Description
Job Specification
EMPLOYEE RELATIONS
As the name suggest it is all about maintaining relationship with
the employee. It includes all terms that are concerned with the
employee like employee remuneration, i welfare, safety and health
issue, trade unions etc. Here it’s where the HR manager
communicates with employee about their problems, suggestion and
so on. All these steps are followed in order to retain best employee.
Employee Remuneration
In most of the hotels, the human resource department plays a
crucial role in determining the remuneration policy of employees.
For this they take into consideration all external as well as the
internal factors. By this they have to deal with external factors like
labor market, going rate, cost of living, labor unions, labor laws,
society and the economy as well as internal factors like company’s
ability to pay, job evaluation and performance appraisal and the
worker himself or herself. In hotel industry both financial as well
as non-financial methods of remuneration are followed.
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Incentives Payments
It is seen that HRD are highly involved in deciding the incentives
programmes. As this department is involved in deciding the
remuneration programmme, they are serving as the foundations for
most incentive plans. The management of these plans is
collaborative. These incentives schemes are for direct workers who
work in batches, as well as for indirect workers.
Employee Benefits and Services
The HRD has a major role in the development and management of
benefits programs. These benefits are designed by HRD in order to
suit the requirement of employee. And further, they are sent to the
top management for approval. Thereafter they are implemented.
These benefits, which are given to the employee, are both financial
as well as non-financial.
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Some of the benefits and services, which are practiced in the hotel
industry, are as follows:
Legally required payments
Old age, survivors, disability and health insurance
Worker’s compensation
Unemployment compensation
Contingent and deferred benefits
Pension plans
Group life insurance
Sick leave
Maternity leave
Payments for time not worked
Vacations
Holidays
Voting pay allowances
Employee Welfare
Labor welfare refers to taking care of the well being of workers by
employers, trade unions, and government and non-government
74
agencies. Recognizing the unique place of the worker in the
society and doing good for him/her retaining and motivating
employees, minimizing social evils, and building up the local
reputation of the hotel are the arguments in favour of employee
welfare. Hence this area has generated one more area for practicing
of HR roles.
360 DEGREE PERFORMANCE APPRAISAL
360 degree appraisals are a powerful developmental method and
quite different to traditional manager-subordinate appraisals. As
such a 360 degree process does not replace the traditional one-to-
one process - it augments it, and can be used as a stand-alone
development method.
360 degree appraisals involve the appraise receiving feedback from
people (named or anonymous) whose views are considered helpful
and relevant.
360° Feedback is a proven method of helping individuals reviews
their performance through the eyes of their working colleagues.
The feedback is typically provided on a form showing job
75
skills/abilities/attitudinal/behavioral criteria and some sort of
scoring or value judgment system. The appraise should also assess
themselves using the same feedback instrument or form.
BENCHMARKING
Benchmarking is the process of determining who is the very best,
who sets the standard, and what that standard is. In baseball, you
could argue that seven consecutive World Series Championships
made the New York Yankees the benchmark. It is done to motivate
people to improve toward that goal.
Benchmarking is usually part of a larger effort, usually a Process
Re-engineering or Quality Improvement initiative. Benchmarking
is a management tool that is being applied almost anywhere. Once
we decide what to benchmark, and how to measure it, the object is
to figure out how the winner got to be the best and determine what
we have to do to get there.
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CHAPTER-3
RESEARCH
METHODOLOGY
77
SOURCES OF DATA
Data’s are the useful information or any forms of documents
designed in a systematic and standardize manner which are used
for some further proceedings. One of the important tools for
conducting marketing research is the availability of necessary and
useful data. Sometimes the
data’s are available readily in one form or the other and sometimes
the data’s are collected fresh.
The sources of data falls under two categories:
1.)Primary Sources.
2.)Secondary Sources.
Secondary Data- The Secondary data was collected through the
following:
Online Research material of the various Institutions/Outlets
directly or Indirectly involved with the Retail Industry.
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Secondary Data used in External Source of Information Like.
# Internet
# Magazine
# Paper cutting
OTHER SOURCES
Information SourcesInformation has been sourced from namely,
Books
Newspapers
Trade journals
White papers
Industry portals
Government agencies
Trade associations
Through industry news and developments.
79
CHAPTER-4
DATA
ANALYSIS &
OBSERVATIONS
80
RETAIL ANALYSIS
Raising aspirations: Value added good sales
Organized retailing in B-CITIES has been largely an urban
phenomenon with affluent classes and growing no. of double
income households.
Rural markets emerging as a huge opportunity for retailers
reflected in the share of the rural market across most
categories of consumption.
Companies using their own web portals with the horizontal
players like Rediff.com and Indiatimes.com to offer products
on the web.
DLF plans to invest US$4.02 billion over four years to
develop about 20 large shopping malls across the country’s
retail market.
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Israeli mall developer plaza Centre NV plans to invest
US$ 1.25 billion over the next five-seven years to set up 50
malls in India.
Reliance Retail is going ahead with plans worth an
investment of US$ 3.77 billion for setting up 205 stores.
IT is a tool that has been used by retailers ranging from
Amazon.com to eBay radically changing the buying behavior
across the globe.
Experimentation with formats: Retailing in B-CITIES is
still evolving and the sector is witnessing a series of
experiments across the country with new formats being
tested out.
Ex. Quasi malls, sub-urban discount stores, Cash and Carry
etc.
Unorganized retailing is getting organized: To meet the
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challenges of Organized retailing such as Cineplex’s and
malls, which are backed by the corporate houses such as
Annals’ and ‘PVR’. The Unorganized sector is getting
organized. 25 stores in Delhi under the banner of provision
mart are joining hands to combine monthly buying.
Bombay Bazaar and E-food mart formed which are
aggregations of Kirana’s.
Emergence of discount stores: They are expected to
spearhead the organized retailing revolution. Stores trying to
emulate the model of Wal-Mart. Ex. Big Bazaar, Bombay
Bazaar, RPG’s etc.
83
CHAPTER-5
IMPORTANCE
OF
STUDY
84
ROLE OF HUMAN RESOURCE IN RETAIL INDUSTRY
Service quality and productivity were the most crucial competitive
issues facing these firms. When asked to different hotels regarding
strengthening competitiveness, 50 percent choose internal
management actions, including educating and training employees,
with publicly announcing employee policy. And all these
procedure of implementing such task is over HR shoulder.
To achieve a progressive, innovative culture within organization-
and to cope with the critical challenges that the future might bring-
human resources professionals are likely to assume certain roles
with greater frequency. These roles are following:
The Consultant Advisor Role:- In particular, the top human
resources executive will increasingly play a major role in
advising the CEO and the top management team about the
human resources implications of broad organizational strategy,
both nationally and globally. Further, the human resources
department will be called upon more and more advice
management at all levels about the motivational, morale and
legal implications of various present and proposed practices and
policies.
85
The Catalyst Facilitator Role: - The human resources directors
have a unique opportunity to serve in a catalyst-facilitator role
in stimulating a top management philosophy, leadership style
and organizational culture and climate. It is important that
management develops a clear view of these interrelated matters
and that management is self-conscious about them on an
ongoing basis. In addition, the human resources director can
serve as a resource person about these concepts and their links
to organizational outcomes such as effectiveness, efficiency,
development and participant satisfaction.
The Diagnostic Role: - By this, they are expected to identify the
underlying causes of an organizational problem as distinct from
its symptoms and to come up with solutions – or system for
solving the problem- that correspond with the diagnosis. All too
often, programs of various kinds, like job enrichment, incentives
systems, and quality circles and so on, are proposed by
managers or human resources people. What is usually needed is
an accurate description of the problem to be solved, a careful
analysis of the dynamics of that problem, and a close look at
86
alternative solutions and their rectifications before a program are
implemented.
The Assessment Role: - One of the most difficult roles for
human resources professionals is the assessment role, in which
they assess the effectiveness of various human resources
practices and policies. A comprehensive evaluation of the
effectiveness of various human resources policies and practices
is called a human resources management audit or personnel
audit. These comprehensive human resources audit may be used
to analyze a wide array of human resources practices and
outcomes.
BENEFITS TO THE B-CITIES CONSUMERS
One has to agree that the entrance of big players will ensure the
high quality of service produced and being sold to the consumers.
There are other indirect benefits in terms of choice and pricing that
will be passed along to the consumers as the big retailers with
compete with each other for having the greater share in the market.
87
CHAPTER-7
FINDINGS
88
MAJOR FINDINGS
1- The Retail Sector in India can be split up into two parts, the
Organized and the Unorganized. The Organized sector, whose size
is expected to triple in the coming years, can be further split up
into departmental stores, supermarkets, shopping malls.
2- In terms of value, the size of the retail sector in India is $300
billion. The Organized sector contributes about 4.6% to the total
trade.
3- The retail sector in India contributes 10% of the Gross
Domestic Product and 8% to the employment of the country.
4- In terms of growth, the FMCG retail sector is the fastest
growing unit and the retail relating to household care,
confectionery etc, have lagged behind.
5- The foreign retail giants were initially restricted from making
investment in India. But now FDI at 51% is permitted in India only
through Single branded retail outlets. Multi brand outlets are still
89
beyond their reach. At this point they can only enter the market
through franchisees. Example, Wal-Mart had entered joining
hands with Bharti Enterprises.
6- On- line retailing is still to leave a mark on the customers due to
lacunae that have already been mentioned.
7-Cultural and Regional’s differences in India are the biggest
challenges in front of retailers. This factor deters the retailers in
India from adopting a single retail format. Hypermarket is
emerging as the most favorable format for the time being in India.
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CHAPTER-8
RECOMMENDATIONS
91
RECOMMENDATIONS
Looking for Opportunities, developing proposals and
implementing projects is very time consuming in formulating
the project.
1.) The management of the organization must allocate sufficient
human and financial resources if it wants the project to be
successful.
2.) Good quality project preparation pays off fine results.
3.) Thinking before the action taking is necessary.
4.) One has to be précised & complete with the information.
5.) It must be made sure that all the activities are ‘translated’ into
the Budget.
92
CHAPTER-9
PROJECT
LIMITATIONS
93
PROJECT LIMITATIONS
The Organized retail industry in India is faced with the stiff
competition from the unorganized sector.
There is the shortage of quality Real estate and Infrastructure
requirements in the country.
Opposition to Foreign Direct Investment from small traders’
effect retail industry.
A very high stamp duty on transfer of property affects the
industry.
Shortage of retail space in central and downtown locations
also hinders the growth of retail industry.
Land use conversion is time consuming and becoming
complex.
For settling property disputes, it consumes lot of time.
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Non residents are not allowed to own property except they
are of Indian origin.
Inadequacies in infrastructure such as lack of high quality,
road networks, power shortages and insufficient storage
spaces.
Presence of strong Pro-tenancy laws makes it difficult to
evict tenants and this is posing problems.
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CHAPTER-10
CONCLUSION
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CONCLUSION
For a start, this retailer does not use HR Strategies in capturing
much more specific market. The retailers also need to make the
substantial investment in understanding/acquiring some advanced
expertise in developing more accurate and scientific demand
forecasting models,HR Policies, Recruitment, Development more
towards collaborative planning and replenishment should then be
next on their agenda. The message, therefore for the existing small
and medium independent retailers is to closely examine what
changes are taking place in their immediate environment, and
analyze whether their current market offers a potential
redevelopment of the area into a more modern multi-option
destination.
The next effort should be to encourage retailers to make
some investments in improving the interiors of their respective
establishments to make shopping an enjoyable experience for the
customer. As the retail marketplace changes shape and competition
increases, the potential for
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Improving retail productivity and cutting code decreases.
Therefore, it will become important for retailers to secure a
distinctive position in the market place based on value,
relationships or experience.
Finally, it is important to note that these strategies are not
strictly independent of each other; value is a function of not just
price, quality and service but can also be enhanced by
Personalization and offering a memorable experience. Infact
building relationships with customers can itself increase the quality
of overall customer experience and thus the perceived value. But
most importantly, it is critical to understand the target customer’s
definition of value and make an offer, which not only delights the
customer but also is difficult for competitors to compete.
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CHAPTER-11
BIBLOGRAPHY
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BIBLIOGRAPHY
1. S. Namakumari “Marketing Management”, Macmillan
Business Book, Delhi.
2. Philips Kotler “Marketing Management”, 11th Edition,
Eastern Economy Edition.
3. Ramanuj Majumdar “Product Management in India” 2nd
Edition, Eastern Economy Edition.
4. Christopher Lovelock “Service Marketing” 5th Edition,
Pearson Education.
5. Dr. S.L Gupta “Sales and Distribution Management”, Excel
Books.
6. Business and Marketing Magazine “4P’s Business &
Marketing”.
7. Business Magazine “Business Today”.
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8. “Changing Consumer Interface of Market Driven
Innovations”- Report.
9. “Retail Industry- Where does India stand?”- Report by
Sanjeev Kumar.
10“Global Powers of Retailing 2006”- Report by Stores
Magazine, Nation.
11 Human Resource Management by V.S.P.RAO
12 “The Great Indian Retail Story”- Report by Ernst & Young
India.
13“Indian Retail Industry”- Report by www.Rocsearch.com .
14 http:// www.indianretailing.com
15 http:// www.pantaloon.com
16 http://www.google.com
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17http://economywatch.com/business-and-economy/retail-industry
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