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1. INDUSTRY PROFILE

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1.Industry Profile Indian Retailing:

Retailing in India is one of the pillars of its economy and accounts for about 15% of its GDP.

The Indian retail market is estimated to be US$ 450 billion and one of the top five retail markets

in the world by economic value. India is one of the fastest growing retail markets in the world,

with 1.2 billion people.

India's retailing industry is essentially owner manned small shops. In 2010, larger format

convenience stores and supermarkets accounted for about 4 percent of the industry, and these

were present only in large urban centers. India's retail and logistics industry employs about 40

million Indians (3.3% of Indian population).

Until 2011, Indian central government denied foreign direct investment (FDI) in multi-brand

retail, forbidding foreign groups from any ownership in supermarkets, convenience stores or any

retail outlets. Even single-brand retail was limited to 51% ownership and a bureaucratic process.

In November 2011, India's central government announced retail reforms for both multi-brand

stores and single-brand stores. These market reforms paved the way for retail innovation and

competition with multi-brand retailers such as Walmart, Carrefour and Tesco, as well single

brand majors such as IKEA, Nike, and Apple The announcement sparked intense activism, both

in opposition and in support of the reforms. In December 2011, under pressure from the

opposition, Indian government placed the retail reforms on hold till it reaches a consensus.

In January 2012, India approved reforms for single-brand stores welcoming anyone in the world

to innovate in Indian retail market with 100% ownership. Indian government continues the hold

on retail reforms for multi-brand stores.

Organized retailing, in India, refers to trading activities undertaken by licensed retailers, that is,

those who are registered for sales tax, income tax, e t c .

These include the publicly- traded supermarkets, corporate-backed hypermarkets and retail

chains, and also the privately owned large retail businesses.

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Unorganized retailing, on the other hand, refers to the traditional formats of low-cost retailing,

for example, the local mom and pop store, owner manned general stores, paan/beedi shops,

convenience stores, hand cart and pavement vendors, etc.

Organized retailing was absent in most rural and small towns of India in 2010. Supermarkets and

similar organized retail accounted for just 4% of the market.

Background of Indian retailing:

Most Indian shopping takes place in open markets or millions of small, independent grocery and

retail shops. Shoppers typically stand outside the retail shop, ask for what they want, and cannot

pick or examine a product from the shelf. Access to the shelf or product storage area is limited.

Once the shopper requests the food staple or household product they are looking for, the

shopkeeper goes to the container or shelf or to the back of the store, brings it out and offers it for

sale to the shopper. Often the shopkeeper may substitute the product, claiming that it is similar or

equivalent to the product the consumer is asking for. The product typically has no price label in

these small retail shops; although some products do have a manufactured suggested retail price

(MSRP) pre-printed on the packaging. The shopkeeper prices the food staple and household

products arbitrarily, and two consumers may pay different prices for the same product on the

same day. Price is sometimes negotiated between the shopper and shopkeeper. The shoppers do

not have time to examine the product label, and do not have a choice to make an informed

decision between competitive products.

India's retail and logistics industry, organized and unorganized in combination, employs about 40

million Indians (3.3% of Indian population). The typical Indian retail shops are very small. Over

14 million outlets operate in the country and only 4% of them being larger than 500 sq ft (46 m2)

in size. India has about 11 shop outlets for every 1000 people. Vast majority of the unorganized

retail shops in India employ family members, do not have the scale to procure or transport

products at high volume wholesale level, have limited to no quality control or fake-versus-

authentic product screening technology and have no training on safe and hygienic storage,

packaging or logistics. The unorganized retail shops source their products from a chain of

Middlemen who mark up the product as it moves from farmer or producer to the consumer. The

unorganized retail shops typically offer no after-sales support or service. Finally, most

transactions at unorganized retail shops are done with cash, with all sales being final.

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Until the 1990s, regulations prevented innovation and entrepreneurship in Indian retailing. Some

retails faced complying with over thirty regulations such as "signboard licenses" and "anti-

hoarding measures" before they could open doors. There are taxes for moving goods to states,

from states, and even within states in some cases. Farmers and producers had to go through

middlemen monopolies. The logistics and infrastructure was very poor, with losses exceeding 30

percent.

Through the 1990s, India introduced widespread free market reforms, including some related to

retail. Between 2000 to 2010, consumers in select Indian cities have gradually begun to

experience the quality, choice, convenience and benefits of organized retail industry.

Growth of Indian retailing:

Growth over 1997-2010

India in 1997 allowed foreign direct investment (FDI) in cash and carry wholesale. Then, it

required government approval. The approval requirement was relaxed, and automatic permission

was granted in 2006. Between 2000 to 2010, Indian retail attracted about $1.8 billion in foreign

direct investment, representing a very small 1.5% of total investment flow into India.

Single brand retailing attracted 94 proposals between 2006 and 2010, of which 57 were approved

and implemented. For a country of 1.2 billion people, this is a very small number. Some claim

one of the primary restraints inhibiting better participation was that India required single brand

retailers to limit their ownership in Indian outlets to 51%. China in contrast allows 100%

ownership by foreign companies in both single brand and multi-brand retail presence.

Indian retail has experienced limited growth, and its spoilage of food harvest is amongst the

highest in the world, because of very limited integrated cold-chain and other infrastructure. India

has only 5386 stand-alone cold storages, having a total capacity of 23.6 million metric tons.

However, 80 percent of this storage is used only for potatoes. The remaining infrastructure

capacity is less than 1% of the annual farm output of India, and grossly inadequate during peak

harvest seasons. This leads to about 30% losses in certain perishable agricultural output in India,

on average, every year.

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Indian laws already allow foreign direct investment in cold-chain infrastructure to the extent of

100 percent. There has been no interest in foreign direct investment in cold storage infrastructure

build out. Experts claim that cold storage infrastructure will become economically viable only

when there is strong and contractually-binding demand from organized retail. The risk of cold

storing perishable food, without an assured way to move and sell it, puts the economic viability

of expensive cold storage in doubt. In the absence of organized retail competition and with a ban

on foreign direct investment in multi-brand retailers, foreign direct investments are unlikely to

begin in cold storage and farm logistics infrastructure.

Until 2010, intermediaries and middlemen in India have dominated the value chain. Due to a

number of intermediaries involved in the traditional Indian retail chain, norms are flouted and

pricing lacks transparency. Small Indian farmers realize only 1/3rd of the total price paid by the

final Indian consumer, as against 2/3rd by farmers in nations with a higher share of organized

retail. The 60%+ margins for middlemen and traditional retail shops have limited growth and

prevented innovation in Indian retail industry.

Growth after 2011

Before 2011, India had prevented innovation and organized competition in its consumer retail

industry. Several studies claim that the lack of infrastructure and competitive retail industry is a

key cause of India's persistently high inflation. Furthermore, because of unorganized retail, in a

nation where malnutrition remains a serious problem, food waste is rife. Well over 30% of food

staples and perishable goods produced in India spoil because poor infrastructure and small retail

outlets prevent hygienic storage and movement of the goods from the farmer to the consumer.

One report estimates the 2011 Indian retail market as generating sales of about $470 billion a

year, of which a miniscule $27 billion comes from organized retail such as supermarkets, chain

stores with centralized operations and shops in malls. The opening of retail industry to free

market competition, some claim will enable rapid growth in retail sector of Indian economy.

Others believe the growth of Indian retail industry will take time, with organized retail possibly

needing a decade to grow to a 25% share. A 25% market share, given the expected growth of

Indian retail industry through 2021, is estimated to be over $250 billion a year: a revenue equal

to the 2009 revenue share from Japan for the world's 250 largest retailers.

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The Economist forecasts that Indian retail will nearly double in economic value, expanding by

About $400 billion by 2020. The projected increase alone is equivalent to

market size of France.

The Indian Retail Market:

The current retail

Indian market has high complexities in terms of a wide geographic spread and distinct consumer

preferences varying by each region necessitating a need for localization Even within the

Geographic zones. India has highest number of outlets per person (7 per thousand) Indian retail

Space per capita at 2 sq ft

(0.1 percent is highest in the

world. 45 lakh (US$85,500).

Delving further into consumer

m2)/ person is lowest in the world Indian retail density of 6

.8 million households in India have an annual income of over buying habits, purchase decisions can be separated into two

categories: status-oriented and indulgence-oriented. CTVs/LCDs, refrigerators, washing

machines, dishwashers, micro ave ovens and DVD players fall in the status category.

Indulgence-oriented products include plasma TVs, state-of-the-art home theatre systems, iPods,

high-end digital cameras, camcorders, and gaming consoles. Consumers in the status category

buy because they need to maintain a position in their social group. Indulgenc -oriented buying

happens with those who want to enjoy life better with products that meet their requirements.

When it comes to the festival shopping season, it is primarily the status-oriented segment that

contributes largely to the retailer’s cash register.

While India presents a large market opportunity given the number and increasing purchasing

power of consumers, there are Significant challenges as well given that over 90% of trade is

conducted through independent local stores. Challenges include: Geographically dispersed

population, small ticket sizes, complex distribution network, and little use of IT systems,

limitations of mass media and existence of counterfeit goods.

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1.1 Major Indian Retailers:

REI AGRO LTD Retail: 6TEN and 6TEN kirana stores

Future Groups-Formats: Big Bazaar, Food Bazaar, Pantaloons, Central, Fashion Station,

Brand Factory, Depot, aLL, E-Zone etc.

Raymond Ltd.: Textiles, The Raymond Shop, Park Avenue, Park Avenue Woman, Parx,

Colourplus, Neck Ties & More, Shirts & More etc.

Fabindia: Textiles, Home furnishings, handloom apparel, jewellery

RP-Sanjiv Goenka Group Retail-Formats: Spencer’s Hyper, Spencer's Daily, Music World,

Au Bon Pain (Internaional bakery cafeteria), Beverly Hills Polo Club

The Tata Group-Formats: Westside, Star India Bazaar, Steeljunction, Landmark, Titan

Industries with World of Titans showrooms, Tanishq outlets, Croma.

Reliance Retail-Formats: Reliance MART, Reliance SUPER, Reliance FRESH, Reliance

Footprint, Reliance Living, Reliance Digital, Reliance Jewellery, Reliance Trends, Reliance

Autozone, iStore

Reliance ADAG Retail-Format: Reliance World

K Raheja Corp Group-Formats: Shoppers Stop, Crossword, Hyper City, Inorbit Mall

Nilgiri’s-Formats: Nilgiris’ supermarket chain

Marks & Spencer: Clothing, lifestyle products, etc.

Lifestyle International-Lifestyle, Home Centre, Max, Fun City and International Franchise

brand stores.

Pyramid Retail-Formats: Pyramid Megastore, TruMart

Next retail India Ltd (Consumer Electronics)(www.next.co.in)

Vivek Limited Retail Formats: Viveks, Jainsons, Viveks Service Centre, Viveks Safe

Deposit Lockers

PGC Retail -T-Mart India [1], Switcher, Respect India, Grand India Bazaar,etc.,

Subhiksha-Formats: Subhiksha supermarket pharmacy and telecom discount chain.

Trinethra- Formats: Fabmall supermarket chain and Fabcity hypermarket chain

Vishal Retail Group-Formats: Vishal Mega Mart

BPCL-Formats: In & Out

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German Metro Cash & Carry

Shoprite Holdings-Formats: Shoprite Hyper

Paritala stores bazar: honey shine stores

Aditya Birla Group - "More" Outlets

Kapas- Cotton garment outlets

Nmart Retails with 71 operating Stores till now and total 153 Stores in India and 1 to open in

Dubai Shortly. (Expected to be 150 by the end of Aug-2012)

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2. COMPANY PROFILE

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2.Company Profile

Background and inception of the company:

About Reliance Group

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private

sector enterprise, with businesses in the energy and materials value chain. Group's annual

revenues are in excess of US$ 58 billion. The flagship company, Reliance Industries Limited, is

a Fortune Global 500 company and is the largest private sector company in India.

Dhirajlal Hirachand Ambani (1932-2002)

Founder of Reliance Group

Backward vertical integration has been the cornerstone of the evolution and growth of Reliance.

Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical

integration - in polyester, fibre intermediates, plastics, petrochemicals, petroleum refining and oil

and gas exploration and production - to be fully integrated along the materials and energy value

chain.

The Group's activities span exploration and production of oil and gas, petroleum refining and

marketing, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles, retail,

infotel and special economic zones.

Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fibre

producer in the world and among the top five to ten producers in the world in major

petrochemical products.

Major Group Companies are Reliance Industries Limited, including its subsidiaries and Reliance

Industrial Infrastructure Limited.

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About Reliance Retail Limited

Reliance Retail Limited is an organized retail arm of the Reliance Industries Limited. Reliance

industry is the largest conglomerate in India. It has an annual turnover of US$35.9 Billion. It is

also listed on 206th position in the Fortune Global 500 companies.

Reliance Retail is actually the retail group of Reliance Industries Limited. It has a number of

brands like Reliance Time Out, Reliance Digital, Reliance Wellness, Reliance Autozone,

Reliance Super, Reliance Mart, Reliance iStore, Reliance fresh, Reliance footprint, Reliance

Jewels, Reliance trends, and Reliance living.

Reliance Group was established in 1970's. The Reliance Retail was found in the year 2006 as an

operating subsidiary. It has its head office in Mumbai, India.

Reliance is gearing up to revolutionize the retailing industry in India. Towards this end, Reliance

is aggressively working on introducing a pan-India network of retail outlets in multiple formats.

A world class shopping environment, state of art technology, a seamless supply chain

infrastructure, a host of unique value-added services and above all, unmatched customer

experience, is what this initiative is all about.

The retail initiative of Reliance will be without a parallel in size and spread and make India

proud. Ensuring better returns to Indian farmers and manufacturers and greater value for the

Indian consumer, both in quality and quantity, will be an integral feature of this project. By

creating value at all levels, we will actively endeavor to contribute to India's growth.

The project will boast of a seamless supply chain infrastructure, unprecedented even by world

standards. Through multiple formats and a wide range of categories, Reliance is aiming to touch

almost every Indian customer and supplier.

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About Reliance Digital

Reliance Digital is a Consumer Electronics, Durables, IT & Telecom retail arm of Reliance

Retail Group, a subsidiary of Reliance Industries Limited hosts over 150 national and

international brands of electronic products. Reliance Digital Stores offer more than 4000 types of

electronic products.

After a successful launch of Reliance Fresh stores across several towns and cities in India,

Reliance Retail Limited unveiled ‘Reliance Digital’ in the year 2007, its pilot consumer

electronics concept mega store. The new destination for the latest in technology and

entertainment products & services, and currently 58 Reliance Digital stores are operating in

India.

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Nature of the business carried: Reliance Digital Store is a one stop shop for different electronic needs of all customers. May it

be household appliances, computers, laptops, games or telecom products; customers can find

every gadget, for every budget at Reliance Digital. It has over 4000 products at reasonable prices

for its valued customers.

Vision, Purpose, Values and Promises:

Vision

Reliance Digital seeks to fulfill the dream of every Indian, be it through its nationwide network

of conveniently located stores or through its presence on the web, by providing a delightful

shopping experience of products & solutions and helping them bring home the latest & best in

technology from the widest selection at the lowest assured price with complete peace of mind

through lifelong support.

Or more simply

“We bring Technology to life for you”

Purpose

Growth is Life

“Bettering the lives of Indian everyday”

Values

We believe in people

We believe in and follow the customer

We believe in the good of the community

We believe in each other

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Promises

A delightful shopping experience

A delighted community

A delightful place to work

Products/ Services Profile:

Reliance Digital – The Merchandise Mix

Complete range of

Consumer electronics

Home appliances

Kitchen appliances

Computing & gaming

Personal audio

Mobile communications

High-end audio & home theaters

High definition flat panel televisions

Music and movies

Digital photography & photo printing

Accessories to enhance product usage & experience

And lots more!

More than 150 brands, 4000 products and countless solution bundles individually

recommended to best suit the customers’ needs. Services

Reliance Digital reviews all its products to provide the best to its customers. It has a specially

designed ‘Experience Zones’ to get the real feel of the product before purchasing it.

Reliance Digital provides financial assistance through easy EMI Schemes; Company has

appointed Bajaj Capital to provide financial assistance to its consumers. Consumers have to

make 40% down payment and the remaining amount is distributed into 8 EMIs and interest rate

varies from brand to brand products.

Reliance Digital has a ResQ facility, which serves the purpose of a technical support team. It

comes to rescue to provide solutions for problems that customers may face with products from

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all leading brands. This facility is available 7 days a week; 365 days a year from 10 a.m. to 10

p.m. They have qualified engineers to deal with installation and to guide you with the usage of

the appliances.

ResQ services are -

Product installation: ResQ help to set up customers’ product for optimum

performance

Specialised customer training:

Specialised training to customers on products and related applications by an industry

trained personnel

Authorised Service Station for diagnosis and repairs (Caters to all brands)

One stop solution for repairs for all brands’ products

Repairs covering both pre and post manufacturer warranty periods

On-site service for select products – for the rest, our engineers shall transport products to

and fro from the service station

Demonstrate Product Usage:

Live demonstration of all features of the product

Provide handy care tips

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Health check-up plan: Preventive Maintenance

To ensure that products do not malfunction, resQ offer periodic services and

maintenance check-ups

Tips on upkeep of products for optimal performance

Also covers products not purchased from Reliance Digital

Enhanced Utility: ResQ Accessories

ResQ offer a host of utility products and accessories that are compatible with products &

help customers get more of them!

Extended Warranty Service- ResQ Care Plan

Free repairs, including both parts and labour

Free preventive maintenance visits during plan period

Area of operation – National:

Reliance Digital is a Consumer Electronics, Durables, IT & Telecom retail arm of

Reliance Retail Group, a subsidiary of Reliance Industries Limited, and currently 58

Reliance Digital stores are operating in India and 9 stores are operating in Bangalore.

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Ownership pattern:

Reliance Industries Limited

Refining Textiles Retail Petrochemicals -

Polyester &

Fibre

Intermediates

Petrochemicals

- Polymers

Reliance Gas

&

Reliance

Aviation

Vimal Vimal Gifting

&

V2 Vimal

Reliance Digital Reliance fresh

Reliance footprint

Reliance Jewels

Reliance trends

Reliance

Petroleum Retail

Roxy

Office Depot

GAPCO

And many more

Recron Stretch

Recron Cotluk

Recron Dyefast

Recron 3s

Recron LP

Relpet

And many

more

Repol

Relene

Reon

Cisamer

&

Relab

Reliance industry is the largest conglomerate in India, having number of brands with the

different businesses. The ownership pattern of Reliance Digital can be explained as - Reliance

Industries Limited has different subsidies; Reliance Retail Limited is one among the subsidies

and under which Reliance Digital is one of the Retail Business of Reliance retail.

Reliance Digital or the Reliance Retail Limited has not listed in stock market individually but

Reliance Industries Limited (RIL) as whole listed under stock market where all the subsidies of

RIL is considered to be a group and listed in the stock market. Hence Reliance Digital is a Public

Limited Company and Mr. Mukesh D. Ambani is the Chairman and Managing Director of

Reliance Industries Limited.

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3. COMPETITORS

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Competitors Information: Croma

Croma is India’s first national, large format, specialist retail chain for consumer electronics and

durables.

Croma is promoted by Infiniti Retail Ltd, a 100% subsidiary of Tata Sons. Woolworths, one of

the world’s leading retailers, provides technical and strategic sourcing support, ensuring that you

buy nothing but the best.

Croma's first store opened on October 9, 2006 at Juhu in Mumbai, and it's rolling out many more

stores across India.

Brand Philosophy

If service wasn't important.

If technology wasn't complex.

If variety wasn't confusing.

We would have no reason to be in business.

We help you buy. eZone

eZone is an experience-led lifestyle format that brings together the best in national and

international consumer electronic and durables brands in a family-centric environment. Typically

covering 12,000 square feet, an eZone store truly enables you to experience electronics through

three dedicated zones - Liberation Zone, Experience Zone and Home Zone.

The Liberation Zone offers personal products like computers, laptops, handy cams, MP 3 players

and mobile phones. Entertainment products such as Plasma / LCD, Flat TVs, Home Theatre

systems, DVD players, and Stereo systems are displayed in the Experience Zone. In the Home

Zone segment, one gets to pick electronic goods of his or her choice including Refrigerators, Air-

Conditioners, Washing Machines and Microwave ovens among other kitchen-related appliances.

eZone also offers an unparalleled service and support through the special ‘E-Care’ customer

support centre. E-Care is a special, dedicated support system designed to offer the best customer

service after purchase of any product at eZone.

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Others

There are other unorganized consumers electronic and durables brands such as Pai International,

Girias and Harsha Electronics are operating in Karnataka and some other states of the country

and these can be called as local market competitors but these brands are not to be considered as

competitors for Reliance Digital Retail Limited.

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4. INFRASTRUCTURE FACILITIES

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Infrastructural facilities:

Planogram

Also known as plano-gram, plan-o-gram, and POG, planogram is a visual representation of a

store's products or services considered as a tool of visual merchandising in retail store.

Signage

Signage is kind of visual graphics created to display information about products to customers.

Experience Zones

Experience zones take consumers through a delightful and interactive voyage in the world of

electronics and durable goods. Crafted with the latest signage, audio and merchandising where

customers can experience the products before purchasing.

Home theater experience zone

It is an exclusive experience zone in reliance digital store. It is a small room arranged well

furnished with sound systems where consumers can experience the home theaters before

purchasing.

Play station

Play station is advanced video gaming station where customers who visit the store can play and

have delightful shopping experience with reliance digital.

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Learning Center

Learning center is training center that is located within the reliance digital store where employees

are trained on the products thos

in the store.

arrived in the store and usually this center is sed for meetings

Work flow model:

The nature of the business is r

tailing hence the manufacturing of goods is not involved with

reliance digital instead goods are ordered and brought into stores for the retail sales. The

numbers of products from the ifferent brands with different product ranges are recruited into

stores and further sales is made so the work flow model could be Operating Model and Stock

Ordering Process.

Operating Model

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Operating Model Explanation

1. The operating model begins with Pre – installation Counseling & queries of customers

basically this happens though telephonic queries by customers or approach to know about

product available in reliance digital and this step will supported by resQ team. Usually

this will not be the initial step in most of the cases, customers directly approach store to

know about the products.

2. The second step could begin the actual operating model because most of the customers

first approach store and get to know details about their required product, when customers

walk in to the store employees counsel the customers, attend their queries and also

understanding their requirements they provide consultative solution to customers and this

can be considered as beginning step of operating model.

3. After counseling and consultation when customer make the purchase of goods, delivery

of goods will be supported by Reliance D&L Team, team also help customer in exchange

and product pick-up in case of any replacements after sale of goods as post sales service.

4. When goods are delivered to customers by D&L team, reliance resQ team helps

customers by Demonstration and Installation of product at customers place.

5. And after sales services such as extended warranty/maintenance and repairs will be

supported by resQ team in the company.

6. And also replacement and up gradation of products will be supported by resQ team and

further queries regarding products etc will handled by resQ team, with this again

operating model may continues as discussed above.

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Stock Ordering Process

Reliance Digital has classified electronics and consumer durable goods into four departments as

1. Consumer Electronics

2. Home Appliances

3. Information Technology

4. Telecommunication When the goods in the departments need to be ordered; each department follow the following

procedure for ordering the stock.

Stock Ordering Process

Stock Ordering Process Explanation

1. Stock report of every product is verified regularly by all the departments.

2. In case there is no stock or less quantity in the stock for the products, st

has to be sent to the category department of respective section requestin

ck ordering mail

the list of goods

required in the department with the complete details such as Product, Brand Name,

Article code and Quantity, and ordering mail should have store code.

3. Category department is central body present in the Mumbai

corporate

office, category

department place the order to respective Brands to deliver the goods

house of the state.

to central ware

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4. Brand people deliver ordered goods to respective central ware house, central ware house

become the distribution center for the stores.

5. Distribution center sends the goods to the stores those are ordered.

6. When the goods arrive to the store goods are received by material department of store.

7. And finally goods are sent to the respective departments.

8. Each department has to update its stock report every day for the stock reference and keep

follow up on stock level.

Future Growth and Prospectus:

At a time when inflation and high input costs are putting pressure on margins of retail

companies, Mukesh Ambani-led Reliance Retail expects its specialty and value formats driving

the firm’s next stage of growth.

Reliance Retail’s value formats include Reliance Fresh, a neighborhood retail concept, Reliance

Mart, an all-under-one-roof supermarket concept, and Reliance Super, a mini-mart concept. The

value formats offer a wide range and assortment of products required for daily household needs.

Its specialty formats include Reliance Digital, consumer durables and information technology

concept, Reliance Trends, apparel and accessories concept, and iStore by Reliance Digital, an

exclusive Apple products stores. Other specialty formats include Reliance Footprint for

footwear, Reliance Jewels, and Reliance Living, a home wear, furniture, modular kitchens and

furnishings concept. Reliance Retail plans to double its stores across all formats within next five

years. At present, it has more than 1,050 stores and a pan-India presence.

Reliance Digital Retail Limited will have 100 stores by the year 2014 in pan India. And also

company planning to provide financial assistance to the reliance digital customers by the reliance

group as of now it has appointed Bajaj Capital for the financial assistance to Reliance Digital

customers.

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5. STRATEGIES USED IN THE ORGANISATION

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o

The McKensy’s 7S Framework

The McKinsey 7S model

The McKinsey 7S model was

named after a consulting company, McKinsey and Company,

which has conducted applied research in business and industry. The McKinsey 7S Framework

was created as a recognizable and easily remembered model in business. The seven variables,

which the authors term "levers", all begin with the letter "S":

These seven variables include structure, strategy, systems, skills, style, staff and shared values.

Structure is defined as the skeleton of the organization or the organizational chart. The authors

describe strategy as the plan or course of action in allocating resources to achieve identified

goals over time. The systems are the routine processes and procedures followed within the

organization. Staff are described in terms of personnel categories within the rganization (e.g.

engineers), whereas the skills variable refers to the capabilities of the staff within the

organization as a whole. The way in which key managers behave in achieving organizational

goals is considered to be the style variable; this variable is thought to encompass the cultural

style of the organization. The shared values variable, originally termed super ordinate goals,

refers to the significant meanings or guiding concepts that organizational members share.

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From above 7, three are called Hard ‘S these are such as

Strategy

System

Structure

And other four are called Soft ‘S’, namely

Skills

Staff

Shared value

Style

McKinsey’s 7s at Reliance Digital

Strategy

Strategy is the plan of action an organization prepares in response to, or anticipation of, changes

in its external environment. Strategy is differentiated by tactics or operational actions by its

nature of being premeditated, well thought through and often practically rehearsed.

Reliance Digital routinely have different campaigning strategies for their new products and to

move stock which offer exciting sales promotion offers for the customers to persuade them to

know the product and purchase it. For e.g. During Christmas and New Year sale they had up to

50% discount on products.

Reliance Digital uses display fixtures to communicate and educate customer about the sales

promotion and they decorate the window areas with the products related to their promotion.

System

The system that Reliance Digital has for its sale of goods is friendlier and assists customer in

purchase of products. The procedure that they follow in Reliance Digital for sale of product is

initially when customers walk in to store junior sales associate welcome customer in to store by

greeting them and ask them how he can assist them, when customer ask him about his required

product junior sales associate takes customer to that particular department and leaves customer to

Senior sales associate or Team leader to attend the customers, here the person attend customer

queries and explain about product features and benefits. And also consult them to go for

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Particular product. When customer makes purchasing decision the same person takes customer to

cash counter to make bill of the purchased product and when customer reaches cash counter

cashier at counter greet the customer and makes billing and keep the product in Reliance Digital

carry bag and hand over to customer in case goods are heavy to carry there are store boys who

help customer taking them out of store and keep the products in their vehicle and if the products

are huge in size they make delivery arrangement through D&L Team.

Structure

The design of organizational structure is a critical task of the top management of an organization.

It is the skeleton of the whole organization. It prescribes the formal relationship among various

positions and activities.

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6. STRUCTURE OF THE ORGANISATION

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Organization Structure

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Store Hierarchy

CMO – Commercial Operations Manager

VM – Visual Merchandiser

DM – Department Manager

CE – Consumer Electronics

Telecom – Telecommunication

HA – Home Appliances

IT – Information Technology

TL – Team Leader

SSA – Senior Sales Associate

JSA – Junior Sales Associate

MOO – Material Operational Officer

MOE – Material Operational Executive

CRM – Customer Relationship Manager

SHE – Senior Helpdesk Executive

JHE – Junior Helpdesk Executive

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Skills

Employees must have products knowledge and they should have skills to persuade customer to

purchase product. At Reliance Digital Company provide training to the employees on products

which help employees to make sale of product with their best knowledge of product and skill. In

successive intervals the company sends mystery shoppers to stores to evaluate the performance

of the employees and they rate the performance of employees in the store and report to the

company if the training is required company arranges for it. And whenever new product has

arrived to store they provide training on that particular product in the store learning center.

During the training conducted by the company they make sure that the employees are aware

about the products information and also sales associates are given proper selling skill tips and

training on selling procedure.

Employees are also trained on how to greet and groomed to their best ability and they are trained

to handle all minor issues encountered in the store.

Staff

Organizations are made up of humans and it's the people who make the real difference to the

success of the organization in the increasingly knowledge-based society. The importance of

human resources has thus got the central position in the strategy of the organization, away from

the traditional model of capital and land.

Reliance Digital has 58 stores in pan India and has got more than 1000 employees working for

the company.

Shared value

We believe in people

We believe in and follow the customer

We believe in the good of the community

We believe in each other

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Style

Reliance Digital has a very friendly environment for all the employees .The management follows

top/down and bottom/up approach. Where in top management transfers the information from the

higher level to the lower level. The target and objectives are set by the top level managers and

are delegated to the lower level managers those in turn transfer to Team leader and sales

associates in the store level, hence all the major decision are taken by the higher authority and

shared to the lower level.

The lower level employees i.e., Team leader and sales associates revert back to the daily reports

to the Department manager who in turn reports to the store manager and further store manager to

his higher authority and it continues.

Every employee has a participative approach towards the business. Every employee is concerned

with his Duties, Responsibilities and accountability for the happening of the event and

employees have to report to their higher authority at regular intervals.

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7. SWOT ANALYSIS

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SWOT Analysis Strength:

Brand Name Reliance - Reliance Industries Limited, is a Fortune Global 500 company

and is the largest private sector company in India.

resQ Services - The dedicated service arm that is available for support all 365 days of a

year, from 10 a.m. to 10 p.m.

Network - Over150 international and national brands.

Private label sale – Some of own products (Reliance Reconnect).

Product mix - One-stop shops for all technological solutions, it has over 4000 products at

reasonable prices.

Weakness:

Poor inventory control.

Inadequate human resources.

Operating costs are too high.

Opportunity:

Potential for investment.

High growth potential.

E-retailing.

Retail franchising.

Wholesale trading.

Threat:

Increasing competitor’s market share.

Price war with competitors.

Inflation.

Competition offered by Chinese products.

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Analysis of Financial Statements

Reliance Digital Retail Limited Balance Sheet as at 31st March, 2010

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Analysis:

Long term funds increase in 2010 compare to the year 2009. Share capital remains

unchanged where Reliance Digital Retail Limited borrowed more funds in the form of

secured and unsecured loans.

The investment in fixed assets is increased to 10448.63 lakhs in 2010 from 8509.70 lakhs

in 2009.

The investment on current asset increased from 3989.34 lakhs in 20009 to 6790.10 lakhs

in 2010.

Interpretation:

The Reliance Digital Retail Limited investing more money in the form of fixed assets.

The current liabilities are not sufficient to meet the regular requirements and also company is

using long term funds to finance current assets.

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Profit and Loss Account for the year ended 31st

March, 2010

The sale is increased from 31628.01 lakhs in 2009 to 41186.78 lakhs in 2010. Though sales

has increased when comparative to last year the loss margin increased in 2010 because of

increased in the operating expenses.

Reliance Digital Retail Limited should take measures to reduce operating expenses.

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8. CONCLUSION

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Conclusion

Opting for internship at reliance digital was an opportunity for to understand the retail

industry and its nature of business. Understanding Retail management difference in organized

retail and unorganized retail was a huge scope for learning, the process and operation in

organized and unorganized retails has a lot of difference that could able to compare in my

learning.

Using knowledge of Marketing and Retail Management that can be found how practically the

strategies are implementing in organized retail and also it could be find some areas of

improvement that can be done in the company.

Learning about merchandising and stocking in retail for the sale and motivating sales team was a

good exposure. That could find the level of difficulty in convincing customers and the pain that

sales team undergoes to make a sale of product.

Also it could be known that merchandising plays a vital role in attracting customers and

stimulate them to buy the product.

The flow of work and the organizational hierarchy from top level management to the store level

can be understand easily. And also it could understand the motivational factors that make

employees to have job satisfaction in the organization.

Customer’s mentality towards promotional sales programme also led to understand that

people look for price prior to the quality or the actual product. Overall exposure to Retail

Management was an eye opener to me as how business is carried out and what all should be

considered for making sales and to have effective retail management.