Q1. Identify the opportunities and the threats that the retailing industry in India offers to local and foreign Companies.
1) Indian consumer's behavior pattern has changed: Indian consumers are becoming more aware of what retailers are offering in India and in foreign Countries because of the TV, Internet and the ability of people to travel abroad easily. So people are not just ready to accept change but rather want these big, modern organized retailers.
2) Growth in foreign direct investment (FDI) in retail to 51% in India: As of now foreign companies are allowed to own 51% of their company in India making them majority share holders, this allows major foreign retail companies to start their ventures in India and rule completely over them. Previously they were unwilling to invest because they didn't have majority share of the company in India. This thou will be bad for the "kirana dukaans".
3) The Organized retailing sector in India is only 2% and is expected to rise to 40% by the year 2010: There is a huge margin for growth. Companies the organized retail sector can grow immensely, with the people of India also ready for a change.
4) Coming up with developed retail formats and organized retailers in non metropolitan states: Thou the buying power of rural areas may be low at the moment, with the immense growth of the Indian economy there could be an increase in the spending power of the people. The amount of large organized retailers in these areas is very small.
5) Innovative use of technology: this provides innovative use of technology that helps in efficiency. It helps in coordinating activities, decision making in large organized retailers
6) The rural market is a very good market to venture into, there are about 720 million consumers in over 6, 00,000 villages. The rural consumers are eager to connect to the outside world and are willing to accept change.
1) Trained Manpower Shortage is a challenge faced...