FORTUNE INSTITUTE OF INTERNATIONAL BUSINESS
TERM-III
STRATEGIC MANAGEMENT ASSIGNMENT
BIG BAZAAR
SUBMITTED TO:
Prof. Arun Sangwan
SUBMITTED BY:
Mrinal Rawat
Aprajita Sharma
Anugrah alexander
Dimple Sharma
Kanika Purwaha
Akash Sharma
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INDEX
Company Background ................................................................................................................................ 3
MISSION ..................................................................................................................................................... 3
VISION ........................................................................................................................................................ 3
OBJECTIVE ............................................................................................................................................... 3
STRATEGIES ............................................................................................................................................. 4
INTERNAL ENVIRONMENT ANALYSIS ............................................................................................ 4
SWOT Analysis for big bazar .................................................................................................................... 4
Strengths in the SWOT analysis of Big Bazaar .................................................................................... 4
Weaknesses in the SWOT analysis of Big Bazaar ................................................................................ 4
Opportunities in the SWOT analysis of Big Bazaar ............................................................................ 5
Threats in the SWOT analysis of Big Bazaar ....................................................................................... 5
CORE COMPETENCIES: .................................................................................................................... 5
Competitive Advantages of Big Bazaar, India ..................................................................................... 6
Variety of Products ................................................................................................................................. 6
Large Chain of Stores ............................................................................................................................. 6
Apt Locations .......................................................................................................................................... 6
Low Price ................................................................................................................................................. 6
Porter’s Five Forces Model ........................................................................................................................ 7
Business level Strategy by Big Bazar......................................................................................................... 8
Service strategy of Big Bazar ................................................................................................................. 8
Is the present strategy working?.......................................................................................................... 10
VALUE CREATION ................................................................................................................................ 12
COST LEADERSHIP ........................................................................................................................... 12
PRICING OPTIONS ................................................................................................................................ 13
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Company Background
Big Bazaar is an Indian retail store that was opened by Sarvesh a chain of hypermarkets, discount
department stores, and grocery stores. The retail chain was originated by Kishore Biyani under his
parent organisation Future Group, which is known for having an significant fame in Indian retail
and fashion sectors. Big Bazaar is also the parent chain of Food Bazaar, Fashion at Big Bazaar and
eZone - all under one roof, while it is sister chain of retail outlets like Brand Factory, Home Town,
Central, eZone, etc.
The brain behind big bazaar is the CEO of Future Group Mr. Kishore Biyani, who founded it in
2001. Big bazaar started with its first store in Kolkata, West Bengal in 2001 and now in India
making itself the fastest growing retail chain in India and leaving all its competitors behind.
Future group is having numerous brands like Pantaloons, F123, Copper Chimney, Etam, Staples,
One Mobile, Urbana, Brand Factory, LootMart, HomeTown and Central. Big bazaar covers all
parts of India including the metro cities Kolkata, Delhi, Chennai, and Mumbai. Big Bazaar is one
of the oldest and major hypermarkets chains of India, housing about 250+ stores in over 120 cities
and towns across the country.
MISSION
“We share the vision and belief that our customers and stakeholders shall be served only by
creating and executing future scenarios in the consumption space leading to economic
development.”
VISION
“To Deliver Everything, Everywhere, Every time, to Every Indian Customer in the most
profitable manner.”
OBJECTIVE
The central objective for earlier businesses of Big Bazaar was to bring in constancy and
consolidation. They were built to enforce order. However, in the new era where nothing
remains constant, the dominant theme for businesses needs to be speed and imagination.
Every time a customer walks in, it is an opportunity to build a relationship and invite the
customer to become a part of the transformational scenario. Design management is
helping us position the customer at the center of every decision we take and operate with
true entrepreneurial spirit.
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STRATEGIES
• To achieve more growth and strengthen the company’s competitive position, the
company mainly focuses on the implementation of the following issues:
• Execute the mission statement.
• Maintain the leading position in the industry as
well know supermarket, retailers.
• To build strong brand awareness and
discounts to the customers.
• Expand and optimise domestic store base.
• To grow international business.
INTERNAL ENVIRONMENT ANALYSIS
SWOT Analysis for big bazar
The SWOT analysis of Big Bazaar discusses the strength, weaknesses, opportunities and threats
for one of the major retailers of India – Big bazaar.
Strengths in the SWOT analysis of Big Bazaar
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High brand equity enjoyed by Big Bazaar
State of the art infrastructure
A vast variety of stuff available under one roof
Everyday low prices, which attract customers
Maximum percent of footfalls converted in sales
Huge investment capacity
Biggest value retail chain in India
It offers a family shopping experience, where entire family can visit together.
Available facilities such as online booking and delivery of goods
Weaknesses in the SWOT analysis of Big Bazaar
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Unable to meet store opening targets on time
Falling revenue per sq. ft
General perception: ‘Low price = Low quality’
Overcrowded during offers
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Long lines at billing counters which are time consuming
Limited only to value offering low price products. A no of branded products is still
missing from Big Bazaar’s line of products. E.g. Jockey, Van heusen.
Opportunities in the SWOT analysis of Big Bazaar
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A lot of scope in Indian organized retail as it stands at approximately 4%.
Increasing mall culture in India.
More people these days prefer to visit big stores where they can find large variety under
one roof.
Threats in the SWOT analysis of Big Bazaar
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Competition from other value retail chains such as Shoprite, Reliance (Fresh and trends),
Hyper city and D mart.
Unorganized retail also appears to be a threat to Big Bazaar’s business. A large population
still prefers to visit local convenient stores for daily purchases
Changing Government policies
International players looking to foray India
CORE COMPETENCIES:
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A choice of more than 20,000 products
Delivery across more than 1500 cities and towns in India covering around 16,000 pin codes
Fast deliveries – tie ups with world leaders in logistics & transportation services
A dedicated Customer Care helpline for any queries
Always offering Manufacturer’s guarantee as opposed to Seller’s guarantee, which most of
the other online shopping sites offers
Talks of Quality and Cost
Special emphasis on apparels and life style products Providing interesting discounts
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Competitive Advantages of Big Bazaar, India
Variety of Products
The main competitors for Big Bazaar are Tata Hypermarket, More, and Reliance Fresh. Big
Bazaar sells almost everything in the retail sector. From Big Bazaar, you can buy packed food,
vegetables, fish, apparels, toys, footwear to hi-tech electronic goods such as TVs, cameras,
iPods, etc. They even have entertainment zones and hotels inside their stores. This offers the
family a comfortable place to do shopping and to spend time. When Big Bazaar offers everything
under a single store, its main competitors offer only specialized products. For example, Reliance
Fresh mainly sells vegetables and food items. Tata Hypermarket sells mainly apparels.
Large Chain of Stores
Big Bazaar has 98 stores in 71 locations in India. This offers great accessibility for customers. As
they have many stores, they purchase product in bulk for cheap price from the suppliers. This
enables Big Bazaar to sell their products for low price.
Apt Locations
Big Bazaar has its stores in 71 cities in India. Their store locations are either city centers or huge
residential areas. This gives Big Bazaar a great advantage over its competitors. Instead of making
the customers come to their store by travel, Big Bazaar established their stores in easily
accessible locations.
Low Price
All the products sold in Big Bazaar are priced lower when compared with its competitors. In
India, the price is the main factor that attracts customers. With a right mix of marketing and
procuring the products, Big Bazaar is offering the products and services for the lowest price.
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Porter’s Five Forces Model
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Business level Strategy by Big Bazar
Service strategy of Big Bazar
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Tangibles - Big Bazar has large no. of employees, properly dressed and are easily
approachable by customers. It also has large area store which has products displayed
clearly, so that customers can find what they are looking for.
Reliability -Customers can easily rely on big bazar because the products are properly
stacked as it also has proper supply chain so that new products can be stored. They are
famous for their customer records and not stocking any expired product.
Responsiveness – Big bazar offers amazing schemes from time to time, so that it can
generate enough demand for its products.
Products offered- It not only provides fresh fruits and eatables, but it also provides fashion
and apparels and consumer durables and electronics at a discounted price. Food and
groceries are the most sold product of big bazar.
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Layout of store – The store is U shaped and well planned and designed, which provides lot
of space to customers to walk by moving around the store. The design gives it a street
shopping experience. They have written boards against the products providing the price
information and discounts offered by big bazar and is located at a area which attracts a lot
of customers.
Pricing – It is known as “Indian Wal-Mart” because they the strategy which is every day
low price, with a promise to save one basket of goods. It is positioned as low price and high
service outlet.
Customer satisfaction -They try to retain their old customers whit their quality service and
trained staff. They also try to add new customers in their list with their promotions and
offers. A lot of companies depend on customer satisfaction to retain their customers and
develop customer loyalty and product repurchase.
 Bundling strategy – They sell combo packs at discount. For example, 3 pack of lays
chips at 20rs, but its actual worth is 30rs.
 Time pricing – They charge different rates for different product depending on the day,
month.
 Differential time pricing – It is based on peak and non-peak hours of a day of shopping.
 Value pricing – Provides lowest price every day.
 Promotional schemes – They have various promotional schemes which attracts a lot of
customers. The name of these schemes is Wednesday Bazaar, Sabse Sasta Din, Great
Exchange Offer, Maha Bachat. It provides family shopping experience, where entire
family can visit under one roof.
 Wednesday bazaar- They introduced the Wednesday bazar concept and promoted it as
“hafte ka sabse sasta din”. This was mainly to attract customers to visit the store on
Wednesdays, when there are less customers expected on weekdays.
 Sabse sasta din - They introduced this concept to introduce a day in a year specially
dedicated for big bazar. This was launched on 26 January 2006; the result was exception
as they had to Call police in order control the crowd.
 Maha bachat – It is a single day campaign with attractive promotional offers all across
all the big bazar stores.
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A. Is the present strategy working?
They focus on profitable growth in consumption categories – fashion, food, distribution.
1. They try to play a major role in hypermarket and fashion business.
2. their focus is on free cash flow, deleveraged balance sheet, maintain low gearing ratios,
and improve working capital management.
3. Many of the customers buy their requirement from big bazar as per weekly and monthly
basis. According to the customers it provides qualitative products/ services with
reasonable price.
4. They hold a large customer base and most of the customers of big bazar belong to the
middle-class family.
5. They have a good reputation in the market and peoples trust in the company.
6. They keep continuing building big bazar chains in different cities and profits show that
big bazar is being accepted as India’ s retail chain.
7. They have positioned themselves as a discounted store.
According to the below financial snapshot of Big Bazaar Data analysis:
 Income from operation for big bazaar has increased by 8.2% from fy17 to fy 18.
 Gross margin has increased by 11.7% which is calculated by gross profit divided by
sales.
 EBIT has increased by38.1% which is before interest and taxes.
 Big bazaar revenue has increased by11.5% from fy17 to fy18. Top line of big bazaar has
increased significantly.
B. Big Bazar business-level strategy for its successful competitive
positioning
Strategy acts as a backbone of any organization. Therefore, it is very important for any
organization to build a strategy to grow in the market. Strategic planning helps company to make
decisions and prepare for future challenges.
Big bazar must face competition from different companies such as reliance fresh store, food
bazaar, Vishal mega mart etc. But the main threat to big bazaar is the local retail store as it
cannot be everywhere, because this is where the big potential for growth lies. It majorly talks
about quality and cost with makes it all the more likeable by customers who want to save money.
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Selling apparels with food and groceries make it different and gain competitive advantage over
the local retailers. It is considered as one roof shopping mart which makes it different from
others.
The waiting time for a customer to get his billing done makes it difficult during the weekends as
there are lots of customers shopping. Mostly the customers who must buy only few items have to
wait long for their billing as there is a rush in the supermarket.
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VALUE CREATION
COST LEADERSHIP
In India Big Bazaar has been essentially working on a low-cost leadership strategy. It sells
branded products that other retailers are also selling but Big Bazaar sells at a price 10-15 percent
lower than that of other retailers.
Well, Big Bazaar works on a huge scale. It operates in more than 72 cities and can apply
economies of scale effectively thus giving it the low-cost advantage. However, this one-time idea
cannot help them sustain their position as the market leaders, thus they continued to innovate
their cost structures seeking low cost suppliers and contracting with suppliers for steady supply.
Big Bazaar showed how economies of scale and experienced efforts help to bring down the costs
as the capacity grows.
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PRICING OPTIONS
The pricing objective at Big Bazaar is to get “Maximum Market Share”. Pricing at Big Bazaar is
based on the following techniques:
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Value Pricing (EDLP – Every Day Low pricing): Big Bazaar promises consumers the
lowest available price without coupon clipping, waiting for discount promotions, or
comparison shopping.
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Promotional Pricing: Big Bazaar offers financing at low interest rate. The concept of
psychological discounting (Rs. 99, Rs. 49, etc.) is also used to attract customers. Big
Bazaar also caters on Special Event Pricing (Close to Diwali, Gudi Padva, and Durga
Pooja).
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Differentiated Pricing: Differentiated pricing i.e. difference in rate based on peak and
non-peak hours or days of shopping is also a pricing technique used in Indian retail, which
is aggressively used by Big Bazaar. e.g. Wednesday Bazaar
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Bundling: It refers to selling combo-packs and offering discount to customers. The combopacks add value to customer and lead to increased sales. Big Bazaar lays a lot of
importance on bundling.
e.g. 3 Good Day family packs at Rs 60(Price of 1 pack = Rs 22)
5kg oil + 5kg rice + 5kg sugar for Rs 599
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