ENVIRONMENTAL SCANNING FOR BIG BAZAAR
INTERNAL SCANNING
The SWOT analysis of Big Bazaar is as follows:
Strengths:
The strengths of Big Bazaar are it is leading and growing at the faster pace.
It has many outlets all over India. It has a good customer base.
They launched Big-Bazaar a hypermarket with over 1, 70,000 products as the first
offering in value retailing segment. Products are cheaper than the market price by as
much as 5 to 60%.
Apparels are cheaper by 25 to 60% while the price difference on the other products
varies between 5 to 20%.
The Big-Bazaar has been positioned to the customer as a place where the customer can
shop for each & everything for which if goes to a market.
Weakness:
Big Bazaar has not yet trapped the whole market.
Facing problems due to political environment.
Falling revenue per square feet.
Opportunities
Huge untapped market
Orgnised sector is only 4% in India.
Threats
Competition from organized retail players which are in market and emerging like
Reliance, shopper’s stop, Wal-Mart
Competition from local retailers.
Undefined government policies.
EXTERNAL ENVIRONMENTAL SCANNING
Before Big Bazaar coming to India their strategy was to scan the environment & find the
location where the Mall should be situated. It will also use various tools such as surveys for
getting the preferences of big bazaar. The question was of the opinion that Big Bazaar sustain in
the market or not, where it is situated. For gaining the opinions from the local people they will
prepare the questionnaire and get it filled from the people. Then they will form a focus group for
getting more and more of information. They can also adopt open forum strategy for
environmental scanning.
Analysis of political and legal factors:
In India there is a political triangle this consist of the municipal corporation which
belongs to Indira congress, the other is MLA which belongs to Shivsena and BJP and MP which
belongs to the national congress. The congress political people are having contacts with common
people and not much concerned with merchants but contradictory to this that the BJP and
Shivsena they are having more concern about merchants of the city. As Municipal Corporation is
in the hands of congress party and they are ready to have big bazaar in India that is the reason
they are ready to provide some kind of perks to big bazaar they are as follows:
Subsidy from octroi, different taxes like land tax and water tax
Help in taking over properties and real estate
Some concessions from labor laws
Socio-cultural factors:
Now a days in India also proportion of working women’s is increasing and the literacy
rate has also increased this will lead into increase in standard of living of people. As people are
aware about western culture through various Medias they are very much eager to follow the
western culture. People from talukas are coming to India as it is a district place for shopping,
taking education, for working etc. This also creates demand. There is a majority of middleclass
people in India and it is a most populated district consisting 13 talukas. The major communities
in India city are Hindus, Muslims, Christians, Jain, Sindhi and Punjabi.
Economic environment:
As this district is having 13 talukas and most of them are having good agricultural base
which ultimately leads to higher seasonal income. Another one is that most of the people who are
residing in India they are engaged in various jobs and businesses they is the part of regular
income group. So this will lead to higher purchasing power and a huge potential market. One
more advantage to big bazaar coming to India is availability of cheap labor.
From the external analysis we came to know that the people residing the India city are in
the favor of Big Bazaar coming to India. The location preferred by them is Savedi as it is highly
developed and accessible area to all the people.
Strategy formulation:
It refers to the development of long term plans for managing opportunities & threats in
the external environment, & for utilizing the strengths & overcoming the weaknesses within the
firm. A strategist takes into consideration components of strategic management like company
mission, company profile, external environment strategic analysis & choice, long term
objectives, grand strategy while formulating the strategy.
Strategy formulation helps an organization to;
Capitalize on available opportunities.
Address the challenges faced by the organization.
Provide leadership that understands & masters change.
Incorporate an in-depth planning model that involves the community.
STRATEGIC FORMULATION FOR BIG BAZAAR:
Big Bazaar will form some strategies for the long-term goals. First of all it will find out
what are the opportunities present in the market so that they can grab it so as to expand their
business, trap a particular segment of people, and establish a good client base and to generate
good revenues. They will also keep in mind the threats that they have from their competitors and
also form the small grocery shops. They will find out some strategies to overcome the threat and
to sustain in the market for a longer period of time. They will also try to utilize their strengths
and overcome the weaknesses.
BIG BAZAAR: PRODUCT LIFE CYCLE:
Factors that Shaped Big Bazaar During its Life Cycle
The Big Bazaar brand name is in its growth stage. Pantaloon Group faced various small and
large scales troubles in the introductory stage of the brand.
Present years are the high growth years in retail sphere as market has high potential to sustain
growth. The sales are increasing, more and more firms are coming to market, foreign players are
entering into retail sector, and pie of organized retail is increasing in retail sector.
The factors that shaped the brand during its life cycle are: -
Influence of Sarvana Stores Located in Theyagraya Nagar, Chennai
Many people think that Big Bazaar was inspired by Wall-Mart but the truth is that Kishore
Biyani and his team members are neither inspired by US ways of doing retailing nor they have
been to US much. The credit for foundation and inspiration goes to Saravana Store, a family-run
25-years-old store, whose philosophy was - low margin, high turnover.
Observing Customers Regularly
Regular customer feedback is also an influential factor for the success of Big Bazaar. The Big
Bazaar has a separate team that looks for customers purchasing pattern and how they like or
dislike products, how they approach particular products
Imbibed Entrepreneurial Spirit in Organization
Decision making power is given to every level of employees at Big Bazaar. Kishore Biyani has
given risk-taking power, which led to exposure of entrepreneurial spirit in every employee.
Building on Core Values
Core values of Indian-ness, valuing and nurturing relationships, and simplicity shaped the brand.
Kishore Biyani always believes in long-term relationships, with customers, suppliers and
employees.
PORTERS FIVE FORCE ANALYSIS FOR BIG BAZAAR:
PORTER'S FIVE FORCE ANALYSIS FOR BIG BAZAAR
FORCES ANALYSIS
RIVALARY ANMONG COMPETETORS RELIANCE, ADITYA BIRLA, VISHAL, BHARTI-WALMART & OTHERS
THREAT OF ENTRANTS 1.FDI POLICY
2.DOMESTIC CONGLOMERATES LOOKING TO START RETAIL CHAINS
3.INTERNATIONAL PLAYERS LOOKING TO FORAY INDIA
BARGAINING POWER OF SUPPLIER 1.DOMINANT POSITION OF UNORGANISED SECTOR
2.BARGAINING POWER OF SUPPLIERS DEPENDS UPON TARGET SEGMENTS
3.FEWS PLAYERS ENJOYING BRAND DISTINCTION
BARGAINING POWER OF BUYER'S 1.AVAILABILITY OF MORE CHOICE
2.CONSUMERS ARE PRICE SENSITIVE
THREAT OF SUBSTITUTES UNORGANISED SECTOR
Consumer Insights & Perceptions
Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolize Change, Confidence and
Consumption, and according to this theory, "Change and confidence is leading to rise in Consumption".
They divided Indian customers in three categories: -
India One
Consuming class, constitutes only 14% of Indian population.
They are upper middle class and most of customers have substantial disposable income.
Initial focus of Big Bazaar.
India Two
Serving class which includes people like drivers, house-hold helps, office peons, washer-men, etc.
For every India One, there are at least India Two and have around 55% of Indian population.
India Three
Struggling class, remaining population of India.
Cannot afford to inspire for better living, have hand-to-mouth existence.
Needs cannot be addressed by current business models.
The potential customers of Big Bazaar are India One and India Two. The customer insights were
developed by close observation of the target set. The insights that came out were: -
The clean and shiny environment of modern retail stores creates the perception that such store are too
expensive and exclusive, and are not meant for India Two.
India Two finds moves and find a lot of comfort in crowds, they are not individualistic. They prefer to be
in queues.
Indian-ness is not about swadeshi, it’s about believing in Indian ways of doing things.
Indian customers prefer to purchase grains, grams, etc., after touching them, so it’s better not to sell in
polythene packs. Big Bazaar has counters where you can touch wheat, rice, sugar, etc., before
purchasing.
Advertisements about schemes and offers through local newspapers, radio in local languages, inspires
customer more than the traditional ways.
The guards, salesman at the Big Bazaar outlets should not look smarter than customer, so they prefer
not to have tie, etc., in their uniform.
Hypermarkets in India should be situated in city unlike western countries where they are located away
from city.
Purchased bags / goods should be sealed at check-out as customer can enter and exit multiple times.
For Indians, shopping is an entertainment; they come in groups, with families so Big Bazaar should
offer something for every section of family. That also led separate section for clothes, vegetables, food,
etc., that is multiple clusters within a bazaar.
Developed a diversity tracing cell to cater local patterns, demands, festivals, as every region of customers
has unique demands.
