ABALAN,
HERE IS SOME USEFUL MATERIAL.
REGARDS
LEO LINGHAM
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INDIAN RETAIL INDUSTRY WILL BE AFFECTED IN FUTURE
-globalization impact on demand / supply
-supply base will be developing countries
-multiple levels of brands [ good . better. best ]
-population growth
-more demand in retails in developing countries
-population shift means more retail outlets
-increased income, means more retail demand
-increased disposable income, means more retail demand
-increased discretionary income, means more retail demand
-life style changes , affecting demand
-demanding consumer needs / wants
-technology impact on retailing
-technology on customer servicing
-shift in people personal values
-product packaging
-diversity of population
-demographical structure change
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CHALLENGES FACING THE INDIAN ORGANIZED RETAIL SECTOR
The challenges facing the Indian organized retail sector are various and these are stopping the
Indian retail industry from reaching its full potential. The behavior pattern of the Indian consumer have undergone a major change. This have happened for the Indian consumer is earning more now, western influences, women working force is increasing, desire for luxury items and better quality. He now wants to eat, shop, and get entertained under the same roof. All these have lead the Indian organized retail sector to give more in order to satisfy the Indian customer.
The biggest challenge facing the Indian organized retail sector is the lack of retail space. With real estate prices escalating due to increase in demand from the Indian organized retail sector, it is posing a challenge to its growth. With Indian retailers having to shell out more for retail space it is effecting there overall profitability in retail.
Trained manpower shortage is a challenge facing the organized retail sector in India. The Indian retailers have difficultly in finding trained person and also have to pay more in order to retain them. This again brings down the Indian retailers profit levels.
The Indian government have allowed 51% foreign direct investment (FDI) in the India retail sector to one brand shops only. This have made the entry of global retail giants to organized retail sector in India difficult. This is a challenge being faced by the Indian organized retail sector. But the global retail giants like Tesco, Wal-Mart, and Metro AG are entering the organized retail sector in India indirectly through franchisee agreement and cash and carry wholesale trading. Many Indian companies are also entering the
Indian organized retail sector like Reliance Industries Limited, Pantaloons, and Bharti Telecoms. But they are facing stiff competition from these global retail giants. As a result discounting is becoming an accepted practice. This too bring down the profit of the Indian retailers. All these are posing as challenges facing the Indian organized retail sector.
The challenges facing the Indian organized retail sector are there
but it will have to be dealt with and only then this sector can prosper
NEED FOR LARGER FDI -----THIS IS NO. 1 PRIORITY.
The need for larger FDI is because India is at a stage whrere it needs US investments, technology, and management policies to sustain and enhance its economic growth. In 2006,
Foreign Direct Investment (FDI) in India amounted to US$37 billion, out of which only $5 billion was from the US.
This was not a very encouraging figure in view of the goal of increasing the GDP by 34-36%. Therefore, there is a need for larger FDIs.
India still requires an FDI component equal to 4% of the GDP. The US needs to invest more in various sectors of the Indian economy. There is a potential to attract more FDIs in areas like infrastructure, IT hardware, automobiles, leather, textiles, gems, jewelery, and the financial sector. As such, India is rated as the 2nd best economy to invest in, after China. Surprisingly, the US is rated 3rd in this domain!
Focus is on the insurance and banking sector, in context with Foreign Direct Investments. Only 10% of the insurance sector has been tapped for foreign investment.
Foreign companies need to persuade the parliament for increasing Foreign Direct Investment capital.
The banking sector is in the process of liberalization which will continue till 2009. The insurance sector is looking forward to increase in the capital as more and more FDIs happen. So the insurance sector is also planning on liberalization, taking a cue from the banking sector.
WHAT ARE THE BENEFITS OF LARGER FDI TO THE RETAIL INDUSTRY
The benefits of larger FDI can be tangibly felt in the domains pertaining to
technological advancements, generation of export,
production improvements, and hastening of manufacturing employment.
Capital inflow into India has increased and so have the exports from the country. Thanks to the economic boom India is experiencing, some Indian companies are doing better than even the
multinational corporations.
The
benefits of larger FDI have been briefly elaborated below:
Improved human capital: Indian industries are predominantly labor based but there is also a significant number of capital based companies. A capital intensive set up is indeed an expensive proposition but with the existing as well as potential labor intensive industries, India can look forward to more professional and sophisticated number of workers and employees at every level. Human capital, in terms of quantity was never a big problem in India, thanks to its huge population and quality and efficiency in work has been ushered in by the MNCs.
Competition Effect: The benefits of larger FDIs will include the launching and marketing of new products and brands in the Indian market. New products are used by the multinational corporations and then demonstrated in the Indian market. The processes followed by MNCs in India serve to have a
demonstration effect on Indian companies which in turn improves market competition and the standard of products. This had started in the 1980s due to Japanese firms and as a result,
Indian firms started inculcating the practices of QC, JIT, and QA.
Manufacturing Employment: Larger FDIs definitely generate more and more
employment opportunities. The opportunities are highly experienced in the manufacturing area. This not only includes the quality human resource but also provides for quick and efficient work and effective outcomes.
New Technology: Technological advancements take place as larger FDIs come in. In fact, three-fifths of the FDIs result in new and advanced technologies. The local industry is benefiting from this to a large extent. This as a result, would encourage more and more
foreign firms for investment.
The benefits of larger FDI are, however, very few in number but as India capitalizes on the above mentioned benefits, there will be more competition in the market at large and the rural sector of the country will be in the process of reformation, thus bringing about a socio-economic stability.
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SUPPLY CHAIN MANAGEMENT IN THE INDIAN RETAIL INDUSTRY
THIS IS THE SECOND MOST IMPORTANT PRIORITY.
The role of supply chain in Indian organized retail is very significant for on it depends the growth of this sector. The
Indian Supply Chain Council have been formed to explore the challenges that a retailer faces and to find possible solutions for India.
The role of supply chain in the organized retail sector in India should be a shelf- centric partnership between the retailer and the manufacture for this will create supply chains that are loss free. This will also give rise to top and bottom line growth. In the organized
retail sector in India the presence of fresh produce (vegetables and fruits) is very small. This is so for the nature of supply chain is very fragmented. This shows the important role of supply chain in the organized retail sector in India.
In the organized retail market in India the role of supply chain is very important for the Indian customer demands at affordable prices a variety of product mix. It is the supply chain that ensures to the customer in all the various offerings that a company decide for its customers, be it cost, service, or the quickness in responding to ever changing tastes of the customer.
The infrastructure in India in terms of road, rail, and air links are not sufficient. And so warehousing plays a major role as an aspect of supply chain operations. To overcome these problems, the Indian retailer is trying to reduce trans portion costs and is investing in logistics through partnership or directly. The Indian organized retail sector is growing so the role of supply chain becomes all the more important. It should become all the more responsive and adaptive to customers demand. There is also need for the supply chain to be more cost efficient and collaborative to win the immense competition in this sector.
The role of supply chain in Indian organized retail has expanded over the years with the boom in this industry. The growth of the Indian retail industry to a large extent depends on supply chain, so efforts must be made by the Indian retailers to maintain it properly.
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THE THIRD PRIORITY IN THE RETAIL INDUSTRY
THE REAL ESTATE SUPPORT
-provide cheaper space for the retail.
-provide tax holidays for rural retail business.
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THE FOURTH PRIORITY
THE RANGE / VARIETIES OF FORMATS FOR THE RETAIL SECTOR
BY PROVIDING TAX BENEFITS.
Formats in Indian Organized Retail Sector -
Supermarkets
Hypermarkets
Department Stores
Modern format individual retailers
Shopping malls
Specialty Chains
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THE FIFTH PRIORITY FOR THE RETAIL INDUSTRY
-INCENTIVE FOR TRAINING OF RETAIL MANAGERS
*category managers.
*retail store managers
*retail marketing managers
*merchandising managers
*store warehouse managers.
*supply chain managers
*procurement managers
etc etc
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THE SIXTH PRIORITY FOR THE RETAIL INDUSTRY
-INCENTIVES FOR TRAINING OF THE STAFF
*SALES STAFF
*CUSTOMER SERVICE
*MERCHANDISERS
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THE SEVENTH PRIORITY TO FOCUS.
THE RETAIL BUSINESS HAS TWO ENDS
END
-retailing
-merchandising
-customer servicing
-displays
-sales promotions
-consumer promotions
-retail marketing
etc.
END
-buyers
-supply chain
-store supply
-accounts
-warehousing
etc.
In real life, it is the back end
which makes the real profit.
BOTH ENDS ARE IMPORTANT FROM THE BUSINESS
ANGLE, BUT THE PROFIT CHURNER IS THE BACK END.
CRITICALLY, IT IS THE
-buyers
-supply chain
WHICH MAKES SIGNIFICANT CONTRIBUTION
TO THE BUSINESS.
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FOR HR IN THE INDIAN RETAIL SCENE, THE CHALLENGES ARE
POSITIONS IN THE
END
-retailing
-merchandising
-customer servicing
-displays
-sales promotions
-consumer promotions
-retail marketing
etc.
END
-buyers
-supply chain
-store supply
-accounts
-warehousing
etc.
There is a general shortage of skilled personnel.
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2. WRITING JOB ANALYSIS
-job descriptions
-position specifications.
-KRAs
-KPi
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THE COMPENSATION PACKAGE,
based on sales performance.
-MANAGING THE MERIT PAY.
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THE HEALTHCARE BENEFITS.
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BUSINESS BRINGS A WIDE MIX OF
PEOPLE, hence managing the workplace DISCRIMINATION.
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THE BLENDED STAFFING
-skilled staff
-full time staff
-part time staff
-casual staff
-temporary staff
-unskilled staff
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AND MANAGING THE HR POLICIES.
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THE HR manuals and THE employee handbooks.
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THE EMPLOYEE MOTIVATION
AT DIFFERENT LEVELS.
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THE REFRESHER COURSES/
CONTINUING EDUCATION FOR ALL STAFF AT DIFFERENT LEVELS.
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THE LABOR / UNION ISSUES.
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THE ALTERNATIVE STAFFING AND
INDEPENDENT CONTRACTORS.
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1 THE Recruiting, hiring and termination issues.
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1 THE LAYOFF.
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15.How would you handle -- worker/ STAFF / MANAGERS performance.
and manage the 360 degree feedback.
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16.HOW WOULD YOU MANAGE / HANDLE
-staff personal security
-personal protection
-violence-safety regulations.
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17.How would you manage , as more women are
entering the RETAIL workforce.
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18.how would you manage different amenities at the workplace,
as more women are entering the retail workforce.
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19.how would you handle equal emplyment opportunites laws
and equal pay/ awards
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20. How would you manage outsourcing of services
ETC ETC
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