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STRATEGIC ANALYSIS OF

NAME OF GROUP MEMBERS:B.Prabu (03)Sharad Jain (20)Saurabh Mahajan (28)Rahul Goyal (46)Nidhi Tiwari (55)

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YOUR ABILITY TO LEARN AND CHANGE FASTER THAN YOUR COMPETITION IS YOUR ONLY SUSTAINABLE COMPETITIVE ADVANTAGE - Ajit Joshi

CEO & MD Infinity Retail

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INDUSTRY ATTRACTIVENESS

Consumer Durable market is over Rs.35000 cr.

Growth rate of 11.5% in 2008 – 2009

Predicted growth rate 12% in 2009 – 2010

The unorganized sector has occupied a major share in manufacturing and supplying VCD/MP3 which has grown by 25%.

Consumer Durable

Growth Rate (%)08- 09

Colour Television

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Window Air Conditioners

18.8

Washing Machines

18.1

Refrigerators 13.8

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CROMA PROFILE Croma is promoted by Infiniti Retail Ltd, a 100%

subsidiary of Tata Sons

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

Woolworth, one of the world’s leading retailers provides technical and strategic sourcing support

Croma outlets stock 6,000 products comprising 180 national and international brands under eight categories, with about 50 stores across India.

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PERPETUAL MAPPING

HIGH QUALITY

LOW QUALITY

HIGH PRICE

LOW PRICE

CROMAVIJAY SALES

UNORGANISED

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MERCHANDISE

Large appliances Small appliances Computers and accessories Music & DVD Communication Gamming Home entertainment Imaging

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TARGET CUSTOMERS

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CORE COMPETENCIES

Access to wide variety of markets Pan India presence (8 cities and 50 stores) and

100 stores by 2010

Difficult for competitors to imitate

Technical and strategic sourcing support from the world’s leading Australian retailer, Woolworth

Higher merchandise mix in a refined way

Computer accessories, electrical equipment, gaming & music

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ANSOFF’S PRODUCT/MISSION MATRIX

CROMA

4. Diversification2. Market

developmentNew

markets

1. Marketpenetration

Existingmarkets

Existingproducts

3. Productdevelopment

Newproducts

CROMA

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GENERIC STRATEGIES

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SWOT ANALYSIS

1. STRENGTH• Large formats with good

ambience(Retail hot spot)• Tie up with Australian retailer

Woolsworth• Strong SCM due to sourcing

from abroad• Strong financial support• Brand equity

2. WEAKNESSES• Lack of experienced personnel• Low in service quality

4. THREATS• New entrants from oraganized

retail• Competition from grey market• High labour turnover

3. OPPORTUNITIES• Pan India presence• Innovations in technology• Increase in customer disposable

income

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VALUE CHAIN

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• High Industry Growth Rate• low Concentration• High Fixed cost• Low Switching Cost • Low Product differentiation

• Low Switching Cost • High Profits • Low product differentiation

• Economies of Scale• Product Differentiation • Capital requirements • Switching Cost• Cost disadvantages

• High buyer propensity to substitute • High switching Cost

• High Switching Cost • High threat to forward integration • High presence of substitutes • Low importance of volume

PORTER’S FIVE FORCE MODEL AND VALUE NET

• MALLS • PRIVATE LABELS

COMPLEMENTORS

NEW ENTRANTSSUBSTITUTES

SUPPLIERS

BUYERS

INDUSTRY RIVALRY

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TETRA FRAME WORK MODEL:

Threats from Imitation: Easily imitable due to less government

regulation needed. To open a consumer durable store

amount needed is 1 to 4 crores , so anybody can start it and give local competition .

Less product differentiation.

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Countering Threats from Imitation: By Getting the important locations for its stores as

it is one among the few pan india level players. Making itself present in all important cities across

india. Differentiation is possible as CROMA has its own

private brands The sourcing and technical support of woolsworth

and IT infra structure from TCS has really upgraded.

Providing technologies that benefit the customer through low power consumption, and Low service requirement,

After sales services.

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Threats from Substitution: Internet virtual stores like ebay.com It can face substitution from other formats of

electronics which deal with only one category(speality stores)

Countering Threats from substitution: Croma can launch its own version of E-

commerce. Croma itself can launch its own formats which

concentrate on a particular product category. (Straddeling)

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Threats from Hold-up: Once government allows 100% FDI in muti brand retail,

Woolsworth will launch its own electronics stores and croma will have trouble as its sourcing of products depends on wholly by woolsworth.

The manufactures of electronics durables can themselves forward integrate to introduce exculsive showrooms.

Countering Threats from Hold-up Opening stores in many cities, this will aid in three ways.

First they will enjoy first mover advantage. Second they will get the volume in sales which are necessary in wafer thin margin in this industry. Finally the numbers stores present will limit others stores from opening as all the demands are satisfied.

Launching its own private label. By offering many brands in one place will make customer

buying process convenient. Customer can compare.

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Threats from slack: Croma has differentiated itself by having a very

efficient sales force which has good knowledge about product. In future it may find difficulty in finding human resource. All ready Indian retail is has a challenge of finding good human resource.

The attrition rate in retail industry is high.Countering Threats from slack: Tata group can open colleges which can be one

place stop for talented human resource. All tata group companies can recruit from those colleges.

CROMA can offer incentives which motivates the employees and keep them switching from one company to another.

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SCOPEHORIZONTAL SCOPE

• LOGISTICS COMPANY

GEOGRAPHICAL SCOPE• TARGET TIRE 2 AND TIRE 3 CITIES

OTHER ‘s• NEW RETAIL FORMATS• E-RETAILING• COMBINATION OF DIFFERENT CATEGORIES

• FRANCHISE MODE

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STRATEGIC RECOMMENDATIONS

Increase merchandise & sale of private labels over a period of time

In house after sales service Display of new technological innovations

(working of blue ray disks) Strategic tie-ups with local companies

(e.g Zapak games etc) Explore B 2 B markets (e.g. Tie ups with

hotels, resorts etc for electronic and electrical items)

Should become a strong national force by acquiring Viveks.

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THANK YOU