Entrepreneurship

Assignment 2

, M/MFM/11/02,NIFT Mumbai

Submitted to: Dr. Sushil RaturiNIFT, Mumbai

Kishore Biyani – India’s King of Retail

Success in business comes from the mastery in all aspect including skills, training and motivating the teammates. These things become crystal clear from the life of ‘Retail King’ of India

Biography:

Born on 9th August, 1961 In a typical middle class trading joint Marwadi family Started his career selling stonewash fabric to small shops in MumbaiChairman and Managing Director, Pantaloon Retail (India) Ltd. Kishore Biyani, who there was conferred “International Retailer of the Year” Award by the prestigious US National Retail Federation(NRF), IN 2007.With the launch of Pantaloons, Big Bazaar, Food Bazaar, Central and many more retail formats, totaling $1 Billion, he redefined the retailing business in India.

Profile: Mr. Kishore Biyani serves as the Chief Executive Officer at Future Group. Mr. Biyani also serves as the Chairman and Managing Director at Pantaloon Retail (India) Limited. Mr. Biyani serves as Managing Partner and Chairman at Indivision Capital Fund. He serves as the Chairman of Future Capital Holdings. He served as Director of Galaxy Entertainment Corp. Ltd. until August 11, 2011.

Philosophy: A staunch believer in the group’s corporate credo, ‘Rewrite Rules, Retain Values,’ Kishore Biyani considers Indianness as the core value driving the group. He recently authored the book, ‘It Happened In India. ‘He also has philanthropic ventures.

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Introduction

An individual is in phase of learning throughout his life. However there are few things and knowledge gained in the initial phase on which the prosperity of an individual depends.

Personality, Behavior, Attitude and Values are the four pillars on which the character of an individual stands upon. The learning and understanding of these things are extremely essential in context of a manager in an organization. Even their basic understanding helps to evaluate the people around us and also in maintaining relationships. Attitude is an individual’s feeling toward a particular thing. Cognitive, Affective and Behavior are the three factors which form a positive or negative attitude. Here understanding the behavioral part is important because it is one which affects formation of attitude of a person. Now the personality of a person shapes his behavior.

Personality is the base of human psychological system and it determines the way in which an individual interact. Heredity and environment are two factors which affects a human personality. However the environment in which an individual lives is the major factor which shapes the personality of a person. The characteristic which are exhibited by a person more frequently is called as personality trait, for example, shyness, aggression, etc.

In modern world the definition of success in business has changed a lot. Success in business comes from the mastery in all aspect including skills, training and motivating the teammates. These things become crystal clear from the life of ‘Retail King’ of India, Mr. Kishore Biyani. Kishore Biyani was born on 9th August, 1961 in a typical joint Marwari family. Since his young age, he had a rational thinking. He would question each and everything and do it if he found some logic behind it. He was an introvert and shy person at young age, his attitude was to challenge each and everything.

The germ of business was in his blood. He believed in the ideology “create and destroy”. He is of the opinion that a continuous process of growth has to be there in every business. He took risks in setting up businesses may it be arranging a disco dandiya or setting a plant in area which had continuous labour problems and use the experience in setting up the present Future Group empire.

Kishore Biyani: The Never-say-die Retailer

His Mentors: Sam Walton and Dhirubhai Ambani. I have followed them since my late teens. I have never met them, but I would read about them, their books and follow them pretty closely.How they have helped me hone my leadership skills: There was a lot to learn from them on how to dream big, how to build a business and how to create an organisation that is able to scale up.

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Their advice that has stayed with me: Two of my favourite quotes from Sam Walton are, “Capital isn’t scarce; vision is.” And “There is only one boss, the customer. And he can fire everybody in the company from the chairman down, simply by spending his money somewhere else.”

It was the middle of September 2008. Kishore Biyani was watching television images of employees from Lehman Brothers carrying their belongings out in cardboard boxes. He knew there would be blood.

Biyani, at that time, was in the middle of a massive expansion spree, which was guzzling capital. Then the taps ran dry. His sales plunged. Bankers who until then had queued up at his offices to lend started to call in their loans, and funds that had invested in his companies decided to get out. His market capitalisation plunged two-thirds in a matter of six months. Biyani who had invested way ahead of the cash flows from his network, found himself trapped.

To his credit, Biyani did the next best thing: He hunkered down for the next 18 months, mobilised his troops to slash costs, slimmed down his portfolio and now, as shoppers are back with a vengeance, the Future Group is in far better shape to tap that growth. It started with Biyani questioning many of his own assumptions on conducting business. In his rush to open new formats — from spas to book shops and sportswear to discount apparel stores — and drive up the group’s valuations, he would entirely rely on his gut. Sometimes, the bets worked, but in a lot of cases, they veered off course. “That time was different. Now, we perfect something and then roll it out,” he says. He’s now more willing to listen to others. Two years ago, with his back to the wall, he hired McKinsey for advice on how to get his business back in shape. He has also hired a slew of professionals from multinational firms like Pepsico and Unilever and handed over the reins of operations to them.

This is a striking change for an entrepreneur who always scoffed at consultants and professionals alike (‘I do all the thinking around here’ he once famously remarked) and had little patience for long-winded presentations on market potential. Family members are now part of a Family Business Board, while professionals run the day-to-day operations.

The old ambitions are once again coming to the fore. Biyani is talking about his vision of taking the Future Group to a $20 billion enterprise by 2020 — backed by a plan to also get him there. He has cleaned up his operations and put in technology to make the back end more efficient and transparent.

Food — including fresh fruits and vegetables — will be a big focus area, something that Biyani had knowingly ignored in the past because of wafer-thin margins. After many

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months of carefully planned home visits, he and his foods team learned one home truth: Unlike Western markets, food habits of Indian consumers were far from homogenous. They were based largely on the ethnicity of the consumer. This made it harder for the retailer to predict the ideal assortment of food items to stock in the store.

Biyani’s team discovered that food habits rarely changed no matter which part of the country a family was living in. Today, ethnic foods, launched under the Ekta brand, are already a big draw at his stores. And gobindobhog rice outsells local varieties at some stores.

Also, as part of the restructuring, the Future Group will focus on four key businesses: Food and grocery, home, apparel and electronics.

Yet, the original success story, Big Bazaar, the crowded hypermarket model that got Biyani into the big league — and even today accounts for about three-fourth of the group’s revenues, is being primed for a gradual overhaul. Biyani’s daughter Ashni is leading a strategic project to understand what consumers at Big Bazaar will want five years from now. Food Bazaar Gourmet, a recent addition, offers customers specialty food along with better designed store shelves and brighter lighting.

The story of Big Bazaar

The story of Big Bazaar is a story of unbridled entrepreneurship, the courage of conviction, and the unending zeal for change and innovation. It is also a testimony to the new face of retail in India where now, a plethora of hypermarkets, supermarkets, departmental stores, shopping malls, and discount stores compete with another. A typical Big Bazaar store is seen as a one-stop destination for products belonging to a wide range of categories including food products, lifestyle, fashion, furniture, electronics, leisure, and entertainment. The retail space of these stores in metros can range between 50,000 square feet and 160,000 square feet. Since its launch in 2001 in Kolkata, Bangalore, and Hyderabad, Big Bazaar stores have spread across 80 towns and cities across the country over the past decade. Not surprisingly, Big Bazaar has strong competition to other major retailers in the domestic market such as Reliance, Tata Group, RPGGroup, and AV Birla Group.

Zealous Entrepreneur

Kishore Biyani, the founder of Big Bazaar, is a man of many moods. While he is passionate about knowing the Indian consumer, he is also fascinated by cricket and movies. A born leader, he has always preferred to chart his own course on grounds of logic and intuition. He has been described as an iconoclast who has not ceased to “Redefine Rules and Retain values”. He has drawn his lessons in consumer behavior by staying in touch with what is happening on the shop floor. This has helped him make some of the most pragmatic decisions as an entrepreneur. Additionally, he has steadfastly clung to his belief in the

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unmatched potential of Indian market, the advent of mass consumerism in the country, and the need to design new business models to meet this growing demand.

Consumer is the King

Kishore Biyani believes that consumer is the king. Post-liberalization, the Indian economy has witnessed an upsurge in consumerism. Three crucial factors – the 3Cs have given momentum to this trend. According to KB, Confidence” has paved way for “Change” which in turn has enhanced “Consumption” levels. Sustained economic growth over the past few decades has increased per capita income in the country. Further, thanks to changing demographics, nearly half the population is in the working age category. Rising education and income levels have encouraged people to change their fortunes for the better, which in turn has led to increased consumption. Consequently, new business models which can scale up rapidly are needed. This has given rise to large format retail epitomized by Big Bazaar. The model seeks to cater luxury and lifestyle needs of higher income segments as well as to bring value for money to lower income sections. Not surpriisngly, Big Bazaar is seen as one-stop shopping destination by many people.

Checkered Past

Kishore Biyani started his innings in textile industry, the lessons from which were later applied in modern retail. He began as garment manufacturer by setting up Mnaz Wear Pvt. Ltd. in 1987. The company was later renamed Pantaloon Retail. After gaining fair insight into the textile business, Biyani began to build his own brands in the market for men’s wear. Bare Necessities came up in jeans segment while John Miller developed as premium shirts brand. In order to increase outreach, Biyani entered into franchise agreements with local retailers. While new outlets did well, sales at old stores began to decline due to poor control on franchise partners. It was at this juncture that Biyani decided to foray in retail. He began to design a model which could offer value for money to mass consumers. He based his hypermarket format - Big Bazaar, on Sarvana Stores in Chennai.

Key to Success

Today Big Bazaar accounts for almost a third of food and grocery products sales through modern retail in the country. It has succeeded largely due to its emphasis on consumer behavior and understanding the diversity of Indian consumers. Further, it is products driven where the focus is on the front end to serve the consumers well. Additionally, the business model is based on low margin and high turnover. The shops offer products from numerous categories spread across multiple floors. The overall ambience is to treat shopping as a family experience. Further, these stores are situated near transportation hubs to attract maximum customers.

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Promising Prospects

Indian retail industry in India is projected to reach US$833 billion by 2013. It is expected to grow at a CAGR of 10% over the next five years. The future indeed looks promising for large format retail such as Big Bazaar. Over 100 such stores have come up within seven years of its launch in 2001. In 2010, Big Bazaar won CNBC’s Awaaz Consumer Awards for the third year in a row.

Kishore Biyani, MD, Pantaloon Retail India Ltd.: “One must believe in oneself and take risk with a back-up plan.”

MBTI(Myers Briggs Type Indicator) model to analyze his personality:

He falls in INTP category :-

Introvert Intuition Thinking Perception He would observe people, judge them and then accordingly associate or dissociate

from them. He loves simplicity and doesn’t demand for luxury. A lot of thinking goes behind when he takes any decisions.

A winner all the way

Kishore Biyani was awarded the Ernst & Young Entrepreneur of the Year 2006 in the Services Sector.

Lakshmipat Singhania - IIM Lucknow Young Business Leader Award by Prime Minister, Dr. Manmohan Singh in 2006.

He was also awarded the CNBC First Generation Entrepreneur of the Year 2006.

Images Retail Awards (2007)

Most Admired Retail Face of the Year: Kishore Biyani

Most admired retailer of the year: Large format, multi product store: Big Bazaar

Most admired retailer of the year: Food and Grocery: Food Bazaar

Most admired retailer of the year: Home & office improvement: HomeTown

Most admired Retail Company of the year: Pantaloon Retail (India) Ltd.

All the above are owned by Mr. Kishore Biyani.

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Sectors:

Retail(Big Bazaar)

Brands(Pantaloons)

Consumer Finance

Insurance

Capital

Ventures

Media

Logistics

Leisure & Entertainment

Shopping Malls(BB, FB, Central)

Knowledge Services

E-Tailing(www.futurebazaar.com)

Companies:

Pantaloon Retail (India) Ltd.

Home Solutions Retails India Ltd.

Future Brands Ltd.

Future Media (India) Ltd.

Future Logistics Solutions Ltd.

Convergem Communications (India) Ltd.

Pantaloon Food Product (India) Ltd.

Future Knowledge Services Ltd.

Future Capital Holdings Ltd.

Future Generali India Insurance Company Ltd.

Future Generali India Life Insurance Company Ltd.

Futurebazaar India Ltd.

Weavette Texstyles Ltd.

Staples Future Office Products Private Ltd.

Pan India Food Solutions Private Ltd.

Talwalkars Pantaloon Fitness Private Ltd.

ConvergeM

Indus League Clothing

Etam Future Fashions Ltd.

Galaxy Entertainment Corporation Ltd.

Future Venture India Ltd.

Foot Mart retail

Personal Qualities:

1) Visionary:- He is true visionary when he started selling readymade garments when nobody preferred ready-to-wear shirts or trousers. Now his vision is serving Indian society and which is unchallenged.

2) Risk taker:- He tried out different things on his own, like readymade garments, textile production, creating brands before he ventured in retail business of selling garments. He took risk in doing something new every time.

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3) Ambitious:- He always had ambition of making it big in business, and that he have done.

4) Simplicity: You’ll never catch him in a tie and jacket. He doesn’t drive expensive cars.

5) Optimistic: Till six months ago, in his own words, Kishore Biyani was an “eternal optimist”. Today, he’s transformed into a “realist”. “It’s my next phase in life,” shrugs the Chairman of the Rs. 8,600 crore Future Group, which has today moved away from retail into financial services.

Leadership:

Mr. Biyani says he could not find any particular meaning of leadership.. but according to him There are two types of Leadership:-

The first is all about thought leadership, which is original thought, believing in it and making things happen based on those thoughts.

The second type is skills leadership, which refers to doing things consistently and in your own style.

Who is an effective leader?

(In his words): Our measurement of effectiveness is a capitalistic approach based largely on how successful leaders are in terms of balance sheet performance. But we must also look at many other benchmarks. Leadership is all about making effective change, creating some kind of paradigm shift by looking at the world or anything in a different way. The environment around you keeps changing and you must keep creating new lenses to look at things. Very few leaders are consistent throughout.

3 – C Theory of Kishore Biyani:

Big Bazaar is based on 3-C theory of Kishore Biyani. The 3-C symbolizes 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 (Targeted Class)

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.

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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.

Incubation and Ideas:

Biyani has also delegated new ideas. Each store manager is asked to and encouraged to be an entrepreneur in his own right.

He surprised the HR when treating a special wrinkle in human resources' selection procedures. “Examining possible candidates, especially store managers, we look for ‘Indian-ness’.

Every two months there is a so-called convergence review for his store formats, where format coordination is assayed, trends examined, and conclusions drawn.

He has very strong observation skills. He can smell products. He is spot-on when it comes to timing.

Biyani is the almost paradoxical kind of entrepreneur, one who is both forward-looking and set in his ways. As the company grows into a giant, he still communicates directly with his house entrepreneurs. He prefers to do this over the telephone or via SMS.

The entrepreneurial culture and spirit prevails in the company, whereby the appetite for taking risks is encouraged.

He believes in learning while doing, and this has helped him on his journey. He does not believe in any rigid organizational structure and instead prefer an organization design approach.

Executive Summary

This report focuses on the study of attitude, behavior, values and personality. The aim of this report is to relate these four aspects with the life of Mr. Kishore Biyani. In this study I have analyzed the personality of Mr. Kishore Biyani and come out with certain conclusions. The following are the conclusions I have arrived on:

The Personality of an individual is affected by environment in which he is living as well as the mindset of him. An individual cannot change his personality but he can try to make few changes which helps him.Aspiration is most important thing to succeed in life.To work efficiently in a team or to make others work understanding their psychology is very important.New and innovative ideas might not work in the beginning but they are always rewarded.

High Flexibility and Focus are corner stones of Kishore Biyani’s Pantaloon Retail

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References:

Biyani, K. & Baishya, D. (2007). It Happened In India. New Delhi: Rupa

Businessworld (2009). Leadership in times of crisis: Retaining customers.

Businessworld (2004). Kishore Biyani: The man they wrote off.

Feroz, A. Pantaloon Retail Too fast Too Curious. Retrieved on 31st August 2011 from

http://www.businessworld.in/index.php/Too-Fast-Too-Curious.html

Leadership. Retrieved on 31st August 2011 from

http://www.futuregroup.in/leadership.asp

Kishore Biyani plans to raise 1000cr. Retrieved on 31st August 2011 from

http://www.moneycontrol.com/india/news/business/kishore-biyani-plans-to-raise-rs-

1000cr/411116

Pitalwalla, Y. Pantaloon double or quits. Retrieved on 31st August 2011 from

http://www.businessworld.in/index.php/Retail-FMCG/Double-or-Quits.html

Rajan, Y. A to Z of Success A companion for Youth (1st ed.). New Delhi: Ocean Books

Robbins, S., Judge, T. & Sanghi, S. Organizational Behaviour (12th ed.). New Delhi: Pearson

Values. Retrieved on 31st August 2011 from

http://www.futuregroup.in/values.asp

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