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THE RELIANCE RETAIL LIMITED A subsidiary of Reliance industries Limited

A report on the organization study submitted in partial fulfillment of the requirements for the MBA (Full time) Degree of the Mahatma Gandhi University

Submitted by MARIA JOSE M 2010-12 Batch

FISAT BUSINESS SCHOOL Hormis Nagar, Angamaly, Cochin - 683577

ACKNOWLEDGEMENT

I take this opportunity to acknowledge the effort of the many Individuals who helped me make this report possible. First and foremost, I would like to express my heartfelt appreciation and gratitude to my guide and facilitator Mr Nagendra Kumar and Mr Hemanth Nagaraj. Their vision and execution aimed at creating a structure, definition, and realism around the course and fostered the ideal environment for me to learn and grow. This report is a result of their teaching , encouragement and inputs in the numerous meetings they had with me , despite their busy schedule. Their help provide the scope and direct my research in a manner to make it most beneficial to me and to the topic. I also thank the senior employee of the Reliance Fresh Ltd, Bangalore for providing me the facilities and support. I would like to express my sincere gratitude to all the employees of New Thippasandra store, specially store manager Mr Raja V, Mr Durgesh for providing data & ideas to assist me in this report. I thank all the employees of Reliance Retail Limited.

DECLARATION

I hereby declare that the Organizational Study Report entitled RELIANCE RETAIL LIMITED a subsidiary of Reliance Industries Limited is a record of bona-fide work done by me in Reliance Retail Limited during may- June 2011 under the supervision of Mr Nagendra Kumar, Deputy Manager in HR, Reliance Retail ,Bangalore and Mr Thejo Jose, Faculty Guide, Fisat Business School, and that no part of this report has formed the basis for award of any degree, diploma, associate ship, fellowship or any other similar title or recognition in any other institution

Bangalore 17/06/2011

Maria Jose M

CONTENTS

Chapter 1 INTRODUCTION ON RETAIL INDUSTRY

Retail the term which is the buzzword in todays day to day life is not at all a new concept and was there since the barter trade days. But the fact is that it has been modified, changed and has been given a new look and thus it has come under the flood lights i.e., as per the old proverb old wine, new bottle. India retailing boom is the result of rapid globalization and the recognition of being a very potential market by big giants and foreign companies making the market more competitive. This has cause existing retailers to re-tailor their strategies to suit the new landscape. Today Indian market is a hot cake in the field of retail and is enticing enough for every retailer to eye for a bigger piece of it. When we talk about organized retailing, with economy booming, competition in the market place is fierce. India is all set to experience the phenomenon of a global village. India Tops A T Kearneys list of emerging markets for global retailers for the 3rd consecutive years. It is the 2nd fastest growing economy in the world. India is the 3rd largest economy in terms of GDP in the next 5 years. India is rated among top 10 FDI destinations. India is the fastest growing market in AsiaPacific for international tourist spending, according to the latest Visa Asia Pacific release. Economy is growing by over 8 per cent a year and Indias growth rate can actually exceed that of China by 2015. Indian economy is expected to grow larger than Britains by 2022 and Japans by 2032 to become the third-largest economy in the world after China and US and finally become the second largest economy after China by 2050. A report by investment banker Goldman Sachs, credits India with the potential to deliver the fastest growth over the next 50 years. According to Standard & Poors, FDI to India is likely to grow the fastest in next few years. The targeted FDI has already hit $ 13 billion in 12 months ending March-2007, more than double Indias previous best of $5.5 billion hit in the previous year.

India is investing over US $130 billion in infrastructure by the end of this decade. The retail industry itself has attracted investment of over INR 200 billion (over $4 billion) in creating infrastructure, systems & shop-fit. The additional retail space is expected to add INR 300 billion ($ 6.67 billion) of business to organized retail. India is having the largest young population in the world over 890 million people below 45 years of age. It has more English speaking people than in the whole of Europe taken together. Its 300 million odd middle class, the Real consumers, is catching the attention of the world. It is estimated that 70 million Indians earn a salary of over INR 800,000 ($18,000) a year, which will rise to 140 million by 2012.

Over 10,000 small and big existing outlets to undergo complete facelift Retailing is one of the largest industries in India and one of the biggest sources of employment in the country. It is the largest employer after agriculture and an account for about 6 - 7% of population i.e., employs more than 4 crore people. The organized retail sector is divided into two types In-store retailing and Non-store retailing. The features of in-store retailing are fixed point-of-sale locations, which are designed to attract a high volume of walk-in customers. Non-store retailers serve the customers at their doorstep. The in-store retail is more prevalent in India. As per management philosopher Professor Dr. Phillip Kotler retailing includes all the activities involved in selling of goods or services directly to the final consumers for personal, non business uses. A retailer or retail store is any business enterprise whose sales volume comes primarily from retailing So in the other words, Retailing is the set of business activities that adds value to the products and services sold to consumers for their personal or family use. y Retailers satisfy consumer needs by offering the right product at the right place and at the right price. Retailers are the final business in a distribution channel that links manufacturers with consumers. A distribution channel is a set of firms that facilitate the movement of products from the point of production to the point of sale to the ultimate consumer. y Manufacturers make products and sell them to retailers or wholesalers. Wholesalers buy products from manufacturers and resell these products to retailers, while retailers resell products to consumers. Wholesalers satisfy

retailers' needs, while retailers direct their efforts to satisfying needs of ultimate consumers. Types of Retail:  Food products  Soft goods- clothing ,apparel ,and other fabrics  Hard goods (hardliner retailers ) appliances, electronics, furniture, sporting goods etc There are the following types of retailers by marketing strategy:  Supermarkets- sell mostly food products  Department stores- very large stores offering a huge assortment of soft and hard goods  Discount stores- tend to offer a wide array of products and services, but they compete mainly on price  General merchandise store- a hybrid between a department store and discount store  Warehouse store low cost, often high quantity goods piled on pallets or steel shelves; warehouse clubs charge a membership fee  Variety store or dollar store extremely low- cost goods, with limited selection  Demographic- retailers that aim at one particular segment (eg: high-end retailers focusing on wealthy individuals)

Some stores take a non frill approach, while others are mid-range or high end, depending on what income level they target. y General store- a store which sells most goods needed, typically in a rural area y Convenience store- a small store often with extended hours, stocking everyday or roadside items y Big-box stores- encompass larger department ,discount, general merchandise, and warehouse stores

Retail Pricing
The pricing technique used by most retailers is cost- plus pricing. This involves adding a markup amount (or percentage) to the retailers cost. Another common technique is suggested by the manufacturer and usually printed on the product by the manufacturer.

Indian Retail Industry


India is the country having the most unorganized retail market. Traditionally it is a familys livelihood, with their shop in the front and house at the back, while they run the retail business. More than 99% retailers function in less than 500 square feet of shopping space. The Indian retail sector is estimated at around Rs 900,000 crore, of which the organized sector accounts for a mere 2 per cent indicating a huge potential market opportunity that is lying in the waiting for the consumer-savvy organized retailer.

Purchasing power of Indian urban consumer is growing and branded merchandise in categories like Apparels, Cosmetics, Shoes, Watches, Beverages, Food and even Jewelers, are slowly becoming lifestyle products that are widely accepted by the urban Indian consumer. Indian retailers need to advantage of this growth and aiming to grow, diversify and introduce new formats have to pay more attention to the brand building process. The emphasis here is on retail as a brand rather than retailers selling brands. The focus should be on branding the retail business itself. In their preparation to face fierce competitive pressure, Indian retailers must come to recognize the value of building their own stores as brands to reinforce their marketing positioning, to communicate quality as well as value for money. Sustainable competitive advantage will be dependent on translating core values combining products, image and reputation into a coherent retail brand strategy.

There is no doubt that the Indian retail scene is booming. A number of large corporate houses Reliance, Tatas, Reheats, Piramalss, Goenkas have already made their foray into this arena, with beauty and health stores, supermarkets, self-service music stores, new age book stores, every-day-low-price stores, computers and peripherals stores, office equipment stores and home/building construction stores. Today the organized players have attacked every retail category. The Indian retail scene has witnessed too many players in too short a time, crowding several categories without looking at their core competencies, or having a well thought out branding strategy.

GROWTH OF RETAIL SECTOR IN INDIA

The trends that are driving the growth of the retail sector in India are
y y y y

Low share of organized retailing Falling real estate prices Increase in disposable income and customer aspiration Increase in expenditure for luxury items (CHART)

(DIAGRAM-1)

Another credible factor in the prospects of the retail sector in India is the increase in the young working population. In India, hefty pay packets, nuclear families in urban areas, along with increasing working-women population and emerging opportunities in the services sector. These key factors have been the growth

drivers of the organized retail sector in India which now boast of retailing almost all the preferences of life - Apparel & Accessories, Appliances, Electronics, Cosmetics and Toiletries, Home & Office Products, Travel and Leisure and many more. With this the retail sector in India is witnessing rejuvenation as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Organized retailers are the contemporary formats by which shoppers have the edge of a world class shopping experience. Fine examples of these formats are Pantaloon, Shoppers Stop and Trent. Organized retail may broadly be classified into the following formats-

Malls. The largest form of organized retailing today. Malls are located mainly in metro cities, in proximity to urban outskirts; this format ranges from approximately 60,000 sq ft to 7, 00,000 sq ft and above. They lend an ideal shopping experience with an amalgamation of product, service and entertainment, all under common roof.

Hypermarkets. They are typically large, starting from 40,000sq. ft plus are usually located outside the city limits. This format comprises of a multiple division layout, and usually has an industrial- look interior. Hypermarkets generally provide daily necessities and grocery like items. Pricing is competitive and they also offer volume discounts.

MBOs. Multi Brand outlets, also known as Category Killers, offer several brands across a single product category. These usually do well in busy market places and Metros.

Super Markets. Large self service outlets, catering to varied shopper needs are termed as Super markets. These are located in or near residential high streets. These stores today contribute to 30% of all food & grocery organized retail sales. Super Markets can further be classified in to mini supermarkets typically 1,000

sq ft to 2,000 sq ft and large supermarkets ranging from a size of 3,500 sq ft to 5,000 sq ft. having a strong focus on food & grocery and personal sales.

Discount Stores. As the name suggests, discount stores or factory outlets, offer discounts on the MRP through selling in bulk reaching economies of scale or excess stock left over at the season. The product category can range from a variety of perishable/ non perishable goods.

Convenience Stores. These are relatively small stores 400-2,000 sq. feet located near residential areas. They stock a limited range of high-turnover convenience products and are usually open for extended periods during the day, seven days a week. Prices are slightly higher due to the convenience premium. Departmental Store. Large stores ranging from 20000-50000 sq. ft, catering to a variety of consumer needs. Further classified into localized departments such as clothing, toys, home, groceries, etc.

Exclusive Store. Ranging from a size of 500 sq ft to 5,000 sq ft. & above, this format is owned/ managed by the Company or through its franchise. These can offer single brand as well as multiple bands.

Specialty Store. These formats focus on a specific product category, Medium sized layout in strategic location. Specialty stores provide a large variety base for the consumers to choose from. Despite the presence of the basic ingredients required for growth of the retail industry in India, it still faces substantial hurdles that will retard and inhibit its growth in the future. One of the key impediments is the lack of FDI. This has largely resulted in limited capital investments in supply chain infrastructure, which is a key for development and growth of retailing and has also constrained access to world-class retail practices. Lack of proper infrastructure and relatively high cost of real estate are the other impediments to the growth of retailing. While the industry and the government are trying to remove many of these hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this industry.

Challenges facing Indian retail industry

       

The tax structure in India favors small retail business Lack of adequate infrastructure facilities High cost of real estate Dissimilarity in consumer groups Restrictions in Foreign Direct Investment Shortage of retail study options Shortage of trained manpower Low retail management skill

RELIANCE GROUP

The Reliance Group, founded by Dhirubhai H. Ambani (1932-2002), is India's largest private sector enterprise, with businesses in the energy and materials value chain. Group's annual revenues are in excess of US$ 27 billion. The flagship company, Reliance Industries Limited, is a Fortune Global 500 company and is the largest private sector company in India. Backward vertical integration has been the cornerstone of the evolution and growth of Reliance. Starting with textiles in the late seventies, Reliance pursued a strategy of backward vertical integration - in polyester, fiber intermediates, plastics, petrochemicals, petroleum refining and oil and gas exploration and production - to be fully integrated along the materials and energy value chain. The Group's activities span exploration and production of oil and gas, petroleum refining and marketing, petrochemicals (polyester, fiber intermediates, plastics and chemicals), textiles and retail. Reliance enjoys global leadership in its businesses, being the largest polyester yarn and fiber producer in the world and among the top five to ten producers in the world in major petrochemical products. The Group exports products in excess of US$ 15 billion to more than 100 countries in the world. Major Group Companies are Reliance Industries Limited (including main subsidiaries Reliance Petroleum Limited and Reliance Retail limited) and Reliance Industrial Infrastructure Limited.

Founder Chairman

"Between my past, the present and the future, there is one common factor: Relationship and Trust. This is the foundation of our growth."

Shri Dhirubhai H. Ambani Founder Chairman Reliance Group December 28, 1932 - July 6, 2002

Board of Directors of Reliance Industries Limited

Shri Mukesh D. Ambani Chairman & Managing Director

Shri Nikhil R. Meswani Executive Director

Shri Hital R. Meswani Executive Director

Shri PMS Prasad Executive Director

Shri P.K.Kapil Executive Director

Shri Ramniklal H. Ambani

Shri Mansingh L. Bhakta

Shri Yogendra P. Trivedi

Dr. D. V. Kapur

Shri M. P. Modi

Prof. Ashok Misra

Prof. Dipak C Jain

Dr. RaghunathAnant Mashelkar

PRODUCTS AND BRANDS


The Company expanded into textiles in 1975. Since its initial public offering in 1977, the Company has expanded rapidly and integrated backwards into other industry sectors, most notably the production of petrochemicals and the refining of crude oil. The Company now has operations that span from the exploration and production of oil and gas to the manufacture of petroleum products, polyester products, polyester intermediates, plastics, polymer intermediates, chemicals and synthetic textiles and fabrics. The Company from time to time seeks to further diversify into other industries. In January 2006, the Company approved a plan to establish a retail business through a subsidiary Reliance Retail Limited that will operate, among other things, supermarkets, convenience stores and specialty stores across India. The Company approved initial expenditure of US$ 750 million to fund the initial stages of this plan. The Company's subsidiary Reliance Jamnagar Infrastructure Limited is currently establishing infrastructure facilities such as roads and buildings for the proposed Special Economic Zone (SEZ) at Jamnagar, Gujarat. The Company's major products and brands, from oil and gas to textiles are tightly integrated and benefit from synergies across the Company. Central to the Company's operations is its vertical backward integration strategy; raw materials such as PTA, MEG, ethylene, propylene and normal paraffin that were previously imported at a higher cost and subject to import duties are now sourced from within the Company. This has had a positive effect on the Company's operating margins and interest costs and decreased the Company's exposure to the cyclicality of markets and raw material prices. The Company believes that this strategy is also important in maintaining a domestic market leadership position in its major product lines and in providing a competitive advantage. The Company's operations can be classified into four segments namely: y Petroleum Refining and Marketing business

y Petrochemicals business y Oil and Gas Exploration & Production business y Others The Company's refinery at Jamnagar is the third largest refinery at a single location in the world. The Company is:

y The world's largest producer of Polyester Fiber and Yarn y 4th largest producer of Paraxylene (PX) and Purified Terepthalic Acid (PTA) y 6th largest producer of Mono Ethylene Glycol (MEG) y 7th largest producer of Polypropylene (PP)

FOOD
Food retail in India Food dominates the shopping basket in India. The US$ 6.1 billion Indian foods industry, which forms 44 per cent of the entire FMCG sales, is growing at 9 per cent and has set the growth agenda for modern trade formats. Food accounts for the largest share of consumer spending. Food and food products account for about 53 per cent of the value of final private consumption. Reliance Retail looks forward to be the driver of growth in this industry with a committed team. Targets:
y y y

Capture dominant market share of Indian Foods retail industry A Pan-India footprint in more than 800 cities and towns Cater to both urban and rural populations

Reliance Foods team strives to continuously delight the customers. This is the first small step in their attempt to build and forge strong and enduring bonds with millions of farmers and transform their relationship with customers to a new level. The organization believes in giving customers quality food items, fruits and vegetables at affordable price at Reliance Fresh stores.

FOOTWEAR
Envisioned by a clear goal of becoming a destination store for footwear Reliance industries plans to Stamp its Presence across 42 cities already opened over 80 independent stores, which will ensure them capturing maximum market share in the 18,000cr footwear industry. Armed with a mission of creating a destination Shoe Stop these stores will be stocked with National / International and Private Label products that will provide Cutting Edge Retail and Shopping experience to the Individual and Family. Products sourced from Brazil, China, Indonesia, Malaysia, Vietnam, Thailand to name a few countries will be on display and sold across all stores. These products are Value led, meant to create novelty and developed to be category killers in footwear, accessories and luggage in all segments and for all occasions. Creating this will be Portland Design Specialists in Design and Providing Solutions for a meaningful Customer Experience. All this will be provided though a State of the Art Design Studio which is being created to have an in-built Design / CAD Room, Product Development Area, Mock Display Room, Testing Laboratory, Range Presentation Area, Reprographics and Sample Storage Area.

APPAREL
As the glaring gaps in the market today remain unattended, it gives Reliance the ideal opportunity to step in and revolutionize the shopping environment in the country. The challenge is to transform the Indian consumers lifestyle and the way our people shop. By offering exciting, fashionable and extreme value products of international caliber they want to capture a significant share of consumer spending more on clothing and luggage. They plan to offer extreme value to the customer by weaving together competitive prices with an irresistible line, Where the

customer would have the luxury of shopping from a diverse product range in an up market ambience. They will be focusing at offering affordable fashion with superior quality fabrics, as demographic figures of a youthful nation (62% are under 30) present an indisputable opportunity. They will also be looking at premium inhouse brands to build a strong business in their departmental and fast fashion apparel specialty and luggage stores. To be a part of Indias globalization, they plan to tie up with big International Brands.

MEMBERSHIP FINANCE AND TRAVEL Membership program:


They plan to have 100 million customers out of which it is expected that 50 million will be membership customers - who will have access to the benefits of the loyalty program under Reliance One.

Payments:
To improve the customer experience and to enable cashless payments by customers it is proposed to introduce several payment options that can be used in all the store formats. The services offered are, Closed Loop Store Cards (Prepaid, Gift & Credit), Credit Cards, Debit Cards, ATM Availability, Mobile and Internet Payment Options etc.

Lending:
As the Indian consumer becomes increasingly aware and demanding, they will need access to easy credit to meet their requirements. It is expected that a significant percentage of Reliance Retail customers will use lending products both in the Urban and Rural areas. The services offered are Consumer Finance, SME Finance, and Rural Hub Finance.

Insurance and Investment:


Reliance Retail will play the role of a broker to service the needs of its customers by distributing a whole range of Insurance and Investment products. The intention is to give them choice and impartial advice. The services offered are Life Insurance, General Insurance and various Investment Products.

Travel Services:
Reliance Retail proposes to offer Travel Services to its customers covering a range of offerings at unbeatable value owning to the scale of distribution envisaged. Services offered are Travel packages for individuals, corporate clients and family holidays, FOREX, Other Foreign Travel linked products, Travel Insurance, Ticketing and Hotel Bookings (both Domestic & International.

AUTOMOTIVE
The team aims to participate in the vehicle ownership experience of Reliance Retail customers & constantly keep on creating value & retaining value. To deliver this, the organization will be retailing automotive products & accessories and setting up world class service facilities catering to two wheelers & passenger cars. India today boasts of a population of 9 million cars & 42 million two wheelers. Despite the burgeoning vehicle population, service & maintenance for these vehicles still remains a problem. It is with this underserved market that Reliance Retail decided to set its foot towards creation of a world class auto care chain, in sync with the Reliance Retail. The facility would also be retailing auto products namely- Tyres, tubes, lube, car accessories, e-bikes etc. All these facilities are coming up in Mumbai and Jamnagar shortly.

LIFESTYLE
At Reliance Retail Lifestyle they promise to offer a world of products and experiences never seen before. A world of style and class for fun and excitement with indulgence and pampering of knowledge and entertainment. They recognize their roles in bringing style, excitement and entertainment to customers lives. So they are offering categories like jewellery, Books, Music, Cosmetics, Fragrances, Watches, Sunglasses, Toys, Sporting Goods, Stationery, Gifts, Flowers, Print Services.

CDIT
IT will be a one-stop solution for all technology solutions in the field of consumer electronics, home appliances, information technology and telecommunication.

Experience Zones
A showcase for technology, every experience zone will have fully functional products, for the customer to have a true touch & feel experience. Experts will guide customers on how to get the best quality experience in their own setups at home. Zones will be for the following, and will be present in stores as per the respective business plans: y Home Theatres different zones ranging from entry-level to a very premium experience. y Car AV installation bays y Photography with a Digital Mini-lab y Designer Kitchen completely operational kitchen with appliances y Gaming area vibrant and happening y A collapsible Classroom space for training & contests

Innovation Pillars
It is a technology-snapshot high point in the store. Customers are drawn to these high points and invited to Discover more". Innovation Pillars will be for the following, and will be present in stores as per the respective business plansy y y y y y y Audio Video Imaging Laptop Gaming Mobile, and Home

The various formats run by Reliance Retail are as follows:1. 2. 3. 4. 5. 6. 7. 8. 9. Reliance Mart. Reliance Trends. Reliance Footprints. Reliance Wellness. Reliance Jewellery. Reliance Time-Out. Reliance Super. Reliance AutoZone. Reliance Fresh.

So by this we can see how Reliance Retail is creating a strong base or foundation in the Indian Retail field. Its trying to make itself available to every needs and wants of present customers. Reliance retail with its huge and mammoth brand name has made its presence felt in the retail field already providing tough competition to the existing big sized retailers. With its Reliance Mart it has come up with so huge hyper market format to cater the needs of the customers making the entire product needed available under one roof to the customer .

For the first time in organized retail, Reliance Trends is introducing a Made to Measure tailoring service, offering customized fits to all the customers buying fabrics from the store at prices comparable to their neighborhood tailors. As we know Reliance Mart is a hyper market format in order to cater the needs. It is well on track to democratize fashion and make it attainable to the masses as we know the present trend of consumers are getting used to mall shopping. So this hyper market is ready to provide them with what they want.

Reliance Fresh is the retail chain division of Reliance Industries of India which is headed by Mukesh Ambani. Reliance has entered into this segment by opening new retail stores into almost every metropolitan and regional area of India. Reliance plans to invest Rs 25000 crores in the next 4 years in their retail division and plans to begin retail stores in 784 cities across the country. The Reliance Fresh supermarket chain is RILs Rs 25,000 crore venture and it plans to add more stores across different cities and eventually have a pan-India footprint in this year. The super marts will sell fresh fruits and vegetables, staples, groceries, fresh juice bars and dairy products and also will sport a separate enclosure and supply-chain for non-vegetarian products. Besides, the stores would provide direct employment to 5 lakh young Indians and indirect job opportunities to a million people, according to the company. The company also has plans to train students and housewives in customer care and quality services for part-time jobs. According to Deccan Herald, the company is planning on opening new stores with store-size varying from 1,500 sq ft to 3,000 sq ft, which will stock fresh fruits and vegetables, staples, FMCG products and dairy products. Each store is said to be

within a radius of 1-2 km of each other, in relation to the concept of a neighbor store. However, this is only the entry roll-out that the company has planned. Bangalore is said to have 40 stores in all by the end of the year. In a dramatic change due circumstances prevailing in UP, West Bengal and Orissa, It was mentioned recently in News Dailies that, Reliance Retail is moving out stocking. Reliance Retail has decided to minimize its exposure in the fruit and vegetable business and position Reliance Fresh as a pure play super market focusing on categories like food, FMCG, home, consumer durables, IT, wellness and auto accessories, with food accounting for the bulk of the business. The company may not stock fruit and vegetables in some states, Orissa being one of them.

Though Reliance Fresh is not exiting the fruit and vegetable business altogether, it has decided not to compete with local vendors partly due to political reasons, and partly due to its inability to create a robust supply chain. This is quite different from what the firm had originally planned. When the first Reliance Fresh store opened in Hyderabad some years back, not only did the company said the stores main focus would be fresh produce like fruits and vegetables at a much lower price, but also spoke at length about its farm-to-fork theory. The idea the company spoke about was to source from farmers and sell directly to the consumer removing middlemen out of the way. Reliance may exit some businesses if the business does not increase by March 2008. Reliance Fresh, Reliance Mart, Reliance Digital, Reliance Trends, Reliance Footprint, Reliance Wellness, Reliance Jewels, Reliance Timeout and Reliance Super are various formats that Reliance has rolled out. In addition, Reliance Retail has entered into an alliance with Apple for setting up a chain of Apple Specialty Stores branded as iStore, starting with Bangalore.

ABOUT RELIANCE FRESH:

Reliance Fresh TYPE Convenient Stores 30Th October,2006 Mumbai, India Mukesh Ambani, CEO Retail www.ril.com

Founded

Headquarters

Key people Industry Website

Vision Of The Company


To be the most admired and successful organized Retail Company in India that materially enhances the quality of life of every Indian. We will achieve this by:

 Providing unprecedented affordability, quality and choice in global products and services  Being the partner of choice in creating prosperity for Indian farmers and other producers of goods and services  Unleashing the power of the Indian workforce through the generation of new & attractive employment opportunities, & creating an empowered & rewarding workplace

Mission Of The Company

Leap frog the way an Indian Consumer shops  Be a trusted partner who provide the best products & services the world has to offer, at the best prices, in the most convenient setting.  Create an efficient and transparent global supply chain by the creation and optimal utilization of world-class infrastructure and international partnerships, thus creating more value for our customers, suppliers, partners and stake holders.  Bring prosperity to millions of Indian producers, especially our farmers, by providing the most attractive returns for their efforts. Be a capable and dependable partner to them right through their creation process and help them become more successful.  Unleash the initiative, creativity & energy of Indian workforce through creation of new jobs, & provide our employees a supportive, rewarding environment to work and grow.  Financially reward our shareholders on a sustained basis

Core Values
 Respecting and valuing employees  Creating a positive work culture and a mutual trust and creating a feeling of family 

Work Flow Model Of Reliance

The following model explains how RRL procure good from farmer and delivered to ultimate customer

Procurement of Fruits and vegetables

Verification

Packaging

Transportation to stores

Labeling price Labeling price

Display at fresh stores

Organizational structure
Organizations are economic and social entities in which number of persons performs multifarious tasks in order to attain common goals. Once a group of people has established an organization to accomplish shared goals, organizational structure evolves to increase the effectiveness of the organizations control of the activities necessary to achieve its goals. Organizational structure is the formal system of task & authority relationships that control how people co-ordinate their actions & use resources to achieve organizations goals. The principle purpose of organizational structure is one of control: to control the means used to motive people to achieve these goals. For any organization, an appropriate structure facilitates effective responses to problem of co-ordination & motivation --- problems that can arise for any number of environmental, technological or human resources. As organizations grow & differentiate, the structure likewise evolves. Organizational structure can be managed & changed through the process of organization design Organization structures can be designed on the basis of departmentalization & relationships. Departmentalization is the process of dividing work of an organization into various units or departments. Relationships are the process by which organization brings relationships among employees at different levels, materials, money & machines.

Types Of Organizational Structures


1. 2. 3. 4. 5. Line Design Functional Design Line & Staff Design Committee Design Hierarchical Design

Among these the Reliance Retail Limited is having Hierarchical organizational structure

Organizational Structure of Reliance Retail Limited

CEO
EXECUTIVE Secretary

Admini stration

Comme rcial

Operat ions

HR

SLP

Market ing

D& L

Other income

EPC

Manag er

Manag er

Operati on Head Cluster manager

HR Man ger

Ma nag er

Mana ger Manager

Manager

Execu tive

Asst. Manager

Executi ve

Asst. mana ger

Officer

Execu tive

Guard Executive Store Manager Executive HR Inbound Manager Outbound manager MIS Manager

ASM C&A

Inbound Executives

Outbound Executive

MIS Executive

Sr. CSA CSA

Functional Departments Marketing Department


y Basic marketing function: In reliance marketing department play a crucial role. There are three main function of marketing department in reliance, there are: 1. Communication of promotion: Marketing department is held responsible for communicating all upcoming promotions like any offer or discount to customers. This is done through visual merchandising which means displaying about current offers and communicating it. This is done through various mean like leaflets, dangles, etc. 2. Customers behavior and their buying pattern: Marketing department is also responsible for knowing about its customer and thereby their buying pattern because on the basis of this only further decision regarding promotion is taken 3. Competitive analysis: Beside above two stated the main function of marketing department is to do competitive analysis i.e. knowing about their competitor and their strategy and thus taking a prominent step.

y Products and services offered: Marketing department people has responsibility to take care of kind of product and services to be offered. It generally includes all FMCG good, any electronic goods, staples. When it comes to serve reliance people are take proper care of customer care and take guarantee of their product which they offer. y Distribution channel: Marketing people take care of supply of goods to final destination. Rather than purchasing from any wholesaler reliance purchase all its vegetables from farmer (where production is more) for all other FMCG it buys directly from producer.

y Advertisement: Since communicating all latest offers to customer is primary duty/ responsibility of marketing department therefore this work is done very crucially by them, for promoting its products reliance uses various media like posters, banners, leaflets, danglers, etc. y Sales promotion: Sales promotion is any initiative undertaken by an organization to promote an increase in sales, usage or trail of a product or services (i.e. initiatives that are not covered by the other elements of the marketing communications or promotions mix). For promoting its sales marketing department offers various offers like buy one get one free, or buy 2ltr Pepsi at just rupee 15.

y Customer loyalty card:


their marketing strategies.

Reliance offers membership cards to their customers in order to get new customers, retain the existing ones. It is one of

Marketing department structure

Marketing Head (Zonal)

State Head

Executives

Human Resource Department

 Personal selection and department: HR is considered as core of all organization thus selection of any personal is the key aspect. Recruitment plays an important role in HR. Recruitment means selecting the Right candidate, at the right time, at the right cost.

Education: based upon qualification a candidate is offered for a post for example

Educational qualification 10 th pass

Designation offered Customer Service Associate Supervisor

PUC + experience as CSA B. com Graduate + experience as supervisor in retail C&A (Commercial Associate) Store Manager

Post Graduate

Administrative job related according to his qualification

 Employee remuneration: HR department is held responsible for deciding on the pay scale of the employee. This decision is taken after considering things

y y y y

Minimum Wages Act 1947 Qualification Experience Previous earnings

Findings
o The recruitment procedure controlling the attrition rate are the most challenging act at Reliance Fresh o The recruitment procedure is same for every walk- in o The number of walk- ins in a day is around 20. o The number of walk-ins are more for CSA ( Customer Sales Associates) when compared to the positions like SM ( Store Manager), ASM ( Assistant Store Manager) , C&A (Commercial & Associate), and MSR ( Membership Sales Representative) & SUP (Supervisor) o The minimum qualification is SSLC as an eligibility criteria for a CSA o The main reason for walk- ins is the advertisement given by the HR team, this is by banners, pamphlets & references given by the employee o It was noticed that maximum number of walk-ins happened to be in the age group 18-22 followed by the age group 22-25 and 25-28 subsequently walk-ins. The age limit for the employment is between 18-30. o The selected candidates are allotted the stores near to their residence. o There will be separate training for Store managers, Department managers, Corporate etc o As a motivational aspect, depending on his/ her performance, a CSA or a Supervisor from each store is rewarded the Star of the Month every month to boost healthy competition between the stores.

Recruitment Process Job Description Job


Releasing IJP (Internal Job Training

Check with Internal Applicants

Candidate selected internally

No Suitable candidate available internally

Sourcing externally through job frontals, employee referrals etc.

Interview candidate

Salary Negotiation

Finding for approval to NHQ

Sending for requisition & position code creation to NHQ

E- Recruitment & Offer letter generation

Joining Formalities

Human Resource Management Department Structure

HR Head (Zonal)

Training

Recruitment

HR Operations

Zonal Training

Recruiters

Payroll and compliances

State Training

F&V Department

Reliance Foods team strives to continuously delight the customers. This is the first small step in their attempt to build and forge strong and enduring bonds with millions of farmers and transform their relationship with customers to a new level. The organization believes in giving customers quality food items, fruits and vegetables at affordable price at Reliance Fresh stores. It Capture dominant market share of Indian Foods retail industries. Around 40% is estimated Reliance Retail Turnover by 2011 to be from Foods Business. Main process in F&V

Purchase

Sale

Functions of F&V Section

F&V

Purchase

Category team
Placing the inter purchase Team Pricing Promo configuration Planogram

Business Process Flow For Fresh


Collective PO made by category in SAP, communicated to CPC

Collectio n Centre

Communi cates to CC

Individual stores place STO in SAP

Sorting Area

Association Area Sales Floor

Staging Area

Area for empty Tagged crates

Picking Area

Processing Area

Stores

Stores

F&V Job Chart

National Head

Zonal Head

State Head

Category Manager

State Buyers

CC In chair

Finance Department  Source and Application: There are various sources of fund, some of them
are: Initial Public Offering (this method was first introduced by reliance itself), Equity share Capital, debenture, bank loans, creditors, etc. As far as application is concern then the main area of application is purchasing all goods from main suppliers like farmers for all different kinds of fruits and vegetables and from main producers like Nestle, Maggie, etc.

 Profit: The estimated turnover of Reliance Retail in the last financial year was
around Rs. 4500 crores and the estimated loss was very marginal (less than 10% of sales). Actual data has not been provided by the company.

 Sales expenditure trend: The sales expenditure trend of the company can explained as follows first purchase department places an order for purchase to operation department which is further placed to vendor. Once conformation letter is received from vendor side then goods are received from them and then quality checking process takes place. For all goods received goods receipt note is generated which is sent to commercial department for payment. This is how sales trend expenditure takes place in reliance retail.  Cost control: Controlling cost is the prime function of finance department. In order to control price reliance follows HUB AND SPOKE MODEL which means that it sources its F&V from farmer due to which cost of intermediaries comes down. Apart from this it buys all of its FMCG from producer only.

 Pricing technique: Charging correct price is very important thus before charging any price finance people do a competitive analysis i.e. they charge price after seeing their competitor all their profit margin.

Key Result Areas


Cash and Bank Controller
      Manage account payable process effectively (payment to vendors) Manage store commercial operation including cash and card sales monitoring Manage F&V process for procurement and payment for farmers Arrange cash for petty payment at various location Manage farmer & Mandi tax payments Arrange timely funds for all commercial activities

Inventory controller
 Check physical inventory & upload PI in system on regular basis  Analyze the reasons for stock variation  Control dump & shrink at stores

Activities specific for this department


     Cash and bank Inventory control Tax matters Income accounting Support Head Office

Dividend Policy
Dividend per every year and bonus issue is made periodically

Inventory Management Policy


The main purpose of inventory management policy is to continue, control on stocks to minimize holding cost and dump and shrink accounting

Receivable Management Policy


    Bulk of the sales are in cash at stores Sales through Credit Card - cash received within weeks time Sales through coupons (Sodexho) cash received within a fortnight Payments are realized after a fixed cyclic time

Capital Expenditure decisions


Capital expenditure decisions are taken by Head Office

Risk Management
Insurance Risk, Currency Risk, Commodity Risk etc are managed and hedged where necessary with financial & other institutions by Head Office.

Cost Innovations and Cost Reductions


 Use of Petro card for diesel purchase  E- payment to farmers

Best practices specific to the department


 Accounts payable done strictly as per credit limits negotiated with vendor  Enhance capability of commercial staff at stores

Mode of payments
There are various modes of payments in the stores like: y y y y y Cash Credit Card/ Debit Card Sodexho Accor R one vouchers/ Gift vouchers

Among these only cash is collected by CMS security service in banks on a daily basis, whereas the coupons (Sodexho, Accor) are collected once in a week on Friday.

During the time of cash collection, four copies of each reliance fresh & delight transactions (with detailed information such as notes particular with denominations) are prepared. Three copies are taken by CMS representative & one copy of it is kept in the store, all copies duly signed by the CMS authority & store C&A. Then its recorded in the system with the representative scroll number, which is thereby sent to the state corporate office. There is a minimum balance of cash to be maintained in every store which is fixed by the Commercial Managers. The total store backend financial operation is co-ordinate by the SAP software, which enables uninterrupted recording of data. Moreover as different aspects such as Void transactions, Refund transactions, Electronic journal (a complete detail of the bill), sales report, hence cross checking in case of any deputes is possible & chances of fraud is less. The inventory system in the stores is also well managed. Stock of Goods is received everyday from the Distribution Centers (DC) , Fasts Moving Consumer Goods (FMCG) is received directly from the company. The perishable items like F&V, FMCGs are recorded as & when they are dumped or wasted in the system. Payment to vendors is also efficiently managed. The average weekly payments is paid either through Cheque (HDFC Bank), Demand Draft or Net Transfer (Account to Account Transfer). The goods purchased from the vendors are on certain credit policies managed by the Mumbai headquarter. Hence the company has a very efficient Working Capital Management.

Functions of the Financial Department


The financial department as called Commercial Department in Reliance is responsible for all cash related transactions in the stores. The Commercial Department has the following functions:-

Functions Of Commercial Department

Front End (Store level)

Backend

Account payables & Receivables Daily Cash Pick up Declaration of Cash Segregations of mode of Payment (MOP) Vendor payment Coins management MIS & budgeting, Analysis of stock &

Store
Physical inventory Analysis (Dump, Shrink) Cash & Bank Stocks Physical Inventory (PI) Stock Controller

(Store P&L,
Liquidation, GRN, PI GRN- Goods receipts note Non F&V) Tikki Paav

Financial Department Structure

Zonal Financial Head

Karnataka

Kerala

Tamil Nadu

Asst. Managers (2)

Asst. Managers (2)

Asst. Managers (2)

Operations Department
This department is wholly concerned with the store operations which involve the following process:-

BUY

MOVE

SELL

 BUY-

The company purchases the goods from the Vendors ( Farmers, Distributers & Wholesalers) which involves the Category, Marketing & commercial managers

 MOVE- This phase is concerned with the Designation & Logistics (D&L) & Supply Chain Management (SCM). The goods either move from the vendors directly to the stores or through the Distribution Centre (DC). The distribution centers are located at Nelmangla & Belgum in Karnataka. This is dealt in by the Replenishment officials in which the purchased goods move in the following process

VENDOR

DC

STORE

Or (DSD) VENDOR
In case of return of goods the opposite process follows i.e.---

STORE

STORE

DC

VENDOR

During the movement of goods from the vendors, several checking are undertaken like the Quality check, Quantity check, Stock check, Cost & Price check. The Warehousing activities can be classified as the Inward & Outward activities, which are as follows:--

 Inward Activities
Storage locations Storage bins First in First out (FIFO) Stock up

 Outward Activities
Picking Sorting & Grading Check for damages & dump Docking, load Dispatching Flow through Transport o Route plans o Trucks o Timeless  SELL The operations related to selling are listed as follows:

Planogram A Planogram is the systematic arrangement of different products of


different categories in different sections of the store so that it will be convenient for the customers to get the products as well as will be beneficial for the store. Planogram for different stores is different because the store size and shape varies constantly from place to place. In the planogram there are different arrangements for different categories of products. So the planogram for non-food items is different from that of Beverages.

Stocking or replenishment Order the goods when the stock is about to be


finished, so that customers get the things whenever they want

Cleanliness Maintain good ambience and keep the store clean is another
important process.

Customer Service Customer is the king, so in order to gain more customers the
customer service is made efficient. This gives the company a competitive edge in the market.

Billing and Checkout - The CSAs are trained to carry on the billing process faster
& with minimum mistakes, which results in low waiting time for customers & greater customer satisfaction. After billing the bills are rechecked at the exit by the security & thereby recorded in the log book, which results in minimizing frauds & future reference.

Manpower management managing all level of employees effectively is also a


complementary process

Operations Department Structure


Zonal Chief Executive

Karnataka

Kerala

Tamil Nadu

State Operations Head

State Operations Head

State Operations Head

Cluster Managers Store Managers

Cluster Managers

Cluster Managers

Store Managers

Store Managers

Asst. Store Managers C&As

Asst. Store Managers C&As

Asst. Store Managers C&As

Store Supervisors

Store Supervisors

Store Supervisors

CSAs CSAs

CSAs

Information Technology department


 SAP (software Application Products) is used as the back end support software which co-ordinates all the departments together.  ILO (Integrated Light Out) is also used as a supporting software in the company. This software enables to hold together all the corporate office of reliance in India with Mumbai.  The usage of MIS (Management Information System) by the managers is also extensive in various DSS (Decision Support System). There is also a 24 hours SAP helpdesk which makes the more easy & uninterrupted. This also enhances the efficiency of the employees.  Each employee is also provided with an individual internet connection  Limited sites to access & an individual telecom service for the purpose of communication. Hence this facilities the timely completion of works & good co-ordination among departments.

 IT Department Structure

Information Technology Head

Corporate IT Managers

Store IT Managers

Limitations of the Study

 Companies would not be disclosing all the details of the Functions due to the confidential nature of the information

Conclusion

As per the observations & data collected now in India the Retail industry is in a booming stage where the companies are pertaining in semi urban and rural markets. The change in mind set of the public towards retail has been changed. The companies in this sector are focusing more on customer perception. The company is totally concentrating on customer equity by creating hypermarket and providing satisfactory shopping experience. This report has given me the exposure to the practical side of retailing like how to interact with customers at the time of selling, how to arrange products effectively. The most important thing that I learned was on tactics of gaining new customers & retaining them. The conclusion from this research is that Reliance Stores lead the retail market in all the aspects of shopping by providing good quality products and services to consumers and the consumer perception is good towards Reliance.

Bibliography
Primary Source  Interview  Data from Organization  Observation Secondary Source     Kotler and Keller, Marketing Management, 12th edition Aswathappa. K.2009. Organizational Behavior www.ril.com www.retailindustry.com

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