Corporate Strategies Case Study

Case Title:

Indian Retail Models: Reliance Retail vs ITC Retail vs Future Group Retail

Abstract:
This case study helps to create an in-depth understanding of the distinct models of the retail giants in India – ITC, Future Group and Reliance. Analysing the unique model of Reliance’s retail venture and its growth prospects, the case facilitates a comparison and evaluation of the three retailing business models based on the sustainability and effectiveness of the models in the context of Indian retailing sector’s untested growth trajectories.

Organised retail is still in its nascent stages in India as Indian corporate houses were late in realising the potential of organised retail. The sector, which was on a boom, was hit hard by the global financial crisis during 2008. Many of the retailers have resorted to reducing costs by consolidating formats and models. However, at a time when the existing retailers are tackling their blues, Reliance Industries Limited (RIL) has made a grant entry to the retail sector through Reliance Retail Limited (RRL), its retail arm. RRL has opened stores in each of the verticals and by mid-2009 has been operating around 12 formats, above 920 stores – spread across the country – in about 4.2 million sq. ft. Though it is the biggest conglomerate in the country, RRL is facing tough competition from two powerful and ambitious retailers – Future Group and ITC. Future Group’s retailing arm Pantaloon Retail India Ltd. has managed to find growth even during the recession and its pan-Indian retail model has gained loads of acclamations. ITC has presence in rural and urban areas alike with its well-positioned national brands in FMCG and Lifestyle Retailing Business Division (LRBD). The three famous corporate houses, emerging from three different backgrounds have different operational models. While wading through the crisis, the three retailers are trying to script a right combination to succeed in the Indian organised retailing sector.

Pedagogical Objectives:

• To have an overview and in-depth understanding of the three different retailing models of three different Indian corporate houses
• To analyse and debate on Reliance Retail’s rationale behind operating in many of the retail verticals as independent Strategic Business Units (SBU)
• To compare, contrast and evaluate Reliance’ Retail strategy with that of ITC and Future Group.

Keywords : Retail Industry, Indian Retailing Industry, Indian Retailing Companies, Retailing Formats, Retailing Models, Big Bazaar, Reliance Retail, Future Group, Kishore Biyani, Pantaloons, Retail Merchandise, Retailing Brands, Private Labels.