SUPERIOR UNIVERSITY

Retail Management
MBA Professional (Evening)
Section X
Session 2007-09

Group Profile

Group Name The Leaders

Group Logo

Group Slogan DARE TO LEAD

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 Members Detail

KHALID AZEEM 8257

AHMAD IKRAM 8278

AHMAD KHAN 8259

ADIL NAWAZ 8249

FARHAN BUTT 8227

BILAL RASHEED 8231

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 DEDICATION

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We are dedicating our work to our parents and respected teacher
PROF. Asim Jamil, who have played a vital role in our studies
and have guided us at every step with their precious ideas. No
doubt this dedication is insufficient and we can never repay for
the role they have played in our studies but we are sure that his
work will prove itself an asset in our life.

ACKNOWLEDGEMENT

We are very thankful to SARDAR ABID ALI KHAN who helped

a lot us by giving up to date information.
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We are very proud of our teacher Prof. Asim Jamil, whose help
and instructions enable us to bind papers into project manner.
We are very thankful to him.

Company History

METRO Cash & Carry is a leading international company in

self-service wholesale and operates more than 600 outlets
in 29 countries. With over 100,000 employees worldwide,
the company achieved sales of € 31.7 billion in 2007. By
generating almost 50 percent of the total sales, METRO
Cash & Carry is the top-selling sales brand of the METRO
Group. Assortment and service of METRO Cash & Carry’s
unique business-to-business model are targeted only towards
professional customers such as hotels and restaurants as well as small
and mid-sized retailers or institutions. The company offers these special
groups a high level of assortment competency both in food and nonfood
as well as attractive wholesale prices. An efficient and internationally
conferrable concept ensures success in entering new markets.
METRO Cash & Carry – A story of expansion
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The self-service wholesale trade came to Europe in the year 1964 when
METRO SB-Großmärkte GmbH & Co. KG was founded in
Mülheim/Ruhr. The initiator and driving force behind this concept was
Prof. Dr. Otto Beisheim. In 1967 the Franz Haniel & Cie. company
became a partner in the new venture. Prof. Dr. Otto Beisheim, the Franz
Haniel & Cie. GmbH company and the Schmidt-Ruthenbeck family then
each held one third of the shares in the German METRO activities and
thus constituted the “original group of partners”.
As from the year 1968 the concept was extended beyond the German
borders, with the Dutch company Steenkolen Handelsvereeniging N.V.
(SHV) as a new partner. The two sides jointly established Makro
Zelfbedienigsgroothandel C.V. with the original group of partners holding
40 percent of the shares in this activity. Within the framework of a first
major expansion drive METRO/MAKRO Cash & Carry entered the
market in nine Western European countries by 1972. In the nineties,
METRO Cash & Carry expanded its activities to Portugal, Turkey,
Morocco and to Eastern Europe.
In July 1996 METRO Cash & Carry merged with Kaufhof Holding AG
and Asko Deutsche Kaufhaus AG and the METRO Group was founded.
That year also saw the group’s going public. The Metro stock is the only
retail stock listed in the German blue-chip index “DAX 30“.
The first step into Asia was taken when METRO Cash & Carry moved
into China in 1996. Today the company is present in 5 Asian countries:
China, India, Japan, Pakistan and Vietnam. The METRO Cash & Carry
business is going to be further internationalized and expanded with the
focus on Eastern Europe and Asia. Already by today, more than 80
percent of the staff is working outside of Germany. In many countries the
company is on of the major employers.

What is METRO Cash & Carry?

METRO Cash & Carry – this name stands for one of the great success
stories in modern commerce. The unique wholesale business-to-
business model of METRO Cash & Carry is focused only towards
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professional customers such as hotels, restaurant, caterers as well as
small and mid-sized retailers. METRO Cash & Carry offers this target
group a greater efficiency than the multilayered supply chain thus
helping them to improve their business: By offering them a one-stop
solution for their purchases, by helping them to improve their
assortment, by offering them high quality products at reasonable and
transparent prices and by offering them
a consistent supply source.
What does METRO offer?
METRO Cash & Carry is a reliable
partner for more than 20 million
professional customers worldwide. It
gives them a clear competitive
advantage in their own markets.
Professionals can purchase everything
they need to run their business: A restaurant owner, for example, can
buy food like fish or vegetables as well as kitchen equipment and office
supplies.
METRO Cash & Carry offers an exceptionally wide range of high-quality
products under one roof. Depending on the size and type of wholesale
center, the assortment includes up to 20,000 items in the food range and
30,000 items in the nonfood sector. As the name implies, METRO Cash
& Carry customers select their own items and take them with them to
their restaurants and shops. With this unique business-to-business
concept, the company has grown to become a leading international
player in self-service wholesale.

METRO in Pakistan

METRO Cash & Carry announced its operations in Pakistan in January

2006. Since then, it has established itself as a potential market leader in
wholesale.
Under the supervision of Managing Director Mr. Giovanni Soranzo,
METRO Cash & Carry Pakistan has opened its first store in the city of
Lahore in October 2007.
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The company’s country head office is also based in Lahore and currently
employs over 400 people in two offices.

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METRO Cash & Carry Pakistan (Pvt.) Ltd.
Main Air Port Road, DHA, Near Divine Garden Scheme,
Lahore 54792.
Pakistan
Telephone: +92 (0)42 35609000
Fax: +92 (0)42 35702100.

10 METRO Cash & Carry principles

The success of the company is based on the following principles:

• Focus on professional customers

• One-stop shopping
• Efficient store concept designed for professional needs
• Advanced customer service
• Enhanced customers’ competitiveness
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• Excellence in supply chain and quality management
• Strengthening of local suppliers
• Development of national infrastructures
• Career opportunities
• internationally transferable concept

Product range

Each store is tailored to address the needs of professional customers.

We offer a wholesale price that leaves the customer room for healthy
margins and provide a one-stop-shop for the customer.

In the food range, freshness is our first priority. This is guaranteed by the
efficient supply-chain and quality control management we have in-place.

In non-food, we offer only products that are up-to-date in terms of

technology and design, and meet all safety standards.

Food

At the METRO wholesale center you can find a wide range of food
products

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Dairy, Frozen
Meat
Fresh Fish & Seafood
Fruits & Vegetables
Edible Groceries, Canned Goods and Bakery
Sweets and Confectionary
General Grocery
Tobacco and Beverages
Detergents
Cosmetics & Toiletries

Non Food

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Office Equipment
Media , Radio & Accessories
Home Electronics/House Hold
Household Goods

• Pots & Pans (Tefal, Sonex, Majestic, Prestige)

• Tableware (Luminarc, Clayworks)
• Glass (Pasabache, Bormioli Rocco, Toyonasic, Ocean)
• Cutlery & Cutting Tools (Cocktail, Kiwi)
• Kitchen Utensils & Serving Articles (Fackleman).
• The range also include decoration products (Walther Glass),
• Candles
• Cleaning items.

Home Improvement/DIY (Do it Yourself)

• Lamp fixtures, lamps & bulbs (OSRAM, PHILIPS)

• Electrical items (BUSH) Bathroom & Sanitary (Faisal & ICL)
• Flooring (Krono Flooring)
• Paints and painting accessories (ICI,Master Paints)
• General use and specialized hand tools (Stanley)
• Power tools (BOSCH, Black & Decker)
• Generators (Honda) and operating equipment.

DIY also offers a wide range of car interior and exterior equipment, car
care solutions (MOTHERS, COSMIC) and good quality tyres at low rates
(GOODYEAR, NEXEN).
Home Textile/Home Decoration
Ladies wear/Men’s wear/Children’s wear/Shoes/Luggage
Sports & Seasonal
METRO own brands
In several food and non-food product categories METRO Cash & Carry
offers a wide range of its own brands. These brands are highly popular
across the globe.

The availability of these brands allow our customers to save money

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without compromising on the quality for which we are famous and feel
proud of it.
Their brands are following

Alaska
Fairline
Enhil

All of these three are related to electronics equipments.

Identify the type of retail outlet, and type of ownership.

The Metro categorized itself as a wholesaler. They sell in bulk quantity. We

can say that they are business to business sellers. The type of ownership is
Sole Proprietorship. There is only one Person who is the Owner of Metro all
over the world. There are more than 600 hundred branches all over the
world.

Has the retail outlet identified its target market and competitors? If so
describe the target market, and identify the competitors, of the store?

According to them they are HORECA which offers products to

Shopkeepers, Hotels
, restaurants and canteens. Metro have no any competitor in the Market of
such a standard. They are unique in the Pakistani Market.

Is the store management making efforts Building Sustainable

Competitive Advantage, and loyalty program with the help of
positioning, service, database retailing, and unique merchandise? If so
how?

Metro is leader in such a situation. It has no any strong competitor as well.

But they have made strong position in the mind of consumers. They have
international GMS system which handles their management system. Their
system is made by Germany. The system is online which collect data and
create data base of INVENTORY and customers.
They call their platinum customers to have proper feedback and solve their
problems. In this way they successfully create customer Loyalty.
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What kind of vendor relation do they have? Are they deriving any kind
benefit out of that relationship? Pen down the details.

They have almost all famous companies with them. They directly purchase
through companies in very huge bulk quantity. They contract with
companies and get best quality and quantity.
On the other hand the companies also save their cost, because companies put
their stock in METRO at once. And they purchase on debt, the terms of debt
vary company to company.

How does the retailer motivate its employees does it help in retaining
them?

The bonus, benefits and incentives are given to employees. They have
created a strong culture. They arrange different Picnic trips and other
function to entertain and motivate their employees.

How do they keep the operation low cost? And build multiple sources of
advantage?

When they purchase in huge bulk they got reasonable discount as compared
to others. On other Metro is self services wholesaler, so they reduce their
cost in customer services. But most of the companies send their own sale
representative to Metro on their own stall to facilitate the customer I
purchasing the product

What kind of growth strategies do they follow, like market penetration,

Market expansion, retail format development, and or diversification?

They have adopted market penetration strategy. They are now working hard
to create more and more business. They are now investing more on their
business retailer.

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 How do they define their Mission statement?

Mission Statement

"Metro is a Cash & Carry Distributor for businesses and

professionals. Metro provides quality products and business solutions
at the lowest possible prices".

Are they carrying Strength and Weakness analysis? –

They have ATM facility at their store, they also offer installment plans in
which bank is involved. (HABIB BANK LIMITED)
IT is also their strength that they do not have strong competitor at their level.
The registered business person can refund GST (General sales tax which he
has paid on metro) when paying the tax to FBR (FEDERAL Board of
Revenue)

What is the basis of selecting their retail site? Please give details.

The Metro mostly select the site at the extreme corners of any city the
location that they have selected near AirPort is surrounded by DHA
PUNJAB COOPERATIVE and other societies, As we know that the final
consumer is not a target of Metro, they are focusing Business and Business
Class which mostly lives in that areas.

What kind of retail organization structure do they have? Is it single

store, regional department store chain, corporate organization of a
regional department chain, or any other type? Please discuss in detail.

The Metro classifies itself as business to business wholesaler. They are

following vertical organizational structure with proper hierarchy. At each
level the authority and span of control is predefined

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 Store Manager

Floor manager Floor manager

Floor Manager Floor manager

Department
Department Department
Department Manager
Manager Manager
Manager

Assistant
Department Manager

Store Associates

The hierarchy starts with store manager and there are Four Flour managers
and each manager controls 10 Departments and there are total 40
Departments. The proper authority and moderate Spam of control make it
possible to operate functions efficiently.

What kind of incentives do they offer to their employees?

Normally incentives are given to them on basis of their performance. The

incentives in the form of bonus are mostly given in Metro store. On
quarterly basis the performance is analyzed and rewards are given to
employess.

How are they managing diversity in their workforce?

The Metro is accommodating divers workforce at their working area their

training is carried out to manage them properly

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 Do they have CRM in place and how do they manage it?

The Metro has created CRM successfully with its customers. Their Data
Base deals with the customer information. They also call to their platinum
customers. In cause of problem they sincerely solve it.
On other hand Metro create CRM through his offers. They distribute
magazines monthly to their registered customers. This trend is deeply
practiced by Metro only in Pakistan.

How do they evaluate store employees and provide feedback?

They evaluate their employs on the basis of their Task. The Monthly
performance reports are prepared. After evaluation the hardworking employs
are promoted as well as rewarded.
Metro also have a teaching staff to train their existing and new staff.

What steps do they take to detect / prevent shoplifting?

The shop lifting is common all over the world. Metro has created a strategy
to minimize this loss. They place a tag or Sticker on every single piece of
product. When shop lifter try to take any product without billing. The
Automatic scanner on Exit gates are activated and detect the bar code (which
is pasted or tagged on product). The shoplifters have to pay double of the
price. Other wise they are given in the custody of Police.

What are your overall evaluations of the store? In your point of view
what are the critical success factors of the store? And what are your
suggestions to further improve the store’s business?

The setup of Metro is good and standardized. They have gained competitive
advantage. But it will take time to change the perception of Local retailer.
On the other hand the prices of products not have much difference as
compared to local market. There is a miner difference in their prices. Only
big retailer can have fruit of Metro.
They have better Parking Place then others.

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 Suggestions

• The Metro should facilitate Local consumer. In simple words they

need to break bulk.

• There should be more branches of metro in Pakistan.

• They should also invite international brands to enter in Pakistan.

• There should also be facility of E-retailing on Metro Site.

• They can start Metro Cards to salaried Persons. The Card should be
worth of 5000-100000Rps. It will be new in Pakistan and easy for
salaried persons to accommodate their salary on Merchandise.

• They should also start charity related activities to attract customers

and help desired peoples.

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