Management Test Assignment

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Management Test Assignment

Executive Summary

The retail industry in India is experiencing a boom in the present situation. However, the

competition in the retail industry is also fierce and cut throat. The following report analysis

and examines the progress of the retail chain business of the D Mart. The report scrutinizes

its challenges, strengths, potentials and threats that will provide the best analysed source of

information for retail industry which explores the key competitors in the retail market. D

Mart was established in 2000, with one store in Mumbai suburban area now has grown to be

a market leader and a tough competitor in the Indian retail sector which has its own share of

challenges. The report also studies the entire journey of D Mart, its business strategies,

challenges, growth, technological improvements, human resource management strategies,

organizational structure and the surrounding business dilemma in the industry.

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Contents

Introduction ................................................................................................................................ 4

Organizational Structure ............................................................................................................ 5

The functions of the staff ........................................................................................................... 6

Ownership .................................................................................................................................. 7

SWOT and PEST Analysis- ....................................................................................................... 8

SWOT Analysis of D Mart ........................................................................................................ 8

PEST analysis of D Mart ........................................................................................................... 9

Conclusion ................................................................................................................................. 9

Bibliography ............................................................................................................................ 11

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Management Test Assignment

Introduction

The retail industry in India is one of the fastest growing industries with glimmer future on a

global scale. Although retail industry is present from a very long time in Indian economy but

it is making a dynamic change by slowly accepting international and effective system of

retailing. According to a recent report by IBEF (India Brand Equity Foundation), the retail

industry contributes 10% of India’s GDP and it is also the fifth largest global leader in retail

industry (Ibef.org, 2017). Changing life style and developing and stable economic condition

in Indian economy has aided the retail industry to experience a dynamic growth not only in

metropolitan cities but as well in Tier-II and Tier-III Indian cities. According to a recent

economic report, the retail industry in India is expected to develop to US$ 1,100 trillion by

2020 from US 672 in 2017 (Assets.kpmg, 2018).

Utilizing the opportunity, Mr. Radhakishan Damani who was a leading investor in stock

market established the unbeatable retail chain; D Mart. Mr. Damani is often regarded as one

of the finest value investors in India. The retail king, Mr. Radhakishan Damani has been

listed as 11th richest Indian and 151th billionaires on global ranking (Magazine, 2019). In

2000, Mr. Damani established his first retail store in suburban in Mumbai and since then his

business has been unstoppable (Appendix 2).

The basic objective of D Mart was to offer value-based products at affordable and pocket

friendly prices to Indian families throughout the country. The headquater of D Mart is

situated at Mumbai. D Mart has a number of private products like D-Mart Premia, D-Mart

Homes and D-Mart Minimax. The organization has 160 retail stores across Maharashtra, Delhi,

Punjab, Gujarat, Andhra Pradesh, Madhya Pradesh, Telangana, Rajasthan, Tamil Nadu,

Rajasthan, and Karnataka (Sebi.gov.in, 2019). The total employee strength is more than 164

along with part time employees located in retail shops.

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The company has a very strong supply chain management system that supports the retail system.

The organization has also 22 distribution and 7 packaging centres in Maharashtra, Karnataka,

Gujarat and Telangana which has helped D Mart to become one of the most profitable retail chain

in India (Dmartindia.com. 2016).

D Mart retail shops has become one of the most favoured shopping destination for Indian

customers because D Mart offers a wide range of products (Home utility products, Foods,

Toiletries, Beauty products, Garments, Kitchenware, Bed and Bath linen, Home appliances, Toys

& Games, Stationery, Footwear, etc.). Therefore, it has become one stop destination.

Organizational Structure

The organization structure of D Mart is decentralized where there are different regional heads

and who is connected with the director, i.e Mr Dimani. Contracts are made with different

novelty of products for distribution to the distribution centres and from there to the packaging

centre and lastly to the stores. Every activity are recorded according to zones and groups of

zones only and forwarded at one to make the final. The organizational structure of D Mart

goes like this

 Chairperson (Mr. DImani)

 Board of Directors

 Department for each operation

 Zonal heads

 Zonal directors

 Zonal superintend

 Zonal distributor

 Employees as accountants, salesperson etc.,

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The functions of the staff

D Mart’s success is in its primary three pillars that the business focuses on – Customers,

Vendors and Employees. Therefore, the third pillar of the D Mart success model is effective

human resource management. In retail business employees are as important as customers.

Competition in the retail business is getting fierce with new technological up gradation,

customers are now getting insight of their needs and available options, facilitating a rising

amount of personal service, articulated in innovative ways and delivered through the

cloud. In a recent study it had been observed that unreasonable and inflated employee

turnover in the retail business has an impact on the management employee relation (Imna &

Hassan, 2015). In retail business the employees are the face of the organization who engages

with the customers directly. Therefore, if an organization fails to connect and develop an

effective and positive relationship with the workforce, then the management may be

compromising the investments that the organization is building to make customer satisfaction

as a priority for success. The hidden risks of employee satisfaction can lead to negative

publicity and harm reputation of the organization in the market and decrease return in

investment (Salleh, et al, 2012). Therefore, being one of the pioneers of retail market, D Mart

hires talented youths, train them effectively to cultivate their skills and talents and mould as

per requirement of the organization. Employees in D Mart are offered excellent salary

revenue, flexibility, positive and well organized work culture. D Mart employees are taught

about the organization’s objective and rules and regulation during the training period but

once on the floor of the retail chain they have the empowerment to operate according to their

convenience to solve customer problem and increase customer satisfaction.

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Ownership

D Mart is owned by Mr. Radhakishan Damani and it is a limited company and it is listed in

Indian Stock Exchange. D Mart is listed on stock exchange of India by Avenue Supermarts

Ltd. and is regarded as the 65th valuable Indian business organization. According to 11th June,

2018, the market capitalization of D Mart has crossed 1 Trillion (Sonavane, 2018). The board

of directors of D Mart contains six individuals holding different prominent post within the

organization who assist the organization to take ethical and strategic business plans

(Economictimes.indiatimes.com, 2019). Referring to appendix 1, it can be observed that

promoters hold 81.2% of the total share of D Mart which is followed by General Public

(9.14%), Foreign Institutions (5.86%), N Banks Mutual Funds (2.85%), other (0.7%) and

Financial Institutions (0.24%).

The business strategy of D Mart is by expanding its stores in owned store locations only

which has facilitated D Mart saving 5-6% of its expenditure on lease and rent. D Mart

currently owns 85% of its total stores that facilitate to keep the organized well capitalized and

free from debt while the business operations create new revenue from the business. This

strategy helps the business to save revenue which it offers back to its customers in form of

discounts. D Mart also buys directly from suppliers which saves a lot of intermediary margins.

D Mart has a Certificate of Incorporation and the objective of the organization was to

research, identify and ensure the accessibility of innovative products which can fulfil the

requirement of the middle class Indian family (Sebi.gov.in, 2019). The organization tries to

bring the best value for the customers so that the money the customers send in D Mart gives

them highest possible return and as a result the customer satisfaction is also elevated like no

other super market.

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SWOT and PEST Analysis-

SWOT stands for Strength, Weakness, Opportunity and Threats and PEST stands for

Political, Economic, Social and Technological. The basic objective of performing a SWOT

and PEST analysis is to understand the strengths, opportunities and possibilities in the market

for the organization to grow and also being aware of the weakness and threats and the

technological changes and innovations available in the market (Cadle, et al. 2010). These

marketing tools help the business to understand the situation and possible threats and market

trends for formulating strategic business planning.

SWOT Analysis of D Mart

Figure: SWOT Analysis of D Mart

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Management Test Assignment

PEST analysis of D Mart

Political- The federal law of India and consumer forum has set some rules and regulations to

protect customer rights therefore; D Mart has to operate their business by respecting those

laws.

Economic- The economy of India is developing and per capital of income of individual has

also increased. So, the sending capacity of spending has also increased. Therefore, offering

quality products that can solve customer needs can result in sustainability and growth for the

organization.

Social- D Mart has successfully providing quality products at affordable and competitive

price for its customers. Therefore, the reputation of the organization in the society has

accelerated. D Mart has cut down its advertisement cost as it believes that customer loyalty

and word of mouth are the effective business strategies for sustenance and growth in long

term.

Technological- D Mart stores has adopted new and innovative technologies for appropriate

management of the retail business. Technology saves time and energy. The retail business has

installed lifts, excellent shopping environment, online shopping option in selected stores,

cashless payment methods, etc.

Conclusion

Analysing the different available reports and information on retail industry and D Mart it can

be implied that D Mart has adopted the cost effective business model for sustainability and

growth of the business which is efficient and achievable for short term goals. However, in

long run, as the business expands and the operational expenses increases, it will create new

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challenges for the management. It is not always possible for corporate retail chains to own

stores as it involves a huge capital investment and this is one of the major reasons why D

Mart’s growth is slow compared to its competitors. However, this business strategy makes D

Mart profitable in comparison to other retail companies in Indian retail industry. The

capability of thinking out of the box strategies and ability of taking calculated risks has been

enhancing D Mart to sustain and grow in the competition.

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Bibliography

Assets.kpmg. (2018). Indian Retail - The. [online] Available at:

https://assets.kpmg/content/dam/kpmg/pdf/2014/11/BBG-Retail.pdf [Accessed 23

Jan. 2019].

Cadle, J., Paul, D., & Turner, P. (2010). Business analysis techniques: 72 essential tools for

success. BCS, The Chartered Institute.

Dmartindia.com. (2016). Annual Report D Mart. [online] Available at:

https://www.dmartindia.com/files/investor_relationship/annual_report_2016_-

17/Annual%20Report%202016%20-1710_08_2017_12_38_13.pdf [Accessed 24 Jan.

2019].

Economictimes.indiatimes.com. (2019). Avenue Supermarts Management Information -

Details of Avenue Supermarts Management - The Economic Times. [online] Available

at: https://economictimes.indiatimes.com/avenue-supermarts-

ltd/infocompanymanagement/companyid-45987.cms [Accessed 23 Jan. 2019].

Ibef.org. (2017). RETAIL : Market Overview and Trends. [online] Available at:

https://www.ibef.org/download/Retail-January-2017.pdf [Accessed 23 Jan. 2019].

Imna, M., & Hassan, Z. (2015). Influence of Human Resource Management practices on

Employee Retention in Maldives Retail Industry. International Journal of

Accounting, Business and Management. Research Paper, 3(1), 28.

Magazine, F. (2019). Radhakishan Damani & family. [online] Forbes. Available at:

https://www.forbes.com/profile/radhakishan-damani/#17508fa440de [Accessed 23

Jan. 2019].

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Salleh, R., Nair, M. S., & Harun, H. (2012). Job satisfaction, organizational commitment, and

turnover intention: A case study on employees of a retail company in Malaysia. World

Academy of Science, Engineering and Technology, 72(12), 316-323.

Sebi.gov.in. (2019). AVENUE SUPERMARTS LIMITED. [online] Available at:

https://www.sebi.gov.in/sebi_data/attachdocs/1475235183964.pdf [Accessed 24 Jan.

2019].

Sonavane, R. (2018). Business News, Shares and Stock Markets News Live - Latest IPO,

Mutual Funds, Budget, Income Tax and Finance News. [online]

https://www.livemint.com. Available at: https://www.livemint.com/ [Accessed 23 Jan.

2019].

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Appendix

Appendix 1

Source-

Economictimes.indiatimes.com. (2019). Avenue Supermarts Shareholding Pattern - The

Economic Times. [online] Available at: https://economictimes.indiatimes.com/avenue-

supermarts-ltd/shareholding/companyid-45987.cms [Accessed 23 Jan. 2019].

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Appendix 2

D Mart Store in Mumbai, Maharashtra

Source- Internet.

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