Team Name: Kronos College: IIM Shillong Member 1: Priyansh Modi Contact: priyansh10@iimshillong.

in 9774014143 Member 2: Arnav Gupta Contact: arnav10@iimshillong.in 9774012088 Member 3: Saket Rungta Contact: saket10@iimshillong.in 9774011050

JSPL Retail Channel

A Case Study for Abhay- MDI Imperium 2011

To come up with a strategy to strengthen existing retail channel for the distribution of three products - TMT Bars, Angles and Channels
Distribution has always been a problem in India in terms of retail business. Companies lose customers due to unavailability of products and hence suffer losses. JSPL is facing tough competition from its major rivals in the Steel manufacturing industry by SAIL, Essar & TATA.

These major competitors have Hyper-marts, Express-marts, Storage Houses & various other retail distribution channels in order to deliver the goods to the end users. JSPL has currently 8 stockyards in the country for demand fulfillment of the requirements. Thus, because of the competition, JSPL needs to strengthen its existing retail channels for the proper distribution of its products.

Proposed Changes
In order to increase the retail channel base, JSPL should increase the number of dealers so as to cover more perimeter providing convenience to the customers for their purchase. JSPL need to set-up channel partners to prevent customers from jumping to other retailers. These channel partners will sell these JSPL products and will have a direct interaction with the customers and will provide time to time updates to the company regarding the feedback from the customers. For Example, the Tata Shakti model caters to the mainly rural consumers with retail chain in almost each and every district covering more perimeters. JSPL needs to open such models which can cater to the consumers across the region. In rural consumers, the price and availability of the Steel Products plays a huge role in its demand many major Steel brands have increased their sales many fold with the use of this attribute of Indian Consumers.

Mining

Works

StockYards

Branch Offices

Dealers

Consumers

Currently, JSPL has limited number of stockyards in each region to fulfill the demands. Compared with TATA Shakti retail outlets, the penetration level is very low. To solve this issue, JSPL can create either retail outlets across the regions or dealers for the same. For example, in Gujarat, there is only 1 stockyard located at Ahmedabad. Under this we can create 3 more dealers located in Surat, Rajkot & Bhuj, which will control the nearby districts. Thus, through strategically located dealers JSPL can increase the penetration to a greater extent. Also for future strategic outlook the company should focus on Company Owned Company Operated outlets or Franchise Model Based retail Outlets for rural areas which will help in increasing JSPLs reach in rural India where the demand potential is high.

Thus, the one major change JSPL needs to do is to increase its penetration in India, especially Rural India which is expected to be the major market for Retail Steel. With local promotion, it can give a stiff competition to Tata Shakti and other Steel firms in Retail segment.