PANTALOONS

1)Current Industry Statistics >Turnover -700crApparels >40%Revenue from Kolkata >No of stores -45all over India (25 cities) >Highest Revenue From John Miller >Lowest Revenue fromAgile(sports new brand) >Private Label Contribution towards sales >Mens wear65%Womens wear 35 % 2)Retail Industry Trends Key Issues - Maintain margins despite tight economy; optimize supply chain - Avoid stock outs on in demand goods, improve responsiveness to trends/opportunities - Compete aggressively with volume, category and convenience competitors - Cost effectively educate consumers (mobile, digital displays, wands....) - Satisfy demanding consumers and integrate their buying experience across channels - Deal with regulation and compliance - Optimize costs including IT - Seek profitable expansion opportunities - Manage online reputation risk

Trends Affecting Retail Businesses:

- Mobile marketing and social media - Flat panel displays are at an all time low cost - Demise of some larger chains - Economy driven changes in consumer buying power and behavior; slow recovery - Reinvigoration of credit card purchasing - Stop'n'Shop are experimenting with shopping wands

3)Future Estimate Future Group firm Pantaloon Retail (India) today said it will merge its wholly-owned subsidiary Future Value Retail, which runs Big Bazaar and Food Bazaar stores, with itself. Future Value Retail operates 148 Big Bazaar and 169 Food Bazaar stores, among other formats, in over 70 cities across the country, according to its website. It also runs another retail brand KB's Fairprice. In April, Future Group gave away majority control of Pantaloon to ABNL for a total consideration of Rs 1,600 crore. In June, the group had sold majority stake in Future Capital Holdings to private equity firm Warburg Pincus for Rs 560 crore.

5)Major Players in Industry (in India) Who are the top players in the retailer industry in India today? Pantaloon Retail (India) Pantaloons managing director Kishore Biyani believes in changing the rules. When Pantaloon started the Big Bazaar discount stores in 2002, malls were not part of the shopping culture. Big Bazaar became a hit, as it combined the look and feel of Indian bazaars with aspects of modern retail like choice, convenience and quality. Headquartered in Mumbai, the Rs 3,500-crore company now operates over 5 million sq ft across 40 cities.

Shoppers Stop A menswear store owned by K Raheja in the Mumbai suburb of Andheri in 1991 has now transformed into Shoppers Stop,

with 27 departmental stores. The company entered airport retailing in a joint venture with the Nuance Group. It also launched Indias largest hypermarket, Hypercity. In 2005, it bought the Crossword bookstore chain.

Lifestyle Growing from one store in Bahrain in 1973, the NRI-led Landmark Group today operates over 5 million sq ft in the Middle East and India. The groups first Lifestyle store in India opened in Chennai in 1999. Now it has 325,000 sq ft in Chennai, Hyderabad, Bangalore, Gurgaon and Mumbai. Its first hypermarket, branded as Max, is expected to open soon.

Reliance Retail Mukesh Ambanis 15,000-people Reliance Retail has opened 250 convenience stores, branded as Fresh, across the southern states. It is now planning to launch 30 such outlets in Mumbai. Reliance Retail plans to invest Rs 25,000 crore on hypermarkets, supermarkets and specialty stores in the next four years. The first hypermarket will be up in Ahmedabad by the end of July.

Aditya Birla Retail The company, which will operate under the brand More, has selected two formats hypermarkets and supermarkets for its initial foray. The first store has opened in Pune. Last January, the company acquired Trinethra Super Retail, which has given it more than 5,00,000 sq ft and a strong presence in the South. The Birlas outlay for the business over the next three years is Rs 9,000 crore.

Bharti Retail The worlds largest retailer Wal-Mart, which prefers to go it alone outside the US, chose Sunil Mittals Bharti Enterprises as its partner in India. The venture will start with the cash & carry (wholesale) format, which could be extended to retail operations once foreign direct investment is allowed in multi-brand retail, as is expected. The entity is yet to start operations as the formal agreement has not been inked.

6) International Players in the Retail Industry

1. Wal-Mart (United States )The world's largest retail company, WalMart was founded by Sam Walton in 1962. Incorporated on October 31, 1969, Walmart has 8,500 stores in 15 countries.

2. Carrefour (France )Carrefour S.A. headquartered in Levallois-Perret, France opened on January 1, 1958, in suburban Annecy. The group was built by Marcel Fournier, Denis Defforey and Jacques Defforey. In 1995 it merged with Promodes, known as Continent, one of its major competitors in the French market.

3. Metro (Germany) Founded in 1964, Metro AG is a diversified retail and wholesale/cash and carry group based in Dusseldorf, Germany. It has the largest market share in its home market.

4. Tesco (United Kingdom)Tesco plc is a global grocery and general merchandise retailer headquartered in Cheshunt, United Kingdom.Founded in 1919, it has stores in 14 countries across Asia, Europe and North America. 5. Lidl Stiftung & Co (Germany) Founded in the 1930s by a member of the Schwarz family, Lidl stores are present across 20 countries in Europe. 7) Porters Five Forces Model Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.
Diagram of Porter's 5 Forces SUPPLIER POWER
Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry

THREAT OF NEW ENTRANTS

Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products

THREAT OF SUBSTITUTES
-Switching costs -Buyer inclination to substitute -Price-performance trade-off of substitutes

BUYER POWER
Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives

DEGREE OF RIVALRY -Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes

Critical Success Factors in that Industry/Market/ Business Creating Systems In Retail

As much as possible and especially with recurring events like receiving merchandise, or ringing up a transaction, you want to create a system for how these activities are to be done. By having a system, and training employees on that system, you increase the productivity and confidence of your employees. They know what they are supposed to do and how to do it. Hiring the Right Employees

Hiring the right employees rather than just warm bodies is critical to the success of any retail store. Naturally, they should be comfortable dealing with a diverse range of people. They need to be able to genuinely put the needs of the customer ahead of their own. They need to be self motivated and always on the look out to provide customer service and sales opportunities. Marketing

Marketing is critical in creating brand awareness and customer loyalty. You will likely want to incorporate a variety of tactics, which might

include direct marketing to your ideal clientele, social marketing via sites such as Facebook, Twitter, and You Tube and telemarketing. Buying The Right Merchandise

In order to ensure that you buy merchandise that doesn't sit around collecting dust, you need to be clear about the customer you are seeking to serve. You want to develop one or more precise profiles of your ideal customers. This would include their lifestyle, their needs, their fears and the solutions they are looking for. Customer Service

When done right, customer service creates a bond and sense of loyalty. This loyalty means that they are more likely to shop with you even if a competitor offers a lower price. Also, while there are many factors that are beyond your control, customer service is one area that you have absolute control over. Analyzing Your Results

You want to always be analyzing your results. This allows you to identify areas of opportunity for improvement. Tony Robbins the personal growth guru says, "You are either growing or you are dieing." The same holds true for retail. To succeed in retail you always need to be seeking to improve and grow or, with time, your business will die. Pantaloons Success Story Pantaloons Story Pantaloons success and continuous growth in the Indian organized Retail market can be attributed to a number of factors, some of which have been derived from the strategies of large retailers in the west, while others are completely tailor-made for the Indian market. What is evident at the outset is that Biyani has foreseen and understood the Indian retail roadmap better than anyone else. Pantaloons major advantage over its competitors in the retail sector has been its unique understanding of the Indian organized retail market with all its quirks, shortcomings and challenges. By creating a retail business from the ground-up and expanding rapidly, Pantaloon has followed a Wal-Mart-like pattern of growth. However, unlike Wal-Mart, it decided to experiment with as many retail formats, product-mixes and brands as was possible in order to gain maximum knowledge about the uncertain

Indian mindset. In fact, newer entrants in the organized retail market would learn the ways of the unique Indian organized retail sector as well as find a way to combat Pantaloons dominant market share in almost all forms of organized retail a daunting task. What did it do Right ? The Retail Experiment Multiple Formats, Multiple Brands Pantaloon has experimented with every retail format possible. Most of their experiments have proven to be successful and Pantaloon continues to experiment while expanding existing ventures. However, the real reward of these experiments is the knowledge and experience gainedThis was most elusive in a previously untouched and unknown organized retail sector. This is an example of Pantaloon adapting itself to the Indian market rather than attempting to copy a Wal-Mart. The experimentation process did not end with testing different store formats alone: Pantaloon is also experimenting with a variety of products. From mens wear the company has moved on to introduce furniture, sportswear, kitchen appliances, food, electronics and childrens apparel. Again, it seems to know what works and what doesnt in the Indian market, something that would not have been this apparent even 1 decade ago. Pantaloon has also introduced a number of private brands. For example, it has experimented with launching clothing lines based on famous Bollywood blockbusters.. Within the brand retailing space, Pantaloon has also tied up with some of Indias most popular brands like Gini and Jony to sell them at their stores. Rather than attempt to compete with existing popular brands the company has decided to partner with them and leverage them in the ambiguous Indian market. These brands have achieved success and a loyal fan following; Pantaloons move has brought in more customers then they could retain. The competitors do have the opportunity to learn from the experiences of Indias largest retailer, but the experience that comes with managing these diverse retail formats in the Indian scenario is something that new entrants will have to learn on their own. Due to the pace at which Pantaloon had moved, it has made several sectors of organized retail out of anybodys reach. The Right Joint Ventures at the Right Time In accordance with its experimentation policy Pantaloon has formed key joint ventures with a number of popular names like Staples and

Starbucks. With its first-mover advantage, it actively shut doors for the competition by snapping up major brands before others could get to them.

Versatile Retailing Rather than expand as a menswear retailer alone, Pantaloons policy of comprehensive experimentation has given it an important advantage a versatile retail presence. Consumers see Pantaloon as an exclusive brand retailer, discount retailer, specialty retailer and food retailer: all at once. One of the reasons for this versatility is that the brand name has not been forced on, or even associated with the different products and stores other than the original menswear line. Instead, each store and product has been given its own identity and presence. Pantaloon is essentially an organized retailer in the guise of a large number and variety of unorganized retailers. This again represents the companys unique understanding of the Indian scenario consumers often feel threatened in a monopolistic environment, and are thus allowed to choose between multiple brands, all of which essentially belong to the same parent !! Strengthening Back End Operations: Supply-Chain A robust Supply chain serves as the backbone of a successful retail chain in the long-run. Although the company ignored these aspects in initial phases due to the inadequacies in infrastructure, it rightly favored experimentation over organization. But to continue to grow at the pace it had acquired in the first few years, it needed to pay attention to its sourcing network, transportation system and other logistics.. What Pantaloon is and will always have to improvise on is the absence of basic infrastructure like transportation and regulation. The pace of expansion of the retail industry is likely to outstrip that of development of the countrys infrastructure. Pantaloon will have to be innovative in deciding as to how it compensates for these inadequacies while efficiently managing its supply chain. Money: The Ultimate Differentiator Pantaloon has the upper hand as compared to most potential foreign and domestic competitors. However the same characteristics that have made it an exclusive and versatile retailer can prove to be a disadvantage. Much of Pantaloons competition comes from either retail ventures of other large Indian industrial houses (Reliance Retail, Birlas retail venture) or foreign retail giants (Wal-Mart). In other words, Pantaloons competition

is rich, very rich. While the competition may not have made inroads into the Indian market as thoroughly as Pantaloon, it still has enough money to compensate for this shortcoming.

Summary Through a carefully executed policy of comprehensive multi-format experimentation, Pantaloon has managed to understand and take advantage of the compressed evolution of the organized Indian retail industry (mentioned earlier) to become the dominant player. As far as industry knowledge, experience and skill are concerned, Pantaloon with its dream team is looking in good shape. Now it is facing stiff competition that is financially better-equipped. How it takes advantage of its existing resources, accesses additional capital and competes with its competitors in a race to develop an efficient supply-chain will determine the future of the company. While the task is daunting, Pantaloon has more leeway and an enormous head-start compared to anyone else.

FUTURE GROUP :Vision and mission - The vision is to, deliver everything,
everywhere, everytime to every Indian consumer in the most profitable manner. We share the belief that our customers and stakeholders shall be served only by creating and executing future scenarios in the consumption space leading to economic development. We will be the trendsetters in evolving delivery formats, creating retail realty, making consumption affordable for all customer segments for classes and for masses. We shall infuse Indian brands with confidence and renewed ambition. We shall be efficient, cost- conscious and committed to quality in whatever we do. We shall ensure that our positive attitude, sincerity, humility and united determination shall be

the driving force to make us successful. At Future Group we are committed to being a catalyst of positive change in the communities, societies and business sectors in which we operate. We envision Indias transformation into the legendary 'Sone Ki Chidiya' (golden bird), taking wings once again to reach greater heights. We take pride in our Indianness. Our belief in inclusiveness for long-term sustainable growth and economic prosperity evokes trust among consumers, employees, suppliers, partners, shareholders and the community.

Key Milestones
2011
April 2011 KBs Fairprice celebrates opening its 200 stores in India May 2011 Future Supply Chains becomes ISO certified

2010
Future Group launches its telecom brand T24 in partnership with Tata Teleservices to provide additional loyalty benefits to its customers. Future Group launches products in key FMCG categories through Sach, a brand co-created with Sachin Tendulkar. Future Group connects over 4000 small and medium Indian manufacturers and entrepreneurs with consumers. 2009 Future Group celebrates its first Shopping Festival across all retail formats in key Indian cities. Future Innoversity starts its campuses in Ahmedabad, Bangalore and Kolkata to offer degree programs through a tie-up with IGNOU. Future Group partners with Hong Kong-based Li & Fung Group to strengthen its supply chain and logistics network across the country. 2008 Future Capital Holdings becomes the second group company to make a successful Initial Public Offering (IPO) in the Indian capital market. Big Bazaar crosses the 100-store mark, marking one of

the fastest expansions of the hypermarket format anywhere in the world. Total operational retail space crosses the 10 million square feet mark. Future Group acquires rural retail chain Aadhar from the Godrej Group, which has a presence in 65 rural locations. 2007 Future Group crosses the $1 billion turnover mark. Specialized companies in retail media, logistics, IPR and brand development and retail-led technology services become operational. Pantaloon Retail wins the International Retailer of the Year award at US-based National Retail Federation convention in New York, and Emerging Retailer of the Year award at the World Retail Congress held in Barcelona. Online portal Futurebazaar.com becomes Indias most popular shopping portal. 2006 Future Capital Holdings, the groups financial arm, is formed to manage over $1.5 billion in real estate, private equity and retail infrastructure funds. Home Town, the home building and improvement products retail chain, is launched along with consumer durables format Ezone and furniture chain Furniture Bazaar. Future Group enters into joint venture agreements to launch insurance products with Italian insurance major Generali. Future Group forms joint ventures with US office stationery retailer Staples. 2005 Future Group moves beyond retail and acquires a stake in Galaxy Entertainment, Indus League Clothing and Planet Retail. Future Group sets up Kshitij, Indias first real estate investment fund, to build a chain of shopping malls. 2004 Future Group launches Indias first seamless mall, Central, in Bangalore. 2002 Food Bazaar, the supermarket chain is launched. 2001 Future Group launches three Big Bazaar stores within

a span of 22 days in Kolkata, Bangalore and Hyderabad. 1997 Future Group enters modern retail with the launch of the first 8000-sq. ft. store Pantaloons in Kolkata. 1995 Future Group launches John Miller, a brand for Formal shirts. 1994 The Pantaloon Shoppe, Future Groups exclusive menswear store in a franchisee format is launched across the nation. The company starts distribution of branded garments through multi-brand retail outlets across the nation. 1992 Pantaloon Retail India Ltd makes an Initial public offer (IPO). 1991 BARE, an Indian denim brand is launched. 1987 The company is incorporated under the name of Manz Wear Private Limited. Pantaloons, one of Indias first formal trouser brands,is launched.

History
Future Group India was established in 1994 with a vision to provide diverse services in Indian and Global markets. The business areas of Future Group cover BPO (Business Process Outsourcing), New Media, Security Management, and Construction. Through their strategic investment and services, the future of Future Group shows a rising star in the business sky of India. Their headquarters is located in Mumbai and their employee strength is 35000 people. Future group is located in 61 cities and 65 rural areas in India. Future Group, led by its founder and Group CEO, Mr. Kishore Biyani, is considered one of Indias leading business houses with multiple businesses spanning across the consumer space. Retail forms the core business activity of Future Group. Its flagship brand is Pantaloon Retail. The group operates over 11 million square feet of retail space in over 63 cities and towns and 65 rural locations across India. Future Group follows a multi-format retail strategy that captures almost entire consumption basket of Indian customers. On one hand in the lifystyle segment, the group operates Pantaloons, a fashion retail chain and Central,

a chain of seamless malls, whereas on the other hand, in the value segment, it has Big Bazaar which is a hypermarket format that combines the look, touch and feel of Indian bazaars with the choice and convenience of modern retail. Big Bazaar would have 100 stores PAN India which entail the fastest ever organic expansion of a hypermarket. The first set of Big Bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore.

Product Portfolio
Future Group comprises operating businesses in three sectors: Retail, Allied Services and Finance. Leveraging a strong understanding and knowledge of Indian consumer preferences, habits and aspirations, we have built some of the most respected retail brands in the country. Our retail business across the value and lifestyle segments focuses on 4 key consumption verticals: food, fashion, general merchandise and home. While retail forms our core business activity, our groups subsidiaries are present in consumer finance, capital, insurance, leisure and entertainment, brand development, real estate development, retail media and logistics. We have aligned our business opportunities with the broad objective of being a catalyst in Indias consumption-led growth. In line with leading retailers of the world, Future Group aspires to capture a significant portion of Indias consumption and contribute to a significant proportion of our GDP. As the Indian economy matures, it is upon us to lead Indias consumption story, achieving inclusive and profitable growth with sustainable value creation. 1. Retail - Future Group makes every effort to delight its customers, tailoring store formats to changing Indian lifestyles and adapting products and services to their desires. We operate some of Indias most popular retail formats. Across value and lifestyle segments, our multi-format retail strategy caters to the complete consumption needs of a wide cross-section of Indian consumers. As modern retail drives fresh demand and consumption in new categories, our strategy is based on a deep understanding of Indian consumers, the products they want, and making these products available in every city, in every store format. Future Group offers innovative offerings at affordable

prices tailored to the needs of every Indian household. Pioneers in the Indias retail space, our formats are household names in more than 85 cities and 60 rural locations across the country. Our stores cover around 15 million square feet of retail space and attract around 220 million customers each year. Pantaloon Retail (India) Limited focuses on the lifestyle retail segment led by the Pantaloons and Central formats. Future Value Retail focuses on the value retail segment through the Big Bazaar, Food Bazaar and KBs Fairprice formats. 2. Finance - Future Group has broadened its finance services portfolio to strengthen its position in the highly competitive consumer market through user-friendly and dynamic services based on Indian consumer needs. Our group companies provide consumer finance and insurance to customers besides offering corporate loans and equity investments to companies engaged in consumer businesses. The key aspect of our business model is to provide a unique personalized customer experience to expand and capture a greater share in the highly competitive finance market and help people realize the Indian dream. Future Groups financial arm - Future Capital Holdings Limited (FCH) is a provider of financial services across consumer and wholesale businesses, with aspirations to grow into a significant financial conglomerate. Conceptualized around a unique positioning of a financial services business, integrated with a retail chain, Future Capital is establishing financial superstores within the Retail stores of Future Group such as Big Bazaar, E-zone and Home Town to create Indias first consumer-centric retailer of financial products and services. 3. Services the services provided by it include :a. Future Supply Chains, a specialized subsidiary, offers a strategic, focused and consolidated approach to meet the groups large supply chain requirements as well as those of select suppliers and business partners. Future Supply Chains provides integrated end-to-end supply chain management, warehousing and distribution, multi-modal transportation and container freight stations. Operates 5 major verticals: Warehousing, Transportation, International Logistics, Brand Distribution and Reverse Logistics. Current warehouse footprint of over 3.5 million square feet with 67 warehouses across 32 locations. Dedicated fleet of over 400 vehicles and an

outsourced fleet of 400 trucks that move goods across India in the most efficient and cost-effective manner. Li & Fung, the Hong Kong-based largest retail supply chain company, is an investor and partner of Future Supply Chains. b. In 2008, Future Group established Future Learning whose unique strength lies in its rich experience in the learning and development domain, especially across the retail industry. Future Learnings three focused lines of business are Future Lead, Future Innoversity and Future Sharp. Future Lead functions as a centre of learning. It offers a range of customized programmes in leadership, management, personal effectiveness, sales maximization, business processes and customer retention. It also offers audit and consultancy services to corporate clients. Under the aegis of Future Innoversity, Future Learning offers graduate, post-graduate, diploma and certificate programmes. The graduate and post-graduate programmes are offered in collaboration with Indira Gandhi National Open University (IGNOU). In collaboration with the Ministry of Rural Development (MORD) and National Skill Development Corporation (NSDC), Future Sharp offers skill development programmes to make below-poverty-line youth employable. c. Future Media (India) Limited (FMIL) offers relevant engagement through its media properties within Future Group retail spaces. Visual spaces in the shopping environment include shopping trolleys, carry-bags, elevator doors, standees, danglers, trial rooms, counters, in-store signage, product displays and facades. Amongst print properties, Future Media offers My World, a monthly magazine for Future Group customers. Future Media has also launched Future TV, the first retailer-owned channel in India that aims to provide a unique audio-visual experience within an in-store environment. d. Future Brands Limited (FBL) is involved in the business of creating, developing, managing, acquiring and dealing in consumer-related brands and IPRs (Intellectual Property Rights). We retail a wide range of products and brands, some of which have been grown and nurtured by our group companies. e. In partnership with Tata Teleservices Limited, Indias dualtechnology telecom operator, Future Group provides mobile telephony services under the brand name T24 on the GSM

platform. T24 (Talk 24 hours) provides mobile telephony services to the customers of Future Groups retail stores. A differentiated offering in the crowded telecom space, T24 aims to increase loyalty among the millions of customers who patronize our retail stores. Based on the concept of Talk More, Shop More the T24 brand offers unique benefits for customers shopping at Future Groups shopping network. Also, One Mobile is a brand of Future Mobile and Accessories Limited, a Future Group company, having PAN India reach and running successfully 200+ stores, present in the form of SIS (Shop-In-Shop) at all Big Bazaars and also select Pantaloons & Brand Factory outlets of Future Group along with SAS (StandAlone-Stores) across the country. f. Future Group has taken the whole concept of customer loyalty to the next level by joining hands with PAYBACK. PAYBACK is Indias largest and one of Europes most successful multi-partner loyalty programs. With PAYBACK, customers can shop, save and get rewarded. This program enables consumers to collect millions of points across online and offline partners with just a single card. Customers can accumulate points across Future Group formats , thereby making shopping rewarding. Now that Future Group has become a part of this bandwagon, customers are bound to earn points at every step from formats like Big Bazaar, Food Bazaar, Pantaloons, Central, Home Town, eZone, Brand Factory and Future Bazaar. These points can then be redeemed for air miles, movie tickets, air tickets and vice versa.

Revenue Share
When there is Rs 7,846 crore in debt, that takes centrestage and everything else is pushed to the sidelines. And that is exactly what was happening at Kishore Biyanis Future Group over the past few years. However, after selling a majority stake in Pantaloon Retail to the Aditya Birla Group, managing a private placement with Bennett, Coleman & Company (BCCL), and getting private equity giant Warburg Pincus to acquire a majority stake in Future Capital Holdings (FCH) resulted in Biyani raising nearly Rs 2,500 crore in the last couple of months. Further, with Warburg Pincus taking over the Rs 3,800-crore debt of FCH, nearly Rs 6,000 crore in debt

has been wiped off Biyanis balance sheet. Improved financials have left Biyani free to concentrate on his retail business. And first on his to-do list is Central the groups large format retail store which is like a series of shop-in-shops. The Central store format is going to be our major revenue driver in the lifestyle segment in the coming years. We are targeting revenues of Rs 3,000 crore from Central in 2012-13, says Biyani, chairman of the Future Group. In 2010-11, Pantaloons contributed to at least 50 per cent of the Rs 4,325.57 crore revenues generated by the groups lifestyle arms; Central and Brand Factory (selling branded products at discounted rates) contributed to the other half. After Big Bazaar, Central is the only marquee outfit big enough to generate the revenues. Central is a successful and scalable business as it helps the landlord, the brand and the retailer share the upside of the business, says Biyani. Centrals business model is simple: Brands enter into an agreement with Central whereby they pay a minimum guarantee or rent per sq. ft (which may be upwards of Rs 75 per sq. ft), plus 10 per cent of the revenue. In case of the absence of rent, it will be 30 per cent of the revenues. Thanks to this model it covers itself during a slowdown while it shares the revenues of the brand when the going is good. Revenues have increased by nearly 30 per cent year on year between 2009 and 2012 and Central is expected to close its financial year in June with revenues of Rs 1,500 crore.

Financial Performance
Pantaloon Retail (India) Limited is today recognized as one of the pioneers in the business of organized retailing in the country with a turnover of over Rs.2,884.43 millions for fiscal 2006, as opposed to a turnover of Rs.1,463.12 million for fiscal 2005 and Rs.881.04 million for fiscal 2004. During the same period Pantaloon profit after tax was Rs.124.75 million, Rs.30.20 million and Rs.3.82 million, respectively. As a result, Pantaloon sales increased between fiscal 2004 and fiscal 2006 at a CAGR of 80.94% and Pantaloon profit after tax increased between fiscal 2004 and fiscal 2006 at a CAGR of 471.44%.

The Future Groups debts had constantly been increasing over the years (reaching roughly Rs.9000 crore). In 2007, when Biyani thought up of creating a financial services firm that could piggyback on his fast-growing retail empire, he set up Future Capital Holdings (FCH). In April 2012, Biyani decided to hand over majority control of Pantaloons to the Aditya Birla Group. He kept only 25% stake for himself. A few weeks later he even sold his majority stake in FCH. This was to help him make up his debts. Big Bazaar has been contributing to half the Groups turnover over the past few years. Biyani did not want to sell the empire that he had so meticulously built over the years and so this year he announced a war on debt. With selling of majority stake of pantaloons, Biyani was able to offload Rs1600 crore of debt. Biyani also wants to exit his joint venture with Italys Generalii and he expects Rs.1000crore from this sale which will further help with his debts. Biyani hopes that the capital markets will rise again which will help him to raise more money.

SWOT Analysis
Strengths 1. direct access to the Indian middle class masses. 2. Existing distribution franchise 3. Strong brand name 4. Strong bargaining/ procurement power 5. Non- complex controlled value chain Weakness 1. trying to address multiple customer needs 2. except for the flagship brand, no other business are Stars or Cash cows. Opportunity 1. Huge domestic consumption story. 2. Young and developing India 3. Low penetration by competitors in Tier 2 and 3 cities. 4. Untapped backward integration. 5. Increase in land value of village people providing huge purchasing power. Threats

1. 2. 3. 4.

inflation FDI in retail. Recession Domestic geo- political Scenarios.

BCG Matrix
The star products include :- Big Bazaar, Food Bazaar and E-Zone ( these products are in the growth stage and are the most popular products of the company) The Question Mark products include :- Brand Factory, Staples, Home Town, Future Bazaar. ( these are those products that the company isnt really sure about and they arent doing so well) The Dog products include :- Future General Life Insurance ( these products do not generate returns no matter how much capital is invested into them) The Cash Cow products include :- Pantaloons ( these products have a high market share but there is no more scope for growth )

Distribution Strategy
Currently, Future Supply Chain Solutions, the logistics arms of Future Group, is now establishing its own FMCG distribution network for modern trade. The company is currently in talks with big FMCG players to get them on board as clients and hopes to start full fledged operations in two months. It will invest Rs100 crore annually for the next three years in infrastructure, real estate as well as it will support for logistics business and even increase international logistics portfolio. Future Ventures, through its subsidiary, Aadhaar Retailing Limited announced the launch of its rural wholesale and distribution business with the opening up of its first Aadhaar Wholesale store in Kalol, Gujarat. The initiative is aimed at capturing growing consumption demand in rural India through wholesale and distribution centers coupled with a franchisee network. Each of these centers will cater to rural retailers in their vicinity and provide them with a wide range of merchandise and at costs that are lower than what they currently source at. The company expects to develop around Rs 4000 crore business through this format within

the near future. The rural consumption market is estimated to reach Rs 16,70,100 crores by 2015, according to estimates by consulting firm, McKinsey. The Aadhaar Wholesale format will focus on addressing the essential demand and expanding choice of the rural consumers by creating an effective supply chain mechanism. This initiative is in line with the Future Group s commitment to create livelihood and jobs in rural India. In 2011, Future Group had signed a MoU with Gujarat Government for creating livelihood and jobs in rural areas through multiple initiatives. Speaking on the occasion, Mr. Kishore Biyani, Group CEO, Future Group said, Aadhar Wholesale is our first step towards rural distribution model, offering small general traders everything they need to run their business under one roof, and enabling them to participate into a modern distribution infrastructure to grow their business. We plan to have many more such Aadhaar Wholesale stores to further strengthen the rural-modern- trade-infrastructure and thereby contributing in the development of local economy. Aadhaar Wholesale is part of the group s strategy to create a robust business model of rural distribution and supply chain catering to huge but fragmented rural market.

Marketing Strategy
The Future Group is India's fastest-growing retailer which several innovative business models under its belt. In a country dominated by kiranas (mom-and-pop shops), Kishore Biyani, CEO of Future Group, has successfully introduced the big-box retail model, but adapted it to fit India's unique socio-cultural context. The company prides itself in designing innovative customer experiences that blend the best of West and East. For instance, its Big Bazaar stores offer customers the convenience of single-stop shopping in a modern retail setting, yet allow buyers to touch, feel, and smell fresh produce like vegetables and spices, which are displayed in big coconut sacks like you find in typical open markets all across India. Kishore Biyani strongly believes that retailing (and retail marketing) is both an art and a science. He relies on his own creativity and his innate understanding of the Indian market to anticipate customer needs. He believes focus groups aren't always reliable as

customers may not properly articulate their latent needs. He asserted that CEOs need to: a) have a vision on how to shape new markets (Future Group's tag-line is "India Tomorrow") and b) execute that vision by relying on their gut feeling not merely data. But Biyani tempered his own statement by saying that the Future Group also employs an in-house think-tank which conducts analytical research (like sizing the retail market potential across various Indian rural areas) to help execute the firm's strategic vision and scale it up. As Biyani puts it: "You need science to validate art. But without art, science has no meaning. As CEO, you must keep Kama (creative spirit) and Yama (control) in proper and constant balance in your firm." Biyani went on to explain that to gain deeper insights into Indian consumers' mindset he also employs India's leading sociologist. But then Biyani said he also applies right-brain techniques for "internal marketing" purpose like employee training and has hired India's leading mythologist to that effect! He hired "mythologist" Dr. Devdutt Pattanaik to join him. Devdutt is one of the world's leading experts on Indian mythology, which includes Hindu epic tales like Mahabharata and Ramayana. Once Kishore conjures up a visionary idea (say, a novel retail store for children or women), Devdutt is tasked with inspiring employees and rallying them around that vision. Devdutt explained that all employee training programs at Future Group always start with storytelling, inspired by Indian mythology. The goal is to galvanize and inspire workers from store clerks to senior execs to adhere to the vision by unveiling it as a story drawn from, say, the Mahabharata with well-known characters like Krishna that they can all relate to. Devdutt pointedly noted that Greek mythology (which Western management gurus and motivational speakers heavily borrow from) won't work in India for two reasons: first, Greek myths center on a single character and adulate individual heroism (Heracles, Odysseus, Achilles, etc). Second, they promote absolute values (good vs. bad). But Hindu myths like Ramayana are cast with multiple heroes and imbued with relative values (e.g., Hinduism considers a bad action acceptable if animated by a good intention). In the highly diverse and complex Indian society, internal and

external marketing stories won't sink in unless they embody "collective heroism" and non-Manichean values. Two lessons that Western corporate leaders can learn from Future Group: 1. "Whole brain" marketing and communication techniques that combine both art (gut feeling, sociology, and even mythology) and science (analytics, business processes) are key for shaping new markets and keeping employees engaged. 2. As Western companies go after global markets that are increasingly complex and diverse , US and European firms must adopt and adapt stories from Indian mythology to inspire and engage customers and employees.

Human Resource Strategy

Driven by aspirations, Future Group is fuelling a retail transformation in India and finding innovative ways to drive growth. In every business that we are in, in every engagement we have entered, in every relationship, our human capital is the first point of leverage. Our people give Future Group its energy, culture and ideas. At Future Group we see people as partners in the nationbuilding process, shaping the India of their dreams. Our farreaching businesses provide boundless opportunities to put knowledge and creativity towards this goal. But thats only the beginning. We encourage our employees to think independently, explore innovative ideas and make the best of Indias renewed economic growth. Future Group aspires to be an employer of choice in Indian retail offering exciting new possibilities and encouraging people to rise up to new challenges every day. We engage people who are passionate about what they do, who want to make a difference in the lives of customers, and who live our brand pillars of Indianness, valuing and nurturing relationships and leading positive change. At Future Group we are committed to the growth and development of our human assets. With an empowering, entrepreneurial culture, we work with the passion and enthusiasm of our people for renewed success.

HR Policies: Human resource policies are systems of codified decisions, established by an organization, to support administrative personnel functions, performance management, employee relations and resource planning. Each company has a different set of circumstances, and so develops an individual set of human resource policies. HR policies provide an organization with a mechanism to manage risk by staying up to date with current trends in employment standards and legislation. The policies must be framed in a manner that the companies vision & the human resource helping the company to achieve it or work towards it are at all levels benefited and at the same time not deviated from their main objective. HR policies allow an organization to be clear with employees on: The nature of the organization What they should expect from the organization What the organization expects of them How policies and procedures work What is acceptable and unacceptable behavior The consequences of unacceptable behavior The Future Group helps growth- oriented businesses build their leadership capacity from grass roots to CEO enhancing decision making, capacity to influence, effective partnerships and organizational motivation. When leaders are highly effective they develop high- performing teams and attract and retain high quality staff- all critical success factors. The Future Group offers leadership appraisal, review and development services and practical customized training, career development and problem solving strategies to maximize the advantages of effective leadership throughout an organization.

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