How would you rethink the company’s approach to strategic expansion

Problem: How would you rethink the company’s approach to strategic expansion and public relations in India going forward?

Solution:

Strategic management means decisions and acts which a manager undertakes which will decide the result of the firm’s performance. For this company must have a thorough knowledge and analysis of the general and competitive organizational environment so as to take right decisions. For, this company should do following analysis:

1.SWOT Analysis: Company should make best possible utilization of strengths, minimize the organizational weaknesses, make use of arising opportunities from the business environment and shouldn’t ignore the threats.

Following is the SWOT analysis of Metro cash and Carry:

STRENGHTH

Pure and natural products

Largest whole seller platform

Conveniently available products

Effective market research campaign WEAKNESS

They Only deals in wholesales.

They can only supply to retailers having trade license or sales tax registration.

No direct contact with farmers

Dilapidated supply chain

OPPOURTUNITY

No international competition

Highly fragmented wholesale market

High scope of foreign direct investment

Increase in consumer spending

Expansion of food industry

Rise in living standard THREAT

Retail market and Mandis and kiarana

Government instability

Local press delivered bad image

Launch of Wall-Marts and Tesco

Compared to monopolistic market

Delivery mechanism

From, the above analysis we see that the company has high chances of growth in India as it has no competition and fragmented wholesale market which help it to grow in coming future.

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Apart from wholesale company can also focus on retail marketing as government of India allowed FDI in retail marketing ventures.

Supply chain was dilapidated company should focus on creating a strong supply chain as foods products are perishable and require proper care while transporting from one place to another. Taking up the advantage of wastage by mandis which was up to 40% which is not a good sign for food industry here company can take the advantage.

To evaluate macro-environmental factors company should also go for PESTLE analysis of India for its growth in Indian market.

Political:

There is Long procedures to make a governmental decision

Political instability in Chennai

Distinction between government and state legislation

Swadeshi Jagran Manch opposed the company of selling lower prices

Economic:

Increase in Consumer Spending

Increase in FDI

Increased Land Prices

Market is inefficient so it decreases the competitiveness of the country

Prices are 30-45% below the government prices

Entrance of Wall-Mart and Tesco

Social:

Local Traders and associations are opposing Metro C&C

Urban Immigration

Rising Living Standards

Protests of local traders

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Technology:

No cold storage facilities

Delays in infrastructure development

Environment:

The inefficacy of the Mandis brought out 40% of waste in the market

Legal:

Amendments of a law regarding retail market

The above framework represents one of the aspects of the backbone of strategic management that not only defines what Metro Cash and Cary company should do, but also accounts for goals and the strategies stringed to them that they should focus on to expand its business in India as all aspects pf India came into picture by this strategic management analysis of Indian economy.

COMPANY SHOULD ANALYSE PORTER’S FIVE FORCES MODEL FOR INDIA:

Supplier Power: Suppliers in India sell their fresh produce goods in wet market and small shops, in addition to absence of international competitors where suppliers might sell their inputs easily in market having advantage of no competition. The inefficiency of the Mandi resulted in farmers losing their lands and households were in debts thereby, the entry of Metro C&C represents an opportunity for the farmers to sell their inputs at a large scale, thus reduce waste and improve their livelihood in short run for long run company need to compete with upcoming companies i.e. Walmart and Tesco.

Power of Buyers: Analysing the power of buyers in India we found that customers used to buy products of a low quality. When metro C&C opened stores, it offered very competitive less than government prices with a better-quality product, which give them comparative advantage to local retailers. Hence, Metro C&C should advertise more on its value proportion to the Indian costumers.

Threat of Substitutions: Recently company has no threat to substitution as there is no international competition and retail market and kirana stores and mandis are also not that developed in India so it did not have any threat to substitutes but, it may arrive after entrance of Walmart and Tesco in India. Therefore, company focus on product diversification and gain goodwill in the market so that it doesn’t have any threat to upcoming companies in India.

Threat of New Entrants: After the amendment of the Indian legislation towards foreign direct investment in the retail sector the Indian government allows FDI up to 51 % in retail sector. The government eases the rules to attract more FDI such as Tesco and Wal-Mart, which are direct competitors of Metro C&C. The reforms in the legislation seems to be more flexible with the entry of the new competitors so that they can save time and cost accordingly, Metro C&C could benefit from this legislation and expand more as it has already entered in the market and had acquired experience and knowledge more that the upcoming new companies.

Apart from above analysis as company focus more on delivery mechanism as in India it was a huge problem. Moreover, cold storage facility needs to be improved as quality and freshness can be assured only if goods are kept constantly in a good temperature. As, government is allowing FDI up to 51% in retail sector company should also see into it to grow and expand in the market. The company should also engage in joint venture with local traders as it is in other countries and came up with a great- results. It should also do that in India so that it can learn how to penetrate the local market. It should work with farmers can set up a source for perishable goods as it did in China. As India is a densely populated country they should come up with product diversification and innovation. As, till now it has not focused on advertisement they should advertise about their product how it is different and beneficial from existing products. Further, they can take advantage of wastage done by local traders which is up-to 40% company can come up and address the issue.

PUBLIC RELATION GROWTH

For, growing its relationship with public of India company can go for following:

Advertisement: To connect with public of India company should advertise make them aware of their products and acknowledge them how it is different and hygienic as compared to local products. They can also give offers to attract customers. They can conduct surveys and come up with the issues faced by customers and give them a better product.

Loyalty program: Company can conduct some programs to ensure they are trustworthy in the eyes of the customers. For, this they can come up with challenging programs that their product is the best one. They can give discounts and offers. Bill should be computer generated and also monthly offers for regular customers.

Promotions: They can put hoardings pamphlets and connect with the public in an easy manner.

Campaign: Company can conduct various events and campaign to receive customer grievances and complaints and a come up with the solution and also this will help them to build a strong customer relationship management.

So, we can conclude that above findings will help Metro Cash and Carry to expand and develop public relationship in India.