Business foundation Of Metro AG Samples †MyAssignmenthelp.com

Question: Discuss about the Business foundation Of Metro AG. Answer: Introduction Metro AG is a global retail company based in Germany and deals in wholesale and cash and carry business. The mentioned Company established in 1964 has its headquarters in Dusseldorf city of Germany. The following company is the fourth largest retailer of the world based on the amount of Revenue generated in a year. The company is a global pioneer in cash and carry business of the world. It is represented in 25 different countries with over 750 self service wholesale stores. The Company achieved revenue of around 29 billion pounds in the fiscal year 2015-16 which is no doubt a remarkable achievement for the business organization. It has its presence across 25 countries with strength of over 750 self service centers. It employs around1,40,000 employees worldwide and is one of the largest employers of the globe. The management of the company always involves itself in providing different customized solutions to its varied range of customers. The presence of the company in such vast regio ns of the globe has defined its role as a global MNC. Background of the Company The Metro Cash and carry outlet in India commenced operations in the year 2003 with the start no operations in Bangalore. Currently the company has around 24 wholesale centers across the country. The core group of customers of this famous wholesaler includes the small retailers, owners of medium and small shops, restaurants, hotels, corporate entities and many other different forms of business that operates in India. The Indian business of these retail giants includes a vast range of state of the art products that starts from vegetables, fruits, grocery, preservatives, bakery products, household items, fish, meat, confectionaries, electronics and many other different products that cater to different needs of the business and the service users. The Company has done a great job in promoting itself as a developer of the economy of India as it has employed a large number of local people in its value based stores and has been working successfully with agricultural farmers who provide them fresh fruits and vegetables in return of the proper market price. It is ranked 2nd amongst the list of the best places to work in India and has also received the CII National Award for quality and food safety. SWOT Table STRENGTH WEAKNESS Meeting the product requirements Proper and Efficient Network Quality staff in their ranks Largest Wholesaler of India The company does not spend money on advertisements through any kind of media Efficient and cost of operations is extremely low in India Tax Rates are high in India which makes it difficult to carry on efficient business Stores are located far off from the cities The Company only deals in wholesale business The imported items are charged with a high price Absence of transaction with common persons OPPURTUNITIES THREATS Large Expansion of business all around the globe Presence of 24 centers across India is a huge advantage All types of varieties under one roof As mentioned earlier absence of credit sales No discounts are available Presence of Wall-Marts in India Political conditions of India is a huge factor for the business Inflation Table No 1- SWOT Table Source-(Jahan and Hemant 2014) Market Description India is one of the largest economies of the world and has been a potent economic force of Asia as well as the rest of the world since the last decade. The rise in the economic condition of the market is a sign of the nations prosperity (Yadav and Raju 2013). As mentioned earlier the factors there are some key economic factors that have been helpful for Metro Cash and carry to establish its existence in the country, they are; Increase in the amount of consumer spending Increase in the Foreign Direct Investment Positive economic growth Proper and efficient infrastructure for logistics Establishment of other new industries On the other hand there are demand and supply factors as well which determine the market conditions of India. Some of the main factors that influence the demand and supply curve are; Income- Increase in the amount of disposable income of the people have made the consumers more confident as they are now able to afford more and more goods. Higher income can occur due to a variety of reasons like higher wages and lower taxes charged by the government. Substitutes- The increase in the price of the substitute products are helpful for the product of another organization with same characteristics. The increase in the price of the original product will lead to a fall in the sales figures and in turn will increase the sales of the rival product (Varshaa 2015). Advertising- Advertisement is one of the main factors that help to increase the brand loyalty of the goods and increase the demand of the products (Trebbin Franz and Hassler 2015). The higher spending on advertisements of the products is helpful to initiate a rise in the global sales of the organization. Complements- The price fall of a particular product will surely lead to the fall in the prices of the other peripheral products. Quality- In a place like India quality is the key to success in the market. Higher the quality of the product, higher is the demand for the product. Apart from the above mentioned factors the cultural context of India must be taken care of to make sure that the cultural heritage of India is not disrespected at any cost. Therefore all the above factors have a direct influence on the launch of a new product in the Indian market. Findings The classified findings have been a huge help for the organization. The research has been able to identify the different trends that are associated on the launch of a product by such a large scale wholesaler in the Indian market (Jahan and Hemant 2014). It is also amazing to find out that the management of the company used no form of electronic media to promote the product during or after its launch. Explanations of the SWOT Table Strengths The main aim of the management of the company is to meet the requirements of the new product so that it matches all the requisite criterion The presence of proper and efficient networks is an added advantage for the organization as such networks helps to promote the product easily The presence of efficient and trained staffs in the organization helps the organization to have a competitive edge in the market (Gilsenan et al. 2016) Metro is the largest wholesaler of India and thus launching a new product can be a great business initiative The organization is perhaps the one of its kind in the world as it does not spend a single amount in advertising in any forms of media which gives an idea of the powerful brand name and reputation Cost of operating a business is extremely low in India which is a great factor that helps the business to allocate a minimum investment Weaknesses Tax Rates in India is much more in comparison to other countries which makes life tough for foreign firms (Sinitcyna 2016) The distance of the stores is inconvenient for the users as the stores are generally located quite far away from the city. The distance is a main reason for the business to lose customers The Company does not deal in retail business and deals only in wholesale business. Thus common men are not able to buy products easily from the mentioned organization. The imported items of the company are charged heavily once they enter the Indian market which is one of the biggest negative factors in the business (Gopalakrishna Subramanian and Fleischmann 2016) Opportunities The expansion of the business all around the globe will help the organization to sell its new product in its other existing markets and increase the scope for the product Presence of 24 centers across India is a huge advantage for the organization as the product can be made readily available for the other consumers in other centers easily The availability of all kinds of products under one roof will help the customers identify the product easily while they explore the store (Shitole and Thyagarajan 2014) Threats Absence of credit sales does not help the organization as it loses out many potential customers Metro does not offer any discounts on its products which turns out to be a larger threat for the organization Presence of Wall-Mart in India has given Metro a stiff challenge in the coming days Political conditions of India is a huge factor for the business as because the businesses in India are often controlled by influential political parties Inflation in the last couple of years have slowed down the market growth of Metro and has presented a crisis situation in the market Recommendations According to Jahan and Hemant (2014) the absence of credit sales is certainly a negative factor that has an impact on the organization. However this is done mainly because of the bulk amount of products that are sold out to retailers (Schranz-Whitaker 2016). Metro generally deals with wholesale trading and thus credit sales are not supported by them. However things are changing gradually and the management of the company has introduced Smart Cards for the members of the stores with which they can easily transact with the help of the card. The company has also decided to offer discounts on its new products to make it seem friendlier towards the retailers and other small sellers. The management has also taken certain measures so that inflation does not have any such effect on it. Last but not the least the company is least worried about Wall mart as it has 24 integrated centers around India compared to some small units of Wall Mart (Oflazgil et al. 2016). Target Market The mentioned company aims to launch a new range of Travel kits and bags especially for the frequent travelers. The target market of the company is the frequent travelers including the leisure as well as the business travelers. However the management has decided to keep the price within a certain range as the product is kept in the middle class segment. The product is not too costly but its advanced features place it in a premium segment. The main aim of the Company is to create a world class travel kit to ensure that the travelers enjoy a hassle free travel. The management of the company has designed the product in such a way that it provides huge competition to other brands in the market. The product also has quite a number of varieties depending on its design. Some of them are designed normally while the others have a stylish design. New Product Description As mentioned in the earlier part the new range of travel kits has quite a number of varieties in it. The varieties are generally in the design as some of them are designed normally while the others have a stylish and attractive design. Existence of a large number of competitors has forced the organization to follow the cost effective policy which will be helpful for the organization to get a hold of the highly competitive market. The product has earned an ISO 9000 degree and is already regarded as one of the best in the markets prior to its launch. Customer Value proposition Customer Value Proposition is one of the marketing statements that describe the reason for a customer to buy a certain product or use a particular service (Kumar and Bansal 2015). The management of the mentioned Wholesaler has been able to set out a particular value proposition for the travel kits that includes; Best product with a low value Reduces the stress of travelling Targeted for the stylish and comfort loving travelers Justification of the choice of New Product The new product has quite a lot of attractive features that justifies its choice by the service users. The key justification of the product is its premium quality that is received in such low prices. The new products are used effectively and are meant for a safe, sound and a quality journey. The4 following reduces the stress of the journey and also reduces the travel time. Conclusion The following report is one of the few works on the wholesale marketing in a country like India. The detailed internal analysis of the problems that lies in the business along with the recommendations for solving the problems effectively has been extremely helpful for small wholesalers present in the country. The through analysis of the report thus helps to identify the weakness as well as the ways to avoid them. References Doan, P., 2016. RELATIONSHIP MARKETING-LOYALTY CARD. Gilsenan, M.B., Abbinante, F., O'Dea, E., Canals, A. and Tritscher, A., 2016. Open risk assessment: data.EFSA Journal,14(S1). Gopalakrishna, P., Subramanian, R. and Fleischmann, D., 2016. WALMART IN INDIA.Journal of the International Academy for Case Studies,22(3), p.99. Jahan, N.F. and Hemant, D.S., 2014. Emergence of cash and carry business model in india with special reference to metro stores.International Journal of Retailing Rural Business Perspectives,3(3), p.1064. Kumar, P. and Bansal, S., 2015. Swot analysis: what does fdi hold for the indian retail sector in 21th century?.International Journal of Research in Management, Economics Commerce,5(1). Oflazgil, K., Hocken, C., Schenk, F., Teschl, O., Lehr, T., de Boer, M., Schrder, C. and Alt, R., 2016. Smart. NRWRFID as Enabler for an Intelligent FMCG Supply Chain. InLogistics and Supply Chain Innovation(pp. 325-337). Springer International Publishing. Schranz-Whitaker, M., 2016.Supply Chain Excellence in the Retail Industry METRO AGA Case Study(Doctoral dissertation). Shitole, G.Y. and Thyagarajan, G., 2014. Consumers' Perception on FDI in Multi-Brand Retailing in India-A Study.Sumedha Journal of Management,3(1), p.4. Sinitcyna, E., 2016. Improving the competitiveness of Metro Cash Carry Ltd. on the Russian market of goods and services. Trebbin, A., Franz, M. and Hassler, M., 2015. Securing Local Supply in Rural Areas: The Role of Wholesale Cooperations in Central Hesse, Germany.Economic Development in Rural Areas: Functional and Multifunctional Approaches, p.131. Varshaa, H.G., 2015.A study on impact of metro wholesaling on retailing in karnataka(Doctoral dissertation, university of agricultural sciences gkvk, bengaluru). Yadav, S. And Raju, K.H.H., 2013. Swot analysis towards foreign direct investments in retail industry in india.International Journal of Entrepreneurship Business Environment Perspectives,2(3), p.590.