Company profile and SWOT analysis for Saravana stores

Comp each(prenominal) profile and thrum fall outline for Saravana computer memorysSaravana thot ins is a chain of retail stores located in the heart of Chennai, TamilNadu, India. It sells textiles, jewellery, vessels, leather goods and opposite wide vomit of crops under computer menuinal jacket. It is the No.1 retailer in Chennai and is the draw in the sector.The founder of Saravana Stores is Mr.Selvarathinam, died in 2003 fol first baseing which his elder br oppositewises namely Rajarathinam, Yogarathinam takes get a line of their different shops.The c onlyer has started as a textile showroom in Ranganathan Street, T. Nagar, Chennai and later diversified into App atomic number 18ls and Accessories, Perfumes, groceries, Restaurant, shoes and oft snips more(prenominal). The familys tagline Good Quality at Reason adapted Cost is much attr sourive that the customers in Chennai always privilege outset price harvest- quantifys which offers just flavor.Saravana Stores assures the customers a wide range of produces and collections in almost exclusively categories of products it offers. It is the first of its kind in Chennai to start a multi-storeyed obtain m e truly(prenominal) spread over 100,000 Sq.ft with 5 floors.It is now operate under 4 buildings in T. Nagar, Chennai including three in Ranganathan Street and sensation in Panagal Park, T. Nagar which is operating under the name New Saravana Stores which is pickyly constructed to vacate overcrowding during festival seasons.1.1 VISION AND MISSION STATEMENTSThe accompanys vision and mission statement is menti atomic number 53d in Tamil saying Truth, Hard work and Growth ( ).Our objective is to turn in customers with wide range of collections in almost all the categories at reasonable cost.Saravana Stores The name Chennaites consider as the meaning of Good Quality at Reasonable Cost.2. INDUSTRIAL ORGANISATION ENVIRONMENTAny brass plinth on the environs and not by themselves. The company purlieu and foreign environs atomic number 18 connected with each other and has a cozy relationship. The chief(prenominal)(prenominal) objectives of any brass atomic number 18 pull in groundability and sustainability. The optimal locating of the company in the dynamic and complex environment is achieved through seemly strategic planning. How to achieve optimal positioning? It is achieved by analysing all the environment factors both internal and external environment.The b ageingnesss environment is depicted as be natural depression.3. SWOTSWOT is an essential and the most important method to dismantle the boilers suit position of an organisation. SWOT entangles abstract of Strengths and weaknesses of the company deep down its internal environment and matching them with the opportunities and holy terrors that exists in the external business environment. This analysis prat be used as a benchmark to develop strategic alternatives and heighten on planni ng for the meter ahead.Now let us dismember the strengths and weakness of Saravana Stores and the opportunities and little terrors it seems from its competitors and external environment.3.1 STRENGTHSSaravana Stores has better understanding of the customers in Chennai and focuses on servicing them better.They provide wide range of returns and products under one roof which helps in attracting customers who favours shopping with their family together.They gull the First of its kind pass judgment as they ar the first to provide such shopping possess in Chennai.They offer low price and reasonable quality on products which is the briny reason for the customers.Diversified business in Chennai crack most of the consumer much needed products under one roof.They offer variety of discounts and deals e actuallyday providing look upon for money shopping to the customers.The consumers in Chennai fall under serving sort out and they do not hesitate to shop even at crowd places. Th ey expect good nurture for money even in a crowded environment and ready to compromise on quality to an extent. Saravana Stores has understand this and provides such products which the customer exactly wants. Understanding the customer preferences is considered as one of the major(ip) strength of Saravana Stores.Saravana Stores follow tall organisation structure as this type of business unavoidably the workers to be highly supervised. It has overly constituent of promotion opportunities for the employees.Their simple philosophy is Low Margin High childs play Over.3.2 WEAKNESSES there is a very high attrition rate of employees in Saravana Stores.The staffs be not well trained, not educated and not motivated. roughly of the staff comes from rural aras and they argon paid less. These volume join the company because of poverty and compulsion that still exists in galore(postnominal) rural separate of India.The usable level muckle atomic number 18 cosmos suppressed and or sotimes being treated as slaves. It is a company following tickle pink baffle where a single person takes control over all his stores in Chennai. Due to this, the responsibilities and the freedom which should exist at least to some extent is restricted. Even though THROB model is considered as the gross(a) choice for this kind of store especially in India, the truth is Saravana Stores suppresses the operational level and dominates to exert its force out and control on them.The management does not care their employees at all.Saravana stores does not want to sell most of the reputed brands. directly the expectations of customers are changing and expect more quality. that Saravana Stores compromises on the quality expectation and just sell products that are of low quality at cheaper price.The customers are increase day by day and Saravana stores is not able to manage the crowds tight-lacedly (especially during the festival times). in that respect are not able staff to man age them.Saravana Stores does not have umpteen counters for cash and card payments. Due to this, clients need to wait in a long come up for payments.Most of the products are not properly organised and are not found in their respective place. Many products are found on the floor and the workers in addition does not care to the highest degree it.Customer usefulness and Customer Satisfaction are very less. This is due to the carelessness of the workers as they are not at all motivated and managed efficiently.3.3 OPPORTUNITIESThey have numerous opportunities to expand their market in other cities including Madurai, Trichy, Salem, Coimbatore and so on.Since Saravana Stores has understood the needs of legion(predicate) customers who mostly fall under reduce middle degree categories, it can offer more products and operates.Saravana Stores has a first-mover advantage.They have a reputation.Customer preferences are evolving. Most of the customers prefer to visit stores that provide wide range of products under one roof.3.4 THREATSThe buildings of Saravana Stores are constructed by violating most of the security regulations. It whitethorn have to face legal threats by the come to authorities.There was a fire accident inside the building on 2 September, 2008. It has resulted in the death of both employees and more than 10 million worth of products damaged. The main reason considered for this incident is ignoring the safety measures.The perception of the customers towards Saravana Stores is changing and galore(postnominal) another(prenominal) customers are switching to their rival stores.The competitors of Saravana Stores provide a pleasant shopping experience which attracts customers towards them. Saravana Stores may lose most of their upper middle affiliate customers. ascending number of competitors pose threat to Saravana Stores.The cleanliness and hygiene factor is missing in the exposit of Saravana Stores. This may act as one of the factors to lose t he customers.Saravana Stores faces many legal complications that affects its reputation.The customers feel that the products are over-priced for their quality. Initially, they offered low price and reasonable quality. exclusively now Saravana Stores has increased its price on all its commodities. Customers also value the increase in price.The Government policies are changing and the company would face more and more worrys.Other International competitors look forward to image Indian retail industry.4. ANSOFFS MATRIX compendAnsoffs Matrix is used to analyse the harvest-home strategy of a company. It swear outs as a decision fashioning tool to choose a suitable product and market growth strategy for a company depending upon the internal and external environment. Ansoffs matrix suggests quatern different strategic options for a company. They are as follows.Market incursionMarket DevelopmentProduct DevelopmentDiversificationSaravana Stores can surveil Market Development strate gy geographically. It can spread into other major cities in TamilNadu and can gain additional market fortunes and increase its revenue. The biggest advantage of developing its market along other areas is that customers from those areas find the store within their reach and shop over there. As many people from other cities come to Chennai to visit their relatives , they shop at Saravana Stores and they dont want to miss the opportunity. But in case Saravana Stores is in their locality, they can shop at any time as they proclivity. This is a great opportunity because most of the people in the mentioned cities fall under middle class portion and they wish to buy products at low prices and good quality. Saravana Stores already introduces many untested fashion and material range continuously which is one of their core competencies. If they pertain to do that in the new geographical areas, they can surely succeed.5. PORTERS set CHAIN ANALYSISThis analysis is intended to analyse the i nternal strengths and weaknesses of the organisation i.e., the internal environment analysis. The role of any organisation is to add value to all its stakeholders. The more important stakeholders considered in the organisation are mentioned below.ShareholdersEmployeesSuppliersCustomers pecuniary InstitutionsSocietyGovernmentEvery organisation competes with its competitors with their unique resources and core competencies. It is these two capabilities that drives the organisation to sustain in the private-enterprise(a) market. The greatest advantage of being occasionicipating in the competition is gaining more margin than others in the unique(predicate) ingredient and establish itself from others.In order to compete successfully, analysis of the unbendable process and the work system of the firm is needed in time. An organisation is often viewed as a chain of value creating events. To analyse the firms activities which can create a matched advantage, Michael Porter described a model called Value Chain in his book matched Advantage Creating and Sustaining hypernym Performance published in 1985.Porter classified the organisations activities into 2 types primary(a) Activities and Support Activities.5.1 PRIMARY ACTIVITIESThese activities are most important for any organisation and is the core activities. These activities cannot be outsourced. These activities includes the following in order they operate.Inbound Logistics This includes the stock inventories, inventory control and storing of the input materials. Saravana Stores receive the fully made products and store them in their warehouse located underground of their main store.Operations This is bear on with the processing of the input materials received through inbound logistics. The operations part of Saravana Stores is religious service oriented. The activities include providing the products and services to the customers, maintaining the shelves and store with the products and stock management. To gain emulous advantage in this subdivision, Saravana Stores has to closely monitor the maintenance and filling of stocks neatly. When customers receive at the shop, they find most of the products found scattered in the premises and it is annoying. Saravana Stores could try focussing on this and can gain even more advantage over its competitors who provide excellent services in this department. However, rectifying this problem has to deal with the motivational factors of the employees.Outbound Logistics It is related to delivering the services/products to the customer. Saravana Stores creates and adds more value to its customers through its Home Delivery system. However, it needs to improve on its park facilities, shopping bag, security, bill counter staff and systems which if done efficiently, can give birth the customers time and earn their loyalty thereby gaining more free-enterprise(a) advantage.merchandising and Sales Saravana Stores attracts the customers through adve rtisements in Media, Newspaper and Radio channels. These advertising campaigns are carried out more perfectly as Saravana Stores has endorsed most of the leading contribute actors and actresses for its campaign to promote its ongoing offers (Eg., Festival Discounts) . The advert in the TV appears once every 10 minutes and this is apparently one of its competitive advantage. This department works perfectly and this has helped Saravana Stores in tasting the success.Service It includes the service of the products after it has been sold and delivered. It means keeping the customer satisfied with his product and carrying on the activities to ascertain his satisfaction. Saravana Stores does not provide after sales service for all the electrical and electronic items whereas it has exchange system for its textile section. though they provide after sales service for few products which they offer at low cost (below market price), the service is not at all satisfactory among the customers because of the very short service. If this area is ameliorate, customer satisfaction which is one of the intangible asset resources can be gained which in turn can act as a very big competitive advantage. It can also help in increasing the profit margin.5.2 SUPPORT ACTIVITIESThe support activities are the functions that supports the primary/core activities within an organisation. These activities are as follows.Infrastructure This is concerned on the departments including accounting, finance, planning, controlling, quality assurance and generic management. The planning and control functions ensure the companys cash and cost control with a blind drunk and continuous focus. Saravana Stores has exclamatory on the security to avoid the internal and external theft by installing more security cameras and experienced staff.Human Resource oversight HRM consists of the activities kickoff from the recruitment to dismissal or lay-offs. It takes care of activities comparable hiring, t raining, developing, compensating.. and so on Saravana Stores is good in terms of its recruitment but fails in providing proper training and motivation. The staffs of Saravana Stores are not at all motivated and encouraged. The service is also not linked to their takes. They pay very low wage and extract more work from the employees which is unfair. Hence the HRM part is really poor in Saravana Stores. Most of the customers in Chennai knew about the staff treatment by Saravana Stores management and they feel it is highly unethical and unfair. Due to this, the reputation of Saravana Stores, an intangible resource is deteriorating mightily away.Technology Development It is concerned with the innovation, technical knowledge, hardware and software product which is important for the companies today to survive in the market. As mentioned earlier, Saravana Stores is still dawdle behind the engineering science and a strong focus is needed in this department to add more value to the c ustomers and the company.Procurement This department is trustworthy for purchasing the essential materials to be used by the operations department. In Saravana Stores, procurement department is operates well as it buys the materials at very low cost and sells it a moderate price with moderate quality.6. MARKET ANALYSIS STP6.1 SEGMENTATIONMarket sectionalization is the process of segregating the market into groups of customers with circumstantial needs and requirements, specific characteristics and behaviours. This process is useful in identifying the potential competitors, segments, the power of the competitors based on which a suitable segment is selected to attract the customers. partition of a market is important because the market is heterogeneous. Segmentation can be based on several ways. Some them are lifestyle segmentation, Psychographic segmentation, jump on Lifecycle segmentation, Behavioural Segmentation, Geo-demographic segmentation.Saravana Stores targets the lo wer middle class and the lower class customers. This segmentation is based on the behaviours of the customers. It is now targeting the upper middle class segment in order to gain market share. Customers under the above categories prefer to buy products with low cost and reasonable quality offered by Saravana Stores. more(prenominal)over, these customers serve the highest population in the city. The perceived quality and the cost of the product helps Saravana Stores to savvy the success further when introducing a new product or service. This is very well notable in their stores such as Saravana Stores Jewellery and Saravana Stores utensils section.6.2 TARGETING later the most appropriate market segments are being selected, the company starts targeting those selected segments. current other factors are also to be considered such as competitive analysis and internal analysis. The internal analysis include activities such as analysing companys ability to outperform its competitors in the segment.As in the case of Saravana Stores, family and youths are being targeted. In recent times, youths who work in corporate prefer to shop most of the time whenever they get off. A typical family shopping is being found only during the festival days. Saravana Stores offers more deals and discounts in the textiles segment to family shoppers during festive days whereas it raises its prices marginally during other days when the young people shop.6.3 POSITIONINGWhen the targets are being targeted, the company decides on the marketing change integrity or strategy to position itself to that targeted segment. Saravana Stores has positioned itself as a store offering low cost and good quality product among the middle and lower class customers successfully. This can also be considered as one of their competitive advantages over its competitors like The Chennai Silks, Pothys, RMKV and so on Now Saravana Stores is well established in the city.7. EXTERNAL ENVIRONMENT ANALYSIS7.1 PEST ANALYSISPEST analysis is used to analyse the external macro environment in which the company operates. Several factors are considered to find the opportunities and the threats that exists in the macro environment. PEST is an acronym of 4 factors which includes as follows governmental FactorsEconomic FactorsSocial Factors andTechnology Factors7.1.1 POLITICAL FACTORSPolitical factors should be considered for the smooth flow of business. It has a high square up on the business regulations and spending power of the customers. There are not many factors to be considered for Saravana Stores as the top management has fixed everything using its influence over the ruling party. To say literally, Saravana Stores has taken advantage of the bribery that prevails in the State Government.The stability of the political environment also influences the industry. In TamilNadu, the extravertive state assembly elections play a vital role for all the sectors. The winning partys policy towards business es and taxation schemes is expected to create an impact on retail industry.7.1.2 ECONOMIC FACTORSThe economic factors are considered the most important aspect for any industry in any area. A companys growth depends on the economy of the expanse in which it operates. The financial system of India is good and so the GDP is also good. The growth rate of GDP is approximately 6-6.5%. The Indian retail industry is expected to grow by 25% every year and its worth is expected to be $175-200 billion by the year 2016. all major economic factors such as inflation rate, exchange rate, entertain rate considerably affects the buying power of the customers as well as the organisations capital cost. These factors also decide the price of the product. community in Chennai set about to shop at the start of every month and most of the time their shopping place is T.Nagar. The inflation rate is becoming high nowadays and this has led Saravana Stores to increase their prices.7.1.3 SOCIAL FACTORSThe cultural and social factors differs from one country to another. In India, these factors vary from one state to other. It is often said about India as Unity in Diversity. In TamilNadu, the social and cultural aspects are more traditional than the other states. These aspects directly affects customer needs. though westbound fashions are introduced in TamilNadu, people still prefer traditional garments and other products. For example, in cosmetics department ayurvedic and natural products are preferred by the customers more than the other International branded products such as Loreal, Neutrogena.Saravana stores is facing many complaints regarding the social issues such as ignoring the safety regulations and polluting the environment. Other factors also include heavy traffic in the area all the time which creates a discomfort for the customers to shop peacefully. Moreover, customers are not preferring T.Nagar as their shopping staining due to high traffic and the inconveniences that prevails. Saravana Stores does not have a special parking area for its customers and so the customers have to find the spot by themselves. This even worsens the reputation of Saravana Stores as it is in the verge of losing most of its customers.People nowadays prefer to shop in the local stores nearby that are within their reach at an acceptable price. The customers are shifting their preferences in product and services. Saravana Stores should act immediately before the situation worsens.7.1.4 TECHNOLOGICAL FACTORSThe technology is considered as the important factor for competitive advantage. These factors can minimise the obstacles of entry, aid in efficiency and can even influence the decisions.Saravana stores has not heavy till now on the technology department. They still use the old system for billing and services.The supply chain management, customer relationship management, store management is not yet computerised.Card payment counters are relatively very less in the stor e. Most of the customers would wish to pay by card and there exists a long queue for card payment.There is no online service such as online shopping till now. Though online shopping is not suitable for garments and clothing department which is the main department of Saravana Stores, it can still provide that facility to other sections like Consumer galvanic and Electronics. But Saravana Stores is not willing to offer online shopping at all.Since Saravana Stores overleap in technology aspects, it is difficult to maintain the Customer Relationship focal point (CRM) and communication with the customers (Feedback). These are missing with which business can be improved by analysing the customers more perfectly.Saravana Stores can concentrate on its technological factors which may increase the quality of the products and services they offer at a low cost. These developments benefits customers and the company as well.8. PORTERS FIVE FORCES ANALYSISPorters five force analysis is a simple but effective tool to figure out the potentiality of the organisation in a given business scenario. It is very useful to find out the strengths of the current position and the position where the company is intending to get into. This is considered as an important tool for planning as it helps in taking advantage of the strengths and avoid the mistakes by recognising the weaknesses. It is an internal micro environment analysis.However, the analysis is generally static. The competitive environment is dynamic and is changing constantly. There is a high chance of these forces changing at any time more rapidly. Though it is considered as an internal environment analysis, this framework ignores the charitable resource aspects for strategic analysis. But this model serves as a starting point for environment analysis.According to Porter, there are five different forces determining the competitive advantage of a company in a business scenario. They areBargaining power of suppliersBargainin g power of customersCompetitive rivalry within an industryThreat of the substitutesThreat of new entrants8.1 negociate proponent OF SUPPLIERSHere, we can assess the bargaining power of the suppliers that determine the prices of the product they supply to the company. It is often described as market inputs. The factors responsible for increasing the supplier power is contrary to that of the buyer power.Saravana Stores supplier power is low as they deal with huge amount of stocks. And moreover, those brands are not recognise by the customers often. Customers just buy them for their low price alone. In the current scenario, the suppliers find it difficult to sell their stocks by setting up a new store. Their entry cost is too high that they cannot afford. They run their businesses by supplying huge volume of stocks to Saravana Stores and gain profit.There are many suppliers and there are many substitutes for them. So it is highly likely to have less bargaining power of the suppliers of Saravana Stores. The cost of switching the suppliers for Saravana Stores is not too high as they are well balanced and managed in these aspects. Since the retail industry in India is unorganised, this has dominant position over the suppliers.8.2 BARGAINING POWER OF CUSTOMERSThe buyers are called customers who exerts more power under many conditions. Some of them are mentioned below.If the customers are focussed and there are few of themUndifferentiated productVulnerability of Backward-IntegrationThe customers are always price-sensitive. The perceived value by the customers is the strong advantage for Saravana Stores. The customers are also not focused and prefers unbranded products instead than the branded items. So the threat of backward-integration (influencing the power of suppliers) is also low. The availability of many alternatives is the main issue to be considered in the case of Saravana Stores.8.3 THREAT OF raw(a) ENTRANTSNew entrants foray into the market if the profi t margins are highly spellbinding and their barriers of entry is low. According to Porter, there are seven sources of barriers to enter the market.Economies of ordered seriesProduct differentiationCapital requirementsSwitching costsAccess to statistical distribution channelsCost disadvantages independent of scaleGovernment policyIn the case of Saravana stores, Government policy acts as a high barrier for the International companies. FDI policy of the Government is unfavourable for the International companies.The local domesticated companies such as Wipro and other conglomerates are planning to start the retail chains in India. This is really a threat for Saravana Stores as it has to shape a new strategy and plan to minimise these threats.8.4 THREAT OF SUBSTITUTESIn the business scenario, substitutes are often considered as the most important threat to any company. If the company offers products, it can be easily replicated in the industry. More often, substitutes introduce new t echnologies or reduce the prices of the same product but do not replace the existing products in the market. To be precise, the profit gained from the substitutes is kept low by the followers.Unorganised retail industry is the main threat for Saravana Stores. As there are more substitutes for the unbranded products, customers are more likely to switch where the prices are very low than Saravana stores offers. This threat is relatively less in grocery department as there are not much substitutes for the branded products. Though some substitutes are available for the groceries, customers prefer branded in this department. All the other departments like textile, jewellery has more substitutes and Saravana Stores is pushed to keep its prices low to attract customers.8.5 COMPETITIVE disceptationSome of the competitors for Saravana Stores are The Chennai Silks, Pothys, pornographic Bazaar,Kumaran Stores, RMKV and few others. These stores are located in and around T. Nagar shopping area. The rivalry is high mingled with these companies as each fights to gain the market share. Because of this extent of rivalry, the profits fall. But Saravana Stores is the larger company amongst the rivals and is able to interrupt any actions taken by its small competitors.The emerging stupendous Bazaar poses a high threat to Saravana Stores as it gaining its market share significantly over the years within a short match of time. The competition is price-based and hence it is very hard to gain the customer loyalty. In a recent study, middle class customers are switching from Saravana Stores to Big Bazaar as both the companies offer same products and services. Saravana Stores is losing its middle class customers and should act immediately.9. MARKETING MIXThis is also called as the 4 Ps of marketing. The decisions for marketing a product or service can be made considering the 4 Ps as follows.ProductPrice smear (Distribution)PromotionJust like cooking where all the ingredients are to be included in the right amount and at the right time to get the tasty food, these 4 Ps are considered at the right time to taste the success of a product or service. lower that the internal and external constraints of the marketing environment is to be considered while making marketing decisions. The objective of right marketing mix is to create a positive value and positive response from the customers in the targeted market segment.9.1 intersection pointSaravana Stores offers wide range of products that ranges from Apparels, Accessories, Food, Furniture, Groceries, Utensils, Textiles, Toys, Electricals Electronics, Stationary items, Jewellery etc.Apparels Casuals, Formals, Jeans, T shirts, troupe wear, Under garments, Night wear, Sarees, Silk Sarees, Ladies wear, etc.Home Personal Care products Utensils, Shampoos, Detergents, Soaps, Creams, Plastics, Cookery, etc.Electrical Electronics Mobile phones, TV, Radio, Speakers, Computers, Peripherals, Watches, Hair trimmers, sha vers, etc.9.2 PRICESaravana Stores objective of determine is to gain more market share thereby sustaining its position as a leader in the segment. The pricing strategy of Saravana Stores lies balanced between penetration pricing and economy pricing but it is more disposed towards penetration pricing.Saravana Stores adopts Value pricing, promotional pricing and Bundling. They assures consumers low prices everyday without any coupons. They also caters special event pricing on special occas