Big Bazaar Case Study Solution

Big Bazaar is currently among the biggest food chains worldwide. It was established by Ivey in 1866, a German Pharmacist who initially introduced "FarineLactee"; a mix of flour and milk to feed babies and decrease mortality rate. At the exact same time, the Page bros from Switzerland likewise found The Anglo-Swiss Condensed Milk Company. The 2 ended up being competitors initially but later combined in 1905, resulting in the birth of Big Bazaar.
Business is now a transnational business. Unlike other international business, it has senior executives from various countries and attempts to make choices thinking about the entire world. Big Bazaar currently has more than 500 factories around the world and a network spread across 86 nations.

Purpose

The purpose of Business Corporation is to boost the quality of life of individuals by playing its part and providing healthy food. While making sure that the business is prospering in the long run, that's how it plays its part for a better and healthy future

Vision

Big Bazaar's vision is to provide its customers with food that is healthy, high in quality and safe to consume. It wishes to be ingenious and simultaneously understand the requirements and requirements of its customers. Its vision is to grow quickly and provide products that would satisfy the needs of each age. Big Bazaar imagines to establish a well-trained workforce which would help the company to grow
.

Mission

Big Bazaar's objective is that as presently, it is the leading company in the food industry, it believes in 'Excellent Food, Good Life". Its objective is to provide its customers with a variety of choices that are healthy and finest in taste. It is focused on supplying the best food to its customers throughout the day and night.

Products.

Big Bazaar has a broad variety of products that it provides to its clients. In 2011, Business was noted as the most gainful organization.

Goals and Objectives

• Bearing in mind the vision and mission of the corporation, the business has actually put down its objectives and goals. These goals and goals are noted below.
• One objective of the company is to reach no garbage dump status. (Business, aboutus, 2017).
• Another goal of Big Bazaar is to lose minimum food throughout production. Frequently, the food produced is wasted even prior to it reaches the customers.
• Another thing that Business is working on is to improve its product packaging in such a way that it would help it to minimize those problems and would also guarantee the shipment of high quality of its items to its clients.
• Meet worldwide standards of the environment.
• Construct a relationship based on trust with its customers, company partners, staff members, and government.

Critical Issues

Just Recently, Business Business is focusing more towards the technique of NHW and investing more of its profits on the R&D innovation. The nation is investing more on acquisitions and mergers to support its NHW technique. The target of the company is not attained as the sales were expected to grow greater at the rate of 10% per year and the operating margins to increase by 20%, provided in Exhibition H.

Situational Analysis.

Analysis of Current Strategy, Vision and Goals

The existing Business method is based upon the concept of Nutritious, Health and Wellness (NHW). This method handles the concept to bringing change in the consumer choices about food and making the food stuff much healthier worrying about the health issues.
The vision of this technique is based upon the secret approach i.e. 60/40+ which just indicates that the items will have a rating of 60% on the basis of taste and 40% is based upon its dietary worth. The items will be made with additional nutritional worth in contrast to all other items in market gaining it a plus on its dietary content.
This method was adopted to bring more tasty plus nutritious foods and beverages in market than ever. In competition with other companies, with an intention of retaining its trust over consumers as Business Business has acquired more trusted by customers.

Quantitative Analysis.

R&D Costs as a percentage of sales are decreasing with increasing actual amount of costs reveals that the sales are increasing at a higher rate than its R&D spending, and permit the company to more spend on R&D.
Net Revenue Margin is increasing while R&D as a portion of sales is declining. This indicator also shows a green light to the R&D costs, mergers and acquisitions.
Financial obligation ratio of the business is increasing due to its spending on mergers, acquisitions and R&D development rather than payment of debts. This increasing financial obligation ratio posture a risk of default of Business to its investors and could lead a declining share costs. In terms of increasing financial obligation ratio, the company must not invest much on R&D and ought to pay its present financial obligations to reduce the risk for investors.
The increasing danger of investors with increasing financial obligation ratio and decreasing share prices can be observed by substantial decrease of EPS of Big Bazaar stocks.
The sales development of company is also low as compare to its mergers and acquisitions due to slow understanding building of consumers. This sluggish development also impede business to more spend on its mergers and acquisitions.( Business, Business Financial Reports, 2006-2010).
Note: All the above analysis is done on the basis of estimations and Charts given in the Exhibitions D and E.

TWOS Analysis

TWOS analysis can be utilized to obtain different strategies based on the SWOT Analysis offered above. A quick summary of TWOS Analysis is given in Exhibit H.

Strategies to exploit Opportunities using Strengths

Business should introduce more ingenious products by big quantity of R&D Spending and mergers and acquisitions. It might increase the market share of Business and increase the earnings margins for the business. It could likewise provide Business a long term competitive advantage over its rivals.
The global expansion of Business should be focused on market catching of establishing countries by growth, attracting more clients through customer's commitment. As developing countries are more populous than developed nations, it might increase the consumer circle of Business.

Strategies to Overcome Weaknesses to Exploit Opportunities

Big Bazaar should do cautious acquisition and merger of companies, as it could impact the consumer's and society's perceptions about Business. It ought to obtain and combine with those companies which have a market reputation of healthy and nutritious companies. It would improve the understandings of consumers about Business.
Business needs to not only invest its R&D on development, rather than it ought to likewise focus on the R&D costs over examination of expense of various healthy products. This would increase cost efficiency of its products, which will result in increasing its sales, due to declining rates, and margins.

Strategies to use strengths to overcome threats

Business ought to relocate to not just establishing but also to industrialized nations. It should broadens its geographical expansion. This large geographical growth towards establishing and established nations would lower the threat of prospective losses in times of instability in different countries. It must widen its circle to numerous countries like Unilever which runs in about 170 plus nations.

Strategies to overcome weaknesses to avoid threats

It must acquire and combine with those nations having a goodwill of being a healthy business in the market. It would also allow the company to utilize its potential resources effectively on its other operations rather than acquisitions of those organizations slowing the NHW method development.

Segmentation Analysis

Demographic Segmentation

The demographic segmentation of Business is based upon four aspects; age, gender, earnings and profession. For example, Business produces numerous products related to babies i.e. Cerelac, Nido, etc. and related to grownups i.e. confectionary items. Big Bazaar products are rather affordable by almost all levels, but its major targeted clients, in terms of earnings level are middle and upper middle level customers.

Geographical Segmentation

Geographical segmentation of Business is made up of its existence in practically 86 countries. Its geographical segmentation is based upon two primary elements i.e. average earnings level of the customer as well as the climate of the region. For instance, Singapore Business Company's segmentation is done on the basis of the weather condition of the area i.e. hot, warm or cold.

Psychographic Segmentation

Psychographic division of Business is based upon the character and lifestyle of the client. Business 3 in 1 Coffee target those customers whose life style is rather busy and do not have much time.

Behavioral Segmentation

Big Bazaar behavioral division is based upon the mindset understanding and awareness of the customer. For example its highly nutritious products target those consumers who have a health mindful mindset towards their consumptions.

Big Bazaar Alternatives

In order to sustain the brand in the market and keep the consumer intact with the brand name, there are two alternatives:
Option: 1
The Business must spend more on acquisitions than on the R&D.
Pros:
1. Acquisitions would increase total possessions of the business, increasing the wealth of the business. Costs on R&D would be sunk expense.
2. The business can resell the obtained units in the market, if it fails to execute its method. However, amount spend on the R&D could not be revived, and it will be thought about totally sunk expense, if it do not provide prospective outcomes.
3. Investing in R&D provide slow growth in sales, as it takes long time to introduce an item. Acquisitions provide fast results, as it supply the company currently developed product, which can be marketed soon after the acquisition.
Cons:
1. Acquisition of company's which do not fit with the company's worths like Kraftz foods can lead the business to face misconception of consumers about Business core worths of healthy and healthy products.
2 Large spending on acquisitions than R&D would send out a signal of business's inadequacy of establishing innovative products, and would results in consumer's frustration.
3. Large acquisitions than R&D would extend the product line of the company by the items which are currently present in the market, making business unable to introduce new innovative items.
Option: 2.
The Company must spend more on its R&D instead of acquisitions.
Pros:
1. It would allow the company to produce more innovative items.
2. It would supply the business a strong competitive position in the market.
3. It would enable the company to increase its targeted customers by presenting those products which can be provided to a totally brand-new market segment.
4. Ingenious products will supply long term benefits and high market share in long run.
Cons:
1. It would decrease the earnings margins of the business.
2. In case of failure, the entire spending on R&D would be considered as sunk cost, and would affect the business at big. The risk is not in the case of acquisitions.
3. It would not increase the wealth of company, which could offer a negative signal to the investors, and might result I decreasing stock costs.
Alternative 3:
Continue its acquisitions and mergers with significant costs on in R&D Program.
Pros:
1. It would enable the company to introduce new ingenious products with less risk of transforming the costs on R&D into sunk cost.
2. It would offer a positive signal to the investors, as the total properties of the business would increase with its considerable R&D spending.
3. It would not affect the earnings margins of the business at a big rate as compare to alternative 2.
4. It would supply the business a strong long term market position in terms of the company's overall wealth along with in regards to innovative products.
Cons:
1. Threat of conversion of R&D spending into sunk cost, higher than option 1 lesser than alternative 2.
2. Threat of mistaken belief about the acquisitions, higher than alternative 2 and lower than option 1.
3. Intro of less number of innovative items than alternative 2 and high variety of innovative items than alternative 1.

Big Bazaar Conclusion

Business has stayed the top market player for more than a decade. It has institutionalized its techniques and culture to align itself with the market modifications and client habits, which has actually eventually allowed it to sustain its market share. Though, Business has actually established substantial market share and brand identity in the city markets, it is suggested that the company should focus on the backwoods in regards to developing brand name commitment, awareness, and equity, such can be done by developing a specific brand allocation method through trade marketing techniques, that draw clear distinction in between Big Bazaar products and other rival items. Big Bazaar should utilize its brand name image of safe and healthy food in catering the rural markets and likewise to upscale the offerings in other categories such as nutrition. This will enable the business to develop brand name equity for recently introduced and already produced items on a greater platform, making the reliable usage of resources and brand name image in the market.

Big Bazaar Exhibits