Academic journal article Researchers World

Organized Farm Products and Garment Retailing in India: A Comparative Strategic Analysis

Academic journal article Researchers World

Organized Farm Products and Garment Retailing in India: A Comparative Strategic Analysis

Article excerpt

ABSTRACT

Organized retailing is a sunrise industry with maximum growth rate in India. Many national and international players are in the arena. The intense competition in the market posed many challenges to retailers for better organizational performance. In this study we have attempted to compare the strategic match for retail challenges (RC), competitive advantage (CA) and organizational performance (OP) in the organized garment retailing (OGR) business and organized farm product retailing (OFPR). The confirmatory models have been tested using structural equation modeling.

Keywords: Organized retailing, organizational performance, competitive advantage, retail challenges, structural equation modeling, organized garment retailing, organized farm product retailing.

INTRODUCTION:

Organized retailing is the process of influencing supply chain (SC) activities in the most economical and viable way to minimized SC costs. This concept gained momentum in 1980 and got full boom after liberalization in 1991. According to CMIE report the retail growth doubled from 1990 to 1999. In India there are more than 15 million unorganized retailers, operating in the form of 'mom pop' outlets spread over more than 31 million square meters area, generating sales of USD 11 billion in 2007-08 [1]. Nowadays, the major retail players in the organized farm products and garment retailing are; Reliance Retail, RPG Retail, The Tata Group, K Raheja Corporation, Piramyd Retail, Nilgiris', Subhiksha Trading Limited, Trinethra, Vishal Group, and BPCL etc. To harvest the profits the major players have collaborated with many national and international players like Wal- Mart, Tesco, and Metro etc.

Supply chain management (SCM) enhances OP by integrating the internal business functions within a company and linking them with the external operations of suppliers, customers and other channel members [2]. The organizations need to master the challenges of speed, convenience and reliability. It shall help to reduce costs, improve productivity, and reduces risk to gain competitive advantage (CA) [3].

The SCM focuses on operational cost, time and response, customer services, and profitability or margins [4]. It improves service levels and reduces costs to improve organizational performance (OP). It incorporates logistics as a key SC focused function. The effective SCM and purchasing practices are associated with competitive capabilities of a firm and it has more significant effect on firm performance [5].

The intense market competition and changing customer preferences has made the retailers' job difficult and challenging. The intense competition has shut down many organized stores. This scenario has attracted the attention of many researchers to find solution for the same. The discussion with the practitioners in the field of OGR, and OFPR (fruits, vegetable, spices etc.) revealed the need to study RC for better OP.

In this paper, RC, OP and CA have been adopted from the findings of Rajwinder, et al. [6]. Also the RC, CA and OP have been adopted for OGR. A comparative analysis has been made to find the gap among these two different business lines from the same industry. A structural equation modeling has been applied to test the hypotheses.

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RETAIL CHALLENGES:

Organised retail in India is little decade old industry, facing many challenges. The major RC in consultation of practitioners and consultants and with literature support are shown in Table I.

The customers' expectation for a wide product variety has complicated the task to manage the products. Despite the big garment production houses and farm houses owned by the players, still there is a gap for the supply of wide product variety of garment and farm products. It is due the fact that different products have different meaning to the different customers. The product color, size, composition, quality and brand shall quote different meaning to different customers. …

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