Big
Mart has been a valuable brand in the superstore in Nepal. It has two outlets
in Kathmandu located in Kamalpokhari and Lazimpat. The first store was launched
in 10th July, 2009 in the most renowned mall - City Centre Mall
located in Kamalpokhari. It has been given credit for its innovation in the
introduction of Super market in Nepal. In July, 2011 another outlet was opened
in Lazimpat.
Political
The
political condition of Nepal can affect a lot to any business. Due to the
unstable political condition there is a high risk to Big Mart and other retail
business. The consequences of the twelve years long internal war has yet
unclear. The most important thing is that there is no constitution of Nepal.
The Constitutional Assembly failed to issue the constitution of Nepal. The
government is being changed in every six month by which the policies are hardly
implemented in favor of retail industries. Due to such consequences Big Mart is
stepping back to open outlets in different sectors. As their objective was to
open their outlets in every locality, the political factors have affected them
a lot. Also the retailers like Big Mart are not getting any type of support
from the government.
Also,
due to the education consumers rights and other agendas are also rising. There
are some pressure groups who are giving pressure to Big Mart to provide quality
goods and services with a low price. So, they are compelled to minimize the
price hence reducing the profit.
Big
Mart has to pay higher tax but they are not getting any kind of facilities from
the government. So, it has not got any type of attention from the government.
In addition, Big Mart can also affected by their shareholders. The management
may get pressure from the stockholders to give high rate of return.
So,
management needs to be very careful and should be responsible to their
consumer, shareholders and society.
Economic
An
opportunity available to Big Mart is that it has got a lot of customer from
middle level to high level class. Big Mart has been able to make a lot of loyal
customers in a short span of time. On the other hand, the people nearer to Big
Mart are the loyal customers. Individual buy the products from the local
departmental; store rather than from the Big Mart as it will save both time and
money. Also, Big Mart is criticized for taking high price from the customer.
The competitors of Big Mart are attracting customers by offering discounts and
lowering the price.
As
a retail store, it has to pay high amount of tax to the government. Also, due
to the low number of outlets it has losing opportunities, hence resulting lower
profit. Also the inflation rate is 18% which has pressured them to increase the
wages of their staffs which increase the cost.
So,
in order to increase the demand from the customers it should open its outlets
in different localities. Also, higher national income growth may help to
increase the demand for Big Mart’s products.
Social
In
Nepal the concept of buying grocery in departmental store is slowly increasing.
So, Big Mart business is really affected by the perception and life style of
people. Big Mart stores were geared to the higher level people in the
beginning. Changes in the social trends can really impact the on the demand for
the products in Big Mart. With the social acceptance, it has become the
attraction place for middle class level too. Today Big Mart has become a social
place to hang out to meet with friends. Big Mart has helped to show the social
status of people as they will choose products that match their taste and
preferences. Also changes in the education system people are slowly attracted
to such retail stores,
Hence,
Big Mart should have a clear positioning policies and strategies and provide
better facilities to meet the target needs.
Technological
Information
technology has become the most important inputs in the retail stores today. As
Big Mart has got separate IT Departments it can store consumers’ data and
millions of transactions into their database and in order to automate their
operations. It has also helped Big Mart to analyze the customer data to lunch a
right strategy to a right customer group. This has enabled Big mart to lead an
effective CRM program. Also it has been used to share the ideas and thoughts of
their customers. It has really helped them to add value to the services they
are providing to the customer.
Also
by using products like affordable organic produce, fair trade coffee, and
compact fluorescent light bulbs within the reach of one million of customers,
it believes that it can play a powerful role in protecting the environment and
in shifting the behavior and trends of marketplace.
Legal
This
includes the factors which are related with the legal environment in which the
firm operates. In recent years in Nepal there has been a significant change in
legal system that has affected retailers business. the introduction of age
discrimination, an increase in the minimum wage and other facilities and
incentives has affected retailers like Big mart to increase the cost. Changes
in the law can affect Big Mart in terms of cost if new systems and procedure
has to be developed. Also changes in law may affect the demand for goods and
services if the law affects the likelihood of customers buying the goods or
using the services.
There
are different types of laws that may affect the business of Big Mart. The first
one is consumer laws which are designed to protect the rights of customers
against the unfair and misleading practices. Another category of law is
competition law where they are designed to protect small departmental stores
and to make sure that there is no existence of monopoly in the retail industry
and customers are not exploited by the monopoly power of a single retail store.
Another category of law includes employment law. They are mainly aimed at
protecting the rights of employee covering the areas such as minimum salaries
and incentives, facilities and minimum working hours. They are also designed to protect workers
against the abuse of power by managers. Another category of law is health and
safety legislation. This law is designed to provide a safe working environment
to the employees and use of safety products.
Environmental
The
weather and climate changes and its impacts on the retail industry are the environmental
factors. Changes in the weather may positively or negatively impact the
business of Big Mart. For example, in winter season, the demand for ice cream is
low whereas in summer season the demand for the same products is high. This
shows that there is a seasonal impact on the business of Big Mart. Also
environmentalist has pressured Big Mart to use paper hand bags instead of
plastic bags. So, Big Mart needs to focus on saving the environment. Also, it
needs to launch various environmental programs like plantation. It also needs
to use modern technologies, user friendly machines so that it can play a vital
role to save the environment. It can add value to their products and services
which can increase their brand value.
Factors to be considered to be
competitive in Retail industry
Supermarkets purchase goods for resale,
and goods and services for conducting their operations .Supermarkets have to
decide what product assortment to carry, what vendors to buy from and what
prices and terms to negotiate with their suppliers (Kotler, 1984). To stand as
a competitive supermarket in the retail market, innovative changes are required
from time to time. Innovation change can be technological, organizational and
managerial, which should be undertake to remain competitive in the market
(Reardon et al., 2004a)
In order to remain competitive Super
Markets should consider following external issues to remain competitive over
others:
·
Level of demand and supply
Retailers
of super market need to consider the level of demand supply. Products and
services should be delivered after considering demand for that item. If supply
become higher that the demand then a these retailers have to store the excess
goods in inventory which will be costly to them. So, to remain competitive
there needs to have a proper balance in between demand and supply.
·
Economic outlook
Super
market needs to look after the economic background or the living standard of
the people in that location or country. If purchasing power is lower then it
will be beneficial for super market to sell products and services, which can be
afforded by the people of that location or a country. So, to have a competitive
position, super market should look after the living standard of people.
·
Competition from other retailers
Competition
from other retailers can be a great challenge for a retailer of super market.
When other retailers sell products at a lower price than the one who is selling
those products at higher price can get effected. So, super market needs to
closely monitor the activities and strategies of competitors.
·
Political and regulatory policies
Political
policies can affect a lot. When political condition of a country is favorable,
then business may have a positive impact. Political stability means you have a
higher standard of living, which increases the purchasing power of people and
hence increases the sales.
So,
a Super Market needs to focus on the above factors in order to remain competitive over other market.
