Project by Divyanjali Sinha
Executive Development Programme in Strategic Management
Batch 5: Feb’22 – Jul’22
Project Submission - By Divyanjali Sinha
Professors: Dr. Apalak Khatua Dr.Manoj Thomas Dr. Indrajeet Mukerjee Dr. Arindam Mondal
Dr.Saurav Snehvrat Dr. Tata L Raghuram Dr. Kalyan Bhaskar
INTRODUCTION
In 1998 Tata sold off their 50% stake in the company of the cosmetic products Lakme to HUL for ₹200 crores (US$48.46 million) and created Trent from the money it made through the sale. All shareholders of Lakmé zudiore gave different shares in Trent. Simone Tata, the chairperson of Lakmé, zudiont on to head Trent. The reason behind the sale was that Tata saw greater growth potential in retail, and believed that it would be much more difficult for an Indian company to release new cosmetic products in a market that had opened up to global companies. In August 2005, Trent acquired a 76% controlling stake in Landmark, a Chennai-based privately owned books and music retailer, and completed a 100% acquisition in April 2008.
ZUDIO
Established in 1998 and part of the Tata group, Trent Ltd. operates Zudio. Zudio is a mass market brand in the value format offering and a separate fashion destination. The Zudio stores have several departments to meet the varied shopping needs of customers. These include apparel for men, women, and kids, footwear, and home. Tata Trent Ltd opened its first 8,000 sq. ft private label store Zudio at Commercial Street in Bangalore in September 2016. Shop for Zudio online at TataCliq. Zudio now contributes 13 percent to Trent’s overall revenue, say retail analysts tracking the company.
VISION
Aggressively popping all over India, zudio brings to the fore irresistible fashion at unmatched prices. Zudio creates everything in-house and loves cool-spirited people who are trend sussed. Zudio enjoys forming tribes and creating amazing opportunities along the way.
MISSION
● Continued emphasis on aspirational fashionability
● Scaled up exciting exclusive brands
● Ensured faster store opening to scale up to reach
● Focused on the speed of delivering the latest fashion each week
● Built omnichannel presence
With frameworks like Human Capital Readiness Index, zudio identifies critical human capital requirements for our growth strategy. The Company has implemented various initiatives to build better organizational capabilities to enable us to sustain competitiveness in the marketplace. Zudio recruited over 5,000 colleagues in stores and continues to invest significantly in the training and development of our teams. With the use of best-in-class technology for recruitment, zudio has optimized managerial bandwidth, enhanced candidate experience, and standardized the hiring process across diverse locations and geographies. Consequently, the average hiring decision time came down by 80% with better candidate experience. Trent as part of the Tata group emulates the highest standards of governance and fairness.
Regular sessions on POSH (Prevention of Sexual Harassment), Tata Code of Conduct, and Women Safety sensitize colleagues on acceptable ethical behaviors and promote a safe & healthy work environment. As of 31st March 2022, zudio had a staff strength of 11,073 (including Westside, Zudio, Landmark, and the corporate staff), 1,828 at Star, and 1,037 at subsidiaries including Booker India Ltd., Fiora Business Support Services Ltd., Nahar Retail Trading Services Ltd., Fiora Hypermarket Ltd. and Fiora Online Ltd. with an overall total of 13,938 employees across.
Economical Analysis
ICICI Direct Report Trent Ltd. is India’s leading retailer with a presence across various consumer categories (550 plus stores). The inherent strength of brands (Westside, Zudio, Star, Zara) and accelerated store additions have led Trent to be among the fastest-growing companies in our retail coverage universe. Zudio remains the fastest-growing value fashion brand in India with revenues surpassing Rs1000 crore in FY22. With the brand achieving scale, the brand reported its highest Ebit margin of 6% in FY22 (FY21: ~1%). Westside format surpassed pre-Covid levels from H2 FY22 onwards with positive same-store sales growth (FY22 gross revenue: Rs 2900 crore). Trent's share price was up by 2.89 % based on the previous share price of ₹ 1204.65. Trent share price trend:
Last 1 Month: Trent's share price moved up by 10.88 %
Last 3 Months: Trent's share price moved down by -5.16 %
Last 1 Year: Trent's share price moved up by 30.68 %
Last 5 Years: Trent's share price moved up by 385.16 %
Social Analysis
Zudio focuses entirely on exclusive branded offerings, curated in-house and in line with the latest fashion trends at sharp prices. The offerings are constantly refreshed with the aim to provide new and updated merchandise to customers on every visit. Apart from ensuring differentiated fashion and experience for customers, active control of the value chain is integral to evolving a sustainable business model for this concept. Pitched at a younger audience, we recognize it is critical to be fashion-forward and closely synchronized with evolving trends. Hence, as with Westside, the emphasis is on minimizing lead times and landing fresh collections in stores as quickly as possible. The aspiration is to constantly shrink the time window between the initial design concept to be available on the shelf. Merchandise is almost entirely sourced from within India as a matter of choice affording access, speed & flexibility. The share price of any stock is volatile and keeps changing throughout the day owing to different factors. Trent's closing price as of 08 July 2022, 04:01:00 PM is ₹ 1204.65.
Technological Analysis
The pandemic accelerated the adoption of online channels. In keeping with the evolving preferences, they continued to emphasize the seamless access of their stores and follow their customers across channels. The intent is to facilitate access and experience of the brand's basis individual preferences and convenience. Zudio reaches a growing online audience through Westside.com, an arrangement with Tata Cliq, and now through Tata Neu - the recently launched super app that seeks to unite the Tata brand universe. Zudio’s customers continue to increasingly leverage the convenience of digital access with the online channel registering 74% growth in FY22 over the previous year and contributing to around 7% of Westside revenues. On an ongoing basis, the share of online revenues has continued to remain over 5% even as the store business recovered sharply in recent quarters. Digital content and social media initiatives are increasingly central to the ongoing communication of the customer offer. Zudio has also launched exclusive styles online which are witnessing encouraging traction. They adopt an entirely integrated model between their stores and online channels with almost 100% of the orders being serviced directly from stores. They seek to deliver a seamless experience to allow the customers the convenience of relating to their brands at their most comfortable moment, place, and mode. They look forward to growing this channel significantly in the years ahead and leveraging the Tata Neu super app which should allow Westside access to a very large and diverse audience.
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Environmental Analysis
Given the competitive marketplace and an audience with significant real-time exposure to global fashion trends, Westside is increasingly focusing on the rapid delivery of the latest fashion by sharply reducing the concept-to-customer time. Our bouquet of exclusive brands allows us greater control across the supply chain, ensuring that we deliver the latest fashion every week. A sustainable supply chain with strong inventory discipline is the backbone of our business. Their warehouse ecosystems service the growing requirements of our concepts. Zudio uses technology and strong inventory management systems that enable us to deliver fresh fashion every week along with faster replenishment on an ongoing basis. They are committed to investments in scaling and upgrading their supply chain network with a view to enabling sustainable long-term business growth. As they emphasize speed across the value chain, it is also critical that we deliver on key operating metrics. For instance, shrinkage is one of the bellwether measures with respect to operating efficiency at stores and distribution centers.
Legal Analysis
The Company has a defined system of internal controls for financial reporting of transactions and compliance with relevant laws and regulations commensurate with its size and nature of business. The Company also has a well-defined process for ongoing management reporting and periodic review of businesses using the Balanced Scorecard the process to ensure alignment with strategic objectives. There is an active internal audit function carried out partly by the internal resources and the balance activity is outsourced to chartered accountant firms. As part of the efforts to evaluate the effectiveness of internal control systems, the internal audit department reviews control measures on a periodic basis and recommends improvements, wherever appropriate. The internal audit department is staffed by qualified and experienced personnel and reports directly to the Audit Committee of the Board. The Audit Committee regularly reviews the audit findings as well as the adequacy and effectiveness of the internal control measures. Based on their recommendations, the Company has implemented several control measures both in operational and accounting-related areas, apart from security-related measures
PORTER’S MODEL (Five forces analysis)
1. Competition in the industry
Aditya Birla Fashion & Retail Ltd.-Aditya Birla Fashion and Retail Ltd. (ABFRL) formerly known as Pantaloons Fashion & Retail Limited were formed after the consolidation of the branded apparel businesses of Aditya Birla Group comprising Aditya Birla Nuvo Ltd.'s (ABNL) Madura Fashion division and ABNL's subsidiaries Pantaloons Fashion & Retail Limited (PFRL) and Madura Garments Lifestyle Retail Company Limited (MGLRCL) in May 2015. Post consolidation; PFRL was renamed as Aditya Birla Fashion and Retail Limited with effect from 12 January 2016. ABFRL is India's No 1 Fashion Lifestyle entity. It altogether hosts India's largest fashion network with over 8000 points of sale in over 750+ cities and towns which include more than 2161 exclusive brand outlets (EBOs) and 245 value stores. The Company is engaged in the business of manufacturing and retailing branded apparel and runs a chain of apparel and accessories retail stores in India. Pantaloons Fashion & Retail Limited (PFRL) was listed on the bourses and trading in the company's shares commenced on 17 July 2013 after the implementation of a Scheme of Demerger.
V2
Vishal Retail Ltd is one of the fastest-growing retailing groups in India. The company offers a portfolio of products including apparel, non-apparel, and fast-moving consumer goods. The company sells readymade apparel and household merchandise. The company's subsidiaries include VRL Foods Ltd VRL Movers Ltd VRL Consumers Goods Ltd VRL Fashions Ltd and VRL Infrastructure Ltd. Vishal Retail Ltd offers affordable family fashion at prices to suit every pocket. Their outlets cater to almost all price ranges. The showrooms have over 70000 products range which fulfills all household needs. The cost-benefit that is derived from the large central purchase of goods and services is passed on to the consumer.
Future Lifestyle
Future Lifestyle Fashions Limited (FLF) a Future Group company is a leading integrated branded fashion company with a presence across both the design and distribution arms of fashion. The company's portfolio consists of leading domestic and global fashion brands spread across an entire gamut of categories including formal menswear casual wear active or sportswear ethnic wear denim wear footwear and accessories for men and women. The company's fashion brands are marketed through the company's operated retail chains such as Central and Brand Factory as well as exclusive brand outlets (EBOs) department stores and multi-brand outlets (MBOs) which are spread over 332 stores in more than 90 cities across the country and cover over 5.74 million sq. ft. of retail space. These chains are backed by a strong sourcing network of house trend-spotting and design teams coupled with robust logistics and warehousing networks. The company's distribution network includes 40 Central Stores 63 Brand Factory stores along with 229 EBOs. Future Lifestyle Fashions Ltd was incorporated on May 30 2012 under the name and style of Future Value Fashion Retail Limited. The company has been formed through the demerger of the lifestyle fashion businesses of Future Retail Limited and Future Ventures India Limited. The company obtained a Commencement of Business Certificate on June 15, 2012.
2. Potential of new entrants into the industry
Indian retail is subject to the highest degree of competition. Since the structure of the retail business is unorganized hence the possibility of new players entering the game is high. But the cost of distribution and reaching a shelf in the retail shop is high for the competitors as the market share of ITC is high. · So, General Mills must keep eye on branded as well as local players in the market and focus on penetrating to increase market share from 3% to above.
3. Power of suppliers
The power of suppliers will entirely depend on the sale of the current stock present in the stores at Zudio, they have always been stocked up and profit is barging the targets each month. Once they start selling on multiple platforms the request for new supplies will never be ending.
4. Power of customers
Customers are termed as a god. In the retail business, the least price and the quality product is the best arrangement. Once the customers get the taste of this combination, they are never going back to the other choices, however, the good deal may lure them. Also, word of mouth is the strongest way of marketing. So this gives leverage to the customers and the company blooms as it grows.
5. Threat of substitute products
The threat mostly will come from equal marketers, however, this business of clothing line that too in the retail business has a lot of competition. The gap can only be created once they start delivering what they promise. If for example, we say, Zudio raises the prices of the clothing line they sell, initially, they will make a profit, but in the long run, it will become absolute as the target customer will not be shopping from Zudio. In these, times competition like V2, lifestyle, etc can overlap the business. Being cautious and acting in real-time is key to the loop.
Reference
The reference is taken from the internet mostly and the rest of the information is added from my understanding. Business I understood was through my thorough research done on Zudio.
Moneycontrol.com
economic times
Indianretailer.com
businessstandard.com
CONCLUSION
Strategic Management of Zudio states that the company is here to stay and work on a few different strategies to grow exponentially and give great competition to the bigger players in the market.
Nonmarket strategies: Usually the company is just based on a one-on-one business model, however, it can start a customer loyalty program where they earn credit points or any sort of rewarding model. They can organize road shows where Zudio models can have fashion walks and show off really cool clothes for people who walk on the road. They can collaborate with 3rd party/platform( affiliate marketing) for better reach to their customers.
· Market Penetration: Zudio needs to penetrate the market in north India. The crowd of North India is practical and understands the value of money. Zudio is a market for college-going students and middle-class families who want to be on the tip of fashion could be a great idea as the offerings are quite impressive.
Innovation strategy: · Though the business is doing quite well, however, a few additions will not only make it the best company but also the expansion thoughts can be placed minds. They have opened 48 stores in 48 days so, of course, they are here for the long haul. The style of the clothes is very minimal and goes with the concept of the company motto. The addition on the counter for socks and go-to handy products has been given a nice thought and greater possibilities to increase sales.
Disrupting Innovation: To give a better understanding, the stores have wipes at the minimal cost of 30 rs, and when the user does not feel any less than the wipes it comes under 200 bucks minimum. Secondly, they also have a set of lip balms and moisturizers which come at the price of 50 and 200 respectively. These innovation strategies where you set an example of lower pricing and quality product gives the consumer leverage to shop independently and get a feeling of accomplishment of buying many things at such affordable prices.
Thanks.
