Page 298 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 14: A Review of Retailing: Environment and Operations

14.5 Summary Notes

 Urbanization/improvement in infrastructure: Organized retail in India are more of an
urban phenomenon; most retailers have so far been focusing on metros and tier-II cities.
This is unlike the US, where Walmart focused on smaller cities, having a population of
10,000-20,000, with a strategy to enter city-by-city and state-by-state.
 Rural retail models are yet to stabilize in India due to small ticket size, high real estate
costs and tough competition from millions of small mom-and-pop stores. However, the
development of modern cities and townships is catching up in India, and should boost
organized retail.

 GST Implementation: The implementation the goods and services tax (GST) can be a big
trigger for organized retail. It will reduce the tax incidence and complexities of doing
business in India.
 It will remove inefficiencies in the logistics and taxation system.
 Retail sector is in early growth phase of its life cycle and would emerge as unrise sector.
 Indian economy is expected to add another trillion dollars to its GDP in 5 -6 years, enabling
per capita income CAGR of 12%.
 The resultant income growth would change the shape of income distribution from a
pyramid to a diamond, with a huge consuming class in the middle.
14.6 Keywords

Culture: Culture is that complex whole which includes knowledge, belief, a., law, morals, customs
and any other capabilities and habits acquired by humans as members of society.
GST: Goods and service tax.
Macro Environment: The macro environment refers to all forces that are part of the larger
society and affect the microenvironment. It includes concepts such as demography, economy,
natural forces, technology, politics, and culture.
Micro Environment: The microenvironment refers to the forces that are close to the company
and affect its ability to serve its customers. It includes the company itself, its suppliers, marketing
intermediaries, customer markets, competitors, and publics
14.7 Review Questions

1. Discuss the cultural transformation of Indian consumers in retailing.
2. What are the new developments in the retail industry?
3. Discuss the earlier trends in retail industry and its significant impact on future.
4. What do you understand by retail change?

5. What do you understand by GST? Discuss its relevance in retail sector.

Answers: Self Assessment

1. Macro and micro
2. Strategy

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