Metro Cash & Carry Business Analysis

This assignment delves into a comprehensive analysis of Metro Cash & Carry's business operations within India. It employs a SWOT framework to identify the company's strengths, weaknesses, opportunities, and threats, offering valuable insights into its competitive landscape. The report highlights key factors influencing Metro's performance, such as customer loyalty programs, supply chain management, and the evolving Indian retail market. Additionally, it explores potential strategies for Metro to overcome challenges and capitalize on emerging opportunities.

Running head: BUSINESS FOUNDATION
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Executive Summary
The following research has been carried out to determine the market planning for Metro Cash
and Carry outlet in India before the launch of a new product in the market. The research has
started with an initial introduction of the company, its business in India and the background of
the organization. The researcher has made a detailed economic as well as supply and demand
analysis of the Indian market and has provided the detailed SWOT of the organization. The
investigator has also provided all the other factors that involve the launch of the new product like
market description, justification and the value proposition of the product. The report has ended
with a detailed and positive conclusion.

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Table of Contents
Introduction......................................................................................................................................5
Background of the Company...........................................................................................................5
SWOT Table....................................................................................................................................6
Table No 1- SWOT Table................................................................................................................7
Market Description..........................................................................................................................7
Findings...........................................................................................................................................8
Explanations of the SWOT Table....................................................................................................9
Recommendations..........................................................................................................................11
Target Market................................................................................................................................11
New Product Description...............................................................................................................12
Customer Value proposition..........................................................................................................12
Justification of the choice of New Product....................................................................................13
Conclusion.....................................................................................................................................13
References......................................................................................................................................14
Appendices....................................................................................................................................16
Figure 1- Annual Revenue of METRO.........................................................................................16
Figure No 2- Sales Items...............................................................................................................17

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Figure No 3- Promotion of Metro..................................................................................................17

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Introduction
Metro AG is a global retail company based in Germany and deals in wholesale and cash
and carry business. The mentioned Company established in 1964 has its headquarters in
Dusseldorf city of Germany. The following company is the fourth largest retailer of the world
based on the amount of Revenue generated in a year. The company is a global pioneer in cash
and carry business of the world. It is represented in 25 different countries with over 750 self
service wholesale stores. The Company achieved revenue of around 29 billion pounds in the
fiscal year 2015-16 which is no doubt a remarkable achievement for the business organization. It
has its presence across 25 countries with strength of over 750 self service centers. It employs
around1,40,000 employees worldwide and is one of the largest employers of the globe. The
management of the company always involves itself in providing different customized solutions
to its varied range of customers. The presence of the company in such vast regions of the globe
has defined its role as a global MNC.
Background of the Company
The Metro Cash and carry outlet in India commenced operations in the year 2003 with
the start no operations in Bangalore. Currently the company has around 24 wholesale centers
across the country. The core group of customers of this famous wholesaler includes the small
retailers, owners of medium and small shops, restaurants, hotels, corporate entities and many
other different forms of business that operates in India. The Indian business of these retail giants
includes a vast range of state of the art products that starts from vegetables, fruits, grocery,
preservatives, bakery products, household items, fish, meat, confectionaries, electronics and
many other different products that cater to different needs of the business and the service users.

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The Company has done a great job in promoting itself as a developer of the economy of India as
it has employed a large number of local people in its value based stores and has been working
successfully with agricultural farmers who provide them fresh fruits and vegetables in return of
the proper market price. It is ranked 2nd amongst the list of the best places to work in India and
has also received the CII National Award for quality and food safety.
SWOT Table
STRENGTH WEAKNESS
 Meeting the product requirements
 Proper and Efficient Network
 Quality staff in their ranks
 Largest Wholesaler of India
 The company does not spend money on
advertisements through any kind of
media
 Efficient and cost of operations is
extremely low in India
 Tax Rates are high in India which
makes it difficult to carry on efficient
business
 Stores are located far off from the cities
 The Company only deals in wholesale
business
 The imported items are charged with a
high price
 Absence of transaction with common
persons
OPPURTUNITIES THREATS
 Large Expansion of business all around
the globe
 Presence of 24 centers across India is a
huge advantage
 As mentioned earlier absence of credit
sales
 No discounts are available

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 All types of varieties under one roof  Presence of Wall-Marts in India
 Political conditions of India is a huge
factor for the business
 Inflation
Table No 1- SWOT Table
Source-(Jahan and Hemant 2014)
Market Description
India is one of the largest economies of the world and has been a potent economic force
of Asia as well as the rest of the world since the last decade. The rise in the economic condition
of the market is a sign of the nation’s prosperity (Yadav and Raju 2013). As mentioned earlier
the factors there are some key economic factors that have been helpful for Metro Cash and carry
to establish its existence in the country, they are;
1. Increase in the amount of consumer spending
2. Increase in the Foreign Direct Investment
3. Positive economic growth
4. Proper and efficient infrastructure for logistics
5. Establishment of other new industries
On the other hand there are demand and supply factors as well which determine the market
conditions of India. Some of the main factors that influence the demand and supply curve are;

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a. Income- Increase in the amount of disposable income of the people have made the
consumers more confident as they are now able to afford more and more goods. Higher
income can occur due to a variety of reasons like higher wages and lower taxes charged
by the government.
b. Substitutes- The increase in the price of the substitute products are helpful for the product
of another organization with same characteristics. The increase in the price of the original
product will lead to a fall in the sales figures and in turn will increase the sales of the
rival product (Varshaa 2015).
c. Advertising- Advertisement is one of the main factors that help to increase the brand
loyalty of the goods and increase the demand of the products (Trebbin Franz and Hassler
2015). The higher spending on advertisements of the products is helpful to initiate a rise
in the global sales of the organization.
d. Complements- The price fall of a particular product will surely lead to the fall in the
prices of the other peripheral products.
e. Quality- In a place like India quality is the key to success in the market. Higher the
quality of the product, higher is the demand for the product.
Apart from the above mentioned factors the cultural context of India must be taken care of to
make sure that the cultural heritage of India is not disrespected at any cost. Therefore all the
above factors have a direct influence on the launch of a new product in the Indian market.
Findings
The classified findings have been a huge help for the organization. The research has been
able to identify the different trends that are associated on the launch of a product by such a large

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scale wholesaler in the Indian market (Jahan and Hemant 2014). It is also amazing to find out
that the management of the company used no form of electronic media to promote the product
during or after its launch.
Explanations of the SWOT Table
Strengths
 The main aim of the management of the company is to meet the requirements of the new
product so that it matches all the requisite criterion
 The presence of proper and efficient networks is an added advantage for the organization
as such networks helps to promote the product easily
 The presence of efficient and trained staffs in the organization helps the organization to
have a competitive edge in the market (Gilsenan et al. 2016)
 Metro is the largest wholesaler of India and thus launching a new product can be a great
business initiative
 The organization is perhaps the one of its kind in the world as it does not spend a single
amount in advertising in any forms of media which gives an idea of the powerful brand
name and reputation
 Cost of operating a business is extremely low in India which is a great factor that helps
the business to allocate a minimum investment
Weaknesses
 Tax Rates in India is much more in comparison to other countries which makes life tough
for foreign firms (Sinitcyna 2016)

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 The distance of the stores is inconvenient for the users as the stores are generally located
quite far away from the city. The distance is a main reason for the business to lose
customers
 The Company does not deal in retail business and deals only in wholesale business. Thus
common men are not able to buy products easily from the mentioned organization.
 The imported items of the company are charged heavily once they enter the Indian
market which is one of the biggest negative factors in the business (Gopalakrishna
Subramanian and Fleischmann 2016)
Opportunities
 The expansion of the business all around the globe will help the organization to sell its
new product in its other existing markets and increase the scope for the product
 Presence of 24 centers across India is a huge advantage for the organization as the
product can be made readily available for the other consumers in other centers easily
 The availability of all kinds of products under one roof will help the customers identify
the product easily while they explore the store (Shitole and Thyagarajan 2014)
Threats
 Absence of credit sales does not help the organization as it loses out many potential
customers
 Metro does not offer any discounts on its products which turns out to be a larger threat
for the organization
 Presence of Wall-Mart in India has given Metro a stiff challenge in the coming days

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 Political conditions of India is a huge factor for the business as because the businesses in
India are often controlled by influential political parties
 Inflation in the last couple of years have slowed down the market growth of Metro and
has presented a crisis situation in the market
Recommendations
According to Jahan and Hemant (2014) the absence of credit sales is certainly a negative
factor that has an impact on the organization. However this is done mainly because of the bulk
amount of products that are sold out to retailers (Schranz-Whitaker 2016). Metro generally deals
with wholesale trading and thus credit sales are not supported by them. However things are
changing gradually and the management of the company has introduced Smart Cards for the
members of the stores with which they can easily transact with the help of the card. The
company has also decided to offer discounts on its new products to make it seem friendlier
towards the retailers and other small sellers. The management has also taken certain measures so
that inflation does not have any such effect on it. Last but not the least the company is least
worried about Wall mart as it has 24 integrated centers around India compared to some small
units of Wall Mart (Oflazgil et al. 2016).
Target Market
The mentioned company aims to launch a new range of Travel kits and bags especially
for the frequent travelers. The target market of the company is the frequent travelers including
the leisure as well as the business travelers. However the management has decided to keep the
price within a certain range as the product is kept in the middle class segment. The product is not

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too costly but its advanced features place it in a premium segment. The main aim of the
Company is to create a world class travel kit to ensure that the travelers enjoy a hassle free
travel. The management of the company has designed the product in such a way that it provides
huge competition to other brands in the market. The product also has quite a number of varieties
depending on its design. Some of them are designed normally while the others have a stylish
design.
New Product Description
As mentioned in the earlier part the new range of travel kits has quite a number of
varieties in it. The varieties are generally in the design as some of them are designed normally
while the others have a stylish and attractive design. Existence of a large number of competitors
has forced the organization to follow the cost effective policy which will be helpful for the
organization to get a hold of the highly competitive market. The product has earned an ISO 9000
degree and is already regarded as one of the best in the markets prior to its launch.
Customer Value proposition
Customer Value Proposition is one of the marketing statements that describe the reason
for a customer to buy a certain product or use a particular service (Kumar and Bansal 2015). The
management of the mentioned Wholesaler has been able to set out a particular value proposition
for the travel kits that includes;
a. Best product with a low value
b. Reduces the stress of travelling
c. Targeted for the stylish and comfort loving travelers

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Justification of the choice of New Product
The new product has quite a lot of attractive features that justifies its choice by the
service users. The key justification of the product is its premium quality that is received in such
low prices. The new products are used effectively and are meant for a safe, sound and a quality
journey. The4 following reduces the stress of the journey and also reduces the travel time.
Conclusion
The following report is one of the few works on the wholesale marketing in a country like
India. The detailed internal analysis of the problems that lies in the business along with the
recommendations for solving the problems effectively has been extremely helpful for small
wholesalers present in the country. The through analysis of the report thus helps to identify the
weakness as well as the ways to avoid them.

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References
Doan, P., 2016. RELATIONSHIP MARKETING-LOYALTY CARD.
Gilsenan, M.B., Abbinante, F., O'Dea, E., Canals, A. and Tritscher, A., 2016. Open risk
assessment: data. EFSA Journal, 14(S1).
Gopalakrishna, P., Subramanian, R. and Fleischmann, D., 2016. WALMART IN
INDIA. Journal of the International Academy for Case Studies, 22(3), p.99.
Jahan, N.F. and Hemant, D.S., 2014. Emergence of cash and carry business model in india with
special reference to metro stores. International Journal of Retailing & Rural Business
Perspectives, 3(3), p.1064.
Kumar, P. and Bansal, S., 2015. Swot analysis: what does fdi hold for the indian retail sector in
21th century?. International Journal of Research in Management, Economics &
Commerce, 5(1).
Oflazgil, K., Hocken, C., Schenk, F., Teschl, O., Lehr, T., de Boer, M., Schröder, C. and Alt, R.,
2016. Smart. NRW—RFID as Enabler for an Intelligent FMCG Supply Chain. In Logistics and
Supply Chain Innovation (pp. 325-337). Springer International Publishing.
Schranz-Whitaker, M., 2016. Supply Chain Excellence in the Retail Industry METRO AG–A
Case Study (Doctoral dissertation).
Shitole, G.Y. and Thyagarajan, G., 2014. Consumers' Perception on FDI in Multi-Brand
Retailing in India-A Study. Sumedha Journal of Management, 3(1), p.4.

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Sinitcyna, E., 2016. Improving the competitiveness of Metro Cash & Carry Ltd. on the Russian
market of goods and services.
Trebbin, A., Franz, M. and Hassler, M., 2015. Securing Local Supply in Rural Areas: The Role
of Wholesale Cooperations in Central Hesse, Germany. Economic Development in Rural Areas:
Functional and Multifunctional Approaches, p.131.
Varshaa, H.G., 2015. A study on impact of metro wholesaling on retailing in karnataka (Doctoral
dissertation, university of agricultural sciences gkvk, bengaluru).
Yadav, S. And Raju, K.H.H., 2013. Swot analysis towards foreign direct investments in retail
industry in india. International Journal of Entrepreneurship & Business Environment
Perspectives, 2(3), p.590.

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Appendices
Figure 1- Annual Revenue of METRO
Source- (Doan 2016)
Sales
Grocery
Household
Electronics
Others

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Figure No 2- Sales Items
Source- (As created by the author)
Sales
Newspapers
WordofMouth
Own visits
E-mails
Figure No 3- Promotion of Metro
Source- (As created by the author)