Business Model Of Big Bazaar Assignment Sample

Executive Summary

Currently, Big Bazaar is following the “business to business model” which is also known as B2B. It is high time that the aforementioned organisation should start incorporating changes in the business model after analysing the market in order to operate effectively in not only India but expand in other countries as well.

There are certain recommended changes in accordance with the company’s business model in the context of “Business Model Canvas” that can help in changing the inner workings of the organisations.

Furthermore, there are some recommended changes for Big Bazaar like expansion by global tie-ups, introducing till free shops as well as providing membership cards to retain consumers.

Introduction

Big Bazaar, an India based retail chain with headquarters in Mumbai. It was founded in the year 2001 by Kishore Biyani, with approximately 295 stores spread across the nation. The retail chain is a type of hypermarkets as well as discount department stores.

The founder of the organisation established it under his parent company known as Future Group with a substantial name in Indian retail along with fashion sector. The reputation of Future Group is well off, but Big Bazaar has been able to make a substantial space in the life of the people of India.

This Indian retail chain provides a wide range of merchandise, ranging from clothes, apparels, shoes to food, grocery, liquor collection along with other house necessities. However, it has been evident even though there are hundreds of outlets throughout India; it has not expanded in other countries.

This consulting report will focus on the causes behind it and some recommendations to amend the situation.

Brief Summary of Big Bazaar’s Current Business Model

Figure 1: B2B model

(Source: Based on Iankova et al. 2019)

The Big Bazaar Direct is considering a transition regarding their business model; however, it is currently following the B2B business model where the common men can get an opportunity of establishing trading by starting to become a Big Bazaar franchise.

According to the views of Aithal (2016), B2B or “business to business model” is based on a general assumption that consumers and trading are contrasting or poles apart to each other.

As per this model, it has been noted that customers are consumers whereas trading is acting as the provider. In the case of B2B, it is that kind of business model in which the exchange of products and services are taking place between two or more trading. Since B2B is a kind of transaction occurring between businesses like including a manufacturer or even a wholesaler as well as a retailer.

Big Bazaar is not conducting business with an individual customer rather between organisations. One of the primary aspects of Big Bazaar is that there are no middlemen as they mostly directly purchase products from the producers letting them put an end to middlemen along with their profits (Bigbazaar.com, 2020).

Big Bazaar is a large scale organisation which operates over hundreds of stores, the profits and benefits mostly come from wholesale discounts. Another major advantage experienced by the above-stated organisation is because of their large scale nature, they could cut down on costs like transportation, promotion or advertisements.

In addition, they are able to transport a huge quantity of products resulting in dispersion of costs on various items causing it to have a relatively cheaper price. Influenced by the views of Iankova et al. (2019), the organisation also practices bulk purchasing from manufacturers which also helps in reducing expenditures.

The aforementioned hypermarket based organisation is operating in a space of mass merchandise or even value retail. As opined by Likoko and Kini (2017), mass merchandising is a typical procedure of selling items, most insurance policies where the employer is correlated or other company agrees to aid in the sale of the products to its respective consumers.

Big Bazaar primarily concentrates on a volume that helps in enabling the price. On the contrary, the trade-off is that the aforementioned entity tends to not offer an advanced quality level of service. This kind of business approach is famously known as the “category killer approach”. Hence, it clearly indicates that B2B is not functioning effectively for Big Bazaar.

Rationale Regarding the Incorporation Of Changes In The Business Model With Respect To Market Analysis

“Business to business model” has been adopted by Big Bazaar while operating in various parts of the subcontinent. It is a variant of the transaction happening between businesses, for example, like entailing a manufacturer, a wholesaler and even a retailer.

However, Big Bazaar is considering changing the business model in order to operate more effectively and expand its reaches (Remane et al. 2017). There are certain advantages that can be enjoyed by the organisation by implementing the B2B model is that it helps in practising in bigger sales along with bigger values.

This type of approach helps in attracting a specific customer type in India as it is able to garner the attention of the middle class and upper-middle class family.

This type of approach aids in establishing collaboration with retailers which often results in getting regular orders and development of long term consumer associations. It helps in lowering the costs of operations as it is able to operate in bulk.

This kind of business helps Big Bazaar to enact data-centric procedures that help in driving an efficient supply chain management. However, Big Bazaar should incorporate certain changes as this business approach can be really disadvantageous for operating business.

The aforementioned organisation is exposed to the limited market as it is still operating within the national boundaries of India and it takes considerably long time to make a decision regarding purchasing wares.

Influenced by the views of Stott et al. (2016), the power structure of organisations following the B2B approach is inverted in nature in accordance with the sales process. BRB marketing is a stark contrast to that of B2C and it tends to be undervalued by establishments in lieu of their respective sales team.

In B2B, the salespersons were considered as the primary asset whereas marketing has been considered as an afterthought. However, Big Bazaar has started focussing on promotional activities in the last few years.

The aforementioned organisation has been operating for the last two decades without any global presence but similar organisations like TESCO, Sainsbury are operating outside their home market by implementing different business models.

B2B is responsible for constricting the market for Big Bazaar as business selling to other trading experiences comparatively a smaller purchasing pool than business selling directly to consumers like Amazon.

Influenced by the views of Aversa et al. (2017), the whole number of prospective purchasers might top out in low thousands, more than the potential millions of consumers for different products.

For instance, if a businessman supplies products to trading in mature markets, in which only a few rivals are operating, the business might not survive if one of the buyers stops doing business. The sales process is done by multiple meetings and steered by quantifiable aspects instead of qualitative and emotional aspects that help in increasing sales.

Therefore, there are various strong reasons behind initiating changes within the above stated organisation.

Validation About Recommended Changes In Accordance With The Company’s Business Model in The Context Of “Business Model Canvas”

Table 1: “Business Model Canvas”

(Source: Influenced by Bigbazaar.com, 2020)

Limited market

Big Bazaar is operating within India only despite being launched for such a considerable amount of time. Organisations like TESCO that have tied up with Tata Group are operating in India and the supermarket chain is operating in around 11 countries.

B2B business model has prevented Big Bazaar from expanding its market internationally like Sainsbury, COOP, and Tesco. Big Bazaar can implement policies and strategies like tying up with aforementioned internationally renowned companies.

Long purchase decision time

Most of the customer buying decisions incorporates one or mostly two decision makers and the included time for a buying decision is supposed to run on the shorter side. But B2B comprises complicated factors like numerous stakeholders and decision makers (Hofmann, 2019).

This long process is preventing them from taking initiatives to incorporate innovative ideas in order to increase its business. In order to implement innovative ideas, it is essential to act fast so that even in a saturated market, businesses can operate effectively.

Inverted power structure

Big Bazaar is facing the issue of inverted power structure because of the B2B business model as within limits, most customers are at the mercy of trading in terms of what types of products can be bought by them. It also includes available criteria and what sort of prices are going to be allocated in order to sell the products (Planing, 2018).

However, a B2B buyer, also within limits, can easily demand certain exclusiveness and foist specifications as the seller is more dependent on retaining customers. This led to why there is a certain level of flexibility in product development as well as production.

Sales process

The sales procedure demands a substantial amount of face time, numerous meetings and is based on measurable factors instead of qualitative and emotional facets.

On the other hand, with the help of utilising membership for points and providing rewards to consumers can help in attracting customers and gain a solid return of investment. Therefore, it clearly showcases this issue regarding implementing B2B within an organisation.

Conclusion and Recommendations

To sum up everything that has been stated that Big Bazaar which is a well known name in the subcontinent is facing certain issues. The organisation provides a broad range of products starting from groceries, clothes, essentials, stationeries to food courts and other services.

The organisation is operating in various states of India, in not only the metro cities but also in certain large district towns. Big Bazaar has gained fame among middle class and upper class shoppers for providing products at the lower side, since most of its products range within lower prices.

On the other hand, the above stated organisation has gained ill reputation for providing inferior quality products. The establishment has tie ups with famous brands in India like Pantaloons, Fab India, yet the products offered in the outlets are of bad quality in comparison to that of the brand outlets.

Lastly, the organisation has garnered no attention in the global market as it has never gone out of the country’s border to expand its business in foreign lands.

Recommended changes for Big Bazaar

Expand by global tie-ups

The collaboration usually happens amongst entities that can provide strong complimentary values as an outcome to the customer that helps in multiplying the revenues and profits.

Big Bazaar can tie up with world renowned organisations like Tesco, Coop as well as Sainsbury in order to expand its base globally. It is recommended that the partnership can be done by firstly understanding and interacting about what is wanted from the partnership.

As opined by Banaeianjahromi and Smolander (2019), it is essential to define each other’s role and ensure that goals of both companies are aligning. Therefore, being patient is going to be extremely helpful for collaboration to be successful.

Till free shops

It is highly recommended to launch a till free shop for Big Bazaar. This shop can be done by enacting an automatic billing system as it can help in reducing customer rush. In metropolitan cities, Big Bazaar experiences heightened footfall in later hours of the day and like Sainsbury, it can launch a smart shop app that can help shoppers to pay through their smart phones and walk out of the shop without walking into a checkout (Theguardian.com, 2020). This can help Big Bazaar to control the rush in billing counters.

Membership cards

Membership helps in building relationships and in businesses, it aids in retaining customers and maintaining consumer loyalty. These cards help by providing meaningful value to members and encourage them to stick to one entity (Gunawan and Sari, 2019). Big Bazaar can use membership for both points and rewards to gain the attention of the customers. This encouragement can assist in reaching their own goals and become more invested with chosen organisations.

Reference List

Aithal, P.S., (2016). Study on ABCD analysis technique for business models, business strategies, operating concepts & business systems. International Journal in Management and Social Science, 4(1).

Aversa, P., Haefliger, S. and Reza, D.G., (2017). Building a winning business model portfolio. MIT Sloan Management Review, 58(4), pp.49-54.

Banaeianjahromi, N. and Smolander, K., (2019). Lack of communication and collaboration in enterprise architecture development. Information Systems Frontiers, 21(4), pp.877-908.

Bigbazaar.com (2020) About organisation Available at:https://www.bigbazaar.com/inside-big-bazaar/&sa=D&ust=1587202828264000&usg=AFQjCNHkfJlzPhPhE61_fnnaF4P7_TUCrQ [Accessed on: 16.04.2020]

Gunawan, F.E. and Sari, I., (2019). The consumer intention to use digital membership cards. Journal of Business and Retail Management Research, 13(4).

Hofmann, F., (2019). Circular business models: Business approach as driver or obstructer of sustainability transitions?. Journal of cleaner production, 224, pp.361-374.

Iankova, S., Davies, I., Archer-Brown, C., Marder, B. and Yau, A., (2019). A comparison of social media marketing between B2B, B2C and mixed business models. Industrial Marketing Management, 81, pp.169-179.

Likoko, E. and Kini, J., (2017). Inclusive business—a business approach to development. Current opinion in environmental sustainability, 24, pp.84-88.

Planing, P., (2018). Towards a circular economy-how business model innovation will help to make the shift. International Journal of Business and Globalisation, 20(1), pp.71-83.

Remane, G., Hanelt, A., Tesch, J.F. and Kolbe, L.M., (2017). The business model pattern database—a tool for systematic business model innovation. International Journal of Innovation Management, 21(01), p.1750004.

Stott, R.N., Stone, M. and Fae, J., (2016). Business models in the business-to-business and business-to-consumer worlds–what can each world learn from the other?. Journal of Business & Industrial Marketing.

Theguardian.com (2020) About Sainsbury Available at:https://www.theguardian.com/business/2019/apr/29/ringing-changes-uks-first-till-free-grocery-shop-opens-in-london&sa=D&ust=1587212347881000&usg=AFQjCNFn-4xSNqL9O2otd1udriLBfyn8OA [Accessed on: 17.04.2020]

Appendix

1. Things that have been performed

We have done a consultancy report by focussing on Big Bazaar which is an Indian hypermarket.

2. How did you do it?

We have accumulated data about the national organisation and each one of us were allocated with certain tasks. We have done the research together and equally divided the report so that no one has to work more. It has been made sure that research is going to be prioritized before working on the report.

3. How well did you do?

The assignment took around 8 days to complete as once the research was completed, the writing was done quite easily. Initially, we had faced issues about allocation of work, but later it was resolved.

4. Identification of skills

Communicating skills have developed since starting the project as well as decision making skill under pressure.

5. Help of process to enhance skills

The process helped in thinking critically and that helped by arousing curiosity. This curiosity helped in learning new things.

6. Improvements in upcoming projects

Time management skills need to be improved from the next project onwards.