" METRO CASH & CARRY " STRATEGIC REPORT PDF

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Strategic Report Metro Cash & Carry “METRO CASH & CARRY” STRATEGIC REPORT WAQAS SHAFQAT………SOHAIL KHAN……. SANA SHOUKAT NIEWPORT INSTITUTE OF COMMUNICATION & EONOMICS MBA Program “METRO CASH & CARRY” ACKNOWLWDGEMENT We would like to thank Almighty ALLAH who blessed us with knowledge, u...

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Strategic Report

Metro Cash & Carry

“METRO CASH & CARRY” STRATEGIC REPORT WAQAS SHAFQAT………SOHAIL KHAN……. SANA SHOUKAT NIEWPORT INSTITUTE OF COMMUNICATION & EONOMICS MBA Program

“METRO CASH & CARRY”

ACKNOWLWDGEMENT

We would like to thank Almighty ALLAH who blessed us with knowledge, understanding and ability to do this Report. This is our initial learning to work with mutual understanding and cooperation. This report as a whole is a representation of work assigned to me. For this report, firstly we are very thankful to “Newports Institute of Communication & Economics” which providing good opportunities for me and my group members of Subject Strategic Management & Planning. We would like to thanks our teacher Miss. Resham for his guidance throughout the semester. We would like to pleasure of our team to presenting this report of our course “Strategic Management”. This report is the outcome of the study which we have been conducted by me.

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“METRO CASH & CARRY”

Letter of Transmittal

10th December 2018 To, Miss Resham, The Faculty of Business Administration Depth, NICE, Main Campus. Dear Miss, As agreed in our December 10, we are submitting the report entitled “Strategic Survey of Metro Cash & Carry”. This report study to once organization of “Metro Cash & Carry” to study the procedures of Marketing, Comparatives, Strategic Planning, especially the in the CPM and SWOT analysis with competitors. My team completely focuses on this academic report of subject Strategic Management & Planning; it’s a final report of the semester. I appreciate our team to discuss and work in this project and also very thankful to Miss Resham, who invest the full effort to guiding about the professionally share industries, Site of Management on the Strategic Management & Planning area. Thanks sincerely yours, Waqas Shafqat Sohail Khan Sana Shokut MBA Student of NICE Subject Strategic Management & Planning

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Table of Contents ➢ Abstract______________________________________04 ➢ Introduction___________________________________05 ➢ Mission & Vision________________________________05 ➢ Market Share of Metro in Pakistan__________________06 ➢ Analysis of Internal & External______________________07 ➢ Strategies______________________________________08 ➢ Swot Analysis matrix______________________________11 ➢ CPM___________________________________________12 ➢ Internal factor Evolution (IFE)_______________________13 ➢ External factor Evaluation (EFE)_____________________14 ➢ Usefulness of Report______________________________15 ➢ Conclusion______________________________________15 ➢ Recommendation________________________________15 ➢ Reference______________________________________15

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“METRO CASH & CARRY”

Abstract METRO Cash & Carry is a leading international company in self-service wholesale and operates more than 600 outlets in 29 countries. It is 3rd largest trader in world, 2nd largest in Europe and the Largest in Germany with a turnover of 59.9 billion in 2006. METRO is operating around 2,378 locations in 29 countries, with employees numbering over 263,000. At the operational level, the group’s five sales divisions conduct business independently in their respective markets. With over 100,000 employees worldwide, the company achieved sales of 31.7 billion in 2007. By generating almost 50 percent of the total sales, METRO Cash & Carry is the topselling sales brand of the METRO Group.

Executive Summery This report is mainly concerned with the strategic management for METRO Cash & Carry, the departmental chain business. In this report I have discussed that on what grounds the METRO has divided its market into different segments, how they present the product in the mind of the customers. I have surveyed the market and identify the factors which are affecting the output of the Company. And after this process we select the METRO CASH & CARRY store. Moreover, this report shows the Strategic Management and Planning of Marketing and also the SWOT analysis with competitive of Metro Cash & Carry, CPM, IEF &EFE is included in this report. Highlights discussion about the marketing plan and the factors of that like (Product, Price, Place, Promotion, part of our report.

Mission Statement “METRO is a Cash & Carry Wholesaler for businesses and professionals. METRO provides quality products and business solutions at the lowest possible prices”

Vision Statement “METRO will dominate the Cash & Carry wholesale segment globally, through our unique business formula which improves the competitiveness of our customers all over the world.” P a g e 4 | 16

“METRO CASH & CARRY”

METRO Cash & Carry Pakistan METRO Cash & Carry announced its operations in Pakistan in January 2006 & since then it has established itself as a potential market leader in self-service wholesale. METRO Cash & Carry Pakistan opened its first wholesale center in Lahore in October 2007 and today it is successfully operating 5wholesale centers, 2 in Lahore, 1 in Karachi, 1 in Faisalabad & 1 in Islamabad. The company’s country head office is based in Lahore at Thokar Niaz Baig near motorway. The current head count of employees is approx. 1176 including Head Office & 5 wholesale center.

Metro cash & carry Overview Metro cash & carry describe themselves as “Market Leaders” in cash & carry wholesale business. This claim is based in the approach to their core competition. The competitive advantage on which compete in the market is the low Prices with high level of Quality at a same place with convenience. METRO provides each and every thing of household use like food items, electronics, automobile parts and much more at the same place and the major factor is the low prices and they maintain the high-quality level. And for this purpose, they directly deal with the companies for the supply of their products so that the competitive advantage can be enhanced more.

10 METRO Cash & Carry principles The success of the company is based on the following principles: ➢ Focus on professional customers One-stop shopping ➢ Efficient store concept designed for professional needs ➢ Advanced customer service Enhanced customers ➢ Competitiveness ➢ Excellence in supply chain and quality management ➢ Strengthening of local suppliers ➢ Development of national infrastructures Career opportunities ➢ Internationally transferable concept

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Our Objectives for the Report ➢ ➢ ➢ ➢ ➢

SWOT analysis & Matrix CPM of Metro Cash & Carry Internal & External Analysis IEF & EFF of Metro Cash & Carry Strategic of Planning

Market Share of Metro Cash & Carry in Pakistan Metro’s annual turnover in 2017 may cross Rs 40 billion as compared to Rs 38 billion in 2016. After its merger with the House of Habib (HoH)’s Makro, it has now nine stores in four major cities of Pakistani – Karachi, Lahore, Faisalabad, Islamabad – with a 12 per cent potential customer reach. Each store is spread over 5,000 square metrics area while its sales volume/inventory turnover per store is around Rs 300 million to Rs 350 million. Due to its large set-up and inauguration hiccups, Metro has been unable to dent the local market and is now opening small-format convenience stores. Also, after the terror wave in the country during February, Metro and other stores saw a decrease in footfall, according to an employee. We Highlights some the segment of market share in customer footfall in Metro cash & Carry nearest Rs:5,500 in years of 2017-2018.its Share in Market 12 % in all over segmentation of customer or buyer & suppliers.

Footfall Customers

Metro Cash & Carry 12%

Others 88%

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Internal & External Analysis of Metro Cash & Carry Internal Environmental analysis ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢

Strong transportation Home delivery E-Commerce Planning Warehouse Layout Safety and security Safety environment provide Looking International marts behaviors. Pre-& Post Audit system HR & recruitment system Professional employment

External Environmental analysis ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢ ➢

Pricing affordable Comparatives edges. Preparation for upcoming competitor Growth in market share, design strategies. Study Customer behaviors Opportunities create for Non-Commercial customers. Target Marketing and Customers Innovation self-Metro product Lunching. CSR Communication Incentive for Customers Major decision in Sales promotion

Strategic initiatives of Metro Cash & Carry Marketing Strategy According to the Porter Generic Strategies Metro Cash & Carry pakistan is using Focus Strategy. • Producing in Store Brands • Providing many products or brands under the one Roof. • Place in 5 store in Pakistan • Low price as compare to other Cash & Carry Stores. • Distributing their brochure to their target market. • They advertise their own brand in their stores P a g e 7 | 16

“METRO CASH & CARRY”

Positioning Strategy • Maximum products under the one roof with affordable price.

Strategy The unique wholesale business-to-business model of METRO Cash & Carry ensures the company’s future prosperity supported by two major strategic pillars: the development of tomorrow’s METRO Cash &Carry by focusing on the major performance improvement program "MCC2012 Committed to Excellence" and the leading international growth of the wholesale concept. The key to success is our flexible business concept which can be adapted to specific national and local customer needs in any emerging country as well as to the demanding value enhancing project on an international base. Overall, METRO Cash & Carry forms part of the strategy of METRO GROUP, a major international player in trade and retail. The holding, METRO AG, is listed on the stock market. More detailed information is supplied by METRO GROUP Investor Relations. Revolutionary “Metro-Partner” is an advertising program launched in 2012 and which gives an opportunity to represent all promotional offers in the Metro Cash & Carry Web-site completely free; the only requirement is that the customer should have loyalty card. Furthermore, the appeal of this program is that the client receives such opportunities as: − Free advertising of goods or services, − No expenses for management and distribution of advertising, − Detailed statistics of other customers who have already browsed the published offer, − The ability to track competitor’ offers (Metro-Partner Web-site, [Ref. 11 November 2015]). In addition, Metro provides joint promotions, gives an opportunity to place posters minimum for one month in sales area where 75 000 client will see this advertising, conduct degustation that guarantees average three-fold increase of sales, publish leaflets in the Metro’s magazine or send these leaflets to clients by mail as well.

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“METRO CASH & CARRY”

Existing / potential customers At METRO Cash & Carry only the commercial customers can purchase goods. Metro provided a customer card to all their registered customers. Metro’s main customers are small and medium sized traders, hotels, restaurant, some catering businesses centers, companies and institutions. They can purchase goods more easily and at more favorable prices as compared to usual sources. This enables METRO Cash & Carry to strengthen the competitiveness of its professional customers. METRO has the limit of minimum Rs. 2000 on shopping which restrict the customer mentally to think before visiting so it should be eliminated. It has the membership fees of Rs.300 which is also be demolished. It also has the limit of 3 persons at a single card, it may be happening that more than three retailers want to come on a single card which restrict them to come together so also remove this one. Metro cash & carry customers are mostly wholesalers and retailers.

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SWOT Analysis Metro Cash & Carry Positive

Negative

Strength

Internal

1.

Serving the Customers with the Wide variety of products 2. Covering all business solutions under one roof named METRO. 3. Having the strong cash and carry business background. 4. Best location for such kind of big store and also covering many areas. 5. Efficiently using the place and excellent layout. 6. Sufficient parking and safety and security measures ensure the quality in every sector. 7. Friendly and co-operative staff. 8. Computerized data base system which helps both customer and METRO. 9. Cafeteria in the building for the refreshment of customers. 10. Committed and enthusiastic staff. 11. Safe and healthy environment 12. Providing facility for online shopping

Opportunity

External

1. 2. 3. 4. 5.

6. 7.

8. 9.

10. 11. 12. 13.

Growing market of cash and carry Expansion in major cities. Online shopping is much better option to save time Contracting with major hotels and restaurants. The new government policies can significantly impact the way of doing business and can open new opportunities. Weakness of competitors Changing trend of shopping, people prefer to go the place where they can find maximum variety under one roof. Metro is planning to open new stores at different locations. Company name itself is an opportunity as “Metro” itself is a very popular name and they can expand business with any company they like to. People are coming more towards hygienic food. Seek growth through expansion into newer markets Emphasis on private label growth. Widescale advertising, promotions and customer loyalty programmers to increase business and loyal customers

Weakness 1. 2.

Encourage the commercial customers Although location for a big store is suitable but outside the city and not suit for all customers. 3. No proper transportation for customers to carry their products far away. 4. Limit of 3 persons on a single membership card 5. Membership or subscription fees for cards. 6. Shopping from METRO is much time consuming because the travelling and in store visiting time. 7. Relatively high prices for most goods 8. Gaps in the goods display and constant goods rearrangement 9. Frequent lack of necessary information about merchandise in the store 10. Low wages of line employees (operating personnel), their low motivation to do the job better

Threat 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

Launch of Wal-Mart in Pakistan No regular supply of innovative products Intense competition with existing competitors Rising pay level Customer buying decision behavior High inflation rate Government instability Law and order situation Rising labor costs worldwide Threat from unionization of workforce Precarious economic condition

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SWOT Matrix of Metro Cash & Carry Pakistan

Weakness

Strength 1. 2. 3. 4.

Serving the Customers with the Wide variety of products Covering all business solutions under one roof named METRO. Having the strong cash and carry business background. Best location for such kind of big store and also covering many areas.

1. 2.

3.

4. 5.

Opportunities 1. 2. 3. 4. 5.

3. 4. 5.

Launch of Wal-Mart in Pakistan No regular supply of innovative products Intense competition with existing competitors Rising pay level Customer buying decision behavior

(WO) S (1) S (2) S (3) S (4)

Growing market of cash and carry Expansion in major cities. Online shopping is much better option to save time Contracting with major hotels and restaurants. The new government policies can significantly impact the way of doing business and can open new opportunities.

Threats 1. 2.

(SO)

Encourage the commercial customers Although location for a big store is suitable but outside the city and not suit for all customers. No proper transportation for customers to carry their products far away. Limit of 3 persons on a single membership card Membership or subscription fees for cards.

→ → → →

O (1) O (3) O (5) O (2)

(ST)

W (1) W (2) W (3) W (4) W (5)

→ → → → →

O (1) O (3) O (2) O (5) O (5)

W (1) W (2) W (3) W (4) W (5)

→ → → → →

T (4) T (1) T (2) T (5) T (5 )

(WT) S (1) S (2) S (3) S (4)

→ → → →

T (2) T (1) T (3) T (5)

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S.n o

Critical success factor

Weight

Competitive Profile Matrix (CPM) Imtiaz Superstore Rating

Score

Metro Rating

Score

Conventional Markets Rating Score

01

Market share

0.04

3

0.12

2

0.08

3

0.12

02

Inventory system

0.03

3

0.09

3

0.09

2

0.06

03

Financial position

0.05

3

0.15

4

0.2

3

0.15

04

Product quality

0.06

3

0.18

3

0.18

2

0.12

05

Consumer loyalty

0.04

4

0.16

2

0.08

3

0.12

06

Sales distribution

0.04

3

0.12

3

0.12

3

0.12

07

Global expansion

0.04

3

0.12

4

0.16

2

0.08

08

Organization structure

0.02

2

0.04

3

0.06

2

0.04

09

Research and development

0.03

2

0.06

2

0.06

2

0.06

10

Advertisement

0.35

3

1.05

2

0.7

2

0.7

11

Customer service

0.15

3

0.45

3

0.45

4

0.6

12

Price competitiveness

0.07

3

0.21

2

0.14

3

0.21

13

Management experience

0.08

2

0.16

3

0.24

4

0.32

Total

1

4 3

Major Strength Minor Strength

2

Minor weakness

1

Major weakness

2.91

2.56

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“METRO CASH & CARRY”

IFE (INTERNAL FACTORS' EVALUATION) Strengths

Weighted

Rate

Weight Score

1. Serving the customers with wide range of products

0.05

3

0.15

2. Covering all business solutions under one roof

0.05

4

0.2

3. Having strong cash and carry business record

0.04

4

0.16

4. Brand name

0.04

4

0.16

5. Efficiently using the place and ...