McKinsey’s 7S model

McKinsey’s 7s model was named after Mc Kinsey & Co which carries out research with respect
to B&I. It is one of the most popular model in business.All the 7 parameters mentioned in the
model begin with the letter ‘s’.

McKinsey’s 7s Framework Model classification

From the seven, three are called hard namely
1. Strategy

2. Structure

3. System

And the other four are called soft namely

1. Skills

2. Staff

3. Shared values

4. Style

Structure would be describing the strategy as per plan or to allocate resources in achieving goals
over time. Systems are the way in which the process and procedure is completed.Skill refers to
the abilities within the organization. Managers behavior is considered to be the style variable in
the organization.It also reflects on the culture within the organization. Shared values refer to the
goals/concepts that the member within the organization share.

STRATEGIES
Strategy is the action plan by an organization with response to changes in the external
environment. Strategy is differentiated by operational activities .Big Bazaar aims to capture the
entire Indian consumer. The company has not cringed to only one type of retailing. It has been
moving to other retailing ,to keep up with the changing needs and demands by the customers.
Future group which had started as a garment retailer has moved into multiple business due to
growing Indian economy. The company has not only captured the market, but also ensures
consumption. Big Bazaar’s strategy is to discover new geographies, customers, businesses,
markets etc.

Some of the important strategy by Big Bazaar are:-

 Wednesday Bazaar
 Sabse Sasta Din
 Maha bachat
 The Great Exchange Offer
 Public Holiday Sale
 Special offer before college or school start
 Sampling of new product
 Loyalty Program in Big Bazaar
 Exterior Presentation
 Interior Presentation

STRUCTURE

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Big Bazaar has hierarchical arrangement of its structure. It specifies each jobs,its function and
where to report within Big Bazaar.

SYSTEM
Procedure adopted for different department is different. Every department comprises of Assistant
manager,department manager,team leader,team member etc to look after particular department.
They work in asystematic way thereby making work easy to handle. The co-ordination within the
staff member is excellent at Big bazaar.
Ex:-Inventory control system at logistics, order execution system at desk etc
Technology plays a pivotal role for the business to be successful
 Introduction of SAP in 2005-06 by Big Bazaar improvised its business
 Auto replenishment system was introduced to provide productivity and operational
efficiencies.
 Inventory audit system was introduced to help in accounting the total number of physical
goods.It is very important for the health of business and to be successful.Any company
that stocks a large amount of physical goods should be frequently audited.It is done once
in four months by the staff of Big Bazaar.Generally,the inventory control for goods is 6-8
weeks
 Upgradation to online B2B platform to cater to the needs of 250+ vendors

SKILLS
Big Bazaar has tie up with some of the premier management institutions to ensure sufficient
inflow of management required.HRD provides training and development program to employees
in order to obtain necessary skills for effective discharge of their duties.Big Bazaar also has an
edge over its competitor in its bargaining skills by ensuring high margin from its suppliers.It has
the best supply chain in the Indian retail sctor.The company carefully chooses itas vendors.It has
also experimented with contract farming in order to lower its cost structure.Big Bazaae should
communicate with its customers,staff and experts to solve problems and in taking corrective
actions if any.

Skills of Big Bazaar

 1. Festival type creation
2. Fight competition (price)
3. Keeping customer busy
4. Creating desire.

STAFF
All the people working are employed by a particular organization.It is the employees who make
the difference in the success of organization in the knowledge based society.Therefore,Human
reasource plays an important role for Big Bazaar when compared to traditional mode of land and
capital.Big Bazaar keeps its workforce of 200-250 highly satisfied and motivated.The rate of
attrition ia 13% which is much lower than industry standards.Big Bazaar wouldn’t have been
successful if it did not have quality employees.Big Bazaar’s HR activities include employee
advancement, employee recruitment and employee training and development. Big Bazaar has a
tie up with many colleges in order to reduce talent crunch.Nearly half of the employees in Big
Bazaar are women and the average age is approximated to be 27 years within the
organization.Future group has also collaborated with around15 B-schools,design institutes etc to
provide degree programs in SCM,food business,experience mgt etc. Seekho program for both
internal and external candidates ensures well educated and trained retail professionals every
year.Its Gurukul program also ensures employees to inculculate the compan’s value and a sense
of ownership to the company.
Source of recruitment
1. Online portal Naukri.com
2. Employee referrals
3. Pamphlets
4. Company website
5. Consultancy
6. Walk ins

Selection:-
1. Interview
2. Questionnaire(In case of cashier and team leader)
Performance appraisal:
 360-degree Appraisal system
 KRA( Key Result Area)
 Job Rating.
Pay scale
Rs 8,500 to 13,000 per month

Training and development:

 FBB style gene programme training for the span of 35 days is given to the candidate
selected for Fashion department
 Induction is a must for all employees
 On the Job training is provided fto cashiers for a span of 7 days.

Employees welfare :
 All purpose leave is maximum of 30 days per year
 Employees Provident fund of 12 % and ESI of 1.75 % is contributed by employer

STYLE
The act of bringing all the employees together under single window and making the best use out
of them.Management plays a pivotal role in bonding amongst the employees and make them
work as a single unit.It is the duty of management to ensure employee satisfaction with
responsibilities and deliver the results with target achieved.The style adopted at BB are:-
 KRA(Management staff)
 Top down/bottom up
 Participative/Authoritarian
 MBO

SHARED VALUES
Big Bazaar’s parent company the Future group always explores areas yet unexplored. Writing
new rules as well as new opportunities have been the reason for its success. They believe in
creating future scenarios rather than waiting for the future to unfold itself. They also create trend
other than spotting it. While doing these, the following core values are shared among everyone in
the organization
 Indianness: Having confidence in oneself

 Leadership: To be a leader, both in thought and business

 Respect & Humility: To respect everyone and be humble in our conduct

 Introspection: Leading to purposeful thinking

 Openness: To be open and receptive to new ideas, knowledge and information

 Valuing and Nurturing Relationships: To build long term relationships

 Simplicity & Positivity: Simplicity and positivity in our thought, business and action

 Adaptability: To be flexible and adaptable, to meet challenges

 Flow: To respect and understand the universal laws of nature

Porters five force model

 Threat of new Threat of substitutes
entrants
FDI policy Unorganized Retailers
High initial investment Online Retailers
and fixed costs Substitute performance
Cost advantage of existing
player in market Competitive rivalry
Scarcity of resources Competition from
Barriers to entry Reliance Retail, Vishal , D-
Specialist knowledge Mart, Trent Retail etc
Bargaining power of Bargaining power of
suppliers customers
Depends upon target Consumer are price
segment sensitive
Number and size of Availability of more
suppliers choices
Unorganized sector is Availability of online
dominant retailing
Only few players have Cost of changing
competitive edge over Number of customers
others and brand
differentiation

By Porters five force model,we observe that besides few competitors, there is also a threat sue to
new entrants. Only established businessmen could diversify their efforts to venture into, as there
is a very high cost needed at the time of starting up.Moreover, existing players have a edge over
new entrant which could be attributed to experience of operations, expertise staff and economies
of scale. Organised retail tycoons have been successful in developing brand loyalty.They have
been specialized in target segments. Since the customers are very price sensitive and prefer more
choices for the product offered. Therefore ,Big Bazaar has been adept in catering to the needs of
the customer due to its expertise.

SWOC Analysis

STRENGTHS:
 High brand equity:-Big Bazaar has been successful in its brand equity through its
promotion and marketing by deeming the product as cheap and best
 Understanding about the customer-Big Bazaar has always been successful in
understanding its customers. Therefore,it has rolled out various strategies, schemes,
offers to its customers.
 Vast range of products:- Under one roof helping in attracting customer & their family
 Business of the parent company is diversified across all format:-Ex-Brand Factory-
Apparels; Central-Seamless mall; Food court:-Eateries etc
 Ability to sell products to customers at the rate of discounted price due to the scale
of business:-Large scale operstions helps in reducing the cost incurred, thereby helping
in providing discounts.
 Professional management:-Both the Human resource and supply chain management is
carried out in a professional manner
 Good employee & employer relationship:-It is done by building mutual trust and
respect between them.The rate of attrition is quite low at Big Bazaar
 Strong cultural & ethics values are followed:-Impetus is given to cultural value and
ethics is also given importance
 Provides home delivery facilities to customers:-Free delivery option is provided to
customers for bulk purchases
 Maximum number of varieties:-Big Bazaar provides a huge product mix
 Largest chain of retail marketing in India:-Big Bazaar is the largest and most
successful retail chain in India
 High capacity investment:-Big Bazaar involves huge financial outlay as it is running
more than 100’s of outlets across India
 Everyday new promotions and schemes of low prices and discounts:-Price is changed
often in order to attract customers
 State of the art infrastructure:-Big Bazaar has one of the best infrastructural facilities
thereby attracting customers
 Maximum percent of footfalls converted in sales:-Big Bazaar has been successful in
converting the footfalls into sales by rolling out various schemes,discounts,benefits etc
 Preferred destination for family shopping:-Big Bazaar has been successful in building
its brand image,thereby becoming a preferred destination for family shopping.
  Organized retailing for farmers:-It reduces agrarian distress by buying agricultural
produce directly from the farmer, thereby reducing the price of goods
 Benefits to Manufacturers:-Big Bazaar also sells products under ts private label,thereby
helping small manufacturers who have not been able to get recognition
 Population Demographics:- Large number of earning young population has resulted in
Big Bazaar targeting youths
 Low Retail Penetration:-Big Bazaar has been firmly footed in the market across the
country when compared to its competitors thereby making the best use of low retail
penetration
 Versatility in emerging retail formats:-Big Bazaar has been successful in bringing
about versatility in the format of store based on the reconnaissance
 High income amongst the middle and higher class:-Both the middle and higher class
have been successful in drawing a decent salary/income,thereby helping retailers like Big
Bazaar to increase its business
 Growth of real estate and improvement in infrastructure:-Development of new cities
and towns along with infrastructure has given Big Bazaar an opportunity to open up new
stores

WEAKNESSES:
 Huge investment is required:-Setting up of a Big Bazaar store requires huge
investment. This could make a hole in the pocket if the store is not successful in the
locality
 Specific items are not consistently available:-Certain commonly sought goods are not
available in Big Bazaar, thereby forcing the customers to buy somewhere outside
 Unable to meet store opening targets:-In some places,especially in towns ,Big Bazaar
has not been succeful in reaching initial targets
 Very few branded apparels available:-Big Bazaar has only few branded apparels
available when compared to Brand factory, another retail outlet run by Future Group
specifically selling apparels
 Overcrowded:-Big Bazaar is usually overcrowded when compared to its output during
offers. promotions and weekends
  Perception of low price=low quality:-Generally people feel that when the price of a
product is less,then the quality of that product is inferior
 Targets at the middle class and upper middle class only:-It generally targets only
lower and upper middle class, as they believe that higher class prefer buying products at
any price
 Long queues at bill counters:-Long queues at the counter makes customers to wait for
long time
 Political Uncertainty and Regulatory Requirement:-Stringent government norms and
changing regulatory policies discourages retailers
 Poor Infrastructure and Supply Chain Management:-SCM is poor due to
transportation facility being handled by third parties. Poor infrastructure is due to
presence of Big Bazaar at many locations whereby making the products difficult to be
stored.
 Demographic differences:- Demographic differences between the regions require a
regionally adjusted approach to business.
 Intense competition:- Intense competition from rivals
 Relatively small domestic market :-This limits growth opportunities especially in small
towns
 Rent /Leasing price is high for land:-This leads to huge cost being incurred
 Heavy cost is incurred for distribution:-As Big Bazaar is present even in tierII and tier
III cities in addition to towns. Huge cost is incurred in distributing the goods to these
locations.

OPPORTUNITIES:
 Growth in population:-India has been experiencing tremendous rise in urban
population, which boosts the growth of retail in India
 Customer’s taste and preferences:-Can enter into the production of various products
due to its in depth understanding of customer’s taste & preference due to growth in
income
 Expand their business at global level:-Big Bazaar can venture into developing and third
world countries to expand its business
  Provide quality services to the customers:-Quality of service could be improvised such
that it strikes the right chord with its customer
 One shop destination:-Generally, people prefer one shop destination .So Big Bazaar has
the potential to tap the market
 Lot of potential in the rural market:-Big Bazaar can venture into rural market by
opening express stores ,thereby catering to the rural mass
 Growing awareness about product and services provided:-This would help Big
Bazaar in expanding its footprints
 Changing consumer’s requirements and lifestyles:-This is blessing in disguise for Big
Bazaar as customers prefer buying products according to their requirements as a variety
of products are available
 Innovation for new product development:-Big Bazaar has the potential to come up
with new products which would help it in maintaining competitive advantage over others
 Increase in private label products:-Big Bazaar gets the opportunity to market its own
products as people are showing interest towards private label products.
 Digitization:-Big Bazaar has the opportunity to go digitized in various prospective.
Thereby, reducing the cost incurred.
 Customer centric approach:-Customer centric approach would increase the number of
customers as they feel that they are being given due attention
 Changing regulatory scenario:-This is helpful in boosting retail sectors in India

CHALLENGES:
 Intense competition :-Too many competitors has reduced both the customers and profit
margin for Big Bazaar
 Shrinkage:-The number of Big Bazaar in metro cities are reducing due to cut throat
competition
 Huge business risk is involved:-Huge risk is involved when setting up the business and
running it successfully
 Advancement of technology:-Technology has been developing at raid
pace.Therefore,Big Bazaar has to adopt to a technology before it becomes obsolete
  Less Parking Space :-Big Bazaar has to cater to the needs of the customers by providing
services like ample parking facilities
 Economic slowdown:-World has been experiencing economic slowdown.This is having
an adverse effect on consumer spending.Therefore,Big Bazaar has to come up with
incentives to attract custoners.
 Government policies and regulations:-Govt has allowed FDI.This could hurt the
prospective of Big Bazaar. Therefore,Big Bazaar has to come up with strategies to face
its new competitors
 Reduced profit margin:- is having an adverse effect on consumer spending.
 Unorganized retailing is still preferred by majority of the population:-Big Bazaar is
also facing competition from unorganized sector as people prefer buying the products
there itself.Moreover ,they require lost capital investment, low cost labour ,mostly run by
the owner on his own land/rented at a decent price with no or a little tax to be paid.
 Availability of land:-It is not very easy to get land at a reasonable price as real estate
prices have soared high
 Human Capital:-It is very difficult to recruit and hire competent staffs. There is fear of
attrition if the unskilled staffs are provided training

FUTURE

 Future Group hopes to add three million square feet of retail space across all of its format
within one year
 They are also planning to add 35-40 Big Bazaar hypermarket store which reflects on the
rise in number of customers
 It has also acquired fabfurnish.com ,an online furniture entity which is expected to merge
with Hometown, a home product chain
 Big Bazaar has introduced GenNxt stores in Noida and Mumbai ,which provides versatile
shopping experiences with innovations such as sit-down checkouts ,smart customer
service and digital screen
 Big Bazaar has partnered with Amazon to allow customers order product online
 Big Bazaar also provides home delivery to multiple locations
  Big Bazaar has also partnered with Paytm to act as Paytm’s online marketplace as an
anchor store. This will allow users to shop everything on Big Bazaar on Paytm and get it
delivered to a doorstep
 Future has acquired both Nilgiris and Bharti Retail to expand its small format stores
 Future Group is in discussions with Aditya Birla Retail to buy or merge the More
supermarket into Big Bazaar’s fold. This would further strengthen its position in brick
and mortar retail sector and large network of stores with e-commerce companies for
multi-level sales channel for grocery and daily items

Recommendations
1. Industry status must be provided to retail sector: Government should come up with
suitable measures to improve retail sector by providing industry status to provide
financing and to setup insurance norms
2. Investment incentives: Come up with tax holiday norms for infrastructure, transport,
supply chain management, cold storage facility etc
3. Legislation: Bills should be drafted in such a way that it should be futuristic when made
as a law.
4. Elimination of old fashioned laws: Old laws like essential commodities act, stamp
duties, APMC acts etc should be scrapped or modified such that it could boost for the
growth of retail sector.
5. Establishment of national commission: A commission for retail must be established.
They should:
 Support retailers for procurement of goods
 Assure that retailers are following quality standards
 Govern the operations of retailers
6. Policy Barriers: Retailing in India falls under both the Ministry of Commerce &
Consumer Affairs and Ministry of consumer affairs. Retail policy comes under the ambit
of former,where as, licensing and legislation falls under latter. Therefore,it is essential to
establish a single body which carries out the functions of both the ministries involved.

Learning Outcome:-
 1. Big Bazaar involves FIFO arrangement for quality check as a part of arrangement of
retail shelf
2. I learnt about McKinsey’s 7S model which is followed and adopted by Big Bazaar. Here
Big Bazaar discovers new customer, new markets, locations and business structure to
maintain hierarchy within an organization. It classifies each job, its functions and whom
to report. Different department provides different kind of training for its employees to
enhance the skills and maintain quality standards. There is a harmonious relation between
employees; thereby making them work with rapport .This makes Big Bazaar having an
upper hand over competitors. The company believes in creating future rather than waiting
for the future
3. I also learnt about Key result area which is employed to bring all management staff under
single window.KRA is nothing but the general area of output for which the department is
responsible. It is qualitative in nature
4. Guerilla marketing strategy is adopted by Big Bazaar.Basically,it is based on ancient
warfare technique in which the enemy is hit by surprise.It is based on attack, retreat, hide,
repeat until the competitor retreats from the market.
5. I also learnt about the different strategies adopted by Big Bazaar to attract customers

Suggestion:-
1. Design of store:-Big Bazaar could go with low cost design in the form of Aluminum
racks, red oxide floors etc to also reinforce a brand image of low price instead of going
for false ceiling, floors with tiles and metal racks.
2. Fresh Stocks: Big Bazaar should clear the products which are approaching expiry date
and replace it with fresh stocks as soon as possible. Damaged, old and obsolete products
should be removed from the rack in order to remove wrong notion among the customers
3. Atmosphere:-Big Bazaar should be provided with exhaust facility in addition to being
air conditioned to improve the air quality especially during the weekend. Aroma should
be provided to encourage long term shopping
4. Variety:-Big Bazaar has to offer variety in apparels, household and kitchen apparels.
This would attract more customers. Big Bazaar should bring out a new model to cater to
the need.
 5. Theft prevention:-Rigorous action should be taken to prevent shop lifting in Big
Bazaar ,as this is one of the major problem faced by large retailers.
6. Entertainment:-Entertainment facilities with kids play area could be provided to attract
more customers.
7. Online retailing:-Big Bazaar had ventured twice into online retailing,but it was a
failure.But,in order to face the competition from the online retailers,Big Bazaar has to
collaborate /venture into online retailing.Currently,it is in talks with Amazon ,whereby
Amazon would invest in Big Bazaar,such that it would be a win-win situation for both.

Big Bazaar Direct

Big Bazaar direct was a B2C online retail venture launched by Future Retail limited in 2013 .It
had 1,000 franchisees during its inception.It was first launched at Nagpur.It was based on
franchising model.Big Bazaar appointed small franchises who would be provided with a tablet to
keep tab about the deals from the Big Bazaar. Initially ,Big Bazaar had planned to reach a target
of 50,000 franchisees.But ,this was a disastrous venture for BB as its another online
venture,futurebazaar.com failed miserably due to intense competition from Flipkart. It was ended
in 2016.
https://inc42.com/flash-feed/big-bazaar-direct-shut-down/