Metro Cash & Carry Case Study Solution
How would you rethink Metro Cash & Carry's approach to strategic expansion in India going forward?
Metro Cash and Carry entered the wholesale market of India by opening two stores in Bangalore, in 2003. The decision of expanding the business operations in India was supported by the highly fragmented Indian wholesale market, with almost no international competition. Additionally, the decision of expansion is driven by the rising living standards, urban migration, strong growth, increased consumer spending, westernization of urban habits and practices.
In contradiction to these drivers, including: optimism, growth, and no competition; the company is concerned regarding the robust and intense competition in the market from Walmart, Costco, and Carrefour. Also, the complex political structure of India with rapid changes and differences at national and local levels;the Agricultural Produce Marketing Committee (APMC) act is hindering the company from completely implementing the value proposition, and inefficiency of suppliers and distribution systems are primary challenges which are adding much to the intensity of the issues being faced by the company. The entry strategy of the company went wrong due to the many reasons, such as: there was an insufficient integration between Indian operation and headquarters, lack of trust over Indian people and politicians and negligence towards addressing the opposition in media.
Thus, the company needs to build an ecosystem for its business in India, which could be done through educating retailers as well as farmers, and improving the relations with public as well as the government, to make sure that there would be a long-term growth and sustainability in India. Public relations have the higher potential to bridge the gap between different Indian linguistic communities, as it is of paramount importance for gaining the support of farmers, retailers and people. The strategic expansion of the company should follow the approach of opening smaller stores in big cities with good infrastructure, in order to improve the products’ sales. The company should also search for better intermediaries and should strengthen its relationship with retailers as well as suppliers.(Kumar, 2019). Moreover, the company should improve public relations by working closely with the local-language press and advert in the local language.
The company should also sell the products at the competitive pricing, below the maximum retail price until and unless the company successfully gets succeeded in attracting the loyal customers formed. Also, the company should enter into the market through a joint venture as it helps the company in gaining valuable insights about the overall market of India. The joint venture type of entry in India would help Metro Cash and Carry to avoid harsh protests from anti-FDI protesters (Kanter, 2015).Additionally, the company needs to obtain understanding and knowledge regarding the country’s complex political environment. Furthermore, the company is advised to communicate the value propositions of Metro Cash and Carry to the masses, with the use of lobbying, mediaand other useful means.
What specific changes would you make and why?
After considering the analysis of the case study, in my opinion; there must be changes inthe training plan to make the training program more efficient. The problems that are acting as a barrier to effective training must be identified and resolved on an immediate basis so that the training plan could be implemented timely and trainees could get benefit from the program. Besides that, if the trainees’ productivity-increases by the effectiveness of the training, it would mean that the investment made by the company is not wasted.
In Russia, the management needs to focus on implementing supply chain management efficiently, as it is observed that the supply chain is missing in the market, which is causing the company to lose.The company must invest in the Indian market, as it is growing at a substantial ratio and an increase has been observed inthe living standards in India. However, the opposition from the local traders and associations must be managed, and the management must adopt efficient negotiation skills. Besides that, there must be changes concerning the cold storage, and now the company must start using cold storage facilities. The most important concern is the environmental concern, therefore the company must make changes to reduce the wastage from the inefficiency of Man-dis. In China, there is a poor logistics system,which should be focused on, in order to bring an improvement in the Chinese logistics processes, so that the customers wouldn’t have to compromise over quality and on-time delivery..................
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