Transcript Team 4 - Costco Case Study

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INDIA
* Paid member based shopping model.
* Factory direct purchasing, high velocity resale.
* Lower shrink – less stolen, more sold. Member
model reduces shrink.
* Higher freight volumes, lower turnaround to sale
time
* Redistribution is quick – centralized.
* Cost reductions realized from fast inventory sales.
* Efficient sales floor layouts – more product, less
wasted space = more sales.
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* Very low marketing, labor and a targeted discount model
* Coupon/Sales blasts sent to a limited target
audience –
members only.
* Reduction in marketing dollars over competitors equals lower
costs for goods.
* Labor costs reduced via larger volumes of stock on hand, in
pallets and ready for customer distribution with low labor
required.
* Hours of operation limited to core shopping times and light
need for overnight stocking staff.
* Return policy highly favorable in the market, most goods
accepted back without receipts and with extended warranty
options.
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* Gross Domestic Product (GDP) – $4.06 trillion
(5th in the world)
* Inflation – 12% - High (206th in the world)
* GDP Growth Rate – 10.4% (5th in the world)
* Foreign Reserves – $287.1 Billion (7th in the
world)
* GDP Per Capita - $3,500 (262nd in the world)
* Currency Stability – 43 - 49:1 USD – 52wk Range
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* Ruling Party and Leader
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Pratibha Devisingh Patil – (2007 – Current)
Party: Indian National Congress
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Democratic Nation
Harsh relations with China over allegations of munitions being traded
with Pakistan and China’s oversized military footprint.
* Government Stability
* Money Out – Imports
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By 2035 India will be the second largest importer of fossil fuels.
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14% of Indian GDP is subsidized.
Majority of Indian subsidies are oil of which 39% of subsidized
kerosene is stolen.
* Subsidies
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* Indian Transport and Fuel Infrastructure
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Airports – 353 (249 with paved runways)
Heliports – 40
Pipelines
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Condensate/Gas – 2km
Gas – 9,596km
Liquid Petroleum Gas – 2,152km
Oil – 7,448km
Refined Products – 10,486km
Railways – 63,974km (4th in the world)
Roadways - 3,320,410km (3rd in the world)
Waterways – 14,500km (9th in the world)
Merchant Marine – 324 (29th in the world)
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* Indian Real Estate Cost
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India-wide housing prices have increased 21.3% in Q2 2011.
Ranked 2nd out of 50 countries for annual growth of residential prices.
High Growth - Compared to 2010 by City
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Bhopal +46.41%
Faridabad +44.74%
Chennai +35.52%
Bengaluru +35.29%
New Delhi +33.64%
Low Growth – Compared to 2010 by City
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Kolkata +10.23%
Surat +9.56%
Jaipur +4.92%
* Real Estate Availability
* Moderate availability due to financial situations in India.
* High cost is a big detractor in Indian Real Estate Sales.
* Cost of land post Indian 2001 Economic Bubble exceed
that of the median home sales prices.
* 65% of flats sold in Delhi and 35% of flats sold in Mumbai
have sold to speculators.
* Booming growth in Indian GDP may result in more
availability over 2013-2015 at affordable prices.
* Jones Lang LaSalle remains the largest partner for real
estate sales and coverage in India.
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* The following Web Content was used for this presentation.
* The United States Central Intelligence Agency, Retrieved 10/6/2011
* https://www.cia.gov/library/publications/the-worldfactbook/geos/in.html
* Yahoo! Finance, Retrieved 10/6/2011
* http://finance.yahoo.com/q/bc?s=USDINR=X&t=5y&l=on&z=m&q=l&c=
* Wikipedia, Retrieved 10/6/2011
* http://en.wikipedia.org/wiki/Energy_policy_of_India
* http://en.wikipedia.org/wiki/Real_Estate_in_India
* Global Property Guide, Retrieved 10/6/2011
* http://www.globalpropertyguide.com/Asia/India
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