TOPIC : STRATEGIC ANALYSIS OF NATURE’S BASKET

1. INTRODUCTION

Godrej Nature’s Basket is a grocery and fresh food store. It is a venture of the Godrej
Group. Natures Basket Limited - A Non-govt company, incorporated on 29 May 2008 is a
public unlisted company and is classified as 'company limited by shares'. Company's
authorized capital is Rs 50000.0 lakhs and has 77.246% paid-up capital ( Rs 38623.0
lakhs).It was acquired by Spencer's Retail Ltd in May 2019 in an all-cash deal. With
increased competition from grocers like Star bazaar , Organic Garden, Reliance Fresh in
India, is Nature’s basket’s fate in jeopardy?

2. ANALYSIS OF COMPETITORS:
2.1 Industry Definition
1. It was founded as a world health store . The retail chain sells fresh vegetables,
fruits, cold cuts, meats, cheese, organic foods and dairy products.
2. As of 8 oct, 2019, 37 physical stores in cities such as Mumbai, Bengaluru,
Pune
3. It also operates as an online grocery store and mobile app platform which
caters to 125 cities across India.

2.2 Competitors
Competitors of nature’s basket mainly include : Star bazaar, organic garden,
reliance fresh. Star Bazaar is a retail shop which along with groceries sells daily
household items, and Organic garden sells only organic vegetables at high
prices. A real competition to Nature’s Basket in India is Reliance fresh.
Following table shows data of the two companies .

FIG 1
3. ANALYSIS OF ENVIRONMENT

3.1 Political legal pressure :

“Patents “in this industry are not that common. So the major political/legal aspect
is from the taxed levied on the items sold in the supermarket. For imports, like
foreign vegetables (like Avacados in India) or foreign chocolates, higher taxes
are levied. Key factors affecting the competitive setting in industry. India’s biggest
tax reform since independence, the Goods and Services Tax (GST) , has
ushered us in a new tax regime, and has caused many changes to the nominal
prices of the items. The cereals and flours category isn’t the only type of food
that has different rates for branded and unbranded products. Unbranded
namkeens have a GST rate of 5%, while branded namkeens come with a 12%
GST. Unbranded paneer has a 0% GST, and branded paneer has a 5% GST.
Branded coconut water has a 12% GST, and unbranded versions have a 0%
GST. One exception to the rule is bread. Whether it’s branded or not, bread
attracts a 0% GST, unless it’s served at a restaurant for consumption or used as
pizza bread. The GST Council moves products to different GST tax rate
categories at nearly every meeting

3.2 Technological
Technological factors influencing the Indian supermarket industry mainly result
from innovation and the need for supermarkets to keep up with these innovations
to provide the best possible and most current service for their customers and to
increase customer satisfaction.
• Online shopping : The trend for customers to be able to do everything online, for
example, is ever apparent through major supermarket chains introducing online
food shopping and delivery which as mentioned earlier is showing great success.
The same applies to the introduction of the online mobile phone store app which
enables customers to do their shopping on their phone wherever they are.

• Social media: Social media has played a rather beneficial role for the UK
supermarket industry. Facebook, Twitter, etc. have given supermarkets the
opportunity of free advertising through their own Facebook pages and Twitter
accounts. It also allows customers to give feedback on products and services
offered by supermarkets which can greatly benefit supermarkets in their
advertising and the products and services they choose to offer.

• Non grocery sales:Social media has played a rather beneficial role for the UK
supermarket industry. Facebook, Twitter, etc. have given supermarkets the
opportunity of free advertising through their own Facebook pages and Twitter
accounts. It also allows customers to give feedback on products and services
offered by supermarkets which can greatly benefit supermarkets in their
advertising and the products and services they choose to offer.

• Loyalty cards: The loyalty cards offered by many supermarkets nowadays are
also a technological influence. With the help of loyalty cards supermarkets can
offer incentives to keep their customers “loyal” and to gain new customers. They
also help supermarkets keep track of how well they are retaining customers and
 possible shopping habits. Like social media, loyalty cards give supermarkets
valuable feedback about their customers which can lead to more targeted
advertising. It can also educate supermarkets on the incentives more valued by
customers, to which supermarkets can respond directly by improving these
incentives and replacing the ones not valued

• Self checkout: further technological innovation introduced into UK supermarkets

in recent years is the self-checkout. These allow customers to do their checkout
themselves, avoiding long queues and thus saving time and increasing customer
satisfaction. For the supermarkets self-checkout has the added benefit of
checking out more customers without having to employ more people to man
checkout counters

online shopping

social media

non-grocery sales

loyalty cards

self checkout

0 12.5 25 37.5 50

3.3 Social and Demographic trends

Social factors that have an impact on the Indian supermarket industry are either
a result of the impact the economic situation has had on consumer behaviour or
general buying habits of consumers.
One of the factors that fall under the category general buying habits is tradition.
Tradition can play a big role for customers in deciding where they do their food
shopping. For example if your family has always gone shopping at Nature’s
Basket then you might continue to only go shopping at Nature’sBasket. Another
one of these factors could be loyalty.For some people where they shop might be
a form of status symbol. People who choose to go food shopping at Gucci are
less likely to switch and start shopping at one of the discounters like Westside
and Nuon. This shopping habit may well be the consumer saying, I have the
money so I am going to spend it in the more expensive food stores. Others might
feel they are losing face if they shop in discount supermarkets, the same
phenomenon that shows for people that have no other choice than to buy their
clothes and such in thrift shops. These two examples show that people may be
influenced in their food shopping behaviour through the assumption that they are
being judged by where they shop.
 3.4 Environmental
Environmental factors influencing the Indian supermarket industry largely stem
from weather. The weather can for example influence the growth and harvest of
crops, fruit and vegetables or possibly destroy them. This can lead to issues with
the supply chain which in turn would influence pricing in the supermarkets,
making these foods more expensive for consumers. Favourable weather for the
growth of crops will also have an effect on pricing in the supermarkets. If there is
an abundance and supply is higher than demand prices in supermarkets will be
reduced on these foods. The same principle of supply and demand influencing
pricing in India supermarkets also applies to seasonal foods.

4. ANALYSIS OF INDUSTRY STRUCTURE :

1) Threat of entry : Due to low entry barriers (the rental building which is now
used for the store can later be used for other purposes) and almost no exit
barriers, the threat of entry may seem high.
2) Threat of substitutes: Threat of substitutes in this industry is very high.
People can easily switch to other stores as there are many available
options and the switching costs are next to negligible.
3) Bargaining power of buyers :The grocery segment is characterized by
low margins, as the food segment is prone to fierce competition and price
cutting. The grocery retailers are able to achieve some customer loyalty by
offering convenience and low prices, however, customers are free to
choose stores and brands without incurring any additional costs. Therefore
bargaining power of buyers is high
4) Bargaining power of suppliers:This section may not be too high for stores
like nature’s basket as they have a variety of options for suppliers and they
are used on a contractual basis .Thus this power is medium.

FIG 3
 5) Intensity of rivalry: Bigger players can create mobility barriers for smaller
players due to advantages in purchasing, distribution, marketing, and
finance. The smaller players cannot afford to compete on price, products
offerings, and geographic coverage.In India, the intensity of rivalry is high.

5. ANALYSIS OF FIRM CAPABILITIES

FIG 4 consists of a detailed analysis of the analysis of the firm capabilities

FIG 4

FIG 5
8. COMPETITIVE POSITION
The firm’s competitive position as mapped is shown in FIG 5 . The circles
indicate number of stores in india, the x axis indicates the average cost and the Y
axis indicates the quality of facilities (includes food, ambience etc).

7. CONCLUSION
The firm can go for an integration of focussed low cost and differentiation
approach as a strategy for its business. However it would have to apply this
strategy in a careful manner with review
done at regular intervals. Here, it could :
•Deter rivalry by dividing the market
•Capture narrow economies of scale
•Apply total management and lean
production techniques
•Invest readily in R&D

8. CITATIONS
• "About Godrej Nature's Basket".
• "Avani Davda Appointed New MD Of Godrej Nature's Basket".
• "Godrej Nature's Basket to treble revenue in 5 years".
• Jump up to: 

a b "naturesbasket.co.in Site Overview". Alexa Internet. Retrieved 12 October
2018.
• "Godrej Nature's Basket - World Food at the Click of a Button".
• "Natures Basket Limited Information - Natures Basket Limited Company Profile,
Natures Basket Limited News on The Economic Times". Economics times.
• "Spencer's to buy Nature's Basket from Godrej for ₹300 cr in cash - The Hindu
BusinessLine". The Hindu BusinessLine.
• "Godrej Nature's Basket Seeks to Include 200 Cities Online by 2016".
• "Naturesbasket Official website".
• "Starbucks' Avani Davda appointed MD of Godrej Nature's Basket".
• "Godrej Nature's Basket Launched Pan-India Operations".
• "Godrej Nature's Basket bets big on E-Commerce".
• "Godrej Nature's Basket acquires Mumbai etailer Ekstop".
• "How Nature Basket Scripted A 180° Turnaround - Firstpost". www.firstpost.com.
Retrieved 14 July 2018.
• Coursera- foundations of business strategy
• "Now, Godrej Nature's Basket ups e-com play, go pan-India".
• "Avani Davda joins Godrej Nature's Basket as managing director".
• "Avani Davda replaces Mohit Khattar as MD of retailer Godrej Nature's Basket".
• Gupta, Saumya (8 December 2017). "Avani Davda: Scaling back for more". Mint.
Retrieved 8 July 2018.
• "Nature's Basket nurtures its own".
• "Twinkle Khanna reveals her healthy alternatives".
• "TWINKLE KHANNA LAUNCHES GODREJ NATURE'S BASKET HEALTHY
ALTERNATIVE".
• https://www.grin.com/document/278978