Report On Strategic Choice, Implementation, Recommendations and Follow Up For Bhat-Bhateni Supermarket and Department Store Biratnagar, Nepal
Report On Strategic Choice, Implementation, Recommendations and Follow Up For Bhat-Bhateni Supermarket and Department Store Biratnagar, Nepal
Report On Strategic Choice, Implementation, Recommendations and Follow Up For Bhat-Bhateni Supermarket and Department Store Biratnagar, Nepal
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Nabin Karki
University of Wolverhampton
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6BE003 – Strategic Management – 1731192
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6BE003 – Strategic Management – 1731192
Acknowledgement
I would also like to express gratitude to Mr. Pandu Poudel (chief operating officer),
Mr. Phuskal Rai (branch manager) and Ms. Sangita Rayamaji (IT Manger) for their
remarkable support in providing all the important information regarding Bhat-Bhateni
supermarket and department store.
I would like to express my intense gratitude to our module leader Hajrija Derjic for
introducing Strategic Management. Lastly, I would like to thank the University of
Wolverhampton, for providing me such a great opportunity to enhance my aptitude,
knowledge and wisdom.
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6BE003 – Strategic Management – 1731192
Contents
Summary ................................................................................................................... 6
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Summary
The purpose of this report is to evaluate the current strategy of Bhat-Bhateni
supermarket and department store based on SWOT analysis. Then, to propose the
best strategy by using different analysis, such as Ansoff matrix, Bowman's Strategy
clock and Generic strategy and implementation and follow up of the proposed
strategy.
The first part talks about the introduction of Bhat-Bhateni, its overall market share
and performance chart. It also explains about a retail industry analysis of Biratnagar.
The second part talks about the objectives of Bhat-Bhateni supermarket and
department store. The third part talks about, SWOT analysis, VRIN, Porter's five
forces and also BCG matrix to know the current position of Bhat-Bhateni in
Biratnagar. After knowing the current position, the Fourth part talks about, Ansoff
Matrix, Generic Strategy and Bowman's clock strategy.
The fifth part talks about the evaluation of all those three strategies on the basis of
Strategic direction, Vision and strategy of company. The sixth part talks about the
cost leadership of Generic strategy on the basis of SAF. And finally ends with,
recommendation and conclusion.
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Bhat-Bhateni is the leading supermarket and department store, founded by Mr. Min
B. Gurung in 1984, which offers a unique shopping experience. He first started Bhat-
Bhateni as a cold store and later on turned it into a small department store and finally
supermarket. At present, it covers almost 70% of market share (Poudel, 2018),
serving 50,000 customers daily. It has 15 outlets with more than 4500 staffs and
offers 1, 50,000 wide ranges of products. Bhat-Bhateni is not only good at selling a
wide range of products, but also making CSR as a core part of a business and
maintaining a good relationship with Customers and suppliers. It has been offering
free insurance, medical treatment, fooding and transportation to their staffs whereas
free home delivery, guarantee on products, refunds, exchange, club cards and
discounts to each and every customer (Bhat-Bhateni Supermarket and
Departmental Store, n.d.).
There is only one department store named Nepal Bazaar established in 2011 AD
(Nepalbazar.com.np, n.d.). Other than that, most of the people of Biratnagar are
attracted to small retail and wholesale market because they prefer bargaining. There
is also another market named 'Jogbani' situated at India border. Most of the products
are quite cheaper and so people from Dharan, Dhankuta and Bojpur often come to
buy required stuffs (Rai, 2018).
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In 2016, Bhat-Bhateni total revenue was NRS 9 billion even though sales fell by 10%
and had expected to gain more in 2017 (Rijal, 2016). Talking about Biratnagar, it has
made record of Rs 100 million in 10 days, selling Rs 1million per day (Basnet,
2018). This shows that, their performance are going outstanding. On the other hand,
its performance can also be determined from its growth of outlets in the different
major cities of Nepal.
2011 Boudhha
2011 Pulchowk
2012 Pokhara
2012 Newroad
2013 Baluwater
2014 Anamnagar
2014 Balju
2014 Kalanki
2016 Dharan
2017 Butwal
2017 Bhaktapur
2018 Biratnagar
(Bhat-Bhateni Supermarket and Departmental Store, n.d.).
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Within just 12 years of time, it has established 15 outlets, which even their
competitors have not dreamed off. Furthermore, I have surveyed a large group of a
person from different places to know the perception of customer and performance of
supermarkets in Nepal.
4%
From the above bar graph; we can easily see that, Bhat-Bhateni is loved by most of
the Nepalese people and has 46.8% votes. It means, However, Blue Bird has 21.2 %
votes, as it is the first supermarket of Nepal and has just 2 outlets
Bluebirdmart.com.np, (n.d.). If we talk about Nepal bazaar, which is the one and
only established competitors of Bhat-Bhateni store in Biratnagar, it has received only
4% votes. It means that, Bhat-Bhateni has very good number of satisfied customers
rather than any other supermarkets and department stores in Nepal.
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They also want to change its payment system into Debit and credit card in
coming 5 years of time (Poudel, 2018).
2. Rareness: It has been successful in providing customer service like free home
delivery, refundable, exchange offers and 10% discount on every product has
made its offering rare in comparing to Nepal Bazaar which gives competitive
advantage (Poudel, 2018).
4. Non-substitutable: Its brand value is one of strongest strength to attract the new
market. All the resources and capabilities that Bhat-Bhateni contains actually
have helped them to be well renowned throughout Nepal (Poudel, 2018).
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Bhat-Bhateni offers a full range of 15, 00,000 products at a lower price than its
competitors (Bhat-Bhateni Supermarket and Departmental Store, n.d.). The
growing middle income class (Sharma, 2018) and western shopping, culture have
created influential opportunities for Bhat-Bhateni to expand its outlet in the growing
cities of Nepal.
Due to unbalanced political condition, it has not been properly able to operate
business smoothly (TheGlobalEconomy.com, 2016). Cut-throat competitions are
also increasing in Biratnagar as Nepal Bazaar Mall, Centurion Mall and Central Mall,
so they should try to improve its criticisms by managing queue system, providing
good quality of products at reasonable prices and operate ethically.
Biratnagar
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Market penetration:
As Bhat-Bhateni has been established in Biratnagar, so they can use market
penetration to increase their sell by doing following things:
Buy two get one – Rather than giving discount they should use this strategy, to
attract large number of customers in Biratnagar as they love getting things for
free. Bhat-Bhateni can do this by offering other product as well. They do not have
to offer the same product as a free. A study also shows that, most of the people
find difficulties in converting the discount rate, however, free is easily under
stable, so almost 93% customers could be attracted with such provided schemes
(Roque, 2017). Below down the data has been shown, so using this data, Bhat-
Bhateni Biratnagar should try to understand how consumer perceived the given
offers.
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Social media advertisement – The total internet users in Nepal are 16.67 million
as of 2017 with 63% of internet penetration rate. Telecommunication authority
Nepal (NTA) stated that, each hour 250 users are connected to the internet. In
this present scenario, connecting to Internet means connecting to Social media
(Neupane, 2018). There are more than 90% of people are using Facebook,
4.73% YouTube, 2.5% Twitter, 0.4% Instagram and others (StatCounter Global
Stats, 2018). Bhat-Bhateni Biratnagar should understand that, Social media
advertisement is extensively acceptable via which large number of Customers
can be attracted. They should more focus on Facebook, YouTube and Instagram
to pull the customers. Today's, Social media marketing has become one of the
cheapest ways to promote a company's brand and its product. So, by using this,
there would be an increase in sales, brand awareness, Networking and new
customers.
Market development:
Biratnagar has only one market and it is not large in comparison to Kathmandu
where Bhat-Bhateni could establish new outlet in different. However, head office
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of Bhat-Bhateni should target the growing cities like Damak and Birtamode,
where the middle income population is growing and also new shopping trends are
increasing. This will not only help to accomplish their objectives, but as well as
revenue and market share of the company.
Product development:
This approach basically focuses on selling new product into existing markets.
However, in Biratnagar, they should focus and effort on marketing and sales of
the product rather offering new product into market because they already have a
wide range of almost 150,000 products. They could add if the demand increases,
however, product development is not a significant strategy for market growth for
Bhat-Bhateni Biratnagar.
Diversification:
This is the one of the most risky approach, where firms need to sell new product
into new markets. In Biratnagar, they could establish a small outlet of 2 storeys
building in the area like Puspalal Chowk – (Appendices 9). As Puspalal Chowk
has become a mini market for villagers from Ginaghat, Neta Chowk and
Haraicha. People from these areas use Bicycle, so it takes more than 2 hours to
reach main market or Bhat-Bhateni store, so they go to the Puspala Bazaar to
buy all the required stuffs. Nepal Bazaar has also established its small outlet over
there. However, Bhat-Bhateni should also target those people by supplying
essential stuffs like Kitchenware and Groceries using effective strategy.
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they would be able to maximize operational efficiency and helps to set price even
more reasonable than Jogbani bazaar of Biratnagar.
Low price – Bhatbhateni store Biratnagar should use low price strategy to sell
their products. As, this is necessary because if customer conceive that the price
is high than Biratnagar market, they may lose potential customers. Most of the
People in Biratnagar are middle and lower income class, so lowering the price
than market is necessary to attract large number of customers. Bhat-Bhateni
serves wide range of products, so gaining small percentage by selling larger
volume will enhance their economies of scale and ultimately generates profits.
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5.0 Evaluation
Strategic direction of Bhat-Bhateni – To maintain supply chain, operating cost, use of
advance technology, Low labor cost and minimizing extra spending (Poudel, 2018)
Vision – "To be the leader in the retail industry and the best retailers for consumers
and their employees" (Poudel, 2018)
Market strategy – To sell products at low price than competitors (Poudel, 2018)
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7.0 Recommendation
As, every suggestion has already been elaborated clearly above, but I would be
mentioning only important ones for Bhat-Bhateni Biratnagar:
Buy 2 get – It can especially be done for expensive products. People will see
free gifts, so it is important for them to offer essential things that can be useful for
customers and setting prices for those products should also be managed
properly.
Social media – Bhat-Bhateni does have a Facebook page, but it has not been
properly utilized. They should post different news regarding Biratnagar, new
organized program, development works of CSR activities and many more this will
show them responsible company and enhance brand image. They should also
create Instagram page where they can post pictures of new apparel products,
offers product and discounts and others. These are free to post, so they cannot
be a leader just selling range of products, they should be flexible in every aspect
of time and situations.
Cost leadership strategy: None of the retail businesses in Nepal that has a
capacity to achieve this strategy. However, Bhat-Bhateni does have capacity for
implementing this strategy, but they need to act more efficiently in terms of
operating cost, miscellaneous cost, advance technology, logistics cost and also
on renewable energy (Solar power).
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8.0 Conclusion
Taking this point seriously, Biratnagar is going to be a hub center of the whole
eastern region. People want goods at a cheaper price, so if Bhat-Bhateni be able to
supply goods at a cheaper rate implementing cost leadership strategy than those of
wholesaler and Jogbani bazaar's market may become null.
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9.0 References
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9. Boss Nepal. (n.d.) Biratnagar, the second biggest city of Nepal [online].
[Accessed 17 May 2018]. Available at:< http://bossnepal.com/biratnagar-biggest-
city-nepal/>.
10. Business Study Notes. (2016) Low Cost Leadership Strategies [online].
[Accessed 17 May 2018]. Available at:
<http://www.businessstudynotes.com/finance/strategic-managment/explain-the-
cost-leadership-strategies/>.
13. Neupane, N. (2018) Nepal added over 250 internet users per hour. The
Kathmandu post [online] 20 January. [Accessed 17 May 2018]. Available at:
<http://kathmandupost.ekantipur.com/news/2018-01-20/nepal-added-over-250-
internet-users-per-hour.html>.
17. Rijal, P. (2016) Bhat-Bhateni announces plan to IPO in two years. The
Kathmandupost [online]. 16 April. [Accessed 17 May 2018]. Available at:
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<http://kathmandupost.ekantipur.com/news/2016-04-16/bhat-bhateni-announces-
plan-to-ipo-in-two-years.html>.
18. Roque, C. (2017) How to Use Discount Pricing Strategies to Make More Sales
[online]. [Accessed 17 May 2018]. Available at:
<https://business.tutsplus.com/tutorials/how-to-use-discount-pricing-strategies--
cms-28611>.
20. StatCounter Global Stats. (2018) Social Media Stats Nepal [online]. [Accessed 17
May 2018]. Available at: <http://gs.statcounter.com/social-media-
stats/all/nepal/#monthly-201704-201804-bar>.
21. The Himalayan Times, (2018) Three shopping malls coming up in Biratnagar.
The Himalayan Times [online]. 20 February. [Accessed 5 May 2018]. Available
at:<https://thehimalayantimes.com/nepal/three-shopping-malls-coming-
biratnagar/>.
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10.0 Appendices
Appendix –1
Every organization should fulfill three criteria to apply for cost leadership strategy.
They are given below:
Here, Bhat-Bhateni covers all the three criteria to apply for cost leadership strategy
in Biratnagar. Then, Bhat-Bhateni would be requiring five important components to
implement proposed strategy:
1. People – They should select the right person having skills, knowledge and
tactics, for instance, skilled driver in logistics, good negotiator for barraging,
proficient supply chain manager others
2. Resources – They can use their own transportation for the country like India, as it
is nearest and essay to access which would reduce cost of transportation. Use of
sophisticated technology to reduce the cost. They should have sufficient fund to
buy the stuffs in huge volume.
4. System – They should use latest technology to track the progress of proposed
strategy.
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Appendix – 2
After implementing strategy, there are many tools that can be used for measuring the
performance and give continuity to the set of action. One of the best measures is
balanced scorecard; Bhat-Bhateni should also use such measures to follow of any
implemented strategy in proper manner. Rather than rely on traditional measures
such as ROI and EPS, balanced scorecard is the effective way that can easily
handle all the financial operation of the business. With the help of balanced
scorecard, Bhat-Bhateni main operator who is responsible to manage cost
leadership will easily be able to know the overall operation of the business. It
basically focuses on 4 things of the business, which have shown below:
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Source-https://hbr.org/1992/01/the-balanced-scorecard-measures-that-drive-performance-2
So, by using Balanced Scorecard, Bhat-Bhateni will not only be able to measures
Cost leadership strategy, but also be able to create customer value, Improvement on
innovation and technology, shareholder satisfaction and others.
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Appendix – 3
This page was having problem while referencing as well as opening, so it is a screen shot
picture of webpage as a proof in case if reference does not work.
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Appendix – 4
This is a replied mail by Mr. Pandu Poudel, chief operating officer of Bhat-Bhateni.
I personally mailed him on the behalf of my entire team member.
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Appendix – 5
Source:
https://docs.google.com/forms/d/1lmJXIQnMpQ1T6qrTKBf7oMlJ0sxCTYHFjSrLk03r
hxs/edit
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Appendix – 6
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Appendix – 7
Online store
CSR program
Employee
relationship
Compensation
Inventory
management
Store location
Bargaining power
Brand
IT sector
Financial Strength
Pricing strategies
H R managment
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Appendix – 8
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Appendix – 9
This is the map extracted from Google. The red indictor is Puspalal Chowk of
Biratnagar, which has already been explained in diversification part.
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Appendix – 10
Photos were taken via Camera. These are Upcoming competitors of Bhat-Bhateni in
Biratnagar (Centurion mall, Central Mall and Nepal Bazaar Mall)
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Appendix – 11
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