Restructuring Pantaloon Retail: The 'Future Group' Initiative
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Case Code: BSTR227 Case Length: 21 Pages Period: 2004-2006 Pub Date: 2006 Teaching Note: Available |
Price: Rs.300 Organization: Pantaloon Retail (India) Limited, Future Group Industry: Retail Countries: India Themes: Corporate Strategy, Corporate Restructuring, Joint ventures, and Strategic Alliances |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
The 'Future Group'
In March 2006, the Pantaloon Knowledge Group, as part of its restructuring and expansion plans, changed its identity to the 'Future Group.' The new group was set up to drive growth through the use of consumer insights and scenario planning to design future retail delivery formats. Kishore Biyani, Chairman, PRIL, said, "India is changing rapidly and we believe that rather than look at the past to extrapolate or the West to emulate, we have to prepare ourselves by planning scenarios based on innovative and original research."...
New Business Ventures
As a part of the restructuring initiative, Biyani sought to take PRIL beyond conventional retail and cover the entire consumer space. PRIL forayed into many businesses and formats by establishing subsidiaries and forming joint ventures with other companies (Refer to Exhibit III (A) for a list of joint ventures/acquisitions of PRIL/PIL, Exhibit III (B) for a list of subsidiaries of PRIL/PIL, and Exhibit III (C) for a list of new ventures of PRIL/PIL). In January 2005, Pantaloon Industries Limited (PIL), a group company, acquired a 68 percent stake in the apparel company Indus League Clothing Ltd...
Recruiting New Talent
The restructuring and expansion drive prompted Biyani to bring in new talent and professionalize the business. The group sought to utilize the expertise of the highly qualified and experienced executives to oversee the group's initiatives in various business sectors. At the senior management level, the group hired high profile executives from reputed organizations like Goldman Sachs , Coca-Cola India, etc. (Refer to Table II for some of the new recruits at the Future Group). In addition to bringing in new talent at the senior management level, PRIL also tied up with a few management schools to create a management talent pool for the lower levels of the organization...
The Road Ahead
According to a report by KPMG, the size of the Indian retail industry was estimated at US$ 200 billion in 2006. The Indian retail industry showed tremendous growth potential as the retail entrants created awareness among the consumers, leading to increasing consumer expectations and finally to growth in the retail industry (Refer to Exhibit IV for a note on the organized retail industry in India). The growth in the retail sector was reflected in the financial results of PRIL for 2005-06. For the year ended June 30, 2006, PRIL reported a total income of Rs 18.72 billion as compared to Rs 10.88 billion in 2004-05...
Exhibits
Exhibit I: Retail Formats and Store Types of Future Group
Exhibit II: Future Group's Brands
Exhibit III A: Joint Ventures/Acquisitions of PRIL/PIL (As of October 2006)
Exhibit III B: Subsidiaries of PRIL/PIL (As of October 2006)
Exhibit III C: New Ventures of PRIL/PIL (As of October 2006)
Exhibit IV: A Note on the Organized Retail Industry in India
Exhibit V: PRIL's Financials March 2006
Exhibit VI: PRIL's Segment Wise Revenue, Profit & Capital Employed
Exhibit VII: PRIL and its Domestic Competitors (As of April 2006)
Exhibit VIII: A Note on FDI in India's Retail Sector
Exhibit IX: The Reliance Group's Retail Venture
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