EFE Matrix
EFE Matrix
EFE Matrix
The researchers analyzed the external environment of Reliance Retail Ltd through its political,
economic, social, technological, environmental, and legal environment, the industry and finally
the competing firms. Thus, with the use of External Factor Evaluation Matrix, findings for this
paper will be summarized and will properly reflect the performance of Reliance Retail Ltd in
terms of opportunities and threats.
OPPORTUNITIES
1 Increase advertising for Private Brands 0.0900 4.00 0.36
2 Digital Strategy 0.1000 3.00 0.30
3 Rural Retailing 0.0700 3.00 0.21
4 Customer- Centric Approach 0.0800 1.00 0.08
5 Increasing per capita GDP 0.0700 3.00 0.21
6 Changing the Regulatory Scenario 0.0700 3.00 0.21
7 Shopping Culture
THREATS
1 Increasing Retail Segment Competition 0.0900 4.00 0.36
2 Supermarkets moving to 24/7 hours 0.0600 4.00 0.24
3 Security 0.0900 3.00 0.27
4 High Rental Costs 3.00
4 The tax and availability of land and real estate 0.0800 4.00 0.24
5 Competitive Market (Walmart) 0.1200 2.00 0.24
OPPORTUNITIES
This is an opportunity for to add allure to your store’s brand. When these private brands get
marketed well, it can mean not only an increase in your bottom line, but an increase in the
number of Reliance Retail loyal customers. RR for instance, uses social media platforms to
spread information regarding their private brands like AJIO, Reliance Fresh, Reliance Smart,
RelianceSMART.in, Reliance Market, Reliance Digital, Jio Store, Reliance Trends and Project
Eve. Thus with high visibility of their websites, they were viewed by the researchers as a
superior response to this opportunity.
Digital Strategy
Going Digital is not only about e-commerce but the way interaction with employee and customer
engagement and investment in technology.
Customers are demanding an improved experience in items of how to search, browse products
and conduct transactions online.
Online retail sales is forecasted to grow at the rate of 31 per cent year-on-year to reach US$
32.70 billion in 2018.
Rural Retailing
India’s huge rural population has caught the eye of the retailers looking for new areas of growth.
ITC launched India’s First Rural mall “Cahupal saga” offering a diverse range of Products from
FMCG to electronic goods to automobiles, attempting to provide farmers a one-stop destination
for all their needs”
In total US$ 950 million in 2018 the share of rural Consumption is 45% and rest is from Urban
sectors so we can see the opportunity is there to retail outlets.
Customer-Centric Approach
Here the statement defines the more consumption the more growth rate is anticipated, as we
know the consumption of India’s population is growing day by day as per the IBEF record Total
consumption expenditure is expected to reach nearly US$ 3,600 billion by 2020 from US$ 1,824
billion in 2017.
With the increasing trend of per capita GNI, households have higher disposable income. Their
income remaining after deduction of taxes and other mandatory charges are more available to be
spent on products and services. For this opportunity, RR was given a score of 3.0. With the
passing of the RAIN Law, the company will increase the prices of most commodities. The GDP
per capita at current price (US$) in FY2019 is 1,982.65 sources from IMF which shows the GDP
per capita increasing pattern year by year.
This is in relation to the previous opportunity due to the rationale that with higher disposable
income, their purchasing power increases consequently. For this opportunity, RR was given a
score of 3.0. With the passing of the RAIN Law, the company will increase the prices of most
commodities. Aside from that, 7/11 is known to have a pricing strategy viewed to be high by
consumers. RR may implement this in consideration of the current purchasing power of its
market. However, the increase in prices may somehow sacrifice potential income.
Recently the Indian Government made the following two significant announcements that will go
long way in developing the Indian retail sector.
And 100% of FDI in Single brand retail trading to make it more business-friendly .
THREATS
Security
With the nature of business of Philippine Seven Corporation, it is always likely to be a target for
theft and armed hold-up. Obviously the chain has put in various security measures in different
parts of the world, including video cameras, safes, and window barriers and so on.
Locations, these stores operate on a lean budget and only have minimal staff, which presents the
opportunity for some consumers to occasionally shoplift. Like with the security threat above,
video cameras may assist in this regard.
Competitive Market
In addition to market access, the ease of doing business in a jurisdiction is also a decisive factor
for investors. According to the Global Competitiveness Index 2018-2019, the RR ranked 94th
out of 140 countries. This ranking demonstrates that the RR business environment, despite
positive developments in recent years, still remains challenging. This serves as a barrier to entry.