Analysis of Competition in the Industry (ii)
As far as Pantaloon is concerned, it is mainly challenged by Raheja Group’s Shoppers Stop and Tata’s Westside. However, there are different competitors for different lines of business of the company. According Mr. Kishore Biyani (CEO of the company), Pantaloon faces competition from both regional as well as national companies. In an interview he said that in the fashion section, Pantaloon’s major competitors include Shoppers Stop, Lifestyle and Trent. On the other side in the hypermarket business format, the company is challenged by RPG group’s Spencer’s, Star India Bazaar etc. Furthermore, in food business the company faces competition from regional players like Food World and Subhiksha. Pantaloon is well aware of the fact that new and growing competition from domestic as well as potential international players might affect its profitability and competitive position. With the rise in the intensity of competition, each and every player will be almost forced to reduce the prices of the products. This is likely to affect the revenue and profitability of the domestic players like Pantaloon. The global players, if allowed to enter the market, may be in better competitive position to deal with any kind of price war. Foreign players due to their efficient and effective cost structures can reduce the prices to a greater extent as compared to domestic players.
In addition to competition for the general products, companies also compete for real estate resources. In India, retail companies face severe problems regarding infrastructures, and lack of proper real estate resources is one of most important among them. Pantaloon faces tough competition from those players who are ready to make huge investment to acquire the scarce resources regarding real estates, as a result the process of renewing the licenses or leases may be affected. According to the company, “competitors may even provide attractive terms to concessionaires who currently operate from our stores which may reduce our ability to attract concessionaires” (Pantaloon Retail (India) Limited, n.d.).
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