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Easy Shop - Essay Example

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India’s emergence as a rapidly developing economy has meant that many multinational and foreign operations are implanting their business operations in India in order to make profits out of the increasing disposable incomes. …
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Download file to see previous pages This trend has been all the more marked with the emergence of new urban centres that are more or less sub-urban in nature. With the creation of new urban centres and with the rapid expansion in the Indian middle class there is good reason to believe that retail businesses would do well in a country like India. This reasoning has led to the development of new shopping centres and retail businesses throughout India. This report will look into the survivability of Argos’s Easy Shop concept located in a suburb of New Delhi, India’s capital. The nature of the city and the nature of the retailer will be looked into to see the suitability of business. Furthermore, the cash flow statement of the retailer will be presented in order to discern if the retailer would be able to survive the current market conditions. The basic approach will be to contrast earnings from sales and the incurred costs. A worst case scenario or a pessimistic business picture has also been developed in order to assess the survivability of the business if faced with overwhelming odds in the first year. The major expense areas have been identified realistically along with the local taxation scheme in order to present as realistic a picture as possible.
2. Gurgaon City’s Developing Economic Prowess Gurgaon has emerged as the second largest urban centre in the Indian state of Haryana becoming its chief most industrial and financial hub. The urban centre can also be looked at from the perspective of New Delhi’s suburb given that it is only a 30 kilometres ride from New Delhi. As such Gurgaon is considered as one of the four major satellite cities that surround New Delhi (Sustainable Cities Collective, 2011). The city also hosts the third highest per capita income in India (Behl, 2009) making it a particularly attractive place for launching a retail business. Most of the city’s workers are employed by Fortune 500 companies as well as local businesses in and around Gurgaon (Taleja, 2009). This ensures that the local population have high levels of disposable incomes which are essential to the survival of any retailing business. Disposable incomes are particularly higher in the younger generation so there is no danger of sustainability in terms of business. Also the chances for disposable income to increase are on the rise given that Gurgaon is fast becoming one of India’s largest outsourcing hubs (Government of Gurgaon, 2010). Instead there are chances that operating a retail business in a financial and industrial hub such as Gurgaon would lead to expansion in upcoming years. This fact can also be gauged from the presence of over forty five different malls around Gurgaon that are only set to increase further in upcoming times. 3. Background to Argos Argos is one the largest catalogue merchants being based in the United Kingdom and Ireland. Within the geographic domains of the United Kingdom, Argos is the largest retail brand with over 800 stores around the United Kingdom. Argos is owned and operated along with its sister concern Homebase by the Home Retail Group. Argos relies on catalogue retailing and so offers a wide range of brands that it owns and operates thereby adding greater value to both the consumer’s purchase and the business. The more notable brands being operated under Argos include Elizabeth Duke, Chad Valley, Sun Pearl, Challenge, Alba, Schreiber and Bush as well as a number of other brands (Intellectual Property Office, 2012). Argos is now looking to expand into the Indian market using the Easy Shop concept which would serve as a retail outlet for the Indian market. The first retail store is planned for Gurgaon in order to enter the Indian ...Download file to see next pagesRead More
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