The importance of SHRM for services in Emerging Markets: The Case of

Abstract

The strategic role of human resource management has long been ignored at the expense of the traditional role, with a lack of proper alignment of the HR function with organizational objectives. Such importance of the strategic nature of HRM has been ignored more so in emerging markets such as than in the developed economies. Thus, even though the field of SHRM has become more prominent in the Western world, it is still in its infancy in countries such as India. This paper focuses on the necessity and importance of SHRM for competitive advantage in the organized retail sector of India using the case of Reliance retail. The paper builds a case study of the foundation and growth of Reliance Retail, highlighting the roles of executive leadership, institutional legitimation, and strategic human resource management as important factors underlying its success. The resulting model developed points to the critical role played by these variables in ensuring survival and competitive advantage, especially in the context of virtually creating the organized sector of retailing, in a country dominated by the unorganized sector.

That human capital assets are critical for facilitating competitive strategy is well recognized in the SHRM literature (Huselid, 1995; Lawler, 2005; Lepak & Snell, 1999).

More specifically, the importance of strategic human resource management to the services sector is being increasingly recognized by scholars and practitioners (Bowen, Gilliland, &

Folger, 1999; Schneider & Bowen, 1993; Chand, 2010). Further, the notion that building an organized retail network on a nationwide scale from the ground up would automatically heighten the role of such human capital assets has not been lost on key global players in the retail sector (see Dziaboka-Spitzhorn, 2006; Raj Nambisan & Nandini Lakshman, 2006).

More generally however, the role of strategic human resource management and its impact on organizational change initiatives and competitive advantage have not been traditionally recognized by either academics or practitioners in emerging markets such as India, as much as they have been in the developed West (Bhatnagar, Puri, & Jha, 2004; Budhwar &

Sparrow, 1997; Klie, 2006; Som, 2006). However, more recently, increased attention to strategic human resource management practices has begun to be given in the Indian context as well (e.g., Ketkar & Sett, 2009). However, as can be seen from Ketkar and Sett

(2009), such attention has been focused on specific HRM practices and not on broader level constructs such as HRM configurations or HR flexibility. Additionally, the role of such strategic human resource management has not been investigated in emerging sectors such as organized retail in India, although some attention has been paid to the services sector

(e.g., hospitality) in general (see Chand, 2010; Bhatnagar et al., 2004). Given that strategic human resource management has a crucial role to play in the services sector in general (e.g., Bowen et al., 1999) and the organized retail sector in specific, it is imperative that SHRM research in India focuses on this rapidly growing sector. This paper focuses on the role of strategic HRM, executive leadership, and legitimation in institutional fields, as a set of key variables that are critical for both survival and sustainable competitive advantage in this nascent but rapidly growing retail sector of India. To this

2 end, this paper highlights the importance of these three variables using the case of

Reliance Retail, outlining its foundation and rapid growth over a period of four years.

According to some official estimates, the retail sector contributes up to 27% of the

World's GDP and is thus a significant contributor to global economic activity. Some 20% to

55% of this global contribution is by organized retailing in many developing countries. 47 of the Global Fortune 500 companies are retailers, with a majority of them from the developed countries such as USA, EU, and Japan, constituting about 80% of world retail sales. According to many reports the Indian retail industry is pegged at $300 Billion and growing at about 13% per annum, making it a very attractive market. Of this huge retail market, only about 5% is contributed by organized retail. In contrast to the huge retailers of the world such as Walmart, Tesco, Carrefour, and Metro AG, the Indian Retail scenario includes approximately 12 Million 'mom & pop' outlets, of which only 4% are larger than 500 sq. ft. in size. This makes for the lowest per capita retail space in the world of about 2 sq. ft. per person, compared to about 16 sq. ft. per person in the USA. Thus, the Indian retail sector holds a significantly large potential and has attracted global leaders such as Wal-

Mart and Carrefour to enter either the complete retail value-chain or significant parts of it.

Although the Indian retail market is huge and attractive, it is one of the toughest to survive and compete in as a result of the severe inefficiencies of the retail supply chain.

This is also complicated by the lower levels of purchasing power among Indians, with the average spending per month on FMCG goods languishing at around $50 compared to $107 in

China and $390 in Hong Kong. In recent years, several domestic players such as the Future

Group, the Aditya-Birla group, the TATA group, and the Reliance group of companies have made significant attempts to capture an increasing portion of this unorganized sector and bring it into the fold of the organized sector (Satish John, 2006). Many global leaders such as Wal-Mart and Tesco are waiting in the wings and developing their strategies to enter this sector, with key joint-venture agreements in place. There are key legal restrictions

3 for FDI in the multi-brand retail sector that have prevented these companies from entering the market directly with wholly owned subsidiaries (PTI, 2010), although these may be removed in the near future. While Tesco and Carrefour have somewhat significant sourcing operations in India, Wal-Mart has reached a joint venture agreement and mapped out a retail plan for India in association with Bharti Airtel group of companies, and Tesco is in talks with the Aditya Birla group of companies for a similar purpose (Nandini Lakshman,

2006). All of these players are focusing on the favorable demographics of the country such as largest middle class population (300 million), one of the youngest populations in the world (85% less than 45 years old), rising disposable incomes and greater access to consumer financing.

Thus, this paper focuses on two main sectors of interest, viz., SHRM in India, and

SHRM in the organized retail sector, both of which have not received much attention from researchers. The paper first provides a brief review of the role of strategic human resource management to sustainable competitive advantage, with specific attention to the

Indian context. It then provides a brief review of the SHRM literature in the Indian context, highlighting the need to expand this research base, with specific attention to the retail sector, which is currently non-existent. The paper then proceeds to highlight the role of strategic human resource management using the case of Reliance retail, which started with a plan to invest Rs. 25,000 crores (Rs. 250 Billions) and has progressed from its initial count of 96 stores in 2006 to more than 1000 stores in 2010, also expanding from one format to more than a dozen store formats, in multiple segments of the retail market. The case study details the executive leadership vision, the strategic planning process, and the strategic process of organizing the human resources and designing the overall organization, in the effort to firmly establish itself in this tough but attractive market, which is waiting to become more crowded in the near future.

SHRM and its importance

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The importance of strategic human resource management to the services sector is being increasingly recognized by scholars and practitioners (Bowen, Gilliland, & Folger,

1999; Schneider & Bowen, 1993; Chand, 2010). This literature, in general, identifies the unique nature of the services sector and the ways in which this sector is different from the manufacturing sector, including such factors as ‘the moment of truth’ during the service interaction with the customer, and the simultaneity of production and consumption in the services sector, the importance of fairness with employees, and the broader importance of

SHRM, to their resulting impact on service quality and customer satisfaction (Bowen et al.,

1999; Schneider & Bowen 1993). More recently, Chand (2010) identifies the importance of a set of strategic HRM practices that have a strong impact on service quality, customer satisfaction, and performance in the Indian Hotel Industry. He identifies intra- departmental learning and relational capabilities, in addition to a HRM configuration that is market and customer oriented, as much more likely than other HRM practices to result in positive benefits on quality, satisfaction, and performance. Thus, we can conclude that from fairly early on the HRM literature has taken cognizance of the importance of SHRM practices and tested their impact on outcome variables, including some initial work in

India.

However such focus on SHRM practices in India and more importantly the examination of such practices in the emerging organized retail sector of India suffers from serious shortage. Ketkar and Seth (2009) identify the sparse SHRM literature focusing on

India and suggest that instead of focusing on broader HR constructs, this literature has focused on discrete HR practices. These researchers therefore theorize and test the construct of HR flexibility and its impact on firm performance measures on a mixed sample of manufacturing and service firms in India. Although several studies exist in the SHRM domain in the Indian context, such as a study on organizational commitment (Bhatnagar,

2007), the level of HRM integration into strategy (Budhwar & Sparrow, 1997), HR practices in BPOs and call centres (Budhwar, Luthar, and Bhatnagar, 2006), and performance

5 management in the Indian hospitality industry (Bhatnager, Puri, and Jha, 2004), very little of this research focuses on the set of strategic HRM practices that could impact organizational performance. Additionally, very little of this research focuses on the emerging retail sector in India, whose potential is huge, and is on the verge of large scale investment and involvement by the world’s largest players. Thus, this paper aims to examine strategic HRM practices from a broad level of analysis and to engage this analysis in the case of building and launching a pan India retail network from start to finish. The paper now moves to an examination of the rich details in the Reliance Retail case.

Reliance Retail Limited

Early Vision and Strategy: Reliance retail is an unlisted and wholly owned subsidiary of the oil and gas giant Limited, the largest Indian private sector conglomerate, ranked 264th in the Fortune Global 500 in 2009, and ranked 126th in

Forbes Global 2000 in 2010. The activity of the conglomerate spans sectors such as textiles, garments, petro-chemicals, petroleum, and oil and gas, in addition to its recent foray into retail. Based on an assessment of the opportunities in the retail sector, the

Board of Directors gave its consent to pursue the retail business, and approved an initial outlay of $750 Million to set up a variety of store formats such as hypermarkets, supermarkets, convenience stores, and specialty stores (2005-06 Annual Report, p.61).

The Chairman and CEO , announcing his intention to invest Rs. 25,000 crores over a period of five years, also outlined his vision of inclusive growth and prosperity for farmers, vendor partners, small shopkeepers, and consumers. This vision outlined a business model that is commonly called 'farm-to-fork', and envisioned significant enhancements and involvement in the entire value-chain to provide a solid footing in the organized retail sector.

According to the initial plans emanating from this vision, the company planned to open nearly 6000 outlets in 784 town and cities by 2010-11, with around 6400 procurement centres around the country, each with a cold storage for fresh produce (Sinha, 2007). The

6 company thus planned to connect farmers to end consumers and disintermediate the whole distribution chain for these products. The company thus aimed to build the huge logistics network to support the national chain of retail stores, with some of this being outsourced.

The aim of this huge logistics network was also to serve corner store shopkeepers (external customers) to derive maximum benefits. The company went into an acquiring mode to help build the logistics infrastructural backbone of the entire network by a) leasing 300 warehouses of the HPMC (Himachal Pradesh Marketing Corporation, best known for its apple juice concentrate) to use them as its Rural Retail Hubs (RRHs) and buying into its equity, b) buying the Sahakari Bhandar chain of cooperative stores in mainly for access to retail real estate and infrastructure, c) buying an exclusive fleet of 40 planes to bolster the logistics network (Bhattacharya, 2006a), d) engaging in talks to take over the defunct cooperative chain run by the Central Government called Kendriya Bhandar for its employees, with 112 stores around the country and 42 fair price shops in , and e) planning to take over Super Bazar another defunct chain of cooperative stores with prime real estate in Delhi such as the Connaught Place (Bhattacharya, 2006b).

The company's pan India retail network currently operates nearly 1150 stores in 86 cities across 14 states (see Table 1.), and had retail sales of about Rs. 4,500 Crores (Rs. 45

Billion) in the year ended March 2010 (Economic Times, 19 June 2010). There is continued and growing optimism and enthusiasm on the part of top management and the executive leadership at Reliance Industries for the future of their pan India retail network. Mukesh

Ambani, the CEO of this group said in his own words, "Over the next five years, I can realistically foresee this business growing 10 fold from current levels, and becoming a significant value creator for Reliance in the coming years……Your company is well equipped to be a national leader in this space."

------Insert Table 1 about here ------

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But for some initial resistance from some states and stakeholder groups

(Bhattacharya, 2007; Srivastava, 2007), the company's initial plans and roadmaps would have been more successfully accomplished. A group of protesters including farmers' unions, trade union members, and a group called FDI watch (calling for a national retail policy in FDI) was protesting in the state of Maharashtra, following earlier protests in Uttar

Pradesh, , and Orissa. According to reports, these protests were against all large retail groups, but some were targeting Reliance Retail specifically (Bhattacharya,

2007). As a result of these protests, Reliance Retail closed more than 50 stores and all procurement centres in many northern states (Kamath, 2010; Layak, 2009; Srivastava,

2007). But despite these roadblocks and other hurdles, the company and its top managers, including Mukesh Ambani, the CEO, are very optimistic and determined to continue with their expansion plans. During the slowdown period, as a result of the global recession, which coincided with these protests across many states, the company held many town hall style meetings with their employees. During one of these meetings called Let's Talk

Growth meetings, the CEO vowed to make RRL 'a world-class retailer', and outlined a four point strategy of continuation (Kamath, 2010). In the words of the CEO, "I never give up. I want to make a world-class retail chain and I am committed to this cause. I will support the venture throughout". The CEO for RRL's value-formats, Gwyn Sundhagul (Anusha

Subramanian, 2008) said at this meeting, "We have prepared a robust, sustainable and deliverable business plan that will help us achieve the ambitious growth and returns that we have set for our business. We have also built a very strong and experienced top leadership team to ensure we can implement the plans." Thus, one of the strong points in favor of the success the retail venture has had is strong vision and leadership commitment from the entire top management of the venture. No other company had an investment as big as the one Reliance started with. All the other major competitor groups started with and envision an overall size much smaller than that of Reliance. For instance the Aditya

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Birla group which is in talks with Tesco for a potential joint venture planned for a total outlay of Rs. 4,600 crores (Nandini Lakshman, 2006).

Strategic Intent and response to downturn: In addition to the size of the planned investment and expansion, Reliance Retail is also different from the rest of the group in terms of its overall strategy of entering and occupying a dozen different segments of the retail sector from produce to apparel and footwear, and from books and music to jewellery and consumer electronics. By some accounts, and according to the analysis here, this strategy seems to be working (Layak, 2009). Table 2. provides a listing of the different store formats in different segments that have been opened by the company during the last four years since its inception.

------Insert Table 2 here ------

As can be seen from Table 2., Reliance Retail plans to have a pan India presence in multiple formats and in many different segments of retail to blanket the markets with a product proliferation strategy, which is known to be a very good strategy to increase barriers to entry into the industry, and to provide solid positioning in the competitive market place for retail customers. Other competitors such as Subiksha, a chain of convenience type supermarket stores have struggled in recent times in the face of protests against large retailers, and the impact of the global recession as a result of the financial crisis of late 2008 (Layak, 2009; Nithya Varadarajan, 2007). The RP Goenka group of companies running a chain of Spencer’s stores have also had to close around 55 stores, although they say they are opening new ones as well (Layak, 2009). Multi-format retail competitors such as that of the Panataloon Group are claiming to be not affected by the downturn and that they have no bad news to share (Layak, 2009).

Joint Venture Strategy: In addition to having a strategy of having a presence in multiple retail segments such as apparel, footwear, books, music, consumer electronics, wellness and health, home furnishings, jewellery, automotive products, and groceries, the

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Reliance Retail group of companies is also gearing up with joint ventures with a number of global players. As a way of hedging their risks during the downturn and to increase their presence in more segments of retail, they have entered into a joint venture with Marks and

Spencer of the UK to open more than 50 outlets selling apparels and accessories (Gopalan,

2008; Layak, 2009; Pande, 2009). Within the same fortnight of signing the JV with Marks &

Spencer, Mukesh Ambani also signed another JV with Office Depot, the global retailer of office supplies, and together they announced the acquisition of eOfficePlanet, a company that supplies office equipment to corporate customers in India (Gopalan, 2008).

Additionally, the company has also entered into an equal joint venture with Pearle Europe to open a chain of 700 Vision Express stores selling optical goods and eyewear to a $900

Million Indian Market, which is expected to grow exponentially in the organized sector

(http://www.dnaindia.com/money/report_reliance-pearle-europe-plan-up-to-700-stores-of-eyewear- chain_1334716).

Institutional Legitimation: One of the key underlying success factors of the

Reliance Retail strategy and the reason for some of the opposition and protests in many northern states is the issue of institutional legitimacy (Dimaggio & Powell, 1983). Many stakeholder groups such as the market middlemen, the associations of traders and small shop owners, whom Reliance seeks to ultimately replace with its farm-to-fork business model, joining hands with groups in communist-ruled states of and West Bengal, with some other political groups such as FDI watch, have protested forcefully and stalled the progress of the Reliance juggernaut (Business Today, Oct. 21, 2007). This is essentially an issue of institutional legitimacy and the appropriate way of doing retail business in a country that has been historically dominated by millions of ‘unorganized’ mom-and-pop retailers. Reliance’s strategy to face this trouble has been one of working the system quietly but firmly, and to get legitimacy in as many states of the country as possible, before bringing things to a head in the trouble states. Eventually, even communist West

Bengal and its constituent groups have been won over by the Reliance charm, with the

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Agriculture marketing minister of the state saying, “We would like Reliance to apply for the APMC (agricultural products marketing control) licence all over again. We must be practical and look at things from the current perspective."(Chakraborti, 2009). Another piece of this institutional legitimacy puzzle is the silent stance of the Confederation of

Indian Industry (CII), possibly not helping Reliance, because it is headed by a key top manager of a key Reliance competitor.

Another aspect of institutional legitimacy, one of avoiding the liability of newness

(Hannan & Carroll, 1992), and the Reliance Strategy to counter this liability of newness, is another important underlying success factor of the success achieved to this date.

Reliance’s petrol retail business struggled for a long time in the face of competition in a not-so-level playing field comprising primarily of public sector petroleum retailers.

Eventually Reliance closed down many of their petrol retail outlets (PTI, 2008). Perhaps learning from this experience, and wanting to avoid legitimacy issues, Reliance started with the strategic vision of opening outlets in multiple formats across many different segments to enable the consumers to think of a Reliance store as an automatic (and therefore legitimate) option for sourcing their purchases. Customers and farmers have always been on reliance’s side throughout these protests from other groups. Regardless of

Reliance’s intentions, this presence in multiple formats and segments of the retail business, across many states of the country, within a short span of time, has given them the required legitimacy to sustain themselves in a tough political and competitive environment. Without such legitimacy, the forces of liability of newness would have taken over and dominated them into obsolescence in a relatively short span of time.

Selection of Executives and Organizational Design: Realizing that the scale and scope of their strategic foray into the retail sector could not be achieved without the key human resources in the form of executive leadership, the company began with the task of recruiting well-experienced top executives in the retail sector and creating the necessary organization to make it a grand success. Many of the key generals for the Reliance Retail

11 organization were enticed away from the domestic competition initially (Raj Nambisan &

Nandini Lakshman 2006) and then later from some global players as well (Anusha

Subramanian, 2009). The recruitment of these top executives was the first shot fired by the Reliance Retail organization, leaving the competition battered and bruised (Raj

Nambisan & Nandini Lakshman 2006), and eventually led to some non-poaching agreements with key competitors (Mookerji & Bhattacharya, 2007). This war for talent, in a country that has a severe shortage of retail talent, as a result of decades of dominance by unorganized retailers, has at times affected Reliance itself negatively (Mookerji &

Bhattacharya, 2007) by triggering a poaching war.

First however, Reliance effected a coup by enticing away Raghu Pillai, who kicked off retail ventures such as Food World, Music World, and Health & Glow for the RPG group of companies, from Pantaloon Retail, where he was a strong presence. Raghu Pillai, who had been instrumental in spearheading the front-end operations of the retail venture as

CEO of Reliance Retail has eventually decided to leave the company sometime in the middle of this year for personal reasons (PTI, 2010). He will be leaving the company after having firmly established Reliance Retail as a legitimate and successful player in the Retail sector of India, much as he had done for the other two companies earlier. The company also arrived at an operating structure where the retail division’s chief executives would head vertical profit centres and report to Mukesh Ambani’s right hand man in Manoj Modi.

The company also envisioned a geographical structure with a state level CEO who would be the owner of the geography and all the formats therein. The heads of the business verticals were to be entrepreneurial and responsible for driving profits within the vertical

(Carvalho, 2008), whereas the geographical owners were to be responsible for individual store and geographical performance. Thus, essentially, the company set up a matrix structure of operations in the country to handle the complexities of different institutional environments in different states of the country.

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Following the recruitment of Raghu Pillai was the former marketing head of Titan

Watches (a TATA group retail venture) Biju Kurien, who was to lend his expertise to the

Lifestyle Division. Dipping into the multinational talent pool, Reliance came up with the king of supply chain D Saravanan from McDonald’s. They also roped in Sanjeev Asthana from Cargill India Ltd., as the business head for grains and oilseeds. Rajeev Karwal, an ex-

Onida, LG Electrolux executive was brought in to head the consumer electronics vertical.

Table 3. Provides a complete list of the experienced and knowledgeable executives brought in from leading national and multinational players to provide the think-tank and operational power to the Reliance Retail foray and to make their vision a reality.

------Insert Table 3 about here ------

Such strategic executive recruitment was supported by training, management development, and strategic retention practices, the only a company with the size of

Reliance, not to mention its ambitious attitude, could handle effectively. The latest entry into this fold of top executives is Gwyn Sundhagul, after his successful career as Director of

Tesco Lotus Thailand (Anusha Subramanian, 2009). He is CEO of Reliance’s Value formats and a member of the Board. Sundhagul soon unveiled his brand strategy of ‘Bettering the lives of Indians Everyday’ in one of the Let’s Talk Growth meetings mentioned earlier.

Such a magnitude of poaching from competitors eventually led to a poaching war and later to a non-poaching agreement with the Bharti-Walmart joint venture retail foray

(Mookerji & Bhattacharya, 2007). The agreement was supposed to last a year and would ensure that these two companies did not get into each others’ talent pool. Reliance had hired away a number of professionals from the Bharti-Walmart combine just a year ago, all as a result of the talent shortage for retail professionals in India, compounded by the high turnover for such professionals. Among other factors, employee turnover, perhaps as a result of poaching by competitors, or as a result of a firm's declining capability to retain key employees, has long been considered as a crucial matter of interest for SHRM

13 researchers (Griffeth et al., 2000; Lepak & Snell, 1999). At least two of the people in

Table 3 have been enticed away from Reliance Retail in the last year, including Raghu

Pillai and Rajeev karwal. All this serves to highlight the role of strategic human resource management in general, and strategic executive selection in particular for the success of ventures such as this. The presence of an army of generals and executives with ‘Retail’ as part of their middle names also adds to the institutional legitimacy factors discussed earlier. Thus SHRM in the form of executive recruitment and institutional legitimacy work hand-in-hand in contributing to the sustainability of the business model and its competitive advantage. Reliance does invest in training and managerial development in association with premier Indian Institutes of management for building competencies in the retail sector (Reliance Industries Limited Annual Report 2008-09). Based on the above analysis, we present a brief model of the success of the Reliance foray into retail showing the relationships between its strategy and vision, linked with the institutional legitimation, and strategic HRM, as they impact sustainable competitive advantage (see Fig. 1).

------Insert Fig. 1 about here ------

This figure shows that Reliance’s executive leadership at the top few levels of the retail organization has had a significant impact on both institutional legitimacy and an influence on their strategic human resource management practices. The strategic human resource management practices have in turn had an impact on the institutional legitimacy, independent of their vision and strategy. All three of these factors have had a tremendous influence on the sustainable competitive advantage that the Reliance Retail organization has already built and is continuing to more firmly establish in this emerging market.

Discussion and Conclusion

This paper has used the case of Reliance Retail Limited, an unlisted subsidiary of

Reliance Industries Limited, starting from its conception and board approval, moving on to its inception and growth in the face of many institutional hurdles, severe manpower crunch

14 and the resulting war for retail talent, and its successful overcoming of the downturns as a result of these forces and the global recession. Using this case study, this paper has highlighted the role and importance of strategic human resource management, and the combined effect of this factor and institutional legitimacy on the sustainable competitive advantage in the retail industry of the emerging market of India. The vision, strategy, and the executive leadership of the company and its role in driving the whole model identified in the paper have also been outlined. The paper advances our knowledge of processes that are required to take better advantage of the services opportunities presented by the emerging markets in general and India in specific. It is important to note that this is a context where global retailers including a number from Europe are waiting in the wings and assessing their chances of entering this market to take more advantage of the services opportunities. With the pending discussion in India of relaxing restrictions on FDI in multi brand retail, this paper and the issues discussed herein take heightened importance.

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Srivastava, P. (2007b). Shutters Down, for now: Reliance Retail stops its Fresh business in the state, Business Today, December 16. http://www.dnaindia.com/money/report_mukesh-ambani-s-reliance-retail-gets-a-team- in-place_1020227 http://www.dnaindia.com/money/report_reliance-retail-plans-85-jewellery-stores- over-next-three-years_1325532 http://www.dnaindia.com/money/report_reliance-retail-in-acquiring-mode_1027956 http://www.dnaindia.com/money/report_reliance-retail-may-face-protest-in-state-as- well_1125022 http://www.dnaindia.com/money/report_nita-designing-reliance-retail-stores_1049939 http://www.dnaindia.com/money/report_reliance-retail-plans-to-open-outlets-at- corporates-premises_1333145 http://www.dnaindia.com/money/report_reliance-retail-launches-third-footprint- store_1144641 http://www.dnaindia.com/money/report_reliance-retail-to-expand-in-new-cities-forge- new-alliances_1312873 http://www.dnaindia.com/money/report_good-sales-pushes-reliance-retail-lifestyle-to- expand-network_1335711 http://www.dnaindia.com/money/report_reliance-retail-unveils-india-s-largest- hypermarket-in-ahmedabad_1115587 http://www.dnaindia.com/money/report_bharti-reliance-enter-into-no-poaching-pact- for-retail_1085274 http://www.dnaindia.com/money/report_av-birla-begins-retail-headhunt_1049412 http://www.dnaindia.com/money/report_biyani-will-take-on-reliance-not-wal- mart_1052207 http://www.dnaindia.com/money/report_reliance-kicks-off-wellness-stores_1129939 http://www.dnaindia.com/money/report_wholesale-grab-for-retail-talent_1009069 http://www.dnaindia.com/money/report_reliance-readies-radical-retail-ride_1009266

18 http://www.dnaindia.com/money/report_reliance-pearle-europe-plan-up-to-700- stores-of-eyewear-chain_1334716 http://www.dnaindia.com/money/report_40-aircraft-for-mukesh-ambani-s-retail- supply-chain_1025730 http://www.dnaindia.com/money/report_retail-job-losses-rising_1191142

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Table 1. Reliance Retail's Presence in India

Year No. of Stores States Cities 2006-07 96 4 - 5 Jaipur, Chennai, NCR, Guntur, Vijayawada, Visakhapatnam 2007-08 590 13 57 cities First Reliance Digital Store (Apr '07) First Hypermarket Ahmedabad (Aug '07) Also launched many specialty Stores (Reliance Trends, Reliance Footprints, Reliance Jewels, Reliance Timeout, Reliance Autozone, Reliance Wellness) 2008-09 900 14 80 cities Reliance Super, iStore (Apple Products), Reliance Living. 2009-10 1150 stores 14 86 cities

Table 2. Reliance's Retail Offerings

Reliance's 'Value' Formats A neighbourhood concept Reliance Mart All under one roof supermarket concept Reliance Super A mini mart

Reliance's 'Specialty' Formats Reliance Digital Consumer Durables and information technology concept Reliance Trends Apparel and Accessories concept Reliance Wellness Health, wellness, & Beauty concept iStore by Reliance Exclusive Apple products concept Digital Reliance Footprint Footwear concept Reliance Jewels Jewellery concept Reliance TimeOut Books, Music & Entertainment concept Reliance AutoZone Automotive Products and Services concept Reliance Living Homeware, Furniture, modular kitchens, furnishings concept Stores through JVs with global players Marks & Spencers Apparel and Accessories Reliance Stores Vision Express JV with Pearle Europe for eyewear Office Depot B2B JV for office stationery Toys Franchisee stores for Hamleys Toys in India Giorgio Armani Franchisee boutique style stores for Armani in India

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Table 3. Strategic Recruitment of Key Executives*

No. Name of executive Past experience Key Responsibility at RRL 1. Raghu Pillai Food World, Music World, Health & CEO of Glow, Pantaloon Retail RelianceRetail Ltd. 2. Biju Kurien Marketing Head of Titan Watches CEO of Lifestyle Division 3. D. Saravanan Supply Chain and Quality Control at Supply Chain and McDonald’s Quality Control 4. Sanjeev Asthana Business Head, Grains at Cargill Head of Oilseeds and India Grains 5. Rajeev Karwal ONIDA, LG, Electrolux Head of Consumer Electronics 6. Sriram Srinivasan Indus League Head of Apparels 7. Suresh Singaravelu Prestige Constructions and Forum Development of Malls 8. K L Muralidhara VP and Country Head of American Head of Financial Express Services and Travel 9. Gwyn Sundhagul Director of Tesco Lotus, Thailand CEO of Value formats 10. Gunender Kapur HLL executive head of ModernFoods Head of food and and Unilever Nigeria Grocery * Compiled from multiple sources (Anusha Subramanian, 2008; Pal, 2006; Raj Nambisan & Nandini Lakshman, 2006)

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Fig. 1. Model of success for Reliance Retail

Strategy, Vision, and Executive

Leadership

Institutional Legitimacy Sustainable Competitive Advantage

Strategic HRM Practices

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