A strategic profit model: Constructing a Model to Measure Indian Apparel Retail

Julho 2009

The strategic profit model (SPM) has been used to measure the performance of three Indian retail companies that focus in apparel. In the study three companies have been chosen to represent three groups of companies viz., large, medium and small corporate. In the case of large size, medium size and small size corporate, Pantaloon retail is considered with a turnover of Rs.3,031 crores, Shoppers stop retail with a turnover of Rs.849 crores and Provogue with a turnover of Rs.228 for the year 2007 have been included for the study, respectively. In order to find out the suitable strategies for the companies in the categories, the comparison has been done with its best performance as well as the indicators in relation to peer averages. The ROA has been noticed around 5 percent and the study attempt to reveal the appropriate strategy to increase it by 10 percent. The study has been carried out to indicate suitable strategies to maximize the performance in the future years for Indian apparel retail sector in line with the measure of RONW. Increasing organized apparel retail market results in more competitive situation among Indian companies, which makes top management of the respective companies to think how to curb upon increasing excessive expenditure without disturbing the rising sales for enhancing profit curve. At the same time, they have to keep in mind about the interest of shareholders also. A company performance is measured in terms of their effective allocation of available resources for increasing the value of their shareholders. In other words, measurement of companys Return on Asset (ROA), cash flow and Return on Networth (RONW) reflects financial soundness and overall performance of the company. These act as indicators upon which top management generally considers for drafting futures strategies. A companys profit performance is determined by the profit earned in relative to the capital invested. In this direction, there is need to study Indian apparel retail sector at three levels spread across small, medium and large companies.

Autores da comunidade :

• 

  M

  Maria Isabel Craveiro Pedro

  ist13156

  Afiliações e fontes

  IST > CEGIST

  Centro de Estudos de Gestão do IST

  IST > DEG

  Departamento de Engenharia e Gestão

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Colorado Springs, USA

economics-and-business - Economia e Gestão

eng - Inglês