SWOT ANALYSIS ITC-CHOUPAL FRESH

1. STRENGTH

Choupal Fresh delivers real-time information and customized knowledge to farmers decision making ability, securing better quality & price. The ITC-Choupal Fresh initiative also creates a direct marketing channel, eliminating wasteful intermediation and multiple handling, thus reducing transaction cost and making logistics efficient.
Local Leadership

ITC uses involvement of farmers in content creation helps to easily customize the information as per the local requirements. Participation of local farmers ensures provision of adequate and decipherable information to choupal, which can be employed into the farming, or pricing of the produce. The increased participation in e-choupal develops local leadership quality in farmers. The farmers get attracted towards e-choupal due to increased profits, added services that he could get, saving in time and the ability to use e-choupal for many transactions. Choupal delivers relevant technologies in the hands of the farmers, which can improve the economic condition of the entire village. E-choupal is one of the very few ICT projects in India that has effectively utilized e-commerce transactions for poverty alleviation.

Able to design a win-win model -Digital transformation

ITC began e-choupal with Soya grower in the villages of M.P. e-choupal tried to change the stereotype image of farmers of bullock cart. Farmers now log on to the site through internet kiosks to order high quality input, get information on best farming practices, prevailing market prices for their crops at home and abroad for the weather forecast all in the local language. The e-choupal site is also helping the farmers discover the best price of their quality at the village farmers with specialized knowledge for customizing their produce to the right consumer segments. The new storage and handling system preserves the identity of different varieties right through the farm gate to dinner plate supply chain. Thus, encouraging the farmers to raise their quality standards and attract higher price.

 Credit and Insurance Farmers low income and difficulty in accessing credit limits the capacity to pursue opportunities within and outside the agriculture sector. ITC e-choupal proposes the solution of this problem by making partnership with financial institutions. E-choupal provide various types of loans like noncash loans for farm inputs, loans to sanchalak (sanchalak can better manage credit risk & have better access to farmers), direct loans to farmers based on sanchalak recommendation, Insurance & risk management services etc.

Sanchalaks are selected carefully ITC has given recognition to integral partner in the supply process & not mere as agricultural producer and thus elevating the level of respect of farmers. Similarly providing shaded seating area while waiting for their paperwork shows ITC really care for farmers. Other Benefits Transparency in transaction Flows of funds to the real owner Bottom up model for entrepreneurship Real time information

Multiple Benefits Farmers can look at weather forecasts, order fertilizer and herbicide, and consult an agronomist by e-mail when their crops turn yellow. At some e-Choupals they can even buy life insurance, apply for loans and also check their childrens exam results. While much has been written about the social benefits of ITCs e-Choupal, the matter of the fact is that the project was conceptualized with a pure business focus to create farmer communities in villages to facilitate sourcing of high-quality farm produce for the companys fast growing agribusiness. Better Payment E-Choupal is an intelligent blend of applications like CRM and supply chain management. For instance, by helping the farmer identify and control his inputs and farming practices, and by

paying more for better quality, ITC has been able to preserve the source and improve the quality of produce. The project was built using NET. The first implementation of a Soya Choupal took eight months but later extensions like the Aqua Choupal for aquamarine farmers took between six and eight weeks. Today e-Choupal is a flexible, easy to deploy solution. ITC InfoTech provided an in-house team of 25 to 30 people in the initial stage and this gradually came down to around 20 people, and finally a five-member team to maintain the project. The portfolio of commodities sourced has been vastly expanded to include maize, barley, sorghum, and pulses, and the sourcing cycle is extended almost around the year. In the commodities market, these two factors are helping ITC create a definite competitive advantage.

2. WEAKNESS Inefficiencies Although E-choupal helps eliminate the middleman and therefore allows farmers to get a better price for what they grow, it does nothing to solve the more fundamental problem of the inherent inefficiencies created by so many tiny farms. Weak Infrastructure It relies on infrastructure, which is often lacking in rural communities. Electricity and telecommunication services can sometimes be less than 100 percent reliable in some of the places where e-choupal has been implemented. Telephone exchange also has limited battery backup. There is no local support staff to maintain or troubleshoot telephone exchanges. Finally, although there is no longer a middleman, e-choupal can be no more effective than the sanchalak (coordinator) in each community. As the power is usually available for only a few hours a day at on a sporadic schedule, the e-choupal computer cannot always be accessed when information is needed.
Difficulty in establishing E-choupal in new areas as it is not that easy task

E-choupal is a virtual market that brings together vendors and customers. Geographical distance no longer restricts participation of farmers. The main hurdle of traditional market is that information asymmetry is inherent in the market. The critical element of the e-choupal system

and the key to managing the geographical and cultural breath of ITCs network by recruiting a local farmer is the sanchalak. Sanchalak create trust in society and all infrastructure set up is made in his house. Other weakness

Value chains of different crops different problem. Numerous intermediaries, Excessive dependence on the monsoon variation between different agro-climate zones Implement & expanding of e-choupal

3. OPPORTUNITY Huge scope in other developing and underdeveloped countries. Entering in new products like coffee, aquaculture and wheat in other states. Opening up entirely new and more effective channels for distribution and marketing of a range of goods and services in rural India.
Becoming tested market for new services like selling home appliances, consumers

goods.

4. THREATS
Socio-economic characteristics of different areas are different thus common method

cannot be applied.
Increasing competition from other player like Adatiya and Tata. (Vicious circle of
intermediaries)

Supply chain, revenue models vary across commodities and geographic Illiteracy about computer in rural areas as well as rural population has low trust on

electronic system.
Appropriate Selection of an educated, intelligent, reliable and matured person as a

sanchalak. Lack of rules and regulation related to electronic choupal.

 Mistrust about inspection, testing and weighing of produce on canters.

RELIANCE FRESH 1. STRENGTH Private label sale own products (Reliance Select) Reliance is the first into enter into this unorganized sector of vegetables and fruits. According to them its intentions to have 100% farm fresh foods in their new retail stores. It is also adding shortly a juice bar, and even a large counter for puja flowers. In fact, over 60 per cent of the floor space has been dedicated to fresh fruits and vegetables, the rest to other food products like staples, spices, bakery, etc. So by using this strategy they are positioning themselves different from other players of the industries like Food world, Big Bazaar. they are also introducing new Reliance full-fledged supermarket called Shakhari Bhandar which offers each and everything from the staple to soap. Most of the staples are under its own private label brand Reliance Select. There is a 500g channa dal pack priced at Rs 28, a 500g urad dal pack for Rs 39, all under Reliances own brand. Excepting a few packets of Nestls Maggi, or MTRs masalas or Pepsis Lays chips, there is very little shelf space given to the big brand owners in the country. Reason: private labels offer far better profit margin to the retailer than branded products of FMCG companies. Contract Farming Reliance Fresh is looking at acquiring over 2,000 acres of farm land in Karnataka, which could emerge as one of its hubs for overseas exports in farm produce. The company's plan entails acquiring a 10-acre patch in all 175 talukas and a similar holding in each of the 27 district headquarters. This translates into the company acquiring 2,020 acres across the state. Also in the pipeline are the company's plans to set up warehouses across the state. RIL has already unveiled ambitious contract farming plans nationwide, which would see it operating a massive fleet of cargo flights within India and overseas. For instance, from

Karnataka alone it could operate about 10 cargo flights on a weekly basis. RIL is embarking on contract farming operations in states like Haryana and Maharashtra at the moment. Corporate biggies like Bharti, Godrej, ITC, Mahindra and MNCs like Pepsi have forayed into contract farming that could help doubling India's agricultural exports to the other beneficiary of RIL's massive farmland acquisition would be its farm-to fork project. Reliance Fresh stores - the first of the formats from Reliance Retail - that represent the front-end of the farm-to fork project would source fresh fruits and vegetables, and to some extent even top-up grocery from these farms for their operations within Karnataka. The retail initiative would largely benefit the farmer community. Network Reliance Fresh, the retail venture by the Mukesh Ambani-promoted Reliance Retail Ltd, is getting ready for the Mumbai launch. The company, which already has 157 Reliance Fresh outlets in 18 states, is planning a two-phased strategy for Mumbai. At first, it plans to launch the outlets in western and central Mumbai. This will be followed by Thane and Nasik. To begin with, it will launch 100 stores in Mumbai. "Reliance Industries is headquarter in Mumbai and it holds a lot of significance for the promoters. Keeping this in mind, the company plans to launch the Reliance Fresh network in a much bigger way in comparison with what it did while entering certain other cities," according to an industry source. Since its launch in Hyderabad in November last, Reliance has established 157 Reliance Fresh vegetable and food stores across 18 states. These stores sell fresh fruits, vegetables, staples, bakery and dairy products, pooja flowers, top-up grocery and meat in select stores. The company expects to start operating hypermarkets across the country soon. 2. WEAKNESS This is definitely an interesting business venture but it may miss out on the opportunity to capture a greater share of the customers wallet. For customers, too, this could be irksome, as they would have to visit another store to pick up essentials. Reliance could easily fix this problem by adding a few small counters for some basic non-food products. According to their official this format is not

final one they are accepting the new changes which are required to attract the large number of customers. Poor inventory control Staff Lack of knowledge about products Parking 3. OPPORTUNITY Reliance wants to build a high-profitability business and food is, perhaps, the best venture to start. That is because the Indian food supply chain is grossly inefficient. There are several intermediaries, each of whom adds his own profit margin to the cost. Besides, there is huge wastage in transit. This offers potential for savings and profits. To reduce the cost and increase the profit it has been sourcing out its requirements from the farmers. For example, the leafy vegetables, brinjals, tomatoes and green chilies in the Banjara Hills outlet were sourced directly from farmers in Vantimamdi, Chevella and nearby mandals in Ranga Reddy district of Andhra Pradesh. The supply chain already has been backed by few hundred farmers the number is estimated to touch million in next five years. The main aim of the reliance is to eliminate the intermediaries in the sector and reduce the cost. Smaller stores have two advantages. They bring down the cost of real estate (and increase profits). It is easier to find space for small convenience stores in a quiet neighborhood than for supermarkets in high streets. Farm to fork, No middlemen, Farmers Customer Hundreds of farmers 1 million farmers next five years 4. THREATS This model is engineered to clock a faster turnover of inventory Reliance expects consumers to visit the store at least twice a week for their top-up groceries. Each store will have an investment of Rs 50 lakh to Rs 60 lakh. This model is engineered to clock a faster Turnover of inventory turnover of inventory Reliance expects consumers to visit the store at least twice a week for their top-up

groceries. Each store will have an investment of Rs 50 lakh to Rs 60 lakh. Unlike global retailers who operate on thin margins, Reliance Retail is looking at a fairly high-margin business model. Deliberately stopped short of being a full-fledged supermarket rather, it has limited itself to a food and grocery convenience store. They also have a threat from the existing supermarkets which provides all the services to its customers. For Example Food world and Nilgiris also provides food and beverages with other personal care products. These convince are not existed in the present Reliance retail stores. International Retail Giants: Carrefour, Metro AG, Tesco.
Bharti Wall mart (Farm to Fork)

Operating cost are too high