One of the biggest retail XYZ superstore established its countrywide retail business with speciality in retail food and groceries, clothing, toys and general commodities.

XYZ has planned to invest around $20 billion countrywide and employed more than 150,000 workers on its more than 450 locations. The estimated operating income of the company has been declared around $850 million last year where actual income was $750 million in year 2 and $760 million in year 3 as follows.

Periods	Actual Income(M)	Forecasted Income (M)
Year 1	$780	$700
Year 2	$750	$850
Year 3	$760	$900

Regardless of the fact that XYZ has been successful in getting competitive adavantage in the last three years, it couldnt bring enough business as estimated in the forecasted values, because of increasing competition and financial crisis. The key operational and functional matter of the company came low price strategic management. As the company is among the major market players so it has the place and economies of scope which are considered as the key bargaining powers, it helps to achieve low costs through the suppliers of the company.

The up-gradation of the IT and other functions of the company is a routine matter and with the improved order-taking system. XYZ has to establish separate warehouses near airports to arrange supply logistics to all stores of the city and remote areas.

XYZ is also working with all retail segments, physical ones, online and offline ones. XYZ has to operate directly with all of the operations included in the outbound logistics. The companies is always keen to develop processes and tools to produce and distribute the goods and services effectively and efficiently. XYZ has designed a variety of formats and types related to the stores, it will be implemented strategically with the aim of maximum exposure of the customer, but through surveys XYZ noticed that only 65% of the customers are satisfied with their services and products.

Innovative technology has helped companies and the customers, in various functions and ultimately the rate of customer satisfaction has increased. Now the desired products and goods are available easily

. Companies have individualized their services to make the customer happy, and hence the grocery shopping has become pretty suitable with easy access. XYZ works on the policy of Customer is Always Right to improve its service orientation and has installed various IT gadgets to make the system more efficient.

The following list of technology tools, which are being used by XYZ in its business operations to make the customer more satisfied.

• Introducing of Self-Check-out machines.
• Use of Wireless Devices.
• Electronic Shelfing and Labelling
• Tracking Systems
• (EFT) Electronic Fund Transfer System
• (RFID) Radio Frequency Identification

The inside store inventory management system of XYZ has been improved due to the use of RFID technology to store the information/data of the inventory items. The dealers information is also available with them which helps in making the process much reliable.

XYZ is working with a vast variety of suppliers across the world, being a major retailer with a diverse range of products and employed employees from very different ethnic groups and cultures. It is included in the strategic policy of the company that it should maintain very healthy relationships with the suppliers and work with mutual concerns. The financial shows that XYZ has to pay average $5 per unit ordering cost for the range of items procured from different suppliers while average $12 per unit is paid as a holding cost. The items are stocked at different warehouses across the country.

XYZ has a good network of communication with the suppliers but still it needs to improve and add a technology that will be easily accessible by the global suppliers and understandable also at the same time. The communication network should be very clear and effective between the supplier and the company. The record of all the required products should be clearly mentioned by the company to the supplier it will help in building a long term business. The contractors in the loop will be able to promote the orders and it will improve the conditions and steps included in the supply chain.

In this challenging time, the corporations are facing a rapidly increasing rivalry with changing environment and business tendencies. For long term survival in the business, the companies have to predict the change and adopt it as well. To endure and compete in this modern world it is compulsory to innovate in the technology, operational processes and improvement in the products and services.

In the business of retailing, one has to keep these things mind and ensure;

• Proper Implementation of the systems to control and record all the stock.
• Arranged record of all the previously delivered products.
• Analysis of every business transactions properly.

The above mentioned factors should be analysed properly, as IT has many solutions that are beyond the traditional support role. XYZ should also have adequate execution of extranet service it will be beneficial for the company. Internet will help to create customers circle and flow of customized information among the business partners and the company. Extranet can provide connection with the business partners online and provides the opportunity to build relationships with the partners and delivering the easiest way of accessing the retailing services of XYZ.

Problems and Issues:

Sales of the grocery store and shrinking growth for the last 3 years or so are reported, due to the financial crisis. In this scenario, the major problem for XYZ is to sustain and there are only two ways which needs to be adopted. The first one is of increasing the revenues and the other one is of cutting the cost of doing business. In both of matters, the operational management capacity of the organization is challenged and the operational team involved has to do some essential reforms.

Competition has also increased and the competitors are trying very hard to gain the market share, in order to retain XYZs market share, so here the company needs to have implemented effective operation management system and tools so that the production of goods and services will be maintained smoothly and customers demand is fulfilled efficiently.

There are some issues that are found within the company that are follows:

• Expertise level is not optimum
• Record maintenance of the stock.
• Delivery delays to the customers
• Logistics failures due to lack of control of distribution channels
• No better systems for price control

Calculate NPV (Net present value), if the future income in next 15 years is expected to be $30 billion, if the interest rate is 3% per year and fixed cost is $5 Billion and variable cost is $18 million per year. (Marks 5)