Strategic resource management model and data envelopment analysis for benchmarking of Indian retailers

Abstract

Purpose

The purpose of this paper is to use strategic resource management (SRM) model and data envelopment analysis (DEA) for benchmarking Indian retailers. The study ascertains, how a retailer can benchmark its performance at company level, global level, store level and finally at merchandise category level using diverse strategies for inventory, space and people.

Design/methodology/approach

The paper aims to use SRM model, for evaluating and comparing the performance of two generalized retailers Shoppers Stop and Trent. These two generalized retailers are benchmarked with another best-in-class retailer, Wal-Mart using the SRM model. The benchmarking exercise brings out improvement directions for the Indian retailers. In the next part of the study, economic efficiencies of 11 generalized retailers are ascertained using DEA model. Finally, a study is conducted to understand, how SRM model can be used as a planning tool for deciding alternative inventory, space and people strategies at store level as well as at merchandise category level.

Findings

Based on the data for the year 2011-2012, Trent’s performance is comparatively better than Shoppers Stop. The paper offers suggestion to improve its performance. Next, it was found that the performance of Wal-Mart is superior to the two Indian retailers. The study offers direction to the two retailers to devise appropriate strategies to improve their performance. The study further ascertains the relative efficiencies of 11 generalized retailers in the country. Finally, an illustration of how a retailer can use the SRM model as a tool for planning alternative strategy for inventory, space and people in a particular merchandise category is offered using data from a retail firm. The study has used “Jeans” and “Toys” as two categories to demonstrate this concept.

Practical implications

The examples considered in this paper can be used by practicing retailers to plan and benchmark their performance.

Originality/value

The study proposes a method, by which retailers can examine ways to plan and improve their operations and profitability by using the SRM and DEA model. The study is therefore relevant to practicing retailers as well as academicians.

Citation

Gandhi, A. and Shankar, R. (2016), "Strategic resource management model and data envelopment analysis for benchmarking of Indian retailers", Benchmarking: An International Journal, Vol. 23 No. 2, pp. 286-312. https://doi.org/10.1108/BIJ-02-2014-0013