Regression Analysis for Expansion at Stop’N’Shop
On June 25th 2016, Ramesh Goud (Ramesh) the Founder and CEO of Stop’N’Shop, a reputed retailer in South India, was reviewing the company’s 2015 Annual Report. Ramesh found himself in a quandary on the connection between the revenues and expansion of Stop’N’Shop.
Ramesh, after completing his graduation in Business Management, started his career in 1993 with a popular retail chain in India. In 2003, when the retail chain went online, Ramesh was appointed as the in charge for the business. He had established a good network with many suppliers. After acquiring sound knowledge, he aspired to start his own venture. As he lacked enough funds for starting a business, he approached a bank for business loan along with his proposal. With the loan sanctioned, in 2006, Ramesh established his retail store Stop’N’Shop (both online and physical store) at Jaya Nagar in Bangalore with seven employees. Stop’N’Shop was established with an aim of supplying quality products to the potential customers at affordable price.
Ramesh also had tie ups with many rural farmers and suppliers whom he had known already. He gave many promotional offers (Above the line (ATL) and Below the Line (BTL)) to attract the potential customers. For instance, he gave free home delivery, order-to-home delivery, gifts, prizes, etc. The store became popular in Bangalore within few months of its inception. Ramesh strongly believed that customer satisfaction was the key factor in defining the growth and market standing...................
Assignment Questions
I. How do you measure the relationship between the following variables: retail expansion and financial growth; the store size and financial growth in the context of Stop’N’Shop? Analyze how these variables are related to each other and measure the strength of the relationship.
II. If you are appointed as a consultant for Stop’N’Shop for expansion strategy, what would be your recommendation? What would you recommend – an expansion strategy by increasing the number of stores or operating smaller number of large sized stores (increasing average store size)?
III. .............
Exhibits
Exhibit I: Stop’N’Shop: Number of Stores
Exhibit II: Stop’N’Shop – Revenue and Number of Employees (2006–2015)