SUBHIKSHA

Bachat mera adhikar, Subhiksha mera Abhimaan

Fall of Subhiksha:
The end of 2008 marked the closure of the most talk about retail stores
Subhiksha. It was on the verge of bankruptcy. Subhiksha failed to pay its
employees, supplies and landlords for quite many months in 2008. To
add to its woes, its biggest investors Iventure (Venture Capital Arm of
ICICI, Indias largest private bank) and Zash Investment (Azim
Premjis investment company) who had invested INR 230 crore did not
extend any help.

What went wrong?

Marketing:

Lack of focus in the product category

Poor Brand Building
Faced intense competition from the kirana stores
Giving discount on all the items not necessary

Financial

Financial Adventurism
Too much reliance on debt
Equity raised
Cash outflow much more than cash inflow
Leading to fund crunch

 Operational:

Expansion Plans- hit by increasing reality costs

Quantity and not quality was not giving important
Sales and Distribution
IT systems- Poor web interface
Inefficient inventory management

Human Resource:
No resources with experience in retail
Unethical practices by the employees
Selling of goods to retailers for fudging the sales
figures

Revival Strategy:
Market Re-entry:

re-enter market with same brand name but different

positioning

goodwill of subhiksha better in Chennai, so pilot

project start in residential area of Chennai, then

move to other cities
revenue sharing partnership with building owner
where subhiksha need to be opened

Marketing:
Focus on product range- plan to sell whatever
required
Price- giving discount on selective product on
selective days
Promotion-strong and heavy advertising in TV &
Newspaper
Changing the communication message- providing
standardized quality at discounted rate

Operations:
Expansion plans- once established in one city fully,
then expansion of stores in other cities- mainly
converting the kirana store into subhiksha store
Better supply chain with centralized system
Better IT system to ensure effective inventory
management

 Human Resource:
Recruit store managers with experience in detail
Proper training for employees
Curb unethical practice