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Why Did Subhiksha Failed
Why Did Subhiksha Failed
Why Did Subhiksha Failed
Retailing
Derived from the French word
involved in selling goods and services to consumers for their personal, family, or household use.
Definition of Retailing
It is the last commercial link in
the marketing channel and the point where products finally reach their users. Retailing includes all activities directly related to the sale of goods or services to the ultimate customer for personal nonbusiness use. Dictionary Definition: The selling
Retail Industry
The share of retail trade in the country's gross domestic product (GDP) was between 810 per cent in 2007. It is currently around 12 per cent, and is likely to reach 22 per cent by 2010.
35 % Growth
6 % Growth
company, CB Richard Ellis' findings state that India's retail market is currently valued at US$ 511 billion.
The Organized retail accounted for Rs
55,000 crore (about $12.4 billion) in the year 2006 and still its just about only 4.6% of the total Indian Retail Value that was about Rs 12,00,000 crore.
Subhiksha-The Introduction
Largest retail value chain in India with
1600 outlets started in 1997 . From 150 stores in Sept 2006 all of which were in Tamil Nadu the company grew rapidly to over 1600 stores by Sept 2008 across the country. The companys investors include Wipros Azim Premji and ICICI Prudential Mutual fund apart from the ESOP Trust.
better value to Indian consumers, has guided Subhiksha to deliver savings to all consumers on each and every item that they need in their daily lives, 365
Product Portfolio
Supermarket: The supermarket includes quality groceries, packaged foods, cosmetics and toiletries, household provisions, etc. Fruits and Vegetables:
Includes fresh fruits and vegetables sourced directly from farms on city outskirts by Subhiksha and made available to the consumers at very reasonable prices. Consumers get fresh produce atbest prices.
Contd
Pharmacy: Subhiksha stores generally have a in store pharmacy which stores mostly basic medicines. All medicines are made available to consumers at a flat 10% discount. Telecom: Subhiksha is recently forayed into mobile retailer business and offers handsets, recharge cards and accessories
Retail Strategy
Subhiksha focuses on two factors for its model. These are called the two C's:
1. Criticality of Cost. 2. Convenience of Buying
Internal Analysis
Small Store/Cost Saving. EDLP. Lower Infrastructure Cost. Centralized Purchasing. Marketing Communication. Introduction of Subshikham card. Establishment of Home Delivery and
In March 1997 opening of the first retail store in Chennai, with 5 lacs initial investment. March 99 14 stores in Chennai. June 2000 50 stores in Chennai, ICICI ventures joins Subhiksha. June 2002 120 stores in whole of Tamil Nadu. June 2006 420 stores in other big states in India namely Gujarat, Delhi, Mumbai, Andhra Pradesh and Karnataka. Feb 2007500 stores across country Dec 2007 1000 stores across India October 2008 1600 stores across India
SWOT Analysis
STRENGTHS Discount model Strong Top management team High Customer base High Brand Value Use of Information Technology
WEAKNESS Lack of expertise in Indian Retail environment Low grade lower management team Strategy of debtled Rapid expansion on a small equity base Long time taken in IT Implementation
THREATS
OPPORTUNITIES
World's most lucrative retail market Heavy Investment industry from FIIs and Venture Funds Huge No. of customers
Economic uncertainty and Recession Strong Competitors at National and Regional Level Price war and shrinking margins
Competitive Analysis
SR. BRAND NAME NO OUTLET TYPE LEVEL OF OPERATION OWERNSHIP
1 2
FOOD BAZAR
SUPERMARKET NATIONAL
MORE
SUPERMARKET NATIONAL
ADITYA BIRLA
Contd
Lack of strong HR policy and Staff. Strong Competition. Over confidence and Aggressiveness.
K N A H T
U O Y