Discount Store With A Difference

SUBHIKSHA Discount Store with a Difference PRESENTED BYYUGESH KUMAR DUBEY ROLL NO.-8279

INTRODUCTIONvStarts it’s operation in 8 march 1997 in Thiruvanmiyur. v vIn 2004 subhiksha had 164 stores all over Tamil Nadu and Pondicherry (Chennai alone account for 72). v vRevenue in 2004 reaches to Rs. 2,200 million and it aimed to increase it to Rs. 2,800 million by end of 2005. v vinitially sells grocery and pharmaceuticals.

Conti…. v Plan to have store at every 2 km.

v v Aimed to have 550 stores by 2009 as it’s expansion plan.

v v Without air condition, extravagant lightning or decoration.

v v Customer had to ask for product against touch and feel experience offered by many stores.

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v Goods were 8-10% lower than maximum retail price.

INITIAL PROBLEMvProtest against pharmacy discount strategy. v vFrequent enquiry about standard of drug by drug inspector. v vConflict with drug maker glaxo.  

OVERCOMEv vICICI venture v

MANAGEMENT STRUCTURE 

operation

store

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Procurement and distribution

Goods directly procured from manufa

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One manager for three store

Supply chain software

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Chief manager godowns Vice president

WHY RETAILING IN CHENNAIvSupermarkets don't account for even 10 per cent of the groceries sold in Chennai. vSurvey revealed for four core attribute 1- proximity  2- quality of groceries  3- price of branded groceries  4- availability of products v v

MODEL SUSTAINABILITYvNo middleman decrease the price. vSurvey motivate them to go for this model. vStrategy 1- availability  2- acceptability  3- affordability v

RECENT NEWSv 8-10 per cent of stores that are unviable may be closed while the rest would continue

v v On 30 January- 2009 managing director R. SUBRAMANIAN said that company need cash infusion of Rs. 300 crore to get the company back on track(property & salary dues).

v v Debt up to Rs. 750 crore.

v v late December, Mr Kannan Srinivasan, a professor of marketing at Carnegie Mellon University’s Tepper School of Business, had resigned from Subhiksha’s board and in early January marketing consultant Rama Bijapurkar, who is also an alumnus of IIM-A like Subhiksha

CRUX OF PROBLEMvcompany expanded too rapidly on a small equity base of Rs 250 crore and grew the business, primarily through debt, to a level of 1,600 stores and 15,000 employees, and Rs 2,300 crore in sales by March 2008. v vplanned to raise money from FIIs collapsed when the “financial tsunami” happened. v

.  SPECIAL THANKS TO-

Prof.

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JAVED SYED