PRESENTED BY- YUGESH KUMAR DUBEY ROLL NO.-8279 KOHINOOR BUSINESS SCHOOL, KHANDALA

SUBHIKSHA Discount Store with a Difference

INTRODUCTION-Starts it’s operation in 8 march 1997 in

Thiruvanmiyur.

In 2004 subhiksha had 164 stores all over Tamil Nadu and Pondicherry (Chennai alone account for 72).

Revenue in 2004 reaches to Rs. 2,200 million and it aimed to increase it to Rs. 2,800 million by end of 2005.

initially sells grocery and pharmaceuticals.

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

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

Without air condition, extravagant lightning or decoration.

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

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

Store keeper help customer in their buying decision.

INITIAL PROBLEM-Protest against pharmacy discount strategy.

Frequent enquiry about standard of drug by drug inspector.

Conflict with drug maker glaxo. OVERCOME-

ICICI venture

Home delivery and online selling

MANAGEMENT STRUCTURE-operati

onstore

Procurement and

distribution

One manager for three store

Chief manager

Goods directly procured from manufacturer

Supply chain software

godowns

Vice president

WHY RETAILING IN CHENNAI-Supermarkets don't account for even 10

per cent of the groceries sold in Chennai.Survey revealed for four core attribute- 1- proximity 2- quality of groceries 3- price of branded

groceries 4- availability of products

MODEL SUSTAINABILITY-

No middleman decrease the price.Survey motivate them to go for this

model.Strategy- 1- availability 2- acceptability 3- affordability

RECENT NEWS- 8-10 per cent of stores that are unviable may be closed

while the rest would continue

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).

Debt up to Rs. 750 crore.

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 founder Mr R. Subramanian, also quit the board

CRUX OF PROBLEM-

company 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.

planned to raise money from FIIs collapsed when the “financial tsunami” happened.

SPECIAL THANKS TO- Prof. JAVED SYED