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, India‟s largest private bank) and Zash Investment (Azim Premji‟s 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