subhiksha

1. Why did Subhiksha failed ?

2. Retailing
 Derived from the French word ‘retailer’ which
means,” to cut up".
 It consists of the business activities involved
in selling goods and services to consumers for
their personal, family, or household use.

3. 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 non-business
use.”
 “Dictionary Definition: The selling of goods to
general public.”

4. Retail Industry
The share of retail trade in the country's gross domestic product
(GDP) was between 8–10 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

5. Indian Organized Retail
Industry

6. Indian Retail Industry
 Commercial real estate services 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.

7. Prospects of Retail In
 India new jobs in organized sector alone in
1 million
next 10 years.
 India's overall retail sector is expected to rise to
US$ 833 billion by 2013 and to US$ 1.3 trillion by
2018, at a compound annual growth rate (CAGR)
of 10 per cent.
 Also, organised retail, which accounts for almost 5
per cent of the market, is expected to grow at a
CAGR of 40 per cent from US$ 20 billion in 2007 to
US$ 107 billion by 2013.

8. The Case Study on
Subhiksha

9. 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 company’s investors include Wipro’s Azim
Premji and ICICI Prudential Mutual fund apart
from the ESOP Trust.

10. Business Vision & Mission
 Vision‐ “To emerge as the largest retailer in the
'Food Grocery Pharmacy' segment in all the
geographical regions we operate from”.
 Mission‐ to deliver consistently 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 days a year, without any compromise on
quality of goods purchased.

11. 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.

12. 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 from all leading cell phone
manufacturer’s at lower prices.

13. 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

14. Internal Analysis
 Small Store/Cost Saving.
 EDLP.
 Lower Infrastructure Cost.
 Centralized Purchasing.
 Marketing Communication.
 Introduction of Subshikham card.
 Establishment of Home Delivery and Online
retail system.

15. • 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 2007‐500 stores across country
• Dec 2007‐ 1000 stores across India
• October 2008‐ 1600 stores across India

16. SWOT Analysis
STRENGTHS WEAKNESS
• Discount model • Lack of expertise in Indian Retail
• Strong Top management team environment
• High Customer base • Low grade lower management team
• High Brand Value • Strategy of debt‐led Rapid expansion
• Use of Information Technology on a small equity base
• Long time taken in IT Implementation
OPPORTUNITIES THREATS
• World's most lucrative retail market • Economic uncertainty and Recession
• Heavy Investment industry from FII’s • Strong Competitors at National and
and Venture Funds Regional Level
• Price war and shrinking margins
• Huge No. of customers
• Risk in Retailing and rapid expansion

17. Competitive Analysis
SR. BRAND NAME OUTLET TYPE LEVEL OF OWERNSHIP
NO OPERATION
1 SPENCER’S SUPERMARKET NATIONAL RPG GROUP
2 RELIANCE FRESH SUPERMARKET NATIONAL RELIANCE
GROUP
3 FOOD BAZAR SUPERMARKET NATIONAL FUTURE GROUP
4 MORE SUPERMARKET NATIONAL ADITYA BIRLA

18. Comparison of Subhiksha
with other Retail Outlets
 Product Range
 Positioning
 Store Format
 Strength
 Price

19. Reasons for failure of
Subhiksha
 Expanding the number of stores rapidly
without sufficient funds in hand.
 Expansion of Stores without adequate system
control and IT Support.
 Government Intervention.

20. Contd……
 Lack of strong HR policy and Staff.
 Strong Competition.
 Over confidence and Aggressiveness.

21. O U
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