22092135-why-did-subhiksha-failed (1)

Slide 1: 

PRESENTED BY- Bhawna Upadhyay Pujil Khanna Sarika Taneja Vikas Mittal

Slide 2: 

Subhiksha- Introduction Largest retail value chain in India with 1600 outlets started in 1997 . Chennai based grocery & pharmaceuticals store Founded by R. Subramanian in 1997 Revenue Rs. 2200 million Aimed Rs. 2800 million by the end of 2005 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. Product Portfolio- Supermarket, Fruits and Vegetables, Telecom and Pharmacy.

Slide 3: 

OBJECTIVE OF THE STUDY Examine the various decisions made by Subhiksha and their alignment with the business model of Subhiksha Identify key challenges faced by Subhiksha and importance of assortment planning and inventory management for Subhiksha. Evaluate the performance of the Indiranagar store on forecasting and inventory management. Examine the supply chain practices followed by Subhiksha for different categories. 5. To study the management of variation in demand within a month and variation within a day.

Slide 4: 

SUBHIKSHA- BUSINESS MODEL Focus on 2 factors for their business model(2C’s) Criticality of cost 2. Convenience of buying What the company is looking for is to provide products at sustainable low prices right at the customer’s doorsteps. This model has been the key building block for the success of Subhiksha in making it the oldest discount chain in the country. Everything that Subhiksha does revolve around these 2 C's.

1.Lowest Prices and great saving every day2.Wide selection of goods3.Guaranteed delivery4.Simple return policy5.Provide Customer SupportHow decisions align with business model?This strategy being followed by Subhiksha is driven by the fact that it is not a destination store but Subhiksha is a frequent shopping location for the daily household needs of the CONSUMERS. : 

1.Lowest Prices and great saving every day2.Wide selection of goods3.Guaranteed delivery4.Simple return policy5.Provide Customer SupportHow decisions align with business model?This strategy being followed by Subhiksha is driven by the fact that it is not a destination store but Subhiksha is a frequent shopping location for the daily household needs of the CONSUMERS. BUSINESS DECISIONS TAKEN BY SUBHIKSHA AND THEIR ALIGNMENT WITH BUSINESS MODEL OF SUBHIKSHA

1.Risk in retailing and expansion2.Need for an IT Solution 3.Inefficient Inventory Control4.Absence of departmentalization5.Absence of performance evaluation programmes6.Absence of MIS system7.Inadequate logistics8.Lack of Decentralized planning : 

1.Risk in retailing and expansion2.Need for an IT Solution 3.Inefficient Inventory Control4.Absence of departmentalization5.Absence of performance evaluation programmes6.Absence of MIS system7.Inadequate logistics8.Lack of Decentralized planning KEY CHALLENGES FACED BY SUBHIKSHA

The performance of Indiranagar store : 1.If we observe the negative receipts in case of 3 items mentioned i.e.; Maggi noodle masala, Pepsodent 2 in 1, Gemini sunflower oil-negative receipts in case of Gemini oil is maximum. 2.Maggi incurred moderate negative receipts and Pepsodent minimum. 3.It can be inferred that most of the Gemini sunflower oil (1l) was sent from Indiranagar store to other stores to prevent inventory pile up and have tight control on inventory levels. 4.Sales of Pepsodent were maximum in Indiranagar store than maggi and Gemini oil has least sales at the store. : 

The performance of Indiranagar store : 1.If we observe the negative receipts in case of 3 items mentioned i.e.; Maggi noodle masala, Pepsodent 2 in 1, Gemini sunflower oil-negative receipts in case of Gemini oil is maximum. 2.Maggi incurred moderate negative receipts and Pepsodent minimum. 3.It can be inferred that most of the Gemini sunflower oil (1l) was sent from Indiranagar store to other stores to prevent inventory pile up and have tight control on inventory levels. 4.Sales of Pepsodent were maximum in Indiranagar store than maggi and Gemini oil has least sales at the store. INTERPRETATION: EXIBIT 8

1. They follow the category management for the supply chain practice at Subhiksha2 The supermarket stocks around 1200 SKU’s that can take care of approximately 90%of the customer value requirements. Typically the store would stock only one product from top 3 brands in each category this concise choice allows the store to manage it operations at much lower costs. 3.SKU are divided in to classes A-K in descending order of sales .Greater attention is paid to the A-D category products , each category having 100-125 SKU which account for 80% of the total sales. A class is reviewed on daily basis while B, C , D class of SKU reviewed twice a week and remaining twice a month. : 

1. They follow the category management for the supply chain practice at Subhiksha2 The supermarket stocks around 1200 SKU’s that can take care of approximately 90%of the customer value requirements. Typically the store would stock only one product from top 3 brands in each category this concise choice allows the store to manage it operations at much lower costs. 3.SKU are divided in to classes A-K in descending order of sales .Greater attention is paid to the A-D category products , each category having 100-125 SKU which account for 80% of the total sales. A class is reviewed on daily basis while B, C , D class of SKU reviewed twice a week and remaining twice a month. SUPPLY CHAIN PRACTICES BY SUBHIKSHA

1.The MBQ does not change within a month so they prefer dynamic MBQ to manage demand during a day. During the peak day, as mentioned in the case they keep higher MBQ’s to meet higher level of customer’s demand. 2.During the month they usually follow demand forecasting system to manage variation. : 

1.The MBQ does not change within a month so they prefer dynamic MBQ to manage demand during a day. During the peak day, as mentioned in the case they keep higher MBQ’s to meet higher level of customer’s demand. 2.During the month they usually follow demand forecasting system to manage variation. HOW VARIATION OF DEMAND IS CONTROLLED

Reasons for failure of Subhiksha : 

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. Lack of strong HR policy and Staff. Strong Competition.

Slide 11: 

THANK YOU!!