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Presented by Prashant Mishra Ramkiran Nanduri Yoginder Sharma Sanjeet kumar Jha
INTRODUCTION
Conclusion
Subhiksha in Sanskrit means the giver of all good things in life
INTRODUCTION
Org Retail still in nascent stage Accounts for less than 10% of the retail sales Store which had a dramatic rise, used defined strat effectively- commn ,card, central purchase , IT, low cost
Subhiksha which means prosperity in Sanskrit The history of Subhiksha dates back to the year 1997 when Mr R. Subramanian thought of the idea of entering into the Retail Industry in India Mission - to deliver consistently better value to Indian consumers, without any compromise on quality of goods purchased. Positioning - Low Prices, Trust, Savings Retail Strategy - Criticality of Cost, Convenience of Buying
SCOPE
INTRODUCTION BACKGROUND
INDRANAGAR STORE ,INDRANAGAR SUPERMARKET
Shubhiksha Background
Chennai based grocery & pharmaceuticals store Founded by R. Subramanian in 1997 an IIT-and IIM alumnus. Shubhiksha derived from the Sanskrit word,Subhiksham which means giver of all things good.
Subhiksha opened its first store in Chennai with 4-5 lacks investment with a clear idea to become larger. First year it opened 10 stores and by 2000 it had 50 stores in Chennai. Next two year it had 120-130 stores across Tamil Nadu.
In 2004, 420 stores all over Tamil Nadu & Pondicherry and reached 1000 retail outlets in 2008. Crossed more than 1000 store all over the India. Revenue Rs. 2200 million Aimed Rs. 2800 million by the end of 2005-6.
Strategy adopted by Shubhiksha Focused on the lower & upper middle class Offer a better ambience than typical general store Prices are 8% less than the MRP Inform customers about promotional offers Store keepers help buyers in purchase decision
CATEGORY MANAGEMENT
1. The supermarket stoked around 1,200 SKUs that could take approx 90% of the customers value requirements. 2. The store would stock only products of the top three brands in each product category (sunflower oil, detergent powder -1, etc. 3. In FMCG, 950 branded merchandise and private label SKUs were stocked while in grocery 150 branded and private label SKUs were sold.
MARKETING
1.
2.
3. 4. 5.
EVERDAY LOW PRICING model was always followed at the store. It usually offered an average discount of 8%-10% on all the products irrespective of the quantity purchased with reference to the MRP. The display at each SKU showed both the MRP and the Subhiksha store price so that consumers could compare prices while shopping. The highest sales occurred in the first 10 days of every month. The store always offered some promotional schemes in that period to increase the footfalls. Subhiksha periodically advertised through a local radio channel Radio Mirchi. not advertise through local newspapers and catalog mailings.
THE CREW
1. Cashiers handled billing and payment transactions. 2. CSRs were mainly responsible for store cleaning and hygiene, merchandising, and stock arrangements. 3. Sales assistants mainly interacted with customers and assisted them in the shopping process.
MANAGEMENT OF STORES
MANANGEMENT OF STORES
Regional SBU structure with warehouse BDM(Busuness development manager) controlled 6-7 stores BDM reported to VP BDM monitored sales and wastage VP visited ever store once in 10 days
MANANGEMENT OF STORES
Sourcing
Centralized for most items Food & Vegetables local Allowed for economies of scale Got deep discounts on annual terms
MANANGEMENT OF STORES
RETAIL OUTLET MANAGER(ROM)
Two shifts Increases customer interaction Maintain store hygiene Manage personnel Reduce food and vegetable wastage
MANANGEMENT OF STORES
ROLE OF RETAIL OUTLET MANAGER(ROM)
Investment in inventory fixed Op costs fixed
Rental Wages Elect
ROM could leverage sales and wastage Imp since Subiksha op on low margins
CUSTOMER SERVICE
CUSTOMER SERVICE
Used methods to reduce bill processing time
Bar code for branded FMCG products Price tags for private labels Pre packaged F&V items
Internal target of 5 min for customer to go out of the store Experimented with two stage billing process in big stores
CUSTOMER SERVICE
Phone order
15 % sales Rs 1000 min order Upto 2-3 km radius
Training of employees to tackle customers of different cultures and socio economic backgrounds
SALES
REVIEW
80% SALES
DAILY REVIEW
BI WEEKLY REVIEW
6 DAYS
C
D E TO K FORTNIGHTLY REVIEW 15 DAYS
MBQ LEVELS
SKU BASED SYSTEM INVENTORY BASED ON SALES VALUE /PD ie DEMAND/PD X PRICE/UNIT
16 14 12 10 8 6 4 2 0 SKU TYPE
A
B,C,D
E TO K
Festivals, special schemes accounted for while formulating MBQ Helped achieve lower average inventory levels
INDUSTRY SUBHIKSHA
HOSKOTE WAREHOUSE
Warehouse : Operations
Manual Indents passed to electronically to Warehouse daily (evening). Segregation, Batch Making, Sorting (A, B, C stores), packaging and dispatching were carried out manually. Stores dispatched next day afternoon
Warehouse : Transportation
Total 14 Vehicles, 3-4 Stores/Vehicle Third Party Contract. Fruits & Vegetable dispatched at 6 am. After Noon FMCG Stores. Vehicles locked/Opened by Subhiksha Staff.
Supply Chain
Supply Lines
Grocery Storage Private Labels. Large Inventory. No Bar Coding. Strict Quality Control. FMCG Suppliers Supplies : HUL-Daily, Nestle-once a week Bar Coding. Mobile : Suppliers No stocking in Warehouse Supplied in Motorcycles based on Hubs Indents. Less Transport Time & Nil cost of Inventory.
Warehouse Management
HRM Contractual Workers. Quality training by Subhiksha. Inventory Management Cross Docking Point. Minimum Inventory mostly A-D Category Products. Information Technology Used MS Office for backend IT Ops. Took Long Time for operations and report generation. Internally Developed 3V2 Software for Stores. (Customer Intelligence, Loyalty Cards) Planned for SAP R3. I MBPS Front to Backend connectivity.
1000
800 600 400 200 0 1997 1999 2000 2002 2006 2007 2008
No of Stores
Un answered Queries?
Is the SCM efficient? Scheduling and Planning of Staff in the the right Manner? Increase average Bill Size? Retain existing Customers? Competition in Organized Retail Business?
The Crash
Failure Analysis
(a) Un mindful expansion
Store 14-1000. Manpower. Product Categories, Groceries-Electronics. Huge Investments.
Failure Analysis
(d) Mastering SCM
Subhiksha only a re-seller no SCM. Downstream supply chain was not integrated. Bulk buying is not a source of advantage.
Failure Analysis
Only USP : Discounts/Turnover Rules not followed, Store keepers dishonest Quality of stores suffered. Local people with minimal training operated stores. No focus of Store Products. Credit Default caused Supply Breakage. Huge unsold inventories and nil required stock. Customer dissatisfaction. Reselling to other retailers to get higher turnovers. Lost customers as no goods in store. Lost Focus of customers.
Conclusion
Good Start with Customer Focus and Tend. Lost Focus of Customer as no of Stores increased. Quality unmanaged with volumes. Huge Credit from vendors reduced Sales. Lack of adequate Capital. Could not raise IPO due to market crash. Lack of principles of retail management. Subramanian and Subhiksha gave misleading statements about he health of the organization.
Conclusion
A good Business Gone Bad due to Greed, Loss of Focus and Bad Management
Thank You