A

PRESENTATION ON
SUBHIKSHA JOURNEY
AND ITS FAILURE

PREPARED BY:
RAMJI
 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.
 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.
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
 SUBHIKSHA STRETEGY

Subhiksha focuses on two factors for its model.

These are called the two C's:

1. Criticality of Cost.

2. Convenience of Buying
 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.
 REASONS OF FAILURE
• Expanding the number of stores rapidly
without sufficient funds in hand.
• Expansion of Stores without adequate system
control and IT Support.
• Poor inventory management
• The wrong assumption (mobile& pharmacy)
• Government Intervention
Contd……
• Lack of strong HR policy and Staff.
• Strong Competition.Over confidence and
Aggressiveness
• Financial Crisis
a)Advertising: Advertising dues not cleared
b)Wages and Rent :Huge list of outstanding
wages and rent
c)Disruption in supplies by wholesale suppliers
 SWOT Analysis
STRENGTHS WEAKNESS

 Discount model  Lack of expertise in Indian Retail

 Strong Top management team
 High Customer base
 High Brand Value
 Use of Information Technology
environment
 Low grade lower management team
 Strategy of debt‐led Rapid expansion 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 and
Venture Funds
 Huge No. of customers
 Strong Competitors at National and
Regional Level
 Price war and shrinking margins
 Risk in Retailing and rapid expansion