subhiksha ppt

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PRESENTATION ONSUBHIKSHA MOBILE STORESBYROHAN NAVALE 31 B

AMOL OGALE 32 BSUREN PARADKAR 33 BAKSHAY KHARDE 23 BAJIT SANKPAL 44 BRISHIKESH SHEWALKAR 47 B



� Organized retail accounted for Rs 55,000

crore 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 ($270 billion)

�

Major portion was dominated by Food andGrocery Retail which was about 60% of thevalue (about $160 billion)



� Subhiksha which means prosperity in

Sanskrit was one of the largest retail valuechain in India in terms of no. of stores.

�

It has 1600 outlets selling groceries, fruits,vegetables, medicines and mobile phones.



� The history of Subhiksha dates back to the

year 1997 when Mr R. Subramanian thought

of the idea of entering into the Retail Industryin India.

� It opened its first store

in Thiruvanmiyurin Chennai in March, 1997with an investment of about Rs. 5 crore. Itwas started and managed by R

Subramaniam

, an IIM Ahmedabad alumnus.



� VisionTo emerge as the largest retailer in the 'FoodGrocery Pharmacy' segment in all thegeographical regions we operate from.

� MissionTo deliver consistently better value to Indian

consumers, has guided Subhiksha to deliversavings to all consumers on each and every itemthat they need in their daily lives, 365 days ayear, without any compromise on quality of goods purchased.



� Supermarket:Includes quality groceries, packaged foods,

cosmetics and toiletries, household provisions.

� Fruits andVegetables:Includes fresh fruits and vegetables sourceddirectly from farms on city outskirts by

Subhikshaand made available to the consumers at veryreasonable prices. Consumers get fresh produceat best price.



� Pharmacy:Subhiksha stores generally have a in storepharmacy which stores mostly basic

medicines. All medicines are made availableto consumers at a flat 10% discount.

� Mobile Store:Subhiksha has forayed into mobile retailerbusiness and offers handsets, recharge cardsand accessories from all leading cell phonemanufacturers at lower prices.



� In March 1997 Opening of the first retail store inChennai, 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



1) Chairman -R Subramanian (IIM-A Alumnus)2) Ms.Rama Bijapurkar (IIM-A Alumnus),Board of

Director3) Mr. Kannan Srinivasan (a professor of marketing

at Carnegie Mellon Universitys Tepper Schoolof Business),Board of Director

4) Mr. S.B. Mathur, former LIC Chairman,5) Ms. Renuka Ramnath, Managing Director of

ICICI Venture6) Ms. Rajeev Bakshi, Deputy Managing Director

of ICICI Venture and a former CEO of PepsiCoIndia.

7) Mr. Ajem Premij as Board member



� Subhiksha made an extensive research on customer behavior andfound that offering the branded goods at a lower price than theircompetitors could make them stand in the competitive retailindustry.

� Low Prices :Subhiksha Positioned itself asValue Retail Chain

/Discount Retail Chain with theme as why pay more when youcan get for less

� Trust : Subhikshas name inspires trust and its consumers relyon it through all times to deliver larger savings as compared toany other retail chain or stand alone mom and pop stores.

� Savings : focuses on the concept of constantly sustainable low

pricing so that regular customers see the same low prices monthafter month (below MRP) and are able to buy with the assurancethat they stand to save on any given basket of household goodson any day.



� Opening a chain of no-frills stores-no air-conditioning, no fancy lighting, and no touch and-feel experience (customers have to ask for products at Subhiksha stores)-was a deliberatestrategy.

� Their approach combines the local low-overhead front-end of Indian kirana shops withthe efficient supply chain of a large retailer.

� Their USP is a Walmart-style everyday-low-price (5-10% less than MRP and/or theirnearest competitor), enabled by combining centralized buying and an efficient supplychain, with their simple (and inexpensive) store format.

� Subhiksha follow an Every Day Low Price Scheme (ELDP) where they offer the lowestprices every single day of the year on almost everything that is sold from the stores.

� Shops are located not on the main road, but just off it, to take advantage of vastly lower

rentals.

� The catchment area of customers is rarely beyond a two-km radius, since its customersusually come on two-wheelers or on foot.



Subhiksha: The neighborhood store : With establishing a vast network of relatively small

stores it wants to establish itself as a neighborhoodstore where people can do shopping on a daily basis

thus providing both convenience and cost benefitto its consumers.

Small Store/ Cost saving The belief of Subhiksha is to set up non air

conditioned small neighborhood stores measuring

around 2000 sq ft. It is because of this that Subhikshais able to compete with the big retail stores on theregular discounts and also compete with thetraditional father and son or mom and pop storeson the closeproximity to the customers.



Everyday low price system (ELDP) : In Subhiksha the discounts are not restricted to specific

days and specific items as prevalent in other retailformats. Subhiksha follow an Every Day Low PriceScheme (ELDP) where they offer the lowest

prices every single day of the year on almost everythingthat is sold from the stores. Combination of Discount model and Carpet Bombing

model Apart from being a good discount store another aim of

Subhiksha is to be in close proximity to its consumers and

aim for a greater penetration in all markets where theyoperate. This strategy being followed by Subhiksha isdriven by the fact that it is not a destination store butSubhiksha is a frequent shopping location for the dailyhousehold needs of the consumers.



Lower Infrastructure cost Subhiksha has small stores which do not allow

the customers to browse and shop like the otherretailers in the market. Subhiksha feels that forbuying grocery or cosmetics, the customers lookfor a quick purchase rather than the shoppingexperience. It is a no frill store. Subhiksha haspositioned itself as a store for the "ValueConscious" customer. It is a functional and atransaction oriented shop.



Lease rental system for stores This gives Subhiksha a greater control on the

operations given that they will not have to incur

additional expenses on the franchise and this systemmakes them able to keep costs low.

Centralized Purchasing Another thing what Subhiksha is doing for cost

reduction is of Centralized purchasing for a largenumber of stores. This gives them a greaterbargaining power and which helps them in gettinggreater discounts from the manufacturers and whichthey pass on to the consumers



StrengthsCombination of Discount model and

Carpet Bombing modelStrong Top management teamHigh Customer base

High Brand ValueUse of Information Technology



WeaknessLack of expertise in Indian Retail

environment

Low grade lower management teamStrategy of debt-led Rapid expansion on asmall equity base

Long time taken in IT ImplementationNo funds for operating expenses



Opportunities

World's most lucrative retail marketHeavy Investment industry from FIIs

and Venture Funds

Huge No. of customers



ThreatsEconomic uncertainty and Recession Strong Competitors at National andRegional Level Price war and shrinking margins

Risk in Retailing and rapid expansion

subhiksha ppt

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