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8/3/2019 Subhiksha - Final
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Subhiksha
Discount Store With a Difference
Presented By :
Sophia Gonsalves.
Ashwin Kamble.
Urvashi Patel.
Kushal Thakkar.
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Subhiksha Profile
Subhiksha means “PROSPERITY” Chennai based grocery & pharmaceuticalsand mobile store.
Founded by R. Subramanian, an IIT-IIM alumni in 1997.
The first venture was in grocery.
First outlet in 1997- Thiruvanmyur, Chennai.
The branding strategy for this retail store was low-cost and no-frills.
Subhiksha sold all its products all the time below MRP.
Quickly, diversified into medicine retail as well.
The USP of these stores were the discount pricing.
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People Associated
1. Chairman ‐R Subramanian (IIM‐A Alumnus).
2. Ms. Rama Bijapurkar (IIM‐A Alumnus),Board of Director.
3. Mr. Kannan Srinivasan (a professor of marketing at Carnegie MellonUniversity’s Tepper School of Business),Board of Director.
4. Mr. S.B. Mathur, former LIC Chairman.5. Ms. Renuka Ramnath, Managing Director of ICICI Venture.
6. Ms. Rajeev Bakshi, Deputy Managing Director of ICICI Venture and aformer CEO of PepsiCo India.
7. Mr. Ajem Premji as Board member.
Major Shareholder1. ICICI Venture-23%.
2. Ajem Premji (Wipro) - 10%.
3. ICICI Prudential - 5%.
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0
200
400
600
800
1000
1200
14001600
TIME LINE : THE RISE
STORES
End2006 – 420Stores
2004: Changein principle.
From“consolidation
” to
“Expansion”
2005: Recruitspersonnelacross the
country
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October 2007Subhiksha mulls a Rs.350 crore IPO to finance growth
December 2007Subhiksha shelves IPO in view of uncertain stock market
conditions
April 2008Subhiksha plans private wholesale markets
Sep 2009Reports on Subhiksha defaulting on vendor payments, employee
salaries and Wipro takes 10% stake in Subhiksha
Oct 2009tabloids report problems in the cash flows at Subhiksha vendorscutting off supplies cause Subhiksha stores to go dry Subhiksha
defaults on rents for the stores.
Jan2009R Subramanian admits Subhiksha needs Rs.300 cr to keep on.
Subhiksha enters negotiations with property owners
TIME LINE : THE FALL
CLOSED
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Reasons for failure of
Subhiksha Unmindful expansion.
Growth without consolidation.
Bad retail management.
Balance sheets.
Mastering the supply chain.
Lack of system support & IT control.
Vendor Management.
No competitive edge. Poor management system.
Lack of focus.
Lack of maintenance of stores.
Small format grocery store.
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Relaunch of Subhiksha.
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Merchandise Mix of Relaunched
Wipro - Subhiksha.
Relaunched Subhiksha will have a wide range of products in its store.
- Groceries.
- Toiletries.
- Cosmetics (like Face Cream, Powder, Grooming
products etc).- F&V’s.
- Domestics Fixtures.
- Baby care products.
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Positioning of Relaunched
Subhiksha.
Low Prices
Trust
Savings
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Strategy
Cut Price Strategy
Focus on the lower & upper middle class.
Wal-mart‐style- everyday‐low‐price (5‐10% less
than MRP). Inform customers about promotional offers.
Store keepers help buyers in purchase decision.
We will avoid intermediaries. Separate branded godowns to stock branded, non
branded & pharmacy items.
All stores connected through internet.
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Management
Operations Stores
Vice President
Store 3Store 2Store 1
Manager
Chief Manager
Manager Manager
Earl
eir
New
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The Retail Strategy
Subhiksha will focus on 5 factors for its model.
1. Criticality of cost.
2. Home Delivery.
3. Lease rental system for stores.
4. Centralized Purchasing.
5. Customization is required in stores of differentregions.
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Current Scenario
Stores in INDIA WC & TL offered to Subhikshaby Banks.
Year No of Stores
1997 0
1999 19
2000 50
2003 140
2007 670
MARCH 2008 1320
SEPTEMBER 2009 1650
Bank Rs. Crores
HSBC 85
ABN AMRO 50
Centurion Bank of Punjab 40
YES Bank 50
Development Credit Bank 25
Federal Bank 50Bank of Baroda 75
ICICI Bank 155
Standard Chartered Bank 25
HDFC Bank 65
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Contd
Subhiksha, which was forced to shut all its
stores as it ran out of cash, is in talks withover ten banks to restructure loans of nearlyRs 750 crore through a CDR (corporate debtrestructuring) exercise. Its promoter R
Subramanian has said that the company canresume operations after it gets cash of Rs 300crore.
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Thank you !!!!!