These positions & A ; grounds expressed below are through follow ups of the newspaper studies and conversations from beginnings from the industry and employees at Subhiksha. • Reason 1: Unmindful Expansion Across provinces from South to West and North and East ? Rapid shop enlargement Rapid addition of forces From food markets and medical specialties ? Mobiles and Electronics ? Consumer durable goodss and IT ( Too fast excessively ferocious! ) Huge investings and hard currency flows … • Reason 2: Growth … without Consolidation 2004 marked a going in Subhiksha doctrine from Consolidation & A ; Growth to uncontrolled growing! Very few shops would hold been profitable in footings of hard currency flows • Reason 3: Whither Retail direction The focal point was towards multiplying turnovers! Expansions happened without an oculus to rules in Retail and Customer Management Staff service was cheapjack and shops lacked a healthy entreaty to Consumers A Subhiksha shop frequently looked like a Government unvarying Pricing Shop! • Reason 4: Net income and Loss? Balance Sheets? Cash Flows!
Uncontrolled addition in shop and forces were shed blooding the Treasury Turnover being the mantra. Subhiksha worked on slim and nothing borders. Often raising the wrath of other participants in the market Thus Cash escapes were high where every bit influxs in footings of borders were non existing • Reason 5: Mastering the Supply Chain A Wal Mart builds scale through incorporate Supply concatenation. non by being a re-seller! Downstream supply concatenation was non integrated. Bulk purchasing is non a beginning of advantage. In consequence. Subhiksha was being a reseller purchasing merchandises from sellers and selling them at nothing borders • Reason 6: Managing Sellers! Subhiksha tried to construct graduated table on majority Quantity purchases from sellers and a broad recognition term extended to them Your sellers merely have a limited leash…expecting immense recognition rhythms to do up for your RoIs is barely “good” seller direction •Reason 7: Inventory direction! Recognition defaults caused supply breakages Hence it led to state of affairss where either there were immense shop Inventories traveling bad… … Or the shops merely did non hold stocks! Incompatibility resulted in client dissatisfaction with Store franchise!
Furthermore. unrestrained patterns like reselling to other retail merchants. made companies squeeze supplies In the haste to pump RoI and turnovers. Subhiksha shops were fall backing to indiscipline and uneconomical patterns! •Reason 8: Discounts as USP The lone USP was discounts… barely a sustainable competitory border! Footfalls. turnaround and turnover being the guru mantra: Subhiksha ne’er understood its consumers In a haste to construct turnarounds and turnovers and fitting marks. Lower degree directors resorted to reselling it to retail merchants and emptying their stock lists In consequence. mark force per unit areas impacted the USP since Consumers chose to purchase from outside the shop since the shop was “sold out” •Reason 9: Quality of land degree direction! Personnel recruited to run operations were locals Tendency towards dishonest patterns in face of turnover force per unit area! Scored “own goals” by playing into the turnover traps Quality of shop service was bad. attachment to regulations of retail were minimum •Reason 10: Diffused focal point Subhiksha sold fresh veggies. medical specialties. food markets. nomadic phones. accoutrements and more. . where was the focal point? How robust was the concern theoretical account and the work force to manage such diverseness? Did they of all time stop to catch a breath and consolidate?