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An Assignment

On
Measures for Re-Entry of SHUBHIKSHA
( Retail Management )
Semester-4
Batch -2015-2017
M.B. A. Programme
Tushargiri M. Gauswami

Roll No.
Guided By:
Dr. Reena Ladiwala
Submitted To:
Department Of Business Administration
M. K. Bhavnagar University
Bhavnagar

BACKGROUND
It was an era of software industry booming with a software
startups cropping up every day in the Silicon Valley and everyone
was eagerly learning the language of computers. There was one
industry trying to make its presence felt: Retail Industry. It was
striving hard to achieve the industry status. The early retailers
who made their presence were Raymonds, Indian Coffee House,
Akbarallys, Premsons and Bata that were limited to a few
locations and took long to practically arrive at a retail format. But,
today it is a different story altogether with players talking of ROI,
employee management and IPOs. The fact that retail sector was
the second largest employer after agriculture with a value of 11
lakh crores or $ 240 billion, was unfathomable to all. The small
independent owner managed shops and kirana stores who had
made their presence from ages were denied the retail status
because of the high fragmentation. The retail market potential
was good with an estimated growth rate of 35% in the organized
retail sector.

REASONS FOR SUBHIKSHA FALLS


IN HUMAN RESOURCE :

single head appointed to manage both IT and Marketing


departments.
Most of the experts hired lacked retail experience.
It pulled people from banking, financial services,
pharmaceutical, FMCG industries.
We also can conclude that single head appoint for it and
marketing departments means there was limited staff for
maintain large amount of work so the quality of work got
worse.
Most of the experts hired who have no retail experience.
Any company got into trouble if the employee of company
not well train and experience so, Recruit store managers
with experience in retail.

Finance :
It was in financial trouble right from the beginning.
The reason which Subhiksha put into trouble that was
inadequate finance for daily operation this was happened
due to rapid expansion of retail stores without adequate
finance back up.
Expansion continued without sufficient capital backup with
debt to equity ratio being high.
The financial woes worsened when it was unable to pay
around 15,000 employees for over 6 months.
No banks came to the rescue because of the economic
downturn.
The top executives had left the company and the security
agency personnel responsible left with no protection left for
the various stores and warehouses leaving around 600 of
Subiksha stores ransacked.
The overambitious plans landed the company in a debt of
INR 7 billion.

Information Technology:
No centralized system in place for procurement and
inventory management.
In the year 2007, Subhiksha took a corrective step of
implementing SAP-Enterprise resource Planning (ERP)
software but the project got failed because The company ran
into deep trouble.
The plans to integrate all its stores via wireless
communication to achieve operational efficiency were also
gone fail due to lack of funds.
If they have wireless communication system in between
their store so that they can manage the stock of goods.
They can satisfy their customers by providing appropriate
needed goods in their store by this centralized system.
They can increase their market by using making an e-portal
and mobile application that make easy shopping for their
customer; they also display their offers and price list into it.

Other reasons
1. Rapid store expansion Rapid store expansion in various
formats from groceries, medicines, mobiles, electronics, consumer
durables and IT without sufficient fund in hand.

2. Product category Without focused on single product line they


enter in various product categories like groceries, medicines,
mobiles, electronics, consumer durables and IT and also sold
product at very low margins

3. EDLP EDLP means Every Day Low Price strategy adopted by


Wallmart in which Wallmart sell some product at cheaper than
other store while Shubhiksha sell all products at discounted rate
with very low amount of margin

4. Poor Service Not much attention to customer service resulted


into bad quality service at store level. This is happened because
limited employee with heavy work load on them due to this the
service got worse
5. Poor inventory management Poor inventory management
resulted into defective inventory, breakages, lower fill days and
pile up inventory. The main reason for poor inventory was there is
no central inventory system so in most of store the most of the
product remain out of stock which generates dissatisfaction in
customer.