Retailing & Franchising

Simulation Presentation
Team : NINDIA 6
Objective : Achieve 10% net profit for quarter 6

Team Details
15MDIM14 Apoorva Rastogi | 15MDIM15 Dhage Kunal Chandrakant |
15P030 Manas Ranjan Nayak |15P037 Parul Jain | 15P213 Mohit Sharma |
15P217 Pankaj Kumar Kaushal

Quarter 1
Rationale For the Decision
Percent Markup of Staples and Fashion was reduced to
increase the sales and get rid of the inventory of
Staples. Bulk purchases of big ticket was done to get
the advantage of discount of 10 %
Increase in the amount of Fashion items to counter the
decrease in percent markup to determine the effect of
price in this area
Increase in the number of employees to 12 and
advertising budget to 600 to push the products off the
Stapleswith lowFashion
Big Ticket
shelf accompanied
prices
Opening Stock

11134

5504

Gross
Purchase

15000

10000

20000

Available Stock 26134

10000

25504

Demand at
Cost

8634

6002

24365

Quarter 1
Inferences
Market share of staples and fashion
increased due to decrease in
percent markups
Sales income decreased due to
decrease in big ticket purchases
due
to
competitors
adopting
aggressive strategy of low price
Operating expenses were decreased
due
to bulk purchases
Financial expenses were changed
insignificantly
due
to
steady
payable days

Market
Share
Staples

21

Fashion

18

Big Ticket 16
Quarter
1

Quarter
0

Sales
income

52918

57748

Gross
Profit

13917

16061

Operatin
g
Expense
s

11600

13000

Financial
expense
s

56

Net

1.7 %

3%

Quarter 2
Rationale For the Decision
Percent Markup in Staples and Fashion were increased
after witnessing the decrease in sales income in
previous quarter. Bit ticket sales get doubled in this
quarter hence the markup was reduced to give further
push to the sales
Due to clearance of inventory in staples, purchase of
staples was increased. Big ticket items were purchased
in bulk to avail discounts
Staff and advertising costs remained same
Staples

Fashion

Big Ticket

Opening Stock

1769

19502

Gross
Purchase

25000

7800

20000

Available Stock 26769

7800

39502

Demand at
Cost

6231

22666

20062

Quarter 2
Inferences

Tremendous decrease in market share

due to wrong strategy of increase the
price that led to confusion of quality
among customers
Sales income increased only due to
higher purchases in big ticket items
but it also reflected the negative
effect of decreasing market share
Operating expenses were decreased
due
to bulk purchases
Financial expenses were increased
due to decrease in creditor days

Market
Share
Staples

15

Fashion

15

Big Ticket 18
Quarter
2

Quarter
1

Sales
income

68044

52918

Gross
Profit

19085

13917

Operatin
g
Expense
s

10330

11600

Financial
expense
s

158

56

Net

10.3 %

1.7 %

Quarter 3
Rationale For the Decision
Decrease in percent markup for staples due to poor
results of Q2 that lead to decrease in market share
because of price sensitivity
Percent Markup of fashion and big ticket remained
same to create stable perception about the quality of
products among customers
In order to avail the discounts bulk purchasing was
done on staples and big ticket was not purchased to
clear the inventory
Staples
Fashion
Big Ticket
Advertising expenses were increased
Opening Stock

6707

16836

Gross
Purchase

40000

7500

Available Stock 46707

7500

16836

Demand at
Cost

7377

7375

29592

Quarter 3
Inferences
Able to capture the market share
of staples again by reducing the
prices

Market
Share
Staples

18

Fashion

17

Big Ticket 17

Sales income increased due to

increase in market share that
was followed by decrease in
percent markups. Clearance of
stock was done in Fashion items
as per the strategy
Financial
expenses
were
increased due to bulk purchase
of staples

Quarter
3

Quarter
2

Sales
income

58816

68044

Gross
Profit

14472

19085

Operatin
g
Expense
s

11321

10330

Financial
expense
s

228

158

Net

4.8 %

10.3 %

Quarter 4
Rationale For the Decision
Adopted aggressive strategy of lowering the prices in
staples and big ticket
Bulk purchase of staples was done to clear off the
inventory till Q6 and to avail discounts. No purchase in
big ticket to clear off the inventory carried forward
from Q3
Sales staff was increased to push the products in the
field
Advertising expenses were increased to increase the
Staples
Fashion
Big Ticket
market share by creating awareness
Opening Stock

17115

9461

Gross
Purchase

60000

8500

Available Stock 77115

8500

9461

Demand at
Cost

8223

9160

38262

Quarter 4
Inferences

Strategy for Q4 showed positive

results by increasing the market
share

Market
Share
Staples

20

Fashion

18

Big Ticket 17

Sales
income
increase
but
liquidity decreased due to bulk
purchases and shortage of cash
Financial
expenses
were
increased due to less liquidity
and more purchases

Quarter
4

Quarter
3

Sales
income

72665

58816

Gross
Profit

17020

14472

Operatin
g
Expense
s

12700

11321

Financial
expense
s

324

228

Net

5.1 %

4.8 %

Quarter 5
Rationale For the Decision
Markup of Fashion was increased
No purchases were done for staples to clear off the
inventory from Q4. Bulk purchases in big ticket due to
higher demand in this quarter
Sales staff and advertising expenses remained same
Staples

Fashion

Big Ticket

Opening Stock

38853

301

Gross
Purchase

8500

35000

Available Stock 38853

8500

35301

Demand at
Cost

8454

11443

34920

Quarter 5
Inferences

Aggressive low pricing strategy

adopted by competitors for staples
lead to decrease in our market
share. Market share gained in big
ticket due to lowest price offered
Sales income increased due to
increase in the purchase of big
ticket items but was affected due
to diminishing market share in
staples
Financial expenses were decreased
due to limited purchases

Market
Share
Staples

15

Fashion

18

Big Ticket 20
Quarter
4

Quarter
4

Sales
income

72858

72665

Gross
Profit

18041

17020

Operatin
g
Expense
s

12200

12700

Financial
expense
s

57

324

Net

7.9 %

5.1 %

Quarter 6
Rationale For the Decision

Expectations

Key learnings

Thank You