Subhiksha - Discount Store with a Difference*

Details

Case Code : CLSDM041
Publication date : 2005
Subject : Sales and Distribution
Industry : Retailing
Length : 03 Pages
Price : Rs. 100

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Key words:

No-frills, Air-Conditioning, Discount, Glaxo, Drug Inspectors, Home Delivery, Lease, Fabmall, Logistics, Retailing

Note

* This caselet is intended for use only in class discussions.
** More comprehensive case studies are priced at Rs.200 to Rs.700 (US $5 to US $16) per copy.

 

Abstract:

The caselet talks about the Chennai-based discount stores Subhiksha, which pioneered a unique form of retailing. The caselet examines Subhiksha's motive behind establishing a no-frills stores that does not provide air-conditioning, dazzling lighting, or a touch and feel experience to its customers. It discusses the initial problems faced by the company due to its deep discount offers on drugs, and discusses and describes its logistics management and in-store delivery process. Finally, the caselet brings out the expansion strategy being followed by Subhiksha and the likely impact of competitors on the company.

Issues: » Importance of customer profiles in retailing » Challenges in new retail formats » Kinds of distribution systems in retailing Introduction Subhiksha Trading Services (Subhiksha), owned by R. Subramanian, is a Chennai-based chain of discount stores which sells grocery and pharmaceuticals. It began its operations in 1997 by opening a store in the middle-class dominated Thiruvanmiyur in Chennai...

Questions for Discussion:

1. Chennai has around 15,000 domestic mom-and-pop stores. In contrast, Subhiksha decided to venture into a unique form of retailing business. What do you think were the reasons that motivated Subhiksha to start retailing business in Chennai?

2. Subhiksha stores are a step ahead of small shops but do not offer any shopping frills. Considering the dynamic changes in the retailing industry, do you think that Subhiksha's business model is sustainable? Give reasons to support your stand.