L.L. Bean, Inc.: Item Forecasting and Inventory Management
Subhiksha: Managing Store Operations by Janat Shah, Rahul Patil, Trilochan Sastry
23 pages. Publication date: May 01, 2010. Prod. #: IMB323-PDF-ENG
Founded in 1997, Subhiksha had grown from one store in 1997 to more than 1000 retail outlets in 2008. It sold FMCG, grocery, pharmacy, mobile products, and fruits and vegetables (F&V). It was the largest supermarket and mobile retail chain in India with presence in 90 cities. Although organized retail was identified as a high-growth area by the middle of 2008, players had realized that organized retail in India was going to be tough business. Various players (Reliance, Bharti, Birla, and the Future Group) were experimenting with different formats and models. Subhiksha decided to come up with its own model, which in its view was suitable to the Indian context. Subhiksha targeted the middle and lower classes, not the high-end customers. IT operated with an everyday low pricing model and located several smaller stores closer to customers who lacked markets nearby. At the operational level, the company constantly increased the supply chain process efficiency to deliver goods at low prices. The Subhiksha business model is explained through a detailed description of operations of a store (Indiranagar) located in Bangalore. It also describes operations of the distribution center that served the Indiranagar store as well as 58 other stores. The case discusses the challenges of organized retail in general and specific challenges of inventory and cost management for a discount retailer. It also provides detailed data that can be used for the diagnosis of the supply chain system at Subhiksha.
Learning Objective
The Subhiksha case is a comprehensive case dealing with retail operations and supply chain issues. Ideally this case should be scheduled after all the basic concepts in supply chain management have been covered in the course. It is also useful for discussing the complexity of introducing a unique business model
23 pages. Publication date: May 01, 2010. Prod. #: IMB323-PDF-ENG
Founded in 1997, Subhiksha had grown from one store in 1997 to more than 1000 retail outlets in 2008. It sold FMCG, grocery, pharmacy, mobile products, and fruits and vegetables (F&V). It was the largest supermarket and mobile retail chain in India with presence in 90 cities. Although organized retail was identified as a high-growth area by the middle of 2008, players had realized that organized retail in India was going to be tough business. Various players (Reliance, Bharti, Birla, and the Future Group) were experimenting with different formats and models. Subhiksha decided to come up with its own model, which in its view was suitable to the Indian context. Subhiksha targeted the middle and lower classes, not the high-end customers. IT operated with an everyday low pricing model and located several smaller stores closer to customers who lacked markets nearby. At the operational level, the company constantly increased the supply chain process efficiency to deliver goods at low prices. The Subhiksha business model is explained through a detailed description of operations of a store (Indiranagar) located in Bangalore. It also describes operations of the distribution center that served the Indiranagar store as well as 58 other stores. The case discusses the challenges of organized retail in general and specific challenges of inventory and cost management for a discount retailer. It also provides detailed data that can be used for the diagnosis of the supply chain system at Subhiksha.
Learning Objective
The Subhiksha case is a comprehensive case dealing with retail operations and supply chain issues. Ideally this case should be scheduled after all the basic concepts in supply chain management have been covered in the course. It is also useful for discussing the complexity of introducing a unique business model