Basmati House Supermart: Competing with the E-retail Channel
(7 pages of text)
In January 2020, the proprietor of Basmati House Supermart (BHS), a large grocery retail outlet in India, terminated a partner retailer contract with Springers, an online retail platform. The proprietor had an ancestral property, located in a high-footfall area of the wholesale market, that could be developed into a retail outlet. In the new outlet, the broad options were to replicate the current retail business, focus selectively on staples and do more wholesale, or only focus on rice and develop it as a brand for larger distribution. Alternatively, the proprietor could rent the new property, wind down the grocery business, and invest the money in a fitness centre. Each option required its own particular investments, competence, and marketing strategy, and all options entailed considerable uncertainty and risk. BHS was steadily losing money; therefore, the decision had to be made quickly.
This case can be taught as part of a graduate-level retailing course while discussing the impact of digital disruption and how an off-line retailer can compete with the proliferation of online retail. The case also pertains to sales and distribution management, as it explores the competitive strategies of traditional wholesalers in an increasingly online retail landscape. After completion of the case, students will be able to do the following:
- Appreciate the relevant concepts related to tackling digital disruption and be able to evaluate different alternatives.
- Understand the growth drivers of hyperlocal grocery retail and how large brick-and-mortar wholesalers need to adapt.
- Understand value creation and appropriation opportunities for physical retail outlets.
- Evaluate different business models based on robust decision criteria.
- Conduct simple financial calculations, such as break-even analysis.
India, Small, 2020
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