JSW Shoppe — A Unique Distribution Model for Branded Steel
(9 pages of text)
Organized steel retailing was not very popular among steel manufacturers in India. Very few such initiatives were undertaken by Indian players, but the most prominent was the JSW Shoppe concept promoted by Jindal Steel Works (JSW). JSW sold its products through a large network of dealers. However, the management had been concerned with building a brand image for its products, increasing its market penetration beyond the market of builders and fabricators, and attracting the attention of end users who would drive up sales. The company had felt that its distribution model would not serve its purpose, and had designed the unique concept of JSW Shoppe - a franchising model wherein the company would partner with existing and new dealers to achieve its objectives.
Set in 2010, the case deals with the challenges of transforming from a transactional distribution model to a relationship-based distribution model for franchising. Through the analysis of the case, students will locate the execution flaws in the company’s transformation, and seek the best way to address the issues related to this transformation. The case demonstrates the importance and role of a salesperson and the problems and issues that arise when a distribution model is changed - both from the dealers’ and company’s perspectives. Highlights of the case include the presentation of the challenges of franchising a specialty product, the evaluation of dealers using a balanced scorecard, and the preparation of an elaborate training module for the sales force.
- To understand the steel industry’s retail value chain in general, and JSW’s retail value chain in particular; and to identify and analyze the problems and opportunities for improvement within.
- To discuss JSW’s new business model and contrast it with its earlier value chain.
- To discuss the advantages of JSW’s new business model, identify the challenges - especially with franchising and branding issues in the steel industry - and to debate the possible channel conflicts arising from the new model.
- To examine and debate JSW’s business model execution strategy.
The case study can be used in any of the three following courses:
- Sales and distribution management: The case can be used to examine issues relating to sales personnel (the roles, duties, and responsibilities of sales personnel, along with their recruitment, training, and evaluation), franchising issues, and challenges associated with the choice of channels, channel partners, and application of the balanced scorecard.
- Retail management: The case deals with the foray of manufacturers into organized retailing and franchising as a distribution model. Throughout the case, issues relating to store layout, visual merchandising, branding, and retail communication are dealt with.
- Strategic marketing: The case discusses the choice to change a distribution model and its impact on the sales division, designing and applying the balanced scorecard as an evaluative tool, and determining a strategy to counter emerging competition. The case also provides an opportunity to discuss JSW’s possible pursuit of a forward integration strategy.
India, Large, 2010
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