The expansion travails of a Cost Leader

Me thinks Subhiksha made the mistake of turning into a 'Cost Leader' when it should have stayed at being a 'focused Cost Leader'. Focused on southern Indian states where its business model was perfect for retail conditions prevalent.

As stated in WSJ, 'Even though demand among Indian consumers remains strong, Subhiksha and other major Indian retailers are paying the price of over-expansion. Some are struggling to stay in business now that financial backing has dried up, a sharp swing in a matter of months from an era when they were viewed as perfectly poised to ride the wave of consumption among India's rising middle class.'

Hope we see the likes of Subhiksha back in the Indian retail space, at a time where organised retail in India is poised for growth, despite hiccups.


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