COMPREHENSIVE MODEL OF STRATEGIC MANAGEMENT

BY CHANDRESH DEDHIA – XMBA 54

INDEX

• ESTABLISHING STRATEGIC INTENT

• VISION & MISSION

• BUSINESS DEFINITION & OBJECTIVES

• FORMULATION OF STRATEGIES –

• ENVIRONMENT APPRAISAL, ORGANIZATIONAL APPRAISAL,

• SWOT ANALYSIS , CORPORATE LEVEL STRATEGIES

• BUSINESS LEVEL STRATEGIES , STRATEGIC CHOICE

• STRATEGY IMPLEMENTATION -

• PROJECT, PROCEDURAL, RESOURCE ALLOCATION

• STRUCTURAL, BEHAVIORAL, FUNCTIONAL AND OPERATIONAL

• STRATEGIC EVALUATION

VISION & MISSION

• VISION - TO BECOME AMAZON OF INDIA

• MISSION - PROVIDING A DELIGHTFUL CUSTOMER EXPERIENCE

BUSINESS DEFINITION

• FLIPKART IS AN E-COMMERCE COMPANY FOUNDED IN 2007, BY SACHIN AND BINNY BANSAL

• IT OPERATES EXCLUSIVELY IN INDIA, WHERE IT IS HEADQUARTERED IN BANGALORE, KARNATAKA.

• IT IS REGISTERED IN SINGAPORE, AND OWNED BY A SINGAPORE-BASED HOLDING COMPANY.

• ACCORDING TO ALEXA INTERNET, FLIPKART'S WEBSITE IS ONE OF THE 10 MOST VISITED WEBSITES IN INDIA.

• FLIPKART HAS LAUNCHED ITS OWN PRODUCT RANGE UNDER THE NAME "DIGIFLIP", OFFERING CAMERA BAGS, PEN-DRIVES, HEADPHONES, COMPUTER ACCESSORIES, ETC.

• LEGALLY, FLIPKART IS NOT AN INDIAN COMPANY SINCE IT IS REGISTERED IN SINGAPORE AND MAJORITY OF ITS SHAREHOLDERS ARE FOREIGNERS.

• BECAUSE FOREIGN COMPANIES ARE NOT ALLOWED TO DO MULTI-BRAND E-RETAILING IN INDIA, FLIPKART SELLS GOODS IN INDIA THROUGH A COMPANY CALLED WS RETAIL.

• OTHER THIRD-PARTY SELLERS OR COMPANIES CAN ALSO SELL GOODS THROUGH THE FLIPKART PLATFORM.

BUSINESS OBJECTIVES

• FLIPKART” AIMS TO BECOME THE LARGEST RETAILER OF INDIA. FLIPKART WANTS TO BE PRESENT ACROSS ALL CATEGORIES, EXCEPT IN GROCERIES AND AUTOMOBILES, THE CEO SAID. “OUR TARGET IS NOT JUST THOSE WHO SHOP ONLINE. WE WANT TO HIGHLIGHT THE CONVENIENCE OF E-COMMERCE TO TRADITIONAL OFFLINE SHOPPERS AND, THUS, HELP GROW THE MARKET.

• 2012 - US $ 100 MILLION, DIVERSIFY PRODUCT REVENUES

• 2015 - US $ 1 BILLION INDIA, AGGRESSIVE MARKETS, STRONGER SUPPLY CHAINS

• 2020 – LARGEST RETAILER IN INDIA, ENTER GLOBAL MARKETS

ENVIRONMENTAL APPRAISAL

•Technological•Social:

•Economical•Political

Government support for increasing penetration in India, Tax benefits to corporates, Increase in stock holding % for foreign investors in companies (2012)Resistance against foreign retailers

Booming Indian Economy, Increasing spending power, Skyroketing fuel prices, Base of internet users multiplied by 10 times in 6 years

Advent of mobile shopping, Increasing penetration rate of broadband and wireless internet, Better managed E-Commerce site for ease, privacy and advancements in net banking

Better comfort level and trust in online shopping, High priority on time and convenience , Improving usage of broadband and high computer literacy.

ORGANIZATIONAL APPRAISAL

Competitors: (High)

Low entry barriersHuge Market.

New Entrants: (Moderate)Low Capital Investment.

High Technological Players

Buyer:(Low)Presence of Multiple

Players and traditional retail

stores.Cheap old or used

book vendors.

Substitutes: (Low)Traditional Book stores.

Advent of Ebook readers like Ipad and

Kindle

Supplier : (High)Large supplier

base.Decreasing

popularity of printer books.

SWOT ANALYSIS

Strengths

Supply chainQuick turnaroundAdvertisement &

PromotionStrategic acquisition

Huge reach

Weakness

DeliveryInternet penetrationPayment gateways

Higher costs

Opportunities

Growth in E-tailGrowth in e-Book

Mobile AppsBroadband Penetration

Threats

New players

CORPORATE LEVEL STRATEGIES

STARTED OPERATION IN 2007 AND BREAK EVEN IN AUGUST 2010

TO GROW INORGANICALLY THROUGH ACQUISITIONS

HAVE THEIR OWN SCM COMPANY NAMES EKART

ACQUISITIONS

2010: WEREAD, A SOCIAL BOOK DISCOVERY TOOL.

2011: MIME360, A DIGITAL CONTENT PLATFORM COMPANY.

2011: CHAKPAK.COM, A BOLLYWOOD NEWS SITE THAT OFFERS UPDATES, NEWS, PHOTOS AND VIDEOS. FLIPKART ACQUIRED THE RIGHTS TO CHAKPAK'S DIGITAL CATALOGUE WHICH INCLUDES 40,000 FILMOGRAPHIES, 10,000 MOVIES AND CLOSE TO 50,000 RATINGS. FLIPKART HAS CATEGORICALLY SAID THAT IT WILL NOT BE INVOLVED WITH THE ORIGINAL SITE AND WILL NOT USE THE BRAND NAME.

2012: LETSBUY.COM, AN INDIAN E-RETAILER IN ELECTRONICS. FLIPKART HAS BOUGHT THE COMPANY FOR AN ESTIMATED US$25 MILLION.

LETSBUY.COM WAS CLOSED DOWN AND ALL TRAFFIC TO LETSBUY HAVE BEEN DIVERTED TO FLIPKART.

2014: ACQUIRED MYNTRA.COM IN AN ESTIMATED INR 2,000 CRORE DEAL.

BUSINESS LEVEL STRATEGIES

• FLIPKART HAS BEEN MOSTLY MARKETED BY WORD OF MOUTH ADVERTISING.

• CUSTOMER SATISFACTION HAS BEEN THEIR BEST MARKETING MEDIUM.

• FLIPKART VERY WISELY USED SEO (SEARCH ENGINE OPTIMIZATION) AND GOOGLE AD-WORDS AS THE MARKETING TOOLS TO HAVE A FAR REACH IN THE ONLINEWORLD.

• FLIPKART.COM OFFICIAL FACE BOOK PAGE HAS CLOSE TO 9 LAC LIKES.

• FLIPKART LAUNCHED A SERIES OF 3 ADS WITH THE TAG LINE - "NO KIDDING NO WORRIES“

• KIDS WERE USED TO CREATE THE ADVERTS TO SEND OUT THE MESSAGE - IF A KIDCAN DO IT, YOU CAN ALSO DO IT.

• ALL IN ALL TO CREATE A GREAT CUSTOMER EXPERIENCE.

BUSINESS LEVEL STRATEGY

• IN 2007, FLIPKART STARTED WITH SELLING BOOKS. THE FIRST BOOK SOLD AT FLIPKART.COM WAS —JOHN WOODS' LEAVING MICROSOFT TO CHANGE THE WORLD TODAY

• IN 2010, THEY ADDED TO THEIR CATALOGUE, MEDIA (INCLUDING MUSIC, MOVIES AND GAMES) AND MOBILE PHONES AND ACCESSORIES

• IN 2011, PRODUCT LAUNCHES INCLUDED CAMERAS, COMPUTERS, PENS & OFFICE SUPPLIES, COMPUTER ACCESSORIES, HOME AND KITCHEN APPLIANCES, PERSONAL CARE, HEALTH CARE, GAMING CONSOLES, AUDIO PLAYERS AND TELEVISIONS.

• IN OCTOBER AND NOVEMBER 2011, FLIPKART ACQUIRED THE WEBSITES MIME360.COM AND CHAKPAK.COM LATER, IN FEBRUARY 2012, THE COMPANY REVEALED ITS NEW FLYTE DIGITAL MUSIC STORE. FLYTE, A LEGAL MUSIC DOWNLOAD SERVICE IN THE VEIN OF ITUNES AND AMAZON.COM, WILL OFFER DRM-FREE MP3 DOWNLOADS.

• IN 2012, PRODUCT LAUNCHES INCLUDES HEALTH & BEAUTY PRODUCTS, LIFE STYLE PRODUCTS WHICH INCLUDES WATCHES, BELTS, BAGS & LUGGAGE.

• IN JULY 2012 FLIPKART ANNOUNCED THE LAUNCH OF ITS IN-HOUSE BRAND DIGIFLIP. DIGIFLIP IS A BRAND OF DIGITAL ACCESSORIES WITH PRODUCTS LIKE LAPTOP BAGS, LAPTOP SLEEVES AND CAMERA BAGS AMONG OTHERS

Cost Heavy discounts on

books Free shipping for purchases above Rs. 300

Consumer

Consumer

Availability of products across 14 categories Books can be ordered

before they are launched Pan India presence

Communication Advertisements via

Search Engine Optimization Transparent

CommunicationOnce the customer

places an order, progress can be tracked 

Convenience

Ease of finding the product and related

information Purchase at the click of a button

Cash/ Card on Delivery

STRATEGIC CHOICE

• STARTED SELLING BOOKS : WHY BOOKS WERE THE FIRST CHOICE?

• LOWER TRANSACTION SIZE

• BETTER SHELF SIZE

• SHIPPING AND HANDLING OF BOOKS IS EASY

• TO EMERGE AS A PIONEER IN BOOK RETAILING RATHER THAN VENTURING COMPARISON SHOPPING ENGINE

• GROWTH STORY:

• STARTED WITH BOOKS AND WENT ON TO ADD NEW PRODUCTS

• 2 EMPLOYEES, 2 SUPPLIERS TO 4800 EMPLOYEES AND MORE THAN 600 SUPPLIERS

• HAVE THEIR OWN INTERNAL COURIER SERVICES CALLED FLIPKART LOGISTICS

PROJECT & PROCEDURAL

• LAUNCHED NO KIDDING, NO WORRIES

• FDI NORMS SINCE ITS REGISTRATION IS IN SINGAPORE, NOT CONSIDERED AS INDIAN COMPANY

• TAX RULES AND REGULATIONS AS E-RETAIL AND E-COMMERCE

Evaluation of Alternatives

• Customer Value Perceived

• Wider range across all categories

Purchase Decisions

• Faster Turnaround Time

• Cash/Card on delivery

• Easy return procedure

Post-Purchase Behavior

• Feedback on Flipkart websites and other blogs

• Word of mouth affiliate

RESOURCE ALLOCATION

• STARTED WITH 2 EMPLOYEES AND NOW EMPLOYS 10,000 PEOPLE.

• HAS ITS OWN SCM COMPANY NAMED EKART TO OPERATIONAL EFFICIENCIES

STRUCTURAL

Sachin Bansal Binny Bansal

Karandeep Singh (joined the

company in January 2012), Flipkart CFO, is the one

who handles all aspects of finance and corporate

governance. 

Ravi Vora (joined in March

2011), VP (marketing), seems to be the

right hand man of the Bansals.

Mekin Maheshwari (since Sept

2009), president (engineering) at

Flipkart.com, is responsible for leading the engineering team, scaling up Flipkart’s business at a rapid

speed

Ankit Nagori (in Flipkart since 2010), VP (categories), is an IIT-Guwahati alumnus who

heads multiple categories and helps the e-tailer build its

team across multiple offices.

Sameer Nigam (joined in October 2011), VP (digital business), was the founder of

Mime360.com, a digital distribution platform solution which hosts music streaming for

labels like Saregama, Universal Music and Inreco, which was

acquired by Flipkart last October.

Maneesh Mittal (been with Flipkart since

September 2009), VP (operations), is a B.Tech from IIT-Delhi. Although he

joined the e-commerce company as a general

manager, he went on to become AVP (warehousing) and was finally elevated to

VP last year

Sujeet Kumar (joined in December

2008), president (operations) at

Flipkart, is a B.Tech in Civil Engineering from IIT Delhi. He has been there for quite some time and has been

responsible for building the company, along with the Bansals

BEHAVIORAL

FUNCTIONAL AND OPERATIONAL

• THOUGH AMAZON IS ONE OF THE EARLIER PLAYERS IN THE INDUSTRY, IT IS FLIPKART WHICH IS ONE OF THE INDIAN PLAYERS IN THIS INDUSTRY WHICH REALLY BROUGHT ABOUT THE GREAT CHANGE IN THE MINDSET OF INDIAN POPULATION. 

STRATEGIC EVALUATION

• FLIPKART'S REPORTED SALES WERE

• 40 MILLION IN FY 2008–2009

• 200 MILLION IN FY 2009–2010

• 750 MILLION FOR FY 2010–2011

• 5 BILLION (US$100 MILLION) FOR 2011-2012

• FLIPKART.COM, THE COUNTRY'S FIRST BILLION-DOLLAR-VALUED INTERNET COMPANY, IS SURELY IN A STATE OF PERPETUAL EXCITEMENT.

• FLIPKART IS A STORY THAT COMES FROM SMART WORK AND AN ‘IT IS POSSIBLE’ ATTITUDE.

• THE USP OF FLIPKART IS TO PROVIDE THE CONSUMERS WITH THE BEST ONLINE SHOPPING EXPERIENCE.

• THESE ARE THE REASONS WHY MANY LOVE FLIPKART. SOME PEOPLE CALLING IT AS AMAZON OF INDIA WHICH FITS TO FLIPKART.

STRATEGIC EVALUATION

THANK YOU

• OPEN TO QUESTIONS