Case Studies in Business Ethics and Corporate Governance

Subhiksha: Failed Business Model or Unethical Practices? 141

Poor Inventory Management

Subhiksha kept an inventory of around 16 days against the industry average of 30–35 days. The inven-

tory turnover ratio was high and the fi ll rate resulted in a high stock out, thereby losing an opportunity

to gain a high revenue. The stores used to operate on very meager levels of inventory and the in-store

inventory was largely dependent on vendor supplies. This proved disastrous for the company as the

stores were mostly running out of stock because the vendors had stalled their supplies (in the light of

nonpayment of previous dues).

Strong Competition

The organized retail market, though in its nascent stage, already had the presence of strong national ...