Flipkart's Business success analysis


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The power point drills down in deep analysis of Indian Book retail market and emergence of E- Tailing. We also look at the Business model of Flipkart and how they differentiate from other players.

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Flipkart's Business success analysis

  1. 1. Prepared by – AKASH TYAGI | Section B
  2. 2.  Leading Indian E Commerce company headquartered in Bangalore. Started by two IIT graduates (earlier employed with Amazon) in year 2007. India’s largest online bookseller with over 11.5 million titles in offer. Added other products like media, electronics, personal and health care. Boasts 100% growth every quarter since founded. Funded by owners “Bansals”, VCs Accel India and Tiger global. Projected sales for year end 2011-12 stands at US $ 100 million. Sells nearly 20 products per minute. First company to introduce Cash On Delivery payment system. First Mover in the Indian online retail Industry. Registered User base of two million customers. Prepared By:- AKASH TYAGI 2
  3. 3. Top 30 Websites in India. 11.5 million titles available. 8 million visits every month. 4500 current team strength in 27 cities. 30000+ items shipped per day.Projected to be India’s first Billion dollar Internet company by 2015. Prepared By:- AKASH TYAGI 3
  4. 4. Students/Academicians Book lovers and Corporate/executives Normal people (for gifts, etc.) FLIPKART Prepared By:- AKASH TYAGI 4
  5. 5. Vision“To become Amazon of India”.MissionProviding a delightful and memorable customer experience.Objective“Completely hassle free shopping experience with best prices inIndia”. Prepared By:- AKASH TYAGI 5
  6. 6. • Low capital • Presence of investment. multiple players• High & traditional technological retail stores. intensive • Cheap old/used players. Threat of new book vendors. Entrants Bargaining (Moderate) Power of Buyers (High) Rivalry Among Competitors Existing: Attractive (High)Entrant: Not Attractive • Low entry barriers •Huge market. Threat Of Bargaining Substitutes power of• Traditional book (Low) Supplier • Large supplier stores. base. (Low)• Advent of E book • Decreasing readers like I Pad popularity of and Kindle. printed books. Prepared By:- AKASH TYAGI 6
  7. 7. Prepared By:- AKASH TYAGI 7
  8. 8. Online Book Sellers Traditional Book (20 % market)- Sellers (80% market Direct share)- Indirect FLIPKART: Market leader with General Book Stores/ 80% share. fragmented over whole country. INFIBEAM: 7% share. Branded book chain (Crosswords, Om Book Depot, Landmark, etc.) in Tier 1 cities. BOOKADDA: 5% share. Others (EBay, India Times): 8% share. Prepared By:- AKASH TYAGI 8
  9. 9. Strategic Objective: “Flipkart” aims to become the largest retailer ofIndia. Flipkart wants to be present across all categories, except ingroceries and automobiles, the CEO said. “Our target is not just thosewho shop online. We want to highlight the convenience of e-commerce totraditional offline shoppers and, thus, help grow the market.”Financial Objective: 2015 • US $ 100 million • Largest retailer in revenue. • US $ 1 billion India. • Diversify product revenues. • Enter global portfolio into • Aggressive markets. home appliances, acquisitions. electronics, etc. • Stronger supply chain. 2020 2012 Prepared By:- AKASH TYAGI 9
  10. 10. Flipkart:- High Traditional Bookstores:- Book Adda:- The strategic map suggests that neither Infibeam:- Brand awareness nor Prices are key success factors in the market. SinceBrand awareness Flipkart is not the industry leader with high Brand equity and lower prices. Medium Traditional Bookstores Low Low Medium High Pricing Prepared By:- AKASH TYAGI 10
  11. 11. Flipkart:- High Traditional Bookstores:- The strategic map suggests that Network Book Adda:- reach of fragmented book shops is “Name Infibeam:- of the game” and it is amplified due to low internet penetration and onlineBrand awareness shopping awareness in India. But with changing trend Flipkart will move to high Medium reach and thus grow its market share based on other competencies. Traditional Bookstores Low Low Medium High Network Prepared By:- AKASH TYAGI 11
  12. 12. The strategic map suggests that low High Traditional delivery time is a KSF. It is obvious that Bookstores physical book stores will give immediate delivery while for any online book store it will take a number of days. Flipkart is low on delivery time and guarantees 3 days delivery on several items. But physical book stores also take advantage of on the spotPricing buying behavior. Medium Flipkart:- Traditional Bookstores:- Book Adda:- Low Infibeam:- Low Medium High Delivery Prepared By:- AKASH TYAGI 12
  13. 13. Key Success Factor Weight Flipkart Infibeam Bookadda Physical book storesNetwork/Reach 0.5 3 1.5 1 10Delivery/ Spot buy 0.5 4 1.5 1 10Total weighted score 1 3.5 1.5 1 10Total market share 100% 16% 2.50% 1.50% 80% Prepared By:- AKASH TYAGI 13
  14. 14. • Competitors :- Online Book stores and Physical Book stores.• Online Book Store market’s projected growth at 30-35% in next 5 years.• 52 million active Internet users with only 40 per cent online shoppers.• Largely scattered physical book stores across the towns and cities.• Spontaneous/physical buying behavior of Indian consumers visitingmalls.• Books are amongst the most gifted items in Indian youth.• Displays large disparity between online and physical book stores targetcustomers.• Online Book stores will eat the market share of Physical book stores butonly after customer transition to Internet medium of purchases.• Flipkart will be directly competing with Online book stores whileincreasing the trend of online book shopping behavior through itsexcellent service. Prepared By:- AKASH TYAGI 14
  15. 15. Flipkart:- High Others:- Book Adda:- Infibeam:-Brand Awareness The strategic map suggests that both Medium price and brand awareness are key success factors in the market. Flipkart is the industry leader with 80% market share having a very high Brand awareness and lowest prices. Low Low Medium High Pricing Prepared By:- AKASH TYAGI 15
  16. 16. The strategic map suggests that both Convenience and Availability High are key success factors. Convenience caters to user friendliness of portal, tie ups with banks for reliable transactions. Availability refers to number of titles and various types of additions.Convenience Medium Flipkart:- Others:- Book Adda:- Low Infibeam:- Low Medium High Availability Prepared By:- AKASH TYAGI 16
  17. 17. Key Success Factors: o Brand awareness. o Convenience (Delivery time and reach, user interface and experience and Tie Ups for safe and reliable banking). o Availability (number of available titles, various editions and print types like hard bound/paperback).Threshold Factors: o Being a very new industry in Indian market almost every factor contributes to the Key success of an Online book store. Going forward some of the KSFs will turn into thresholds. Prepared By:- AKASH TYAGI 17
  18. 18. Key Success Factor Weight Flipkart Infibeam Bookadda OthersBrand awareness 0.15 10 3.5 3 4Convenience 0.60 Delivery time 0.2 10 2 1 2 Delivery reach 0.2 9 2 2 2 User Experience 0.10 8 3 3 3.5 Reliability 0.10 9 4 4 4Availability 0.15 10 3 2.5 4Price 0.10 9 7 6 6Total weighted score 1.00 9.4 3.175 2.725 3.35Total market share 100% 80% 7.00% 5.00% 8% Prepared By:- AKASH TYAGI 18
  19. 19. Competencies: • excellent product deliveryKey Success factors: • self owned delivery n/w• brand awareness • supplier network• convenience • first mover advantage • delivery reach • payment mode • delivery time • excellent services • reliability • internet strategy (search engine • user experience optimization)• availability • large loyal customer base.• price Value proposition: “Completely hassle free online shopping experience with best prices in India”. Prepared By:- AKASH TYAGI 19
  20. 20. Key Success factors: Competencies:• brand loyalty • large self owned delivery channels • User experience • Reliability • supplier network/ first to market• convenience • mobile shopping solution/ increased • delivery reach reach • delivery time • innovation in • mobile shopping services/payments/technology• availability • excellent customer services • product modes (printed/ e- • internet strategy (search engine books) optimization, platform advancement) • titles • large loyal customer base.Threshold factors: Brand awareness,price. Value proposition: “Completely hassle free shopping experience with best services to everyone, everywhere and everytime in India”. Prepared By:- AKASH TYAGI 20
  21. 21. Key Success Factor Weight Flipkart Infibeam Bookadda OthersBrand loyalty 0.30 User Experience 0.20 10 5 4 4 Reliability 0.10 10 5 3 3Convenience 0.50 Delivery time 0.15 10 3 2.5 2 Delivery reach 0.20 10 3 2.5 3 Mobile Shopping 0.15 9 0 0 0Availability 0.20 Product modes 0.10 9 2 2 4 Titles 0.10 10 5 4 5Expected weightedscore 1.00 9.75 3.25 2.575 2.9Expected marketshare 100% 90% 4.00% 2.5% 3.5% Prepared By:- AKASH TYAGI 21
  22. 22. Convenience: still remains the name of the game.o An online/mobile shopper still remains strong on the convenience touch point withmain factors as Delivery reach to wide spread locations, short delivery times. Early adventinto providing a mobile platform for on the go shoppers and shoppers with less access toother standard internet devices.Brand Loyalty:o Excellent user experience on the e commerce website in terms of usability, speed,clarity will enhance the loyalty of existing customers and move a step ahead of brandawareness towards customer retention.Availability:o Choice/availability of printed mode or e- books will play a major role in catering to alarger audience with varied needs/interests. Number of titles in either product mode willstill remain a strong factor in determining customer’s interest in purchasing from anyOnline book store. Prepared By:- AKASH TYAGI 22
  23. 23. External Analysis Opportunity: Threat: 1. Untapped mobile users 1. Low internet penetration 2. Coverage of all parts of India 2. Less usage/preference of online 3. Tie ups with Book fairs/education buying institutes. 3. Small value orders in remoteInternal Analysis 4. Enter new untapped global areas with high delivery costs markets 4. Amazon will enter soon 5. Self e-publishingStrength: S1S3S7O1: Provide mobile platforms. S2S6S7T1T1: Mobile consumers1. Customer service S2S4S5O2: Increase the reach. S1S3S7T2: marketing to educate2. Online discoverability S3S4O3: Target students and education reliability to customer3. Brand sector. S4S5T3: Save costs and provide4. Inventory management S2S3S5S6O4: Enter new attractive package deals for higher value orders.5. Self owned delivery n/w global markets. E.g. Srilanka. S1S3S4S5S6T4: Enhance brand loyalty6. Supplier network/relation S2S3O5: Tie up with authors to acquire ,customer service and build on delivery7. Innovation and technology rights. and supplier n/w. competence.Weakness: W1O3: Tie up with educational W1W2T2T3: Minimize small value1. No control over small value orders institutes for providing bulk orders to orders.2. Free shipping built costs students/schools. W3T1: Promote other mediums of3. Less reach as compared to W2O2O5: reduce delivery costs with buying like mobile, telephone or may physical book stores. widespread warehouses and be small retail outlets.4. Global reach. promoting high margin e-books. W4T4: expand to new untapped W3O1O2O3O4: Improve reach, enter markets and acquire small players. new untapped cities. Prepared By:- AKASH TYAGI 23
  24. 24. Short/ long term Strategic options Long Value Capabili Alignme Weighte term propositi ty (.30) nt to d Score objective on (.30) goals s (.30) (.10)Increase the reach using mobile platform, 9 8 9 9 8.7telephone or physical medium.Tie ups with educational institutes across India 7 7 9 6 7.5to cater students and reducing costs throughsimilar order delivered once.Setting up own E-publishing house by acquiring 4 4 3 3 3.6rights from authors to publish high margin e-books.Enter new untapped/unserved global markets 9 9 8 8 8.6like neighboring Srilanka.Reduce costs by increasing warehouses and 9 9 10 10 9.4suppliers across the country.Increase margins through bundled deals for 10 10 9 10 9.7small value customers .Marketing efforts to educate Flipkart’s reliability 8 8 9 10 8.5and safety shopping to conventional consumers. Prepared By:- AKASH TYAGI 24
  25. 25. Short Term: Flipkart must develop mobile application/solution for huge cell-phonecustomer base of India helping it to increase its reach. Increasing margins while reducing losses by providing attractive bundleddeals to low value shoppers. Provide small mobile outlets in cities with limited reach to internet andincreasing demand.Long Term: Enter new international markets which is either un-served or untapped. Focus on high margin products like e-novels for a book store. Diversify into all product categories (achieved) to achieve economies of scale. Educate Indian conventional customer by marketing efforts. Increase bulk selling and reach to student customers by ties with educationalinstitutes for academic curriculum supplies. Prepared By:- AKASH TYAGI 25
  26. 26. Internal Outputs O actions IA IP nr no of vI at ts e Lower costs Prepared By:- AKASH TYAGI 26
  27. 27. Respect the Cost customer-> loyal Employeeadvantage Customer-> WIN strength Provide the customer- best price, service, quality. Promise the customers- value proposition. Connect to customers- increase the Constant reach. SupplierInnovation relations Prepared By:- AKASH TYAGI 27
  28. 28. http://www.pluggd.in/flipkart-story-ecommerce-differentiator-297/http://blog.flipkart.com/https://www.flipkart.comhttp://www.thehindubusinessline.com/todays-paper/tp-new-manager/article2507045.ecehttp://www.iamwire.com/2012/02/flipkart-is-all-set-to-buy-letsbuy-com/http://www.deccanherald.com/content/190213/indian-e-commerce-firm-flipkart.htmlhttp://www.guardian.co.uk/books/2009/apr/22/books-india-chinahttp://timesofindia.indiatimes.com/business/india-business/Flipkart-faces-heat-of-rivals-discounts/articleshow/13029174.cmshttp://www.sramanamitra.com/2010/10/04/building-indias-amazon-flipkart-ceo-sachin-bansal-part-1/http://www.slideshare.net/VarunAthreya/flipkarthttp://www.slideshare.net/krupashankarnj/flipkart-12116318 Prepared By:- AKASH TYAGI 28
  29. 29. Prepared By:- AKASH TYAGI 29