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Case Study Analysis: Team: Zeus Thunderbolt

Nalli's strategy focuses on high quality, unique saree designs tailored to customer needs. They have a wide product portfolio and were an early mover in expanding nationally. Nalli also engages suppliers and customers for feedback to continually improve. While procurement costs vary, Nalli maintains a uniform pricing strategy across stores to ensure consistency for customers.

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SIDDHANT SWAIN
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84 views

Case Study Analysis: Team: Zeus Thunderbolt

Nalli's strategy focuses on high quality, unique saree designs tailored to customer needs. They have a wide product portfolio and were an early mover in expanding nationally. Nalli also engages suppliers and customers for feedback to continually improve. While procurement costs vary, Nalli maintains a uniform pricing strategy across stores to ensure consistency for customers.

Uploaded by

SIDDHANT SWAIN
Copyright
© © All Rights Reserved
Available Formats
Download as PDF, TXT or read online on Scribd
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Case Study Analysis

Team : Zeus Thunderbolt


Team members:
Monali Behera (21202091)
Namrata Mishra (21202094)
Rahul Mohanty (21202098)
Sagar Bohidar (21202104)
Siddhant Swain (21202115)

Q1. How would you describe Nallis strategy? Consider the following points while answering: (0.5 marks)
- Business Model – Customer centricity, Product Portfolio, Supplier Management, Branding, Ownership,
Geographic Presence, External Environmental Factors

The following points describes Nalli’s Strategy


● Silk is considered as queen of fiber because of its lustrous nature and since it is organic.The Nalli
Group was founded by Nalli Chinnasamy Chetty, a skilled weaver from Kanchipuram. His ambition to
expand the family legacy beyond weaving prompted him to open a small 200-square-foot retail
business in Chennai in 1928 to sell Kanchipuram silk sarees.It later on expanded to Madurai and even
metro cities like Delhi, Mumbai and Banglore.It was in fact the first ethnic retailer with pan India
presence.Therefore it gained the first mover’s advantage.
● It also provides various unique designs which suits all age group without compromising on the quality
of its product.It has wide range of products which are being categorized according to fabric, weave ,
style, design and bridal collection.
● Nalli used shelf space successfully to bring in additional consumers and enhance sales from existing
clients. Product shelf space allocation within stores was consistent across locations, with only small
variations to reflect seasonal and regional preferences. Kanchipuram sarees, for instance obtained
about 20% of shelf space, despite the fact that these sarees did not consistently perform well in all
areas. Nalli’s focuses on providing customer satisfaction by giving free shipping within India and free
international shipping with orders costing more than Rs 19999.It also revaluates the product
according to need and taste of its consumers.
● It is also available in online mode and also did word of mouth publicity.
● It is believed to have a uniform pricing strategy across the country because of which the competitor
pricing and variation in customer demand does not affect its strategy and it enjoys the advantage of
one stop shop for ethnic wear.
● It also offers benefits to its vendors.Before opening a new store, Nalli frequently engaged its
merchants and solicited their feedback on patterns, designs, and color palettes that would represent
the newest fashion trends. Because of the longevity of its ties, Nalli was capable of negotiating
generous conditions with several of its vendors.Sarees were sold on credit and the payment period
varied from 15 to 90 days.

Q2. How do Nalli’s determine the price? Does the fixed margin strategy make sense (0.5 marks)
An-The brand of Nalli Sarees is well respected in the market and it can fetches a slight premium over the
other competitive brands as it has high brand awareness amongst customers and also a slight premium price
will not only emphasize the features of the products it has but also stops other players entering into the
present segment.

Their quality is beyond anything anyone offers in the market at an affordable price as they manufacture
themselves, thus there is a greater profit margin on all the products for anyone buying from Nalli Sarees.

While Nalli was well aware of its competitors' pricing and differences, it imposed a uniform pricing margin to
all products in its stores across the country, resulting in a fixed uniform markup over the cost of the product
from its vendors. Knowing that the cost of procuring sari from places like Kanchipuram and delivering them to
stores in Mumbai and Delhi was higher, Nalli applied a uniform margin in all the established stores, knowing
that the cost of procuring sari from places like Kanchipuram and delivering them to stores in Mumbai and
Delhi was higher, but she chose not to discriminate among the prices.

No, the fixed margin plan didn't make sense because the procurement costs were higher, but the profit
margin was larger.However, the pricing was the same for all of the stab list stores, which may result in a loss in
the long term after entering the new market. According to competitors and the market, a competition-based
pricing approach was used to build means until a year after the news broke.

Q3. Given the Cost of Capital, calculate the following for the saree type allocated to your group: (4.0 marks)
- Cost of Shelf Space (Monthly)
- Inventory Holding Cost
- Accounts Payable Interest Float
- Interest Earned or Charged on the Difference
- Salary Allocation
- Total Product Cost

Purchase price = Rs. 12.98*52 = Rs. 674.96


Total quantities = 2222+1435 = 3657
Total Product cost = 3657*674.96 = Rs. 24,68,328.72

- Total Sales

Sales price = Rs. 17.19*52 = Rs. 893.88


Quantity sold = 1435
Total sales = 1435 * 893.88 = Rs. 12,82,717.8

- Profitability
Profitability = 1435*893.88 - 1435*674.96 = Rs. 3,14,150.2
- Per Unit of Shelf Space

Shelf space allocated = 10ft


Total quantities including inventory = 3657
Per Unit of shelf space = 3657/10 = 365.7 units per ft shelf space

- Effective Margin on Sales


What is the learning from the analysis of Effective Margin on Sales for your assigned Saree type?

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