Prepared by IMRAN KHAN|DSM, DTU

Leading Indian E-Commerce company headquartered in Bangalore.

Started by two IIT graduates (earlier employed with Amazon) in year 2007.
Indias 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, Accel India and Tiger global.
Projected Sale for the year 2014-15 stands at US $ 1 billion.
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 three million customers.
Vision
To become Amazon of India.

Mission
Providing a delightful and memorable customer experience.

Objective
Completely hassle free shopping experience with best prices
in India.
Technology-enabled transactions and technology-
mediated exchanges of digitized information
between parties (individuals or organizations) as
well as the electronically based intra-
organizational or inter-organizational activities
that facilitate such exchanges.

Flipkart- What is E-commerce!!!
B2B C2B
B2C P2P
Business Consumers
Business originating from . . .

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Flipkart- Cont
Flipkart- Cont
Key elements E-commerce Traditional commerce
Value Creation Information Product/Service
Strategy Sense and respond
Simple rules
Classical
Competitive edge Speed Quality/Cost
Competitive force Low barriers of entry
Power of customers
Power of suppliers
Product substitution
Resource focus Demand side Supply side
Customer interface Screen-to-face Face-to-face
Communication Technology-mediated channels Personal
Accessibility 24 x 7 Limited time
Customer
interaction
Self-service Seller influenced
Consumer behavior Personalization
One-to-one marketing
Standardization
Mass/one-way marketing
Promotion Word of mouth Merchandising
Product Commodity Perishables, feel & touch

E-COMMERCE vs TRADITIONAL COMMERCE
Initially when they started out, it wasnt easy for them to earn the trust of
the customer.
Handling customer complaints, without having a face to their customer
service, proves to be bit of a challenge at times.
Not having the display advantage, the browsing feature and not being
able to carry out promotional activities are some other obvious
challenges.
The discomfort of paying by cards, on account of security fears is another
challenge. They have now tried to address this by introducing the cash-
on-delivery option.
The fact that highest number of orders and sales get registered during
weekends proves to be tough at times for logistics and customer service.
The fact that they have to work 24X7 and the customer perceptions
around it also bring some difficulty (For example, the customer places an
order at 12 AM and counts the number of hours for delivery right from
then!)
Flipkart- Challenges Faced
Understanding Customer evolution
Invest ahead of customer needs

Charting changing Technology
Match technology choices to consumer tastes

Weathering the Storm
Reassure stakeholders with clear vision, sensible business model and
profitable venture

Integrating Offline & Online activities
Align offline & online business activities, esp. advertising, branding,
retail & online store design, service, warranties, returns (customer-
facing activities)

Identifying key levers of Competitive Advantage
Reallocate resources as competitive advantage levers evolve

Expanding Globally
Deal with complex internationalization issues




Flipkart- Challenges ahead
The company has built a great brand name, they just have to
maintain and enhance the same.
Need to keep introducing more products, adapting to the changing
needs of the customer with time.
The entry of Amazon.com in 2012 in the Indian e-commerce space
has been cited as a big challenge to Flipkart.
Amazon being a very big company can bring in serious
competition to Flipkart, since Amazon can bear more losses in the
beginning to gain customer base.
Flipkart- Challenges ahead Cont..
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 Indias first Billion dollar Internet
company by 2015.
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FLIPKART
Normal
people (for
gifts, etc.)
Students/Academicians
and
Corporate/executives
Book lovers
Large supplier
base.
Decreasing
popularity of
printed books.
Traditional book
stores.
Advent of E book
readers like I Pad
and Kindle.
Presence of
multiple players
& traditional
retail stores.
Cheap old/used
book vendors.
Low capital
investment.
High
technological
intensive
players.
Threat of new
Entrants
(Moderate)

Bargaining
Power of Buyers
(High)



Bargaining
power of
Supplier
(Low)


Threat Of
Substitutes
(Low)

Rivalry Among
Competitors
(High)
Low entry
barriers
Huge market.

Existing: Attractive
Entrant: Not Attractive
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Online Book Sellers
(20 % market)-
Direct
FLIPKART: Market leader with
80% share.
INFIBEAM:
7% share.
BOOKADDA:
5% share.
Others (EBay, India Times):
8% share.
Traditional Book
Sellers (80% market
share)- Indirect
General Book Stores/
fragmented over whole
country.
Branded book chain
(Crosswords, Om Book Depot,
Landmark, etc.) in Tier 1 cities.
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Strategic Objective: 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.
US $ 100 million
revenue.
Diversify product
portfolio into
home appliances,
electronics, etc.
2012
US $ 1 billion
revenues.
Aggressive
acquisitions.
Stronger supply
chain.
2015
Largest retailer in
India.
Enter global
markets.
2020
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Financial Objective:
Traditional
Bookstores
Pricing
Low Medium High
High
B
r
a
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d

a
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s

Low
Medium
Flipkart:-
Traditional Bookstores:-
Book Adda:-
Infibeam:-
The strategic map suggests that neither
Brand awareness nor Prices are key
success factors in the market. Since
Flipkart is not the industry leader with
high Brand equity and lower prices.
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Traditional
Bookstores
Network
Low Medium High
High
B
r
a
n
d

a
w
a
r
e
n
e
s
s

Low
Medium
Flipkart:-
Traditional Bookstores:-
Book Adda:-
Infibeam:-
The strategic map suggests that Network
reach of fragmented book shops is Name
of the game and it is amplified due to
low internet penetration and online
shopping awareness in India. But with
changing trend Flipkart will move to high
reach and thus grow its market share
based on other competencies.
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Traditional
Bookstores
Delivery
Low Medium High
High
P
r
i
c
i
n
g

Low
Medium
Flipkart:-
Traditional Bookstores:-
Book Adda:-
Infibeam:-
The strategic map suggests that low
delivery time is a KSF. It is obvious that
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 spot
buying behavior.
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Key Success Factor Weight Flipkart Infibeam Bookadda Physical book stores

Network/Reach 0.5 3 1.5 1 10
Delivery/ Spot buy 0.5 4 1.5 1 10

Total weighted score 1 3.5 1.5 1 10
Total market share 100% 16% 2.50% 1.50% 80%

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Competitors :- Online Book stores and Physical Book stores.
Online Book Store markets 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 visiting
malls.
Books are amongst the most gifted items in Indian youth.
Displays large disparity between online and physical book stores target
customers.
Online Book stores will eat the market share of Physical book stores but
only after customer transition to Internet medium of purchases.
Flipkart will be directly competing with Online book stores while
increasing the trend of online book shopping behavior through its
excellent service.

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Pricing
Low Medium High
High
B
r
a
n
d

A
w
a
r
e
n
e
s
s

Low
Medium
Flipkart:-
Others:-
Book Adda:-
Infibeam:-
The strategic map suggests that both
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.
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Availability
Low Medium High
High
C
o
n
v
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n
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n
c
e

Low
Medium
Flipkart:-
Others:-
Book Adda:-
Infibeam:-
The strategic map suggests that
both Convenience and Availability
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.
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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.

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Key Success Factor Weight Flipkart Infibeam Bookadda Others

Brand awareness 0.15 10 3.5 3 4
Convenience 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 4
Availability 0.15 10 3 2.5 4
Price 0.10 9 7 6 6

Total weighted score 1.00 9.4 3.175 2.725 3.35
Total market share 100% 80% 7.00% 5.00% 8%

Key Success factors:
brand awareness
convenience
delivery reach
delivery time
reliability
user experience
availability
price
Competencies:
excellent product delivery
self owned delivery n/w
supplier network
first mover advantage
payment mode
excellent services
internet strategy (search engine
optimization)
large loyal customer base.
Value proposition:

Completely hassle free online
shopping experience with best prices
in India.


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Key Success factors:
brand loyalty
User experience
Reliability
convenience
delivery reach
delivery time
mobile shopping
availability
product modes (printed/ e-
books)
titles
Threshold factors: Brand awareness,
price.
Competencies:
large self owned delivery channels
supplier network/ first to market
mobile shopping solution/ increased
reach
innovation in
services/payments/technology
excellent customer services
internet strategy (search engine
optimization, platform advancement)
large loyal customer base.
Value proposition:

Completely hassle free shopping
experience with best services to
everyone, everywhere and everytime
in India.


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Key Success Factor Weight Flipkart Infibeam Bookadda Others

Brand loyalty 0.30
User Experience 0.20 10 5 4 4
Reliability 0.10 10 5 3 3
Convenience 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 0
Availability 0.20
Product modes 0.10 9 2 2 4
Titles 0.10 10 5 4 5

Expected weighted
score 1.00 9.75 3.25 2.575 2.9
Expected market
share 100% 90% 4.00% 2.5% 3.5%
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Convenience: still remains the name of the game.
o An online/mobile shopper still remains strong on the convenience touch point with
main factors as Delivery reach to wide spread locations, short delivery times. Early advent
into providing a mobile platform for on the go shoppers and shoppers with less access to
other 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 brand
awareness towards customer retention.
Availability:
o Choice/availability of printed mode or e- books will play a major role in catering to a
larger audience with varied needs/interests. Number of titles in either product mode will
still remain a strong factor in determining customers interest in purchasing from any
Online book store.
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External Analysis




Internal Analysis
Opportunity:
1. Untapped mobile users
2. Coverage of all parts of India
3. Tie ups with Book fairs/education
institutes.
4. Enter new untapped global
markets
5. Self e-publishing

Threat:
1. Low internet penetration
2. Less usage/preference of online
buying
3. Small value orders in remote
areas with high delivery costs
4. Amazon will enter soon

Strength:
1. Customer service
2. Online discoverability
3. Brand
4. Inventory management
5. Self owned delivery n/w
6. Supplier network/relation
7. Innovation and technology
competence.

S1S3S7O1: Provide mobile platforms.
S2S4S5O2: Increase the reach.
S3S4O3: Target students and education
sector.
S2S3S5S6O4: Enter new attractive
global markets. E.g. Srilanka.
S2S3O5: Tie up with authors to acquire
rights.

S2S6S7T1T1: Mobile consumers
S1S3S7T2: marketing to educate
reliability to customer
S4S5T3: Save costs and provide
package deals for higher value orders.
S1S3S4S5S6T4: Enhance brand loyalty
,customer service and build on delivery
and supplier n/w.
Weakness:
1. No control over small value orders
2. Free shipping built costs
3. Less reach as compared to
physical book stores.
4. Global reach.
W1O3: Tie up with educational
institutes for providing bulk orders to
students/schools.
W2O2O5: reduce delivery costs with
widespread warehouses and
promoting high margin e-books.
W3O1O2O3O4: Improve reach, enter
new untapped cities.

W1W2T2T3: Minimize small value
orders.
W3T1: Promote other mediums of
buying like mobile, telephone or may
be small retail outlets.
W4T4: expand to new untapped
markets and acquire small players.
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Short/ long term Strategic options Long
term
objective
s (.30)
Value
propositi
on (.30)
Capabili
ty (.30)
Alignme
nt to
goals
(.10)
Weighte
d Score
Increase the reach using mobile platform,
telephone or physical medium.
9 8 9 9 8.7
Tie ups with educational institutes across India
to cater students and reducing costs through
similar order delivered once.
7 7 9 6 7.5
Setting up own E-publishing house by acquiring
rights from authors to publish high margin e-
books.
4 4 3 3 3.6
Enter new untapped/unserved global markets
like neighboring Srilanka.
9 9 8 8 8.6
Reduce costs by increasing warehouses and
suppliers across the country.
9 9 10 10 9.4
Increase margins through bundled deals for
small value customers .
10 10 9 10 9.7
Marketing efforts to educate Flipkarts reliability
and safety shopping to conventional consumers.
8 8 9 10 8.5
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Short Term:
Flipkart must develop mobile application/solution for huge cell-phone
customer base of India helping it to increase its reach.
Increasing margins while reducing losses by providing attractive bundled
deals to low value shoppers.
Provide small mobile outlets in cities with limited reach to internet and
increasing 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 educational
institutes for academic curriculum supplies.

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Outputs O
Internal
actions IA
P
r
o
f
I
t
s
I
n
n
o
v
a
t
e
Lower costs
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Respect the
customer-> loyal
Customer-> WIN

Provide the
customer- best
price, service,
quality.
Promise the
customers-
value
proposition.
Connect to
customers-
increase the
reach.
Employee
strength
Supplier
relations
Constant
Innovation
Cost
advantage
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http://www.pluggd.in/flipkart-story-ecommerce-differentiator-297/

http://blog.flipkart.com/

https://www.flipkart.com

http://www.thehindubusinessline.com/todays-paper/tp-new-manager/article2507045.ece

http://www.iamwire.com/2012/02/flipkart-is-all-set-to-buy-letsbuy-com/

http://www.deccanherald.com/content/190213/indian-e-commerce-firm-flipkart.html

http://www.guardian.co.uk/books/2009/apr/22/books-india-china

http://timesofindia.indiatimes.com/business/india-business/Flipkart-faces-heat-of-rivals-
discounts/articleshow/13029174.cms

http://www.sramanamitra.com/2010/10/04/building-indias-amazon-flipkart-ceo-sachin-bansal-part-1/

http://www.slideshare.net/VarunAthreya/flipkart

http://www.slideshare.net/krupashankarnj/flipkart-12116318