Financial / strategic planning:

• Big Bazaar went on an expansion spree without cracking the code of being cash flow positive. They burnt cash in most of their store and still continued to expand which ultimately resulted in their downfall. Timely strategic financial planning could have helped them save
• Big Bazaar operated from leased premises which hit them on account of increase in rentals during their growth phase. As against DMart’s own-store model allowed for value-unlocking for shareholders upon listing as they had land parcels which only appreciated over time

• Efficiency improvements:

• Big Bazaar was struggling with inefficient cost structures and low asset turnover ratios. Here, if a potential business risk on account of rising commercial rental yields would have been factored in early, the CXOs could have optimised an 8% hit on the cost structure in a wafer-thin margin business. Proper efficiency improvement exercises could have helped them save finances
• Additionally, through competitive benchmarking and tracking the Indian commercial real estate market closely could have highlighted the benefits of property asset acquisition or co-acquisition of property, identification of areas with a higher foot fall possibility
• Diversification by acquisition of a rack manufacturer could have unlocked synergies at rapid scale. Storage space could have been optimised by underlying flexibility to innovate on rack designs

• MIS / Dashboards:

• MIS / Dashboard could have a division of capital utilisation based on long-term sources of capital and short-term sources of capital. Gradual category addition tracker based on scientific study of regional consumer behaviour could have helped them in Inventory management framework incl. time & quantity of ordering thereby increasing the monitoring of business driven by its underlying store economics at a regional level
• Consumer behaviour at regional level varies by a mile and so does their likes & preferences, if a store business is running a shopping experience not restricting itself to only essential commodities, then a study about the regional consumer preference would have helped in regional category assortment thereby enhancing their overall shopping experience
• Constant tracking of Dashboards customised to track regional consumer preferences, segmental revenues and delta in share %, capital availability, inventory and vendors would have helped in early warning signs as well as timely corrective actions. On-going independent strategic advice based on consistent discussions with the CXOs would have helped align management efforts with long-term stakeholder goals

• Risk management and compliance:

• Business risk management encompasses a bird’s eye view to the overall business level systems & processes not being particularly restrictive only towards Internal control framework suggested by certain governing bodies. Designing and implementing robust risk management framework covering entire business and follow-on expansion risks could help in signalling as well as mitigating potential threats and several other business risks
• Big Bazaar could have used various financial management tools specific to the large retail store chain, could have gained significantly by renting out space to partner brands EBO, should have incorporated learnings from other successful global retail chain like Walmart, perform competition benchmarking exercise to monitor performance of similar concept brands like DMart. This would have enabled them to take conscious business call and improved revenue from sales per retail business area sq. ft.

• Cash flow management:

• Use of short-term funding for long term resources – Future group’s big bazaar continued using debt for their expansion without considering store level unit economics, margin addition per new store presence, revenue bill cuts etc. In any business, positive operating cashflow is a key metric for long term business sustenance. They could have used proper cash flow management techniques to identify and plug the gaps in different cash buckets. Paying the suppliers early and availing significant cash discount for spot payment could have created a positive leverage per dealing with the supplier even after offsetting entire financing costs associated with working capital facilities

• Working capital management:

• Big Bazaar emphasised on short term growth against long term sustainability – A proper due diligence into the business could have helped identify the stress at a much early stage.
• Working capital management is vital for any business. Big Bazaar could have used structured working capital limits to manage the procurement costs, Inventory holding period and cost of holding inventories.

• Stakeholder communication:

• While pursuing store volume growth, the focus shifted away from the core activity of being a profitable retailer. Therefore, it was crucial to maintain emphasis on the primary objective