FabIndia: Reinventing with Western Wear

FabIndia: Reinventing with Western Wear

Expected Learning Outcomes

• Fabindia’s business model, its critical success factors and whether its business model can be construed as reverse positioning
• Fabindia’s retailing innovations that helped it to be a niche player
• Fabindia’s decision to shift focus from ethnic wear to western wear and the implications of its ‘reinvention’ on its business model

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Fabindia’s Business Model and Its Retailing Innovation

1. Have you visited any of Fabindia’s stores?

a) If yes, what caught your attention? Did you buy any merchandize and what has been your experience?
b) If not, have you heard or read about Fabindia and its celebrated business model?

2. What do you understand by a business model? Why is it important for any company to have a holistic control and understanding of its business model? Should it be static or should it evolve over a period of time?

3. From the mandated readings given for this case flyer, can you construct Fabindia’s business model? What are the unique components of this business model? How are these components connected?

4. .................

Fabindia’s Reinvention with ‘Fables’: The Business Logic and Challenges

1. As the base article3 points out, “What made the purveyor of stylish Indian ethnic wear look West, who’s the (new) target group, how will it change business operations of a company that clocked ₹542 crore (₹5.42 billion) in revenue last fiscal, and, most crucially, will the bet work?” Explain.

2. Who according to you are the major players – store-based and product-based – in the organized apparel market and what are their value propositions?

3. .............

FabIndia: Reinventing with Western Wear

Synopsis

This case flyer, as can be inferred from the questions, enables a deeper understanding of business models and positioning concepts. Fabindia with its famed business model has undoubtedly been the first social enterprise in India having started its operations in 1975. Since then it had been adding new product lines over the years, yet the basic philosophy remained the same. In the process, it executed several innovations that kept it differentiated from the pack of organized and branded retailers. However, with its new move of embracing western wear, should there be a change in its business model?

Expected Learning Outcomes

• Fabindia’s business model, its critical success factors and whether its business model can be construed as reverse positioning
• Fabindia’s retailing innovations that helped it to be a niche player
• Fabindia’s decision to shift focus from ethnic wear to western wear and the implications of its ‘reinvention’ on its business model

Positioning and Setting

The case flyer can be used in the following courses:

a) Strategy Course – Business Model Module
b) Social Entrepreneurship – Scaling up a Social Enterprise
c) Retailing Course – Retailing Innovations in India
d) Marketing Course – Positioning concepts, especially the Concept of Reverse Positioning

Suggested Orchestration

Before the Case Flyer Discussion in the Classroom

a) Students/participants should be asked to read three articles – Break Free From the Product Life Cycle¹, Successful Innovation in Indian Retail² and Reinventing Your Business Model³. Reading these three articles would provide sufficient academic reasoning to the topics of Reverse Positioning and Innovations in the Business Model

b) Most importantly, the students/participants should be encouraged to analyze all the questions given in the case flyer (either individually or in learning teams or in appropriate discussion forums) to enable them to participate effectively and enrich the learning outcomes.

During the Case Flyer Discussion in the Classroom

As indicated, this case flyer can be used for highlighting two important themes in the light of Fabindia’s ‘Reinvention’ with Fabels – Business model and Reverse Positioning and Retailing Innovations in India. The following table outlines the way this case flyer was orchestrated in the classroom in Marketing course’s Positioning module/topic. This case flyer can be effectively discussed in the classroom under two broad segments which would help achieve the three pedagogical objectives...........

Classroom Discussion and Analysis

Needless to say, all the students must have read the base article and the case flyer (along with the three mandated articles) and come prepared with their perspectives/ideas.

I. Fabindia’s Business Model and Its Retailing Innovation

The class was started by asking the students what they know about Fabindia and if they have visited any Fabindia store. While only few of them said that they have visited Fabindia’s stores, most of them said that they know that Fabindia is a retail chain store that sells Indian ethnic wear and that it sources its collection/products from the artisan communities. The participants then discussed what attracts them about Fabindia. While some were attracted by the stylish Indian ethnic wear collection Fabindia offered, and the aesthetics of the stores, others were impressed by the business model with a social cause of supporting the local artisans.

With the topic business model coming across during the discussion, the class discussed about the concept and its importance. A business model defines a company’s key markets and target customers. It helps decide the customer value proposition that is to be offered by the company and the key processes and resources required to do so. It determines about how the company would make money and plays a key role in obtaining funding for its operations. The class concluded that it is important for a company to have a holistic control and understanding of its business model. The discussion was then directed to connect these constituents of the business model to Fabindia [Exhibit (TN)-I]..............

Exhibits

Exhibit (TN)-I: Fabindia’s Business Model

Exhibit (TN)-II: Fabindia – Critical Success Factors

Exhibit (TN)-III: Fabindia’s Product Experience

Exhibit (TN)-IV: Fabindia’s Product Additions Over the Years