Harvard Case study Review on Nalli Silk Sarees

1. Nalli Silk Sarees (B) –
An Abstract by M.D.Karthik, PGDM1, Roll N0-1403
The abstract is about the interview conducted with Ramnath K.Nalli,
Vice Chairman of the Nalli Group and his daughter Lavanya K.Nalli (HBS MBA
2011), the fifth generation entrepreneur in the family business.She introduced
the NalliNext format which appealed the young urban women with
merchandise more suitable for business and casual wear. A comparative
analysis has been made regarding the impact of increasing shelf space for silk
sarees and reducing the shelf space for cotton sarees. Silk sarees and Cotton
sarees have their own market share and they cannot be replaced. Decreasing
the shelf space for cotton sarees will result in the young girls losing their
impression on Nalli Silks and this will change the customer profile of Nalli Silks.
A significant loss of the young urban women customers will be seen. The shelf
space for silk sarees can be increased by reducing the shelf space for items like
children’s clothes, men’s wear and synthetic sarees in the same order.
According to the weather conditions of a particular region, the shelf space for
silk sarees and cotton sarees are increased and reduced accordingly(Delhi has
more requirements for silk sarees in winter and the hotter regions in India
have increased demand for cotton sarees). The product mix cannot be
compromised because in a small store like in Mumbai, the highest sales per
square feet month is generated. Also the other factor to be considered is the
cost comparison which customers are engaging in. The price of the cotton
sarees cannot be increased as this will hamper the customer beliefs. Cotton
sarees are not loss leaders and the silk sarees are in equal demand from the
customers. The “Balancing Effect” is achieved by the “fixed price” policy of
Nalli Silks and Sarees.