Business Model – Saravana stores, Chennai, Tamil nadu

Adam smith is our father of economics and he only coined the word Political economy. Adam smith defined Profits "as type of return which accrues to undertakers as the reward for the trouble taken, and the risks incurred, in combining the factors of production".
My first entry in to the Saravana stores at ranganathan street, T.Nagar, Chennai gave me a different perspective those days. My self and my friends use to spend our Saturday evening by just walking on the streets. It’s just a window shopping experience for our self.
For the last one decade, I was doing all my purchase from the store only. The striking business model is very simple. They are using only the number games. So, they can sell the product in mass selling with low price. The price will go even below the MRP rates. The branded items are received in a bulk order so they are able to sell even with branded items with lower price than the exclusive franchisee stores. The major target groups are the lower middle class peoples. I have seen many times those people will come on their Lorries and vans from the outskirts of Chennai for the mass purchase during the festive times.
They can concentrate more on the customer treatments. The astonishing think is the route between billing and the product selection.

I should appreciate the growth of the store over the 10 year period. At the same time they should learn to RESPECT the CUSTOMER. The workers in the store treat the customer as if they are the rulers. Now, I am really afraid to enter the store any more.
CUSTOMERS ARE THE KING IN THE MARKET