Tru Value

TrASSIGNMENT 2

OPERATIONAL EXCELLENCE AT TRU-VALUE

M/s Tru-Value Stores (TVS) was founded by two young brothers, Trinath & Karunakar Reddy from Hyderabad. Their father started as a grocer and established five stores in Hyderabad by mid 2005. Mr Trinath, after his graduation, spent some years with the Landmark group in Dubai and worked as a store manager for one of the Lifestyle stores. Meanwhile Karunakar started helping his father in managing their traditional grocery store. With the retail sector booming, the brothers found that they had an opportunity to expand their network across Hyderabad and perhaps, make it as a pan-India network. Trinath was responsible for branding and operations standards at the outlets. With his experience from the lifestyle group, he formed a core team of merchandisers and trainers and started standardizing their own network of stores. Karunakar headed sourcing and procurement and took care of back-end operations. Tru-Value Stores (TVS) was born and they started expanding their network. The unique value proposition was to sell groceries and greens at low margins, since costs were competitive due to direct sourcing from farmers. For FMCG and other non-durables, they were able to negotiate hard and win good discounts from the local branches of these companies. Customer acceptance was good and there was a demand from other parts of the state to start TVS outlets. The brothers wanted to own all their outlets. Initially, they started opening stores in all the major cities and towns of Andhra. However, large industrial houses and politicians were eyeing the sector. As a result, there was intense competition for real estate properties in most towns. In order to expand quickly, TVS adopted a unique business model with three formats. Own Store – Stores owned and operated by TVS Franchise – Stores where the landlord owns a prime property, wants to operate the business and is averse to leasing the property to others. For Franchise stores,...