Core of Principles of Management

Flipkart – 0 to $100 million in five year

Flipkart presents an interesting story of Indian entrepreneurship. A company started by two IIT D graduates, Sachin Bansal and Binny Bansal, has become synonyms of e-commerce in Indian Market. How did it happen? Before discussing this, let me show you a brief timeline of Flipkart history.

Flipkart started by selling books and in stages they have expanded to include almost everything under the sun. Looking at their milestones provide a good insight for entrepreneurs on how to establish their business. Let’s split the flipkart story in different parts to understand what made flipkart India’s Amazon.

Small and focused start

 They started by selling books, which required small initial budget. Since they were new in market and had no money for advertisement, they relied on word of mouth publicity. And, for having an effective word of mouth they kept the prices as low as possible. Now, people were getting books at lower prices without taking pain of going to bookstores.

Surprise customer through fast delivery 

From starting Flipkart distinguished itself with other competitors by having a super-fast delivery. Many times, people ordered book and it reached next day itself. Indian consumer habituated of late delivery in everything found it pleasantly surprising and went on a publicity spree for flipkart.

Keep on growing

If we see flipkart’s timeline, they expanded their product category every year after reaching break even. They were already getting a huge no. of page views daily. Increasing product category ensured a 100% increase in revenue every quarter.

Cash on delivery and Cash on Card

 This was one of the most innovative and bold step taken by flipkart. People in India were still skeptical about paying online. Getting things without advance payment delighted customers. They can be more casual in ordering now. In case they don’t like a product or find any defect, they can cancel the order with zero risk. People without credit or debit card can also order. It made online shopping affordable to everybody, which was a luxury earlier.

Range of Product

Flipkart boasts of having around 11.5 million book titles available in their catalogue. It has almost all the brands available for other products as well. It is having around 1 million tracks of 55 different genres in its music store. This fulfils customer’s stated ,unstated and latent wants as well.

Organizational Structure 

Flipkart has focused equally in both operation and Technology. Below is the top view of its Organization structure.

 Till now, it has been a great ride for flipkart. It is growing with a rate of 100% every quarter. This has resulted in significant increase in operational cost. On the operational front, company is facing issues pertaining to delay in delivery or getting faulty products delivered. It faces significant challenge in reverse logistics. It’s a big task to track unsuccessful orders, which are quite costly to track. Flipkart is planning of bigger investments in supply chain and technology to enable large warehouse and increase process automation. Flipkart is also facing huge losses due to cash on delivery for mainly two reasons,  1^st it makes cash flow routed through courier companies, who  charges a hefty amount and 2^nd there are more rejected orders due to customer fickle mindedness.  Recently, flipkart bought letsbuy.com for $25 million. This all has made getting a good funding source essential for flipkart. At the same time Bansal are having more than 30% of flipkart’s shares, so they have  very little to offer for new investors. Recently, Bansals failed to get funding from General Atlantic . They have not been able to get any big investor apart from their first investor Accel India. 

With bigger players coming in the market, increasing cost of operation and chipping in profit margins, it will be a tough road ahead for flipkart.

3 Monks - A Sanghai Animation Studio Presentation

Let me show you one small animation film made by Shanghai animation studio. This is based upon the ancient Chinese proverb “One monk will shoulder two buckets of water, two monks will share the load, but add a third and no one will want to fetch water.” This rib-tickling movie depicts the human psychology imbedded with many management lessons. I will put movie in multiple parts to provide some mastication and pose some riddles.

Q:- How would you solve the current issue?

Before seeing the clip below, please prepare a plan to solve the issue.

Quite simple, Isn’t it. Divide the work equally by measuring equal lengths from both ends and fix the bucket in middle.  But, when Dr. Mandi asked same question in the class most of the people start thinking in the direction of resolving the fight through dialogue, motivation etc. Here, we need to notice that any problem need to be addressed both at micro and macro level. We must focus on solving the current issue first and then start looking at bigger picture.

Let’s see part 3 of the video.

So, finally all the three have decided to work together. Now they need to formulate a plan to use their combined power for solving water crisis effectively.  What will you suggest them.

Think!

Think!

Think!

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 let’s see the solution they come up with.

And the temple never lacks the water again.

Creative Problem Solving
 Here, major point is to observe that one side of mountain is vertical and it touches the lake directly. We see it many times but miss to observe. Very few students were able to thought of it, when this question arouse in class. For having an optimal solution, we need to think creatively and as a team.

Other lessons from this whole video

Situation changes people
 If you observe carefully all the monks are portrayed as good person through some action they do in their appearance, like planting flower, putting fish in water etc. When they reach at monastery, they fill water without any rivalry. But, soon they get a feeling that others are doing less or consuming more. This brings significant change in their behavior. When solving a problem we should examine situation more closely before blaming any person, because we may be looking cure for the disease that doesn’t exist.

“Understanding can overcome any situation, however mysterious or insurmountable it may appear to be.” - Norman Vincent Peale 

Responsibility sharing
 All the problems were arising because there was no clear role distribution. So, everybody was trying to elude from filling water. Responsibility sharing should also be done judiciously to avoid any clash.

Productivity
Productivity can be enhanced by Team work and creative problem solving as we saw in the last clip. While many people keep on looking for improving the existing method, there may be a whole new way for an efficient solution. Like  they did in last clip by 

On the high end of creativity

Unity is strength 
“We are only as strong as we are united, as weak as we are divided.” – J.K.Rowling, Harry Potter and the Goblet of Fire

 Together they managed to save monastery and improve productivity.

This movie was released in 1980 and went on winning many awards.

Awards

§  Won the outstanding film award at China's Ministry of Culture.

§  Won the Best animated film prize at the first Golden Rooster Awards in 1981.

§  Won four international awards including a Silver Bear for Short Film at the 32nd Berlin Film Festival in 1982.

There are still many life lessons you can find in this video. Do you see any? Please comment.