Krishna Textiles: Survival Strategy for a Wholesale Business

Kamal Kapoor, a cotton shirting fabric wholesaler based in Delhi, India, was unable to decide whether or not to continue his business. Retailers had been procrastinating regarding their outstanding payments and international suppliers offering exclusive goods were asking for advance payments. Domestic suppliers had disintermediated the channel by directly approaching retailers or launching their own retail brands. In addition to these challenges, e-tailors were eroding Kapoor’s business, as modern consumers preferred ready-made shirts at reasonable prices that were available at their convenience.<br><br>In light of this changing landscape, Kapoor was unsure whether his business model was sustainable. He considered various alternatives, such as whether he should move forward in the value chain by starting his own private retail brand or move backward by acting as an agent. He even contemplated focusing on a niche segment of the market that offered higher margins but not high volumes. Time was running out. Kapoor had to investigate the three options and make a choice, keeping the working capital cost of each in mind. Or was it simply time for Kapoor to liquidate his assets and exit the business on which he focused so much time and energy?

This case is intended for use in graduate-level courses on marketing management, sales and distribution management, and entrepreneurship. Following a discussion of the case, it can also be used as an evaluation tool, as it illustrates multiple concepts and enables students to demonstrate their understanding of various subjects. After working through the case and assignment questions, students will be able to<ul><li>appreciate the effectiveness of micro-environmental factors in terms of helping to explain the problems faced by a business;</li><li>understand the concept of disintermediation due to digital disruption as well as how it impacts channel intermediaries, especially wholesalers;</li><li>explore the choice between options within a value chain (i.e., moving forward as a retailer, moving backward as an agent, or selecting a niche segment);</li><li>perceive the challenges faced by a wholesaler vis à vis a retailer and comprehend the role of a del credere agent;</li><li>understand the problems associated with selecting a niche segment;</li><li>calculate the working capital differences between two channel options; and</li><li>appreciate the significance of a business’s exit strategy.</li></ul>

• disintermediation, exit strategy, workin