Hauz Khas Market, New Delhi Mr. Rao Grocery Store Case Study – Management Assignment Help

Assignment Task

QUESTION
Mr. Rao owns and operates a grocery store in Hauz Khas Market, New Delhi. Given that the area around the market is residential in nature, in addition to a steady sale of perishable foodstuffs, he witnesses a weekly demand for household items, particularly detergents. Often his supply of detergents runs low at the end of every weekend, requiring him to source additional supply from the detergent manufacturer. Mr. Rao’s store primarily sells detergent powder and soap bars for washing clothes, linen, and other fabrics. He also sells fabric softener due to increased customer demand for the same. Some customers have also enquired about the availability of liquid detergents, but the manufacturer has been unable to supply the same to Mr. Rao. Hauz Khas market is a community market and has a few eateries/cafes, medical stores, stationery shops, etc.Ms. Batra owns and operates an upscale mini-departmental store in Khan Market in New Delhi. Among the various perishable household items sold, there is a steady weekly demand for liquid detergents and fabric softeners. Since the store witnesses a weekend rush similar to Mr. Rao in Hauz Khas, and an increased demand for detergents at those times, Ms. Batra has a go-down nearby where she keeps additional stock should the store face any shortage. This go-down is 2 km away due to the cost of high rent for even small properties in the Khan Market area. In addition to domestically manufactured liquid detergents, the store also stocks imported liquid detergents that are often 2-3 times the price of the domestic ones.

Ms. Batra discontinued procuring or selling powder detergents and soap bars 10 yearsago, since she found that her clientele often frowned down upon these products. Khan market is a commercial space and has several eateries/cafes, bars, bookstores, clothing and designer stores.BeeZee Day is a multi-storey all-purpose departmental store in DLF Galleria market in Gurgaon, Delhi NCR. While keeping several perishable and non-perishable household related products (including kitchen-ware, household appliances, and even washing machines), BeeZee Day sells all domestic items sold by Mr. Rao and Ms. Batra i.e., detergent powder, soap bars, liquid detergents, and fabric softener. Since space is not a constraint, Bee Zee Day has its go-down in the basement itself, should any shortage arise. Similar to other markets in Delhi NCR, Bee Zee Day witnesses maximum footfalls over the weekend when customers purchase all varieties of household items including detergents. Further, due to DLF Galleria’s central location in Gurgaon and it being a commercial space with several cafes, bookstores, clothing stores, salons, electronic shops, etc. customers from many neighbouring areas travel to it to avail of the many options it has to offer.The distance between Khan Market and Hauz Khas market is approx. 10 km. The distance between Hauz Khas Market and DLF Galleria is approx. 20 km. The distance between Khan Market and DLF Galleria is approx. 25-30km. Hauz Khas market and Gurgaon are also connected by the Yellow line of the Delhi metro.
In the context of the aforementioned facts, discuss the role played by demand side substitutability and supply side substitutability in defining relevant markets.

• Discuss whether detergent powder, liquid detergent, soap bars, and fabric softeners fall in the same relevant product market, with reference to the relevant factors applicable for each of these items.
• Discuss whether Mr. Rao’s store, Ms. Batra’s store, and Bee Zee Day fall in the same relevant geographic market, with reference to the relevant factors. 
• What is market power? Discuss the market power of BeeZee Day in the current fact situation. How would this market power change if BeeZee Day acquired (i) Mr. Rao’s store in Hauz Khas, or (ii) Ms. Batra’s store in Khan Market. Consider that there are other grocery stores and departmental stores in South/Central Delhi in/around a 10km radius of both the Hauz Khas market and Khan Market areas.