Study of small commercial units within an educational setup

Abstract

Small commercial units within an educational set up have become a part and parcel in recent times.Today some prominent brands show great eager to establish their outlet in premier institutes likeIITs and IIMs as a part of their brand extension programme. These big brands along with smallcommercial outlets serve the huge student and faculties residing on the campus. This project wascommissioned to examine the viability and utility of these commercial units within an educationalset up. The point of focus was five different commercial units, including two big brands, present inIIM Bangalore. Various types of data were collected initially by designing an exhaustivequestionnaire. These data helped us to understand right from the motive behind their establishmentto their financial and economic viability. We interviewed all five outlets on various parameters.Various points popped out during the course of interview. This research pointed us towards the factthat these commercial units are backed with huge subsidies given by institute to sustain thecyclicality variation of demand and give support to sustain their business even in tough times ofdecreasing demand. Institutes have their own motive of serving student and faculty communityresiding full time and part time on the campus. Basically the focus was on return on investmentmade by these commercial units, opportunity cost and benefit taken by these units in terms ofdifferent types of subsidies provided to them. Our research findings were based on questionnaireand detailed interview with commercial units, thorough analysis of these interviews and a surveydone to know the customer perspective of these units. Majorly PGP, FPM and PGSEM students werepart of our survey. We found that ATHICA and AMRIT KALASH are two most preferred andfrequently visited outlets on the campus. They are equipped well to serve the huge varied demandsof student community on the campus and it can affect their normal life at IIM B if these outlets areclosed permanently. Also we found that these outlets are earning super normal profit and also themargin on their food items are bit higher than normal. AMRIT KALASH is in win-win situation byacquiring so much space and paying meagre rent to the institute. The opportunity cost of space andinfrastructure is very high for AMRIT KALASH as compared to other outlets. It is not utilizing its fullpotential in terms of infrastructure as well as well as type of food provided by it. Survey was floatedto know the customer perspective of these commercial outlets. Amrit Kalash and Athica were twomost favourable outlet and success factors varied from one outlet to other. Delivery time, quality offood items and credit facilities were key drivers of success of these outlets. Finally, we came toconclusion that some of the outlets are enjoying supernormal profit by huge subsidies given to themby institute in different forms while some are just surviving due to these subsidies. We proposed twomodels, either open all outlets at the same place so that competition can be introduces within themor there must be food chain across all premiere institutes like IITs and IIMs which will maintain a setstandard across institutions.