WE
ARE PROVIDING CASE STUDY ANSWERS
ASSIGNMENT
SOLUTIONS, PROJECT REPORTS AND
THESIS
ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM -
SMU / SYMBIOSIS / XAVIER / NIRM / NAMS….
MBA EMBA
BMS GDM MIS
MIB
DMS
MMS DBM PGDMA
DBA…..
WEBSITE: www.casestudies.co.in
ARAVIND 09901366442 09902787224
CASE – 1 Dabur India Limited:
Growing Big and Global
Dabur is among
the top five FMCG companies in India and is positioned successfully on the
specialist herbal platform. Dabur has proven its expertise in the fields of
health care, personal care, homecare and foods.
The company was
founded by Dr. S. K. Burman in 1884 as small pharmacy in Calcutta (now
Kolkata), India. And is now led by his great grandson Vivek C. Burman, who is
the Chairman of Dabur India Limited and the senior most representative of the
Burman family in the company. The company headquarters are in Ghaziabad, India,
near the Indian capital New Delhi, where it is registered. The company has over
12 manufacturing units in India and abroad. The international facilities are
located in Nepal, Dubai, Bangladesh, Egypt and Nigeria.
S.K. Burman,
the founder of Dabur, was trained as a physician. His mission was to provide
effective and affordable cure for ordinary people in far-flung villages. Soon,
he started preparing natural remedies based on Ayurved for diseases such as
Cholera, Plague and Malaria. Due to his cheap and effective remedies, he became
to be known as ‘Daktar’ (Indianised version of ‘doctor’). And that is how his
venture Dabur got its name—derived from Daktar Burman.
The company
faces stiff competition from many multi national and domestic companies. In the
Branded and Packaged Food and Beverages segment major companies that are active
include Hindustan Lever, Nestle, Cadbury and Dabur. In case of Ayurvedic
medicines and products, the major competitors are Baidyanath, Vicco, Jhandu,
Himani and other pharmaceutical companies.
Vision, Mission and Objectives
Vision statement of Dabur says
that the company is “dedicated to the
health and well being of every household”. The objective is to “significantly accelerate profitable growth
by providing comfort to others”. For achieving this objective Dabur aims
to:
·
Focus on growing core brands across categories,
reaching out to new geographies, within and outside India, and improve
operational efficiencies by leveraging technology.
·
Be the preferred company to meet the health and
personal grooming needs of target consumers with safe, efficacious, natural
solutions by synthesising deep knowledge of ayurveda and herbs with modern
science.
·
Be a professionally managed employer of choice,
attracting, developing and retaining quality personnel.
·
Be responsible citizens with a commitment to
environmental protection.
·
Provide superior returns, relative to our peer
group, to our shareholders.
Chairman of the company
Vivek C. Burman joined Dabur in
1954 after completing his graduation in Business Administration from the USA.
In 1986 he was appointed Managing Director of Dabur and in 1998 he took over as
Chairman of the Company.
Under Vivek
Burman’s leadership, Dabur has grown and evolved as a multi-crore business
house with a diverse product portfolio and a marketing network that traverses
the whole of India and more than 50 countries across the world. As a strong and
positive leader, Vivek C. Burman has motivated employees of Dabur to “do better
than their best”—a credo that gives Dabur its status as India’s most trusted
nature-based products company.
Leading brands
More than 300 diverse products in
the FMCG, Healthcare and Ayurveda segments are in the product line of Dabur.
List of products of the company include very successful brands like Vatika,
Anmol, Hajmola, Dabur Amla Chyawanprash, Dabur Honey and Lal Dant Manjan with
turnover of Rs.100 crores each.
Strategic
positioning of Dabur Honey as food product, lead to market leadership with over
40% market share in branded honey market; Dabur Chyawanprash is the largest
selling Ayurvedic medicine with over 65% market share. Dabur is a leader in
herbal digestives with 90% market share. Hajmola tablets are in command with
75% market share of digestive tablets category. Dabur Lal Tail tops baby
massage oil market with 35% of total share.
CHD (Consumer
Health Division), dealing with classical Ayurvedic medicines has more than 250
products sold through prescription as well as over the counter. Proprietary
Ayurvedic medicines developed by Dabur include Nature Care Isabgol, Madhuvaani
and Trifgol.
However, some
of the subsidiary units of Dabur have proved to be low margin business; like
Dabur Finance Limited. The international units are also operating on low profit
margin. The company also produces several “me – too” products. At the same time
the company is very popular in the rural segment.
Questions
1.
What is the objective of Dabur? Is it profit
maximisation or growth maximisation? Discuss.
2.
Do you think the growth of Dabur from a small pharmacy
to a large multinational company is an indicator of the advantages of joint
stock company against proprietorship form? Elaborate.
CASE – 2 IT Industry: Checkered
Growth
IT industry is now considered as
vital for the development of any economy. Developing countries value the
importance of this industry due to its capacity to provide much needed export
earnings and support in the development of other industries. Especially in
Indian context, this industry has assumed a significant position in the overall
economy, due to its exemplary potentials in creating high value jobs, enhancing
business efficiency and earning export revenues. The IT revolution has brought
unexpected opportunities for India, which is emerging as an increasingly
preferred location for customised software development. Experts are estimating
the global IT industry to grow to US$1.6 million over the coming six years and
exports to reach Rs. 2000 billion by 2008. It is envisaged that Indian IT industry,
though a very small portion of the global IT pie, has tremendous growth
prospects.
Stock Taking
The decade of 1970 may be taken
as the stage of introduction of the Indian IT industry. The early years were
marked by 75 per cent of software development taking place overseas and the
rest 25 per cent in India. Exports of Indian software until the mid-1970s was
mainly Eastern Europe, followed by US. Tata Consultancy Services (TCS) was among
the pioneers in selling its services outside India, by working for IBM Labs in
the US. The hardware segment lagged behind its software counterpart. With
instances of exports worth US$ 4 million in 1980, the software segment of the
industry has shown an uneven profile. It was not until 1980s that vigorous and
sustained growth in software exports begun, as MNCs like Texas Instruments
started to take serious interest in India as a centre of software production.
Destinations of export also underwent changes, with US dominating the main
export market with 75 per cent of the exports. The IT Enabled Services (ITeS)
segment, however, had not emerged at this stage.
It was also
during the mid to late 1980s that computer firms shifted focus from mainframe
computers (the mainstay of MNCs) to Personal Computers (PCs). In March 1985,
Minicomp installed the first ever PC at CSI, Delhi; this changed the entire
industry for good. With the entry of networking and applications like CAD/CAM,
PC sales soared in 1987-88, touching 50,000 units.
From a modest
growth in the mid-1980s software exports moved up to Rs. 3.8 billion in
1991-92. Since then, it grew at an incredible rate, up to 115 per cent in 1993.
The hardware could also register an annual growth of 40 per cent in this period,
backed by a surging demand for PCs and networking. Growth of the industry was
also driven by the emergence and rapid growth of the ITeS segment.
IT sector’s
share of GDP rose steadily in this period, rate of increase being the highest
at 44.91 per cent in 2000-01. It was in the same year that the size of the
total IT market was the biggest in the decade, at Rs. 56,592 crore. The overall
IT market was also found to increase till 2000-01. The overall IT market was
also found to increase till 2000-01, with the only exception of 1998-99. The
domestic market also showed an overall increase till 2000-01, registering a
spectacular CAGR of 50.39 per cent. Aggregate output of software and services
also increased in this period, though at an uneven rate. Of approximately $1
billion worth of sales in 1991-1992, domestic hardware sales constituted 37.2
per cent (13.4 per cent growth over the previous year), exports of hardware 6.6
per cent.
During 2000-01
the growth in the hardware segment was driven mainly by PCs, which contributed
about 58 per cent of the total hardware market. This period also witnessed the
phenomenon of increasing share of Tier 2 and cities in PC sales, thereby
indicating PC penetration into the hinterland. PC shipments had increased by 35
per cent every year from 1997 till 2000-01 when it reached 1.8 million PCs. The
commercial PC market saw a growth of 23.5 per cent mainly due to slashing of
prices by major vendors.
It was in
2001-02 that the industry had a sharp fall in rate of growth of its share of
GDP to 5.90 per cent, from 44.91 per cent in the previous year. The total IT
market also showed a fall in growth rate from 56.42 per cent in 2000-01 to a
mere 16.24 per cent in the next year, growing further at the rate of 16.25 per
cent in the next year. Software export was also affected, registering a low
growth of 28.74 per cent and failed to maintain its growth rate of 65.30 per
cent in the previous year. It got further lowered to 26.30 per cent in 2002-03.
CAGR of total output of software and services (in Rs. crore) came down to 25.61
in 2001-02 and further to 25.11 in 2002-03. The domestic market showed a steep
decline in growth to 3 per cent in 2001-02 from an outstanding 50.39 per cent
in 2000-01. It could, however, recover by growing at 4.11 per cent in the next
year.
Table 1: Indian IT Industry: 1996-97 to 2002-03
|
Year
|
A*
|
B*
|
C*
|
D*
|
E*
|
|
1996-97
1997-98
1998-99
1999-00
2000-01
2001-02
2002-03
|
1.22
1.45
1.87
2.71
2.87
3.09
|
18,641
25,307
36,179
56,592
65,788
76,482
|
3,900
6,530
10,940
17,150
28,350
36,500
46,100
|
6,594
10,899
16,879
23,980
37,350
47,532
59,472
|
9,438
12,055
14,227
18,837
28,330
29,181
30,382
|
|
*A: share of GDP of the Indian
IT market, B: size of the Indian IT market (in Rs. crore), C: software and
services exports (in Rs. crore), D: size of software and services (in Rs.
crore), E: size of the domestic market (in Rs. crore)
Questions
1.
Try to identify various stages of growth of IT
industry on basis of information given in the case and present a scenario for
the future.
2.
Study the table given. Apply trend projection method
on the figures and comment on the trend.
3.
Compute a 3 year moving average forecast for the
years 1997-98 through 2003-04.
CASE – 3 Outsourcing to
India: Way to Fast Track
By almost any
measure, David Galbenski’s company Contract Counsel was a success. It was a
company Galbenski and a law school buddy, Mark Adams, started in 1993; it
helps companies find lawyers on a temporary contract basis. The growth over
the past five years had been furious. Revenue went from less than $200,000 to
some $6.5 million at the end of 2003, and the company was placing thousands
of lawyers a year.
At then the
revenue growth began to flatten; the company grew just 8% in 2004 despite a
robust market for legal services estimated at about $250 billion in the
United States alone. Frustrated and concerned, Galbenski stepped back and
began taking a hard look at his business. Could he get it back on the fast
track? “Most business books say that the hardest threshold to cross is that
$10 million sales mark,” he says. “I knew we couldn’t afford to grow only 10%
a year. We needed to blow right through that number.”
For that to
happen, Galbenski knew he had to expand his customer base beyond the Midwest
into large legal supermarkets such as Boston, New York, and Washington, D.C.
He also knew that in doing so, he could run into stiff competition from
larger publicly traded rivals. Contract Counsel’s edge has always been its
low price, Clients called when dealing with large-scale litigation or
complicated merger and acquisition deals, either of which can require as many
as 100 lawyers to manage the discovery process and the piles of documents
associated with it. Contract Counsel’s temps cost about $75 an hour, roughly
half of what a law firm would charge, which allowed the company to be
competitive despite its relatively small size. Galbenski was counting on
using the same strategy as he expanded into new cities. But would that be
enough to spur the hyper growth that he craved for?
At that time,
Galbenski had been reading quite a bit about the growing use of offshore
employees. He knew companies like General Electric, Microsoft and Cisco were
saving bundles by setting up call and data centers in India. Could law firms offshore
their work? Galbenski’s mind raced with possibilities. He imagined tapping
into an army of discount-priced legal minds that would mesh with his existing
talent pool in the U.S. The two work forces could collaborate over the Web
and be productive on a 24-7 basis. And the cost could be massive.
Using offshore
workers was a risk, but the payoff was potentially huge. Incidentally
Galbenski and his eight-person management team were preparing to meet for
their semiannual review meeting. The purpose of the two-day event was to
decide the company’s goals for the coming year. Driving to the meeting,
Galbenski struggled to figure out exactly what he was going to say. He was
still undecided about whether to pursue an incremental and conservative
national expansion or take a big gamble on overseas contractors.
The Decision
The next morning Galbenski
kicked off the management meeting. Galbenski laid out the facts as he saw
them. Rather than look at just the next five years of growth, look at the
next 20, he said. He cited a Forrester Research prediction that some 79,000
legal jobs, totaling $5.8 billion in wages, would be sent offshore by 2015.
He challenged his team to be pioneers in creating a new industry, rather than
stragglers racing to catch up. His team applauded. Returning to the office
after the meeting, Galbenski announced the change in strategy to his 20
full-timers.
Then he and
his team began plotting a global action plan. The first step was to hire a
company out of Indianapolis, Analysts International, to start compiling a
list of the best legal services providers in countries where people had
comparatively strong English skills. The next phase was vetting the companies
in person. In February 2005, just three months after the meeting in Port
Huron, Galbenski found himself jetting off on a three months trip to scout
potential contractors in India, Dubai, and Sri Lanka. Traveling to cities
like Bangalore, Chennai and Hyderabad, he interviewed executives from more
than a dozen companies, investigating their day-to-day operations firsthand.
India seemed
like the best bet. With more than 500 law schools and about 200,000 law
students graduating each year, it had no shortage or attorneys. What amazed Galbenski,
however, was that thanks to the Web, lawyers in India had access to the same
research tools and case summaries as any associate in the U.S. Sure, they
didn’t speak American English. “But they were highly motivated, highly
intelligent, and extremely process-oriented,” he says. “They were also eager
to tackle the kinds of tasks that most new associated at law firms look down
upon” such as poring over and coding thousands of documents in advance of a
trial. In other words, they were perfect for the kind of document-review work
he had in mind.
After a return
visit to India in August 2005, Galbenski signed a contract with two legal
services companies: QuisLex, in Hyderabad, and Manthan Services in Bangalore.
Using their lawyers and paralegals, Galbenski figured he could cut his
document-review rates to $50 an hour. He also outsourced the maintenance of
the database used to store the contact information for his thousands of
contractors. In all, he spent about 12 months and $250,000 readying his newly
global company. Convincing U.S. based clients to take a chance on the new service
hasn’t been easy. In November, Galbenski lined up pilot programs with four
clients (none of which are ready to publicise their use of offshore
resources). To help get the word out, he launched a website
(offshore-legal-services.com), which includes a cache of white papers and
case studies to serve as a resource guide for companies interested in
outsourcing.
Questions
1.
As money costs will decrease due to decision to
outsource human resource, some real costs and opportunity costs may surface.
What could these be?
2.
Elaborate the external and internal economies of
scale as occurring to Contract Counsel.
3.
Can you see some possibility of economies of scope
from the information given in the case? Discuss.
|
|||||
CASE – 4 Indian Stock Market:
Does it Explain Perfect Competition?
The stock
market is one of the most important sources for corporates to raise capital. A
stock exchange provides a market place, whether real or virtual, to facilitate
the exchange of securities between buyers and sellers. It provides a real time
trading information on the listed securities, facilitating price discovery.
Participants in
the stock market range from small individual investors to large traders, who
can be based anywhere in the world. Their orders usually end up with a
professional at a stock exchange, who executes the order. Some exchanges are
physical locations where transactions are carried out on a trading floor. The
other type of exchange is of a virtual kind, composed of a network of computers
and trades are made electronically via traders.
By design a
stock exchange resembles perfect competition. Large number of rational profit
maximisers actively competing with each other, trying to predict future market
value of individual securities comprises the main feature of any stock market.
Important current information is almost freely available to all participants.
Price of individual security is determined by market forces and reflects the
effect of events that have already occurred and are expected to occur. In the
short run it is not easy for a market player to either exit or enter; one
cannot exit and enter for few days in those stocks which are under no delivery.
For example Tata Steel was in no delivery from 29/10/07 to 02/11/07. Similarly
one cannot enter or exit on those stocks which are in upper or lower circuit
for few regular trading sessions. Therefore a player has to depend wholly on
market price for its profit maximizing output (in this case stock of
securities). In the long run players may exit the market if they are not able
to earn profit, but at the same time new investors are attracted by rise in
market price.
As on 01/11/07
total market capital at Bombay Stock Exchange (BSE) is $1589.43 billion
(source: Business Standard, 1/11/2007); out of this individual investors
account for only $100bn. In spite of the fact that individual investors exist
in a very large number, their capital base is less than 7% of total market
capital; rest of capital is owned by foreign institutional investor and
domestic institutional investors (FIIs and DIIs), which are very small in
number. Average capital owned by a single large player is huge in comparison to
small investor. This situation seems to have prompted Dr Dash of BSE to comment
‘The stock market activity is increasingly becoming more centralised,
concentrated and non competitive, serving interest of big players only.” Table
2 shows the impact of change in FII on National Stock Exchange movement during
three different time periods.
Table 2: Impact of FIIs’ Investment on NSE
|
Wave
|
Date
|
Nifty
close
|
Change in Nifty Index
|
FLLS Net Investment
(Rs.Cr.)
|
Change in Market Capitalisation
(Rs.Cr.)
|
|
Wave 1
From
To
|
17/05/04
26/10/05
|
1388.75
2408.50
|
1019.75
|
59520
|
5,40,391
|
|
Wave 2
From
To
|
27/10/05
11/05/06
|
2352.90
3701.05
|
1348.15
|
38258
|
6,20,248
|
|
Wave 3
From
To
|
12/05/06
13/06/06
|
3650.05
2663.30
|
-986.75
|
-9709
|
-4,60,149
|
By design, an
Indian Stock Market resembles perfect competition, not as a complete
description (for no markets may satisfy all requirements of the model) but as
an approximation.
Questions
1.
Is stock market a good example of perfect competition?
Discuss.
2.
Identify the characteristics of perfect competition in
the stock market setting.
3.
Can you find some basic aspect of perfect competition
which is essentially absent in stock market?
CASE – 5 The Indian Audio
Market
The Indian
audio market pyramid is featured by the traditional radios forming its lower
bulk. Besides this, there are four other distinct segments: mono recorders
(ranking second in the pyramid), stereo recorders, midi systems (which offer
the sound amplification of a big system, but at a far lower price and expected
to grow at 25% per year) and hi-fis (minis and micros, slotted at the top end
of the market).
Today the
Indian audio market is abound with energy and action as both national and
international majors are trying to excel themselves and elbow the others,
ushering in new concepts, like CD sound, digital tuners, full logic tape deck,
etc. The main players in the Indian audio market are Philips, BPL and Videocon.
Of these, Philips is one of the oldest and is considered at the leading
national brands. In fact it was the first company to introduce a range of
international products such as CD radio cassette recorder, stand alone CD
players and CD mini hi-fi systems. With the easing of the entry barriers, a
number of new international players like Panasonic, Akai, Sansui, Sony, Sharp,
Goldstar, Samsung and Aiwa have also entered the arena. This has led to a sea
of changes in the industry and resulted in an expanded market and a happier
customer, who has access to the latest international products at competitive
prices. The rise in the disposable income of the average Indian, especially the
upper-income section, has opened up new vistas for premium products and has
provided a boost to companies to launch audio systems priced as high as Rs.
50,000 and beyond.
Pricing across Segments
Super Premium Segment: This segment of the market is largely
price-insensitive, as consumers are willing to pay a premium in order to obtain
products of high quality. Sonodyne has positioned itself in this segment by
concentrating on products that are too small for large players to operate in
profitably. It has launched a range of systems priced between Rs. 30,000 to Rs.
60,000. National Panasonic has launched its super premium range of systems by
the name of Technics.
Premium Segment: Much of the price game is taking place in this
segment, in which systems are priced around Rs. 25,000. Even the foreign
players ensure that the pricing is competitive. Entry barriers of yester years
compelled the demand by this segment to be partially met by the grey market.
With the opening up of the market, the premium segment is witnessing a rapid
growth and is currently estimated to be worth Rs. 30 crores. Growth of this
segment is also being driven by consumers who want to upgrade their old music
systems. Another major stimulating factor is the plethora of financing options available,
bringing more and more consumers to the market.
Philips has understood the Indian
listener well enough to dictate the basic principles of segmentation. It
projects its products as high quality at medium price. In fact, Philips had
successfully spotted an opportunity in the wide price gap between portable
cassette players and hi-fi systems and pioneered the concept of a midi system
(a three-in-one containing radio, tape deck and amplifier in one unit). Philips
has also realised that there is a section of the rich consumer which values not
just power but also clarity and is willing to pay for it. The pricing strategy
of Philips was to make the most of its image as a technology leader. To this
end, it used non-price variables by launching of a range of state of art
machines like the FW series, and CD players. Moreover, it came up with the
punch line in its advertisements as, “We Invent For You”.
BPL stands
second only to Philips in the audio market and focuses on technology as its
USP. Its kingpin in the marketing mix is its high technology superior quality
product. It is thus at being the product-quality leader. BPL’s proposition of
fidelity is translated in its punchline for its audio systems as, ‘e-fi your
imagination’ (d-fi stands for digital fidelity). The company follows a market
skimming strategy. When a new product was launched, it was placed in the top
end of the market, and priced accordingly. The company offers a range of
products in all price segments in the market without discounting the brand.
Another major
player, Videocon, has managed to price its products lower even in the premium
segment. The success of the Powerhouse (a 160 watt midi launched by Philips in
1990) had prompted Videocon to launch the Select Sound range of midi stereo
systems at a slightly lower price. At the premium end, Videocon is making
efforts to upgrade its image to being “quality-driven” by associating itself
with the internationally reputed brand name of Sansui from Japan, and following
a perceived value pricing method.
Sony is another
brand which is positioning itself as a premium product and charges a higher
price for the superior quality of sound it offers. Unlike indulging into price
wars, Sony’s ad-campaigns project the message that nothing can beat Sony in the
quality and intensity of sound. National Panasonic is another player that has
three products in the top end of the market, priced in the Rs. 21,000 to Rs.
32,000 range.
Monos and Stereos: Videocon has 21% share I the overall audio
market, but has been a major player only in personal stereos and two-in-ones.
Its history is written with instances where it has offered products of similar
quality, but at much lower prices than its competitors. In fact, Videocon
launched the Sansui brand of products with a view to transform its image from
that of being a manufacturer of cheap products to that of being a company that
primes quality, and also to obtain a share of the hi-fi segment. Sansui is
being positioned as a premium brand, targeting the higher middle, upper income
groups and also the sensitive middle class Indian consumer.
The objective
of Philips in this segment is to achieve higher sales volumes and hence its
strategy is to expand its range and have a product in every segment of the
market. The pricing method used by Philips in this segment is providing value
for money.
National
Panasonic offers products in the lower end of the market, apart from the top of
the range. In fact, it reduced the price of one of its small two-in-ones from
Rs. 3,500 to Rs. 2,400, with the logic that a forte in the lower end of the
market would help in building brand reliability across a wider customer base.
The company is also guided by the logic that operating in the price sensitive
region of the market will help it reach optimum levels of efficiency. Panasonic
has also entered the market for midis.
These apart,
there also exists a sector in the Indian audio industry, with powerful regional
brands in mono and stereo segments, having a market share of 59% in mono
recorders and 36% in stereo recorders. This sector has a strong influence on
price performance.
Questions
1.
What major pricing strategies have been discussed in
the case? How effective these strategies have been in ensuring success of the
company?
2.
Is perceived value pricing the dominant strategy of
major players?
3.
Which products have reached maturity stage in audio
industry? Do you think that product bundling can be effectively used for
promoting sale of these products?
.jpg)
No comments:
Post a Comment