The Indian Institute of Business Management & Studies SUBJECT: Business Management CASE 1: Where Do We Go from Here?

Marks: 100

As one of the many seminars he d to dis!uss the !or"orate res"onse of fami y#o$ned %usiness to i%era isation and g o%a isation& the keynote Mr 'ur!haran (as !on! uded his s"ee!h %y saying& )In the end& I $ou d say that the su!!ess of Indian e!onomy $ou d de"end on ho$ the Indian industry and %usiness res"ond to the reform "ro!ess*+ As the "ro!eedings of the seminar "rogressed it %e!ame ! ear that there $as a differen!e of o"inion in the "er!e"tion of "arti!i"ants* Those $ho $ere su""orting the !ase for etting the fami y#o$ned %usinesses fa!e !om"etition o"ined that su!h %usinesses in India ha,e e-hi%ited finan!ia a!umen. its mem%ers ha,e genera y ado"ted an austere ife sty e. they ha,e demonstrated an a%i ity to take !a !u ated risks& and an a%i ity to a!!umu ate and manage !a"ita * They ha,e de,ised uni/ue manageria sty e and ed the !reation of the e/uity !u t among Indians* Se,era of them are o$#!ost "rodu!ers* The "arti!i"ants !riti!a of the ro e of fami y %usiness had this is to say: )There has %een a tenden!y to mi- u" fami y0s intent $ith that of %usinesses managed %y them* There is a a!k of fo!us and %usiness strategy* 1ami y %usinesses ha,e genera y ado"ted a short#term a""roa!h to %usiness !ausing ess "ur"osefu in,estments in s"e!ia y !riti!a areas su!h as em" oyee de,e o"ment and "rodu!t de,e o"ment* Customers and de,e o"ment of marketing ski s ha,e %een neg e!ted*+ The ,a edi!tory session of the Seminar attem"ted to %ring out the issues ! ear y* It !u minated in an agenda for reform %y the fami y %usinesses* The "oints high ighted in the agenda are: 1* Indian fami y#o$ned %usiness organisations need to "rofessiona ise management& 2* they need to !urtai the di,ersified of their %usiness grou"s and im"art a shar"er fo!us to their %usiness a!ti,ities& and 3* they need to "ay greater attention to the de,e o"ment of human !a"ita * Question Su""ose you $ere an o%ser,er at the seminar* (uring tea and un!h %reaks you had an o!!asion to meet se,era "eo" e $ho $ere ske"ti!a and fe t that the reform "ro!ess $as ha,ing on y a su"erfi!ia im"a!t on the !or"orates* E-"ress your o"inion that you form a%out the issues at the seminar*

CASE 2 A Healthy Dose of Success Muhammad Ma4eed re"resents a ty"i!a Indian $ho has !reated su!!ess out of sheer hard $ork and !ommitment through his edu!ation and e-"ertise* At the age of 23 years& Ma4eed& after graduating in "harma!y from 5era a Uni,ersity& $ent to "ursue higher studies in the US* 6e !om" eted his masters and 7h( in industria !hemistry* Armed $ith high /ua ifi!ations& he %e!ame a resear!h "harma!ist and e,entua y& as most e-"atriate Indians do& set u" his o$n !om"any& Sa%insa Cor"oration* E-"erien!ing diffi!u ties $ith the ong#dra$n drug a""ro,a "ro!ess of the US 1ood and (rug Administration and his

The Indian Institute of Business Management & Studies SUBJECT: Business Management

Marks: 100

o$n d$ind ing sa,ings& Ma4eed fo!ussed on ayur,edi! "rodu!ts %ased on natura e-tra!ts* 6e returned to India in 1881 9in!identa y& the year $hen i%era isation started in India: and set u" Sami Chemi!a s and E-tra!ts ;td& ate renamed as Sami ;a%s ;td 9S;;:& Banga ore* S;; has o,er three do<en "rodu!ts& and se,en US "atents* There are 2= Euro"ean and other !ountry "atents "ending a""ro,a * S;; has four manufa!turing units a %ased in 5arnataka* The sa es is >s ??*= !rore and the "rofit#after#ta- is >s =*@8 !rore* It has "ioneered s"e!ia ised "rodu!ts %ased on Indian her%a e-tra!ts re ying on the "rin!i" es of ayur,eda* The ma4or thrust is on remedies for !ho estero !ontro & fat redu!tion& and $eight management* As against se,era Indian !om"anies e-"orting ra$ her%s& S;; s"e!ia ises in ,a ue#addition through e-tra!tions* The resu t is en!ouraging: S;;0s "rodu!ts ty"i!a y fet!h an e-"ort "ri!e that is more than dou% e the "ri!e of ra$ her%s* S;; thinks of its %usiness as )manufa!turing and se ing traditiona standardi<ed e-tra!ts and nutritiona and "harma!euti!a fine !hemi!a s+* Sa%insa& its US#%ased !om"any& se!ures !ontra!ts from the US !om"anies to manufa!ture !ertain !hemi!a s in India* Its %usiness " ans are /uite am%itious* Setting u" a "rodu!t management team& assisting farmers in !u ti,ation of "harma!euti!a y usefu her%s& and internationa !o a%orations for de,e o"ing resear!h#%ased inte e!tua "ro"erty and its !ommer!ia isation are some of the strategi! a!tions on the an,i * S;; ooks for$ard to %eing a >s =00#!rore !om"any %y 200= $hen the Aor d Trade Brganisation0s "atenting regimes !omes into for!e* Question 6o$ $i you define the %usiness of S;;C Comment on the %usiness of S;; and your o"inion on the ike ihood of its su!!ess*

CASE 3

o Chain! o Gain

Te-ti e industry is one of the o dest industries in India* Se,era %usiness houses ha,e their origin in this industry* In the mid#18@0s& the "o$er oom se!tor in the unorganised se!tor started hurting %ad y the interests of the !om"osite te-ti e mi s of the se!tor* Their !ost stru!ture& $ith o$er o,erheads and no duties& $as ess than ha f of that of mi s for e/ui,a ent "rodu!tion* Ahi e the "o$er ooms so d ! oth as a !ommodity& the mi s tried to esta% ish their "rodu!ts as %rands* The "ost# i%era isation "eriod has seen a arge num%er of foreign %rands enter India* It is in this s!enario that the Mayur %rand of >a4asthan S"inning and Aea,ing Mi s 9>SAM: had to !ar,e out a " a!e for itse f* >SAM is the f agshi" !om"any of the ;DJ Bhi $ara grou"* It has %een the argest "rodu!er and trader of yarn in the !ountry and !aters to the arge demands for % ended yarns and grey ! oth fa%ri! used for !hi dren0s s!hoo uniform* In 188?& the yarn %usiness fa!ed a se,ere !run!h o$ing to o,er!a"a!ity* 1rom 188= on$ard& >SAM %e!ame a ate fo o$er of the industry trend as other !om"etitors a ready mo,ed u" the ,a ue !hain*

The Indian Institute of Business Management & Studies SUBJECT: Business Management

Marks: 100

Te-ti e manufa!turing is %asi!a y !onstituted of the "ro!esses of s"inning& $ea,ing& "ro!essing& and marketing* More than =0 "er !ent of the ,a ue is !on!entrated in $ea,ing and "ro!essing* Mo,ing u" the ,a ue !hain from s"inning in,o ,es arge in,estments in ma!hinery and a%our* 'raduating to marketing re/uires getting ! oser to the !ustomers* This is the !ha enge that a traditiona s"inning mi ike >SAM had to fa!e if it $as to sustain itse f in a high y !om"etiti,e market* At another e,e & for >SAM& it $as a matter of !u tura transformation of the organisation ong used to a !onser,ati,e& trader menta ity* Imagine a !om"any $hose main dri,ing for!e& Shekhar Agar$a & Ei!e#Chairman and Managing (ire!tor ha,ing itt e interest in $at!hing 6indi mo,ies signing u" Sharukh 5han at a !onsidera% e "ri!e for !e e%rity ad,ertising* 1rom the market side& it has ong %een trou% ed $ith its !ommitment to the oya midd e#! ass !ustomers as it had to simu taneous y "ay attention to the u"$ard y mo%i e u""er midd e ! ass !ustomers* Then there $as the di emma of %eing too many things to a $ide range of audien!e* >SAM $anted to ha,e a stake in the e-"ort markets as $e as kee" its share in the rura markets* It "er!ei,ed itse f as an effi!ient "rodu!er and $ished to %e!ome a f am%oyant retai er* It e-!e ed in %asi! te-ti e "ro!essing yet dreamt of attaining so"histi!ation in in#house "rodu!tion of readymade garments* And a this $hi e it has %een a ate mo,er& osing out to ear y mo,ers su!h as >aymonds* Do $onder it ,irtua y anded u" on the fringes of the industry& far %ehind formida% e !om"etitors ike >e ian!e& 'rasim& and S* 5umar* Question Suggest ho$ shou d >SAM manage its ,a ue !hain effe!ti,e y* Shou d it try to imitate the market eadersC If yes& $hyC If no& $hy notC Ahat a ternati,es routes to su!!ess do you "ro"oseC CASE " A #ery $ntri%uin% &ac'a%e

It is not /uite often that a "ositi,e "rodu!t feature %e!omes an a %atross around the ne!k of a !om"any* EI7 Industries had he d s$ay for o,er t$o de!ades in the organised Indian uggage market on the %asis of the dura%i ity of its mou ded suit!ases* B%,ious y& the !ustomer "er!ei,es ,a ue#for#money in the ong# asting& reasona% y#"ri!ed A fa %rand of EI7 suit!ases $hi!h se s 1*= akh "ie!es a month* But this means that ha,ing %ought one suit!ase the !ustomer !an do $ith it for se,era years* Market resear!h %y the !om"any sho$s that an a,erage Indian fami y "u s out the suit!ase mere y for outstation tra,e a fe$ times a year* 6en!e& there is no "ressing need for !ontinua re" a!ement of the o d uggage* The EI7 "rodu!ts are made of ,irgin "o ymer as !om"ared to the re!y! ed grade I and II "o ymers used %y the unorganised se!tor* They are su%4e!ted to stringent stress tests for /ua ity !ontro *

The Indian Institute of Business Management & Studies SUBJECT: Business Management

Marks: 100

EI7 has a "resen!e in a $ide range of the market segments $ithin a "ri!e s"e!trum of >s 28= to >s F&000 a"ie!e* It is her that the !om"etition from the unorganised se!tor hurts the !om"any most* EI70s e!onomi!a y#"ri!ed %rand& A fa is $ide y imitated and so d at mu!h o$er "ri!es* This ena% es the unorganised se!tor to ty"i!a y se 20 times more than EI7 !an* The o$er "ri!e thresho d seems to %e >s 22= $hi!h in near y im"ossi% e for EI7 to a!hie,e gi,en its !ost stru!ture* In the >s 1=00 " us "remium range& EI7 has to !ontend $ith Samsonite $hi!h is a formida% e !om"etitor* The o%,ious ta!ti! for EI7 has %een to !ut !osts* (istri%ution and ogisti!s is one area $here ,a iant efforts ha,e %een made at !ost redu!tion* EI7 has four fa!tories o!ated in heart of India* The a,erage distri%ution !osts !ome to >s G to >s @ a"ie!e* >edu!tion in !ost has %een attem"ted through distri%uted manufa!turing %y ha,ing ,endors making the "rodu!t at different o!ations& there%y& a,oiding trans"ortation of high#,o ume suit!ases a!ross ong distan!es and redu!ing in,entory %ui d#u" in the !hanne * Se,ere "ressure on sa es has resu ted in EI7 Industries offering dis!ounts and un$itting y entering into a disastrous "ri!e $ar* 7romotion of a high ,isi%i ity "rodu!t suffered and ad,ertising e-"enditure has %een ruth ess y !urtai ed from the ear ier >s 11 !rore to >s 2 !rore no$* Its ead ad,ertising agen!y is 6TA* A!tion on the "romotion front has seen reorganisation of the %rand "ortfo io* In!identa y& ear ier its su!!essfu and "o"u ar Kal bhi aaj bhi !am"aign ser,ed to reinfor!e its dura%i ity theme* There are se,era road% o!ks that the !om"any has to negotiate* In!rease in "o"u ation& rising "ro"ensity of Indian to tra,e & and the insatia% e thirst of !ustomers for state#of#the#art te!hno ogi!a "rodu!ts $ith ne$er designs and inno,ation& a at an afforda% e "ri!e are the o""ortunities and !ha enges %efore the !om"any* Introdu!tion of ne$ %rands& Mantra and Sky%ags& "rodu!t range of di,ersifi!ation to in! ude !hi dren0s %ags and adies0 %ags& strategi! a ian!e $ith Euro"e0s eading uggage#makerH(e seyH are some of the ste"s taken %y the !om"any* Iet& !aught in its se f s"un $e% of "ast su!!esses& EI7 is today fa!ed $ith an un!ertain future* Question 6o$ shou d the EI7 Industries get out of the %ind that it finds itse f inC But ine the !ontours of the marketing " ans and "o i!ies that EI7 needs to formu ate and im" ementC

The Indian Institute of Business Management & Studies SUBJECT: Business Management CASE ( )et *here +e )i%ht

Marks: 100

Traditiona y& "o$er " ants& %eing !a"ita #intensi,e& ha,e %een set u" %y the "u% i! se!tor and state e e!tri!ity %oards 9SEBs: in India* E,eryone agrees today that the energy se!tor is the ma4or infrastru!ture %ott ene!k ho ding u" e!onomi! de,e o"ment* A !riti!a as"e!t of e!onomi! reforms thus is the reform of the energy se!tor* The Madhya 7radesh State E e!tri!ity Board 9M7SEB: is not mu!h different from its !ounter"arts in other states* It fa!es simi ar "ro% ems and is o"ting for identi!a so utions* The !ommon e ements in the "o$er se!tor reforms are: !or"oratisation %y %reaking the SEB into generation& transmission& and distri%ution. finan!ia restru!turing in! uding de%t and interest "ayment res!hedu ing. redu!tion of man"o$er. and im"ro,ements in o"erationa effi!ien!y* 7u% i! uti ities& ike SEBS& ha,e to %e !ommer!ia y ,ia% e in order to sur,i,e* Iet histori!a y& this as"e!t of SEB as an organisation has %een sa!rifi!ed at the a tar of "o iti!a e-"edien!y* The ru ing "arty& irres"e!ti,e of $hether it is the Congress at "resent or the Bharatiya Janata 7arty ear ier& ha,e made "re#e e!tion "romises of su"" ying free or hea,i y#su%sidised "o$er* (ig,i4ay Singh& the "resent !hief minister of Madhya 7radesh& a "o"u ist "o iti!ian ear ier& on onger sees e e!tora %enefit in "ro,iding free e e!tri!ity* )It "ays to "ay+ is his refrain today& $hether it is hea th!are or e e!tri!ity* Bo d ste"sH%o d& as they sti !arry the risk of a "o iti!a fa out $ith fiery BJ7 eader Uma Bharti %reathing do$n (ig,i4ay0s ne!k or the si ent s!hemers of his o$n "arty $orking o,ertime %ehind the s!enesHha,e %een initiated to reform the energy se!tor in Madhya 7radesh* M7SEB is to %e di,ided into generation& transmission& and distri%ution 9T&(:& and su"" y !om"anies* 1inan!ia management and !ash f o$ management is to %e im"ro,ed* The retirement age of M7SEB em" oyees has %een redu!ed from F0 to =@ years* Effe!ti,e o"erationa !ontro is sought to %e e-er!ised %y metering "o$er su"" y at di,ision J distri!t e,e to fi- res"onsi%i ity for T & ( osses and "o$er thefts* A sustained dri,e is on to identify non#"aying !onsumers& insta meters& and make them "ay their %i s regu ar y* M7SEB0s annua osses are to the tune of a massi,e >s 1&F00 !rore. tota ia%i ities are estimated to %e >s 20&000 !rore* Undenia% y& are "arameters indi!ating the rot that has !orroded the system* At one e,e & the reform of the energy se!tor is a "o iti!a a!tion %ut at another& and "erha"s& a more fundamenta e,e & it is a /uestion of managing an organisation strategi!a y through strategi! a!tions designed to turn around a ,ita "u% i! uti ity*

The Indian Institute of Business Management & Studies SUBJECT: Business Management Question

Marks: 100

Ana yse the "ro% ems of the M7SEB from the strategi! management "ers"e!ti,e* (o you fee that the a!tions taken or %eing !ontem" ated are strategi! in natureC 7ro"ose $hat e se needs to %e done to make the M7SEB a ,ia% e organisation*