Strategia Round 2- Case Submission

ABC Industries is one of the market leaders in plastic thermowares in Uttar

Pradesh (majorly a price-sensitive market). The company has been growing
steadily over the last decade. The company's value proposition is the purity of
raw materials that they use in their products, and they are known for quality in
the market.

Polypropylene is the major raw material consumed in the production of plastic

thermoware.
It is currently being procured from: -
Source Percentage Average Selling Price (Rs. /kg)
RIL 50% 95
HMEL 30% 93
Open market/traders 20% 92

On an average, 1.5 kg of Polypropylene is converted into 1 thermoware. The

average selling price of 1 thermoware is Rs. 250.

The company has one plant located in the city of Kanpur. Lately, with increasing
competition and price war, they have lost some market share to the
competition. The profitability has been trending downward since 2018.
The profit and loss statement for the last three years: -
Income statement for ABC Industries (INR Cr.)
FY20 FY19 FY18
Revenue 22.9 19.9 16.0
Cost of Revenue 18.9 16.3 12.5
Gross Revenue 4.0 3.7 3.6
SG&A 1.8 1.4 1.3
Operating income 2.2 2.3 2.3
Additional expense items 0.2 0.1 0.1
Interest expense 0.1 0.1 0.2
Taxes 0.5 0.5 0.5
Net Income 1.5 1.7 1.5
One of company’s major worries is the overall expense of operations. The
competitors' performance and overall costs for similar products, appears to be
much lower.
Due to high quality standards, the rejection rate of the plant is 10%. The rejected
products are sold to a local dealer at a flat price of Rs. 50 without the branding
of the company.

They have one distribution centre each in Kanpur, Agra, Varanasi, Gorakhpur,
Lucknow. The plant is currently being operated at 90% of its capacity.
Demand in Number
Distribution Centre Annual
Kanpur 300000
Agra 250000
Varanasi 236000
Gorakhpur 100000
Lucknow 30000

The demand is expected to grow at the rate of 15% post covid.

ABC Industries currently sell their products through retail channel only and the
company.

The company has approached you to review their existing supply chain and
create a broad plan to improve their bottom line. They would also like you to
explore and investigate other channels of sales along with expansion in the
existing production capacity.

Deliverables: -
Create a 5-slide presentation (excluding Cover and Thank you page). Appendix
slides are not mandatory and there is no limit on the number of appendix slides