CASE STUDY

ANALYSIS
GROUP - 1

Mohammad Ahaduddin - 019

Mudamanchu Vamshi Krishna - 089
Datla Rama Sowjanya - 134
Vikram Ravisha - 193
Baby Sivani Vallabhaneni - 245
Terli Surya - 274
Bandi Likith Reddy - 307
Naregudem Kranthi Reddy - 365
 BERDYTCH CLOTHING

Introduction

 Bredytch clothing limited was founded by Jiri and Marie in 1967 in North America,
Canada a supplier of children's clothing.
 Josie Berdytch was only daughter of Marie and Jiri Berdytch who took over the
business in 2000.
 Josie took over the family business. Designed cloths and communicating with
customers, managing the employees, co- ordinated with the outside seamstresses and
handled quality control.
 Josie granddaughter Cristina graduated from HBA she should take care of the
Business or her grandmother should continue with the business.
 Either she should run the business or sell the company and retire.

How many units to breakeven?

 The Retail Selling Price (Average) : 18$

 Retail Margin : 10$
 Variable Cost (Average) : 2$

Fixed Cost (Average) : 922,000$

Total : 153,666 units
 Each item sold to retailers at an average price of $18 per piece, and the products were
in turn marked up a further 100 per cent by retail owners for sale to customers.
 Most of whom were large retail chains that had dealt with Berdytch for many years.
 Berdytch had a unique production system wherein it outsourced the sewing to a group
of women who made the garments in their own homes on their own machines.
 Customer also commented: We wish their delivery was more reliable, but their prices
cannot be beaten.
 Berdytch spent most of its advertising budget on visiting major retail chains watch
product samples three to four times a year and on its business-to-business website.
 The contract sewers wages ranged from $16 to $30 per dozen garments, and some of
the sewers could produce 20 dozen garments a week Buttons, labels and finishing
touches were added by the 13 factory employees for the assembled garments.
 Berdytch's variable costs averaged $10 per garment.
 Their busiest sales months are September and October.
 After the retirement of Alva Hudak, Problems with delivery, invoicing, work
scheduling and various other matters came into existence.
 In addition to having a problem replacing the chief supervisor, Josie was also having
difficulty finding and retaining good home sewers.
 Josie said we have got too many problems right now, and I don't want to work much
longer, But the business is in good financial health, and I've got loyal customers, a
dedicated work force and a group of wonderful sewers.
 What operating, marketing, and general management problems are
affecting Berdytch?

Operating Problems
 Severe restrictions on returning orders
 Unreliable and late deliveries
 Retaining good sewers
 Long production process

Management Problems
 Josie's responsibilities are too much
 Not hiring new chief supervisor
 Relying mostly on part-time sewers.

Marketing Problems
 Relying mostly on word of mouth
 Spent most of marketing money on visiting retailers
 Should Cristina sell their business? if yes, what would be a
reasonable price?

Cristina should sell her business for :

• 600-800$ thousand (Based on net income and value of assets).

If Cristina doesn't sell their business, what could be done to solve the
problems at Berdytch

 Find a replacement for a chief supervisor

 Find and keep good home sewer.
 Reliable and fast delivery
 Find new way to promote the products.
 Find new domestic suppliers.
 Try to make the whole manufacturing process automated.