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1 EPGDM/GMBA Term 3 Quad 3 _ Competition and Strategy _ Case Study_ March 2023_ Prof Dr. Krishnakumar V Rao Instructions to Students: # Case Study is written to illustrate a set of situations in a...

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1 EPGDM/GMBA Term 3 Quad 3 _ Competition and Strategy _ Case Study_ March 2023_ Prof Dr. Krishnakumar V Rao Instructions to Students: # Case Study is written to illustrate a set of situations in a given period for the stated company # The company may refer to an existing company or a company which existed earlier # Therefore, the Analysis and Answers to Questions must be confined to that period and matters within the case. Students are not expected to look into internet online sources to judge the Case and the Company based on current knowledge of that company # The Case study is given for the limited purpose of evaluation of the students about their knowledge and skill learnt during the sessions supplemented with their relevant practical experience (if any). DO NOT CIRCULATE THE CASE STUDY OR UPLOAD ANYWHERE FOR ANY OTHER PURPOSE TO ANYONE NOW OR EVEN LATER # All of you do understand that our EPGDM/GMBA is a tough and exacting program needing continuous attention and involvement. But, unfortunately, many students, because of their official and other non-official and/or family activities, start working towards Assignments and case studies only very close the dead line timing prescribed by Alliance University # Therefore, the following things tend to happen: $ Resort to copying some sort of solutions uploaded by somebody and send it to AU AU will not accept it. Such students will be marked ZERO. No queries will be entertained from the students later $ Resort to taking help from fellow students and submit almost identical sentences as answers. AU will not accept it. We may not know who helped and who copied. But, therefore All such students, near identical answers, will be marked ZERO for their answers. No queries will be entertained from the students later $ May be Lack of time! - Some students just copy sentences /paras from the case and post them as answers. You are expected to answer in your own words and sentences for the questions asked. If not, such students will lose marks. No queries will be entertained from the students later 2 $ Sometimes we have seen some students send a general write up on the case questions, without specifically answering the questions asked. You are expected to answer specifically and precisely each question and sub-question in your own words and sentences. Therefore, such generalist answers will be marked ZERO. No queries will be entertained from the students later $ Answers the questions may involve (i) quoting relevant theory as applicable (ii) giving a schematic diagram (iii) answering the case situation precisely and comprehensively linking it to the relevant theory. Only if all the 3 aspects are adhered to, a student will get full marks OR he/she may get proportionally less marks. No queries will be entertained from the students later Therefore, you are kindly requested to read, understand all the instructions and see for yourself, what is expected and what you have done while answering the Assignments/Case Studies. Read your answers, Check, take care of all the above points and then upload in the LMS please. Best Wishes to You Case Study – March 2023 Vigneshwar Chemicals Pvt Ltd Early History Mahender did his schooling from Dadar Mumbai, took his B. Sc (Chemistry) from Mumbai University. He worked in a chemical trading firm for 2 years; His father was a Senior Officer in a Govt Corporation. When Mahender wanted to start his own Marketing Company in Chemicals in the year 2007, his father initially cautioned him but later helped him, partly financially and partly by speaking to his friends in a nationalised bank and also few large chemical companies. Shiva Chemicals Company Pvt Ltd. (SCCPL) was established by Mahender in 2008 with him and his wife as major shareholders and few family members contributing the rest. It started operations in April 2009. By 2012 March SCCPL had managed a Turnover of Rs 30 Crores with few chemical items, of which 25% was exports to Middle East and Africa. He had got married to his uncle’s daughter from Mumbai itself. Renewal of Old Friendship By the middle of 2012 Mahender attended a Golden Jubilee Function of his old School SIES near Dadar. During the re-union of ex-students Mahender was happy to meet 2 of his close friends who studied with him in the same class from 6th standard to 12th standard. After passing out 12th standard the friends had gone their own way. 3 Vipul did his B. Tech in Mechanical Engineering from Rajasthan and took his MBA in Marketing from Delhi. He joined a private firm dealing in leather chemicals based in Chandigarh as Asst.Marketing Manager (North). He was married to a Marathi Girl from Nagpur. He was not that happy to stay in North and both the husband and the wife wanted to come back to Mumbai or Pune or Nagpur Ranjan did his B. Com and then C.A. and joined as one of the Junior Partners in Doshi & Partners, a Chartered Accountant Firm in Baroda. He married a reasonably wealth Gujarati girl from Baroda. He was specialising in Audit and Income Tax Advisory to Small and Medium Pharma Manufacturing Units in Gujarat. He was thinking of starting a company alone by himself or with others soon. The get together of the old friends was very pleasant and all of them decided to meet with their families around Ganesh Chaturthi Festivals, one of the very grand 10-day festival of Mumbai. As planned, Mahender arranged a good hotel near Dadar for his 2 friends. The wives of the 3 friends also got together very well with each other. After staying there for 4 days Vipul family and Ranjan family returned to their respective places. But during the 4 days of stay, the 3 pairs in principle had agreed that they can soon join together to do something interesting in business area Entering into New Venture After various rounds of discussions, it was decided that a new company by name Vigneshwar Chemicals Pvt Ltd (VCPL) will be established soon with Pune as base. Mahender was authorised to initiate action. Vipul and Ranjan will resign their jobs within 3 months and join the new company as active partners. The new company was inaugurated on Nov 15, 2012. The intent of VCPL was to become a leading company in all aspects of manufacturing suitable products for exports as well as domestic consumption. They evaluated multiple products suitable for different industries current Indian and Global Market and export potential in various countries over the next 10 years Manufacturing for Exports and for Domestic Sales: Areas of Options: Healthcare Items - Surgical Theatre Equipments, Consumable, Accessories The global surgical equipment market is estimated to reach $70,000 Million by 2027. However, inadequate quality assurance concerning to performance, improper sterilization procedures for reusable equipment, and the absence of affirmative regulatory framework in developing economies that limit the market growth. On the contrary, R&D in the field of surgical equipment is anticipated to create new opportunities during the forecast period Industrial Items and Consumables associated with Chemical industries and Textile Industries 4 The global chemical industry is a complex and important part of the global economy and supply chain network. The global chemical industry will amount to over 6 trillion U.S. dollars by 2027. Trading Items for Exports and for Domestic Sales: Areas of Options: Inputs, bye products of heavy chemical industries Inputs, bye products of light chemical industries Inputs, bye products of heavy textile industries Inputs, bye products of leather industries, Global leather chemicals market size was estimated at USD 10 billion in 2027 In all the areas analysed, the industry is almost fragmented (except in heavy chemicals industry) with many large global players, many small and medium regional players from South Asia, China, Asia Pacific, Europe, USA There were long brain storming sessions between the 3 and finally Vipul and Ranjan appreciated the vast knowledge of Mahender and also had accepted the broad suggestions and the line of thinking of Mahender Manufacture of Surgical Gloves for the World Market The global surgical gloves market was valued at $2 billion in 2012, and was projected to reach $ 5 billion by 2027. – India’s heavy investment in healthcare and therefore speciality and general gloves market expected to grow quite fast as well. Therefore, Good Long -Term Prospects predicted if VCPL get into manufacturing. To test the market and the initial success possibility, initially VCPL got surgical gloves of certain sizes manufactured by some of the smaller manufacturing companies in the Mumbai – Pune Belt and used for trading Then the 3 of them were convinced that they can go into own manufacturing of gloves. The manufacture of surgical gloves required very neat and clean facilities to conform to World and USA FDA Standards of GMP (Good Manufacturing Practices). They weighed the options whether to locate a new place in industrial belt and start a brand-new venture. OR to buy up an existing medium type manufacturing unit, modify be marginal investing and start production. Ranjan the CA suggested initially that, instead of investing high amount in own manufacturing unit could they not have strategic outsourcing medium term arrangements with 2 units which already functioning in the field. Mahender was of the opinion that they can have better control over own unit since they want to go for high volume operations. Vipul also agreed and said that he can spend time in all aspects of factory running and Ranjan can look after Finance, Accounts and Corporate Affairs Finally, they decided to buy up an existing unit and quickly get into production. 5 After checking out all aspects and negotiating with 3 chosen companies they decided to buy up one of the units at Rs 60 Lakhs and invest an additional Rs 20 lakhs to modify the production line with appropriate balancing line and making it GMP-worthy. They estimated the whole process to be complete, including trial production, in 5 months. In actual practice, it took 7 months to get the factory in good shape and the total cost also shot up to Rs 100 lakhs. Investments Since VCPL was a new company, they couldn’t get Bank Loan for investment. However, they were promised working capital loan, once they showed the facility in operations. On the strength of Mahender, his SCCPL, an existing successful company, and that the VCPL having signed up exclusive marketing Rights with SCCPL, Rs 50 Lakhs was obtained by SCCPL and passed on to VCPL in stages. The other Rs 50 lakhs were obtained as loan from other sources at a high interest of 24%, (Rs 20 lakhs by Ranjan and Vipul each and Rs 10 Lakhs by Mahender. VCPL was sanctioned working capital loan up to Rs 100 lakhs, in stages based on hypothecation of current assets, from time to time. The chemicals distribution industry is projected to be driven by rising chemical consumption in a variety of end-use industries, including construction, pharmaceuticals, leather and plastics. The global chemical distribution market size was valued at USD 100 billion USD in 2012 and expected to rise to USD 250 billion in 2027 So VCPL decided to get into chemical distribution business also – in India and abroad in those sectors where there are better market opportunities and VCPL can handle things in a better way, as the 3 Owner – friends are professionals in their own way and want to make a difference in the market place. It was decided that, after the Surgical Gloves Manufacturing Unit stabilises its operation, VCPL will invest in Manufacturing Units in 2 or 3 chemicals. Till then they will involve only in trading, both for domestic and for exports Mahender had got an agreement done that his Shiva Chemicals Company Pvt Ltd. (SCCPL) will have the sole right to export the surgical gloves as well to market in Indian market. Similarly, SCCPL got an exclusive arrangement agreement drawn up with VCPL for certain chemicals, both for trading and for later manufacture, based on what SCCPL is already operating with, in such products, such countries and with specified clients 6 For the year XXXXXXXXXXVCPL turnover in surgical gloves alone was Rs 300 Lakhs of which 80% was for exports. Their turnover in Chemicals area – speciality chemicals – for leather and plastic industries was Rs 100 Lakhs Operational and Administrative Arrangements Mahender requested Vipul and Ranjan to take care of the operations almost fully and he used to interact with them generally once in 6 to 7 weeks. Also, Mahender independently was handling his SCCPL, even for VCPL products, without involving Ranjan and Vipul. Meantime Mahender was becoming very busy with the other activities of his company Shiva Chemicals Company Pvt Ltd. (SCCPL). All the 3 friends were happy with the good start VCPL had made. For the year XXXXXXXXXX, market factors internationally turned difficult because of aggressively growing domination of the Chinese companies VCPL turnover in surgical gloves came down to Rs 200 Lakhs of which 60% was for exports. Their turnover in Chemicals area – speciality chemicals – for leather and plastic industries also came down to Rs 50 Lakhs Financial Snapshot (All Figs in Rs Lakhs) FY SCCPL Turnover VCPL Turnover For VCPL Prod For Non VCPL Prod Total FY Gloves Various Chemicals Total XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX XXXXXXXXXX (est XXXXXXXXXX XXXXXXXXXXest XXXXXXXXXXParticularly Ranjan and Vipul were now in a tricky situation. They had to manage funds for paying interest on bank loan as well as on private loans they borrowed at the inception of VCPL. In addition, now that they had chucked out, steady monthly remuneration, which they were getting as employees in their respective earlier organisations, they were wondering how to run family on a month-to-month basis and savings for future. Still, they were hopeful that they could re-vitalise their business soon, by deep thinking, analysis, and with a long heart-to-heart chat with Mahender. Naturally all the 3, particularly Ranjan and Vipul were quite concerned as how to proceed further. Inspire of the recent market downtrend, both of them had very good continued confidence and relationship with Mahender. Ranjan and Vipul suggested that all the 3 may sit together in a different exclusive small hill location near Mumbai for a day and 2 and thrash out what would be the best way forward for all the 3 of them and their respective 2 organisations What the Student should do? You, the student, is expected to wear the Analyst, Consultant, Advisor Cap and suggest a way forward. Certain Questions have been framed to help you to think systematically, logically and of course, practically Please go ahead and answer the Questions individually, comprehensively and also keeping the overall future scenario in mind. Quote relevant theory to certain questions as may be applicable Case-based Questions to be answered Deadline for Submission: As mentioned by the EPGDM/GMBA Dept. Question1: Critically evaluate the process adopted by Mahender, Ranjan and Vipul in Product Area Selection for their New Venture (Consider items like Market factors, Core Competencies, Leadership) (Up to 12 sentences max.) {5 Marks} 8 Question 2: Was the decision to go into own manufacture, correct? Yes, or No? If Yes, give minimum 2 detailed reasons (6 to 10 sentences), If No, give minimum 2 detailed reasons (6 to 10 sentences) {5 Marks} Question 3: Comment Critically on the current overall Organisational structure of the New Venture (VCPL) and the relationship between SCCPL and VCPL (Consider factors like Corporate Structure, SBU Structure) (5 Marks) Question 4: Is it a good option for the friends to continue to operate in the current way? What is the factor which is binding them – Will it be enough to go forward when you become bigger? What would be a better alternative to re-draw the relationships and bring in formal Written Operative Relationships, detailing Responsibility, Authority, Accountability for each of them? (Min 8 Max 16 sentences) (10 Marks) Question 5: Make a Situation Analysis and Comment: What should be the growth strategy for VCPL, for the next 5 years – Draw up a Strategic Management Program, by Products, by Regions? Take into considerations various alternative options like downsizing, divesting, concentration, global strategic alliance (Min 8 Max 16 sentences) (10 Marks)
Answered 1 days After Apr 03, 2023


Monica answered on Apr 05 2023
5 Votes
Answer 1:
Here is a table outlining the growth strategy for VCPL over the next 5 years.
    Product Expansion
    Expand product lines in both domestic and international markets
    Market Emphasis
    Focus on high-growth regions, such as Asia and South America
    Investment Focus
    Heavy investment in research and development, marketing, and distribution
    Alternative Options
    Consider downsizing, divesting, or global strategic alliances as alternative options
    Performance Evaluation
    Continuously evaluate performance and adjust strategy as needed to stay ahead of competition and meet changing market conditions
Mahender, Ranjan, and Vipul seem to have adopted a systematic process for selecting the product area for their new venture. They examined the market to find potential growth areas first, and then they evaluated their key competencies to determine where they could contribute value. This plan is consistent with well-known strategy frameworks like Porter's Five Forces and SWOT analysis.
To decide which product areas they would be best suited for, they also took into account their individual leadership abilities and prior experience in the chemical business. This is a wise choice because guidance is essential to the success of any endeavour. It's also important to note that they took their time choosing the product areas, which is crucial for guaranteeing that the new endeavour has a successful outcome.
Overall, Mahender, Ranjan, and Vipul's process for product area selection appears to be thorough and well thought out. However, it would be beneficial for them to continue monitoring the market trends and consumer demands to ensure that they remain competitive and relevant.
Answer 2:
Yes, the decision to go into own manufacture was co
ect for the following reasons:
First off, Mahender, Ranjan, and Vipul would have more control over the cost, supply network, and quality of their products if they produced their own goods. As a result, there may be an increase in customer happiness, improved profit margins, and market competitiveness. Additionally, by producing their own goods, a company can...

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