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 Vora and company.

Vora and company. A report on short term and long term strategy. Problem situation:

Mr. Vora has started a company without much research. His brand of "Blossom, Quick

Cooking Oats" is faring very badly in the market. Its only competition is Ganesh Mill's

Champion Oats. Both these companies started production after the exit of Quaker oats

of America. However, they have not been able to capture the market as they expected.

Mr. Vora approached the SSI consultants to find out the next best thing to be done.

Question that needs to be asked is, what are Mr. Vora, plan? It has been identified from

careful analysis of the facts presents to us that his short term plan is to make profits

and stop the immediate loss of money. We the group of LM11 have found 2 ways for

Mr. Vora to make his short term and long term plans achievable. * Cost... ..are the

people doing the actual direct selling. This does not ensure that Mr. Vora's interests are

met properly as the subagents have nothing to loose. They get a commission of 20%

on the product. As they do not have any commercial interests in the product since they

stock non competitive goods, Mr. Vora should instill marketing people directly, who will

be responsible for the actual sale. As we have seen that the numbers required are NOT

such large numbers given the facts, this is one option of making money. The increase in

sale from 83 crates to 250 crates can be done in a matter of 5 months. Taking to

account, the increase in sale, it has been increased by a mere 40% every month. Which

are just 34 extra crates in every month. This works out to about 4 extra crates in every

region every month. This is NOT a very large increase in terms of numbers. 2) The next

step to make sure that the revenue starts coming in; Mr.Vora needs to increase the

price. This will not hit the sales for two reasons. a. There are dedicated sales people to

take care of the sale aspect so they can push for the sale even if the price goes up

marginally. b. The selling price increase will happen over a 15 month period. This is

done to ensure that the price increase is not felt too badly. As the current price of the

product is Rs.85 per crate, which works out to around Rs.2.36p per can of Blossom

Quick cooking Oats, the new price works out to around Rs. 2.50p per can, which is an

increase of just 5.4% over a span of 15months. From the given facts it has been

established that Blossom quick cooking oat's competitor Champion Oats is selling his

product approximately around Rs.2.60p. This step ensures profits start coming in faster

than just improving one step. The increase in production is not necessary at this point

of time. The product is not getting sold properly, and there are huge inventories and

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these can be used to adjust the future demand increase. Even though there have been

no preliminary market analyses which have been conducted, from statistics provided to

us, we believe that this is a viable step. Hence we do not have to reduce the costs. We

are able to achieve a break even in sales and in numbers hence it not being necessary

to reduce the cost. However in the long run it will help Mr.Vora to reduce costs. These

are some of the short term plans that can be implemented for Mr. Vora's company.

Long Term Plans: Once the immediate need of the hour is met, i.e. the ceasing of the

incurring of losses, Mr. Vora should focus on making money and making his business

establishment a more viable process. We identified several key areas where he can

invest money and thereby increase his market share through careful selection of 

market segments and product mix. 1) Changing Processes: currently Mr. Vora's

distribution is handled from Lucknow (Central India) alone. In this unit, the crates are

packed and shipped to their regions directly. This implies that there are increased costs

due to increased freight. One way of reducing this can be to have decentralized

packaging. Mr. Vora can set up two packaging units in north and south India. This will

facilitate him to reduce costs at the Lucknow plant by shipping the contents in bulk to

the packaging plants. These plants will act as distribution centers to the south and

western region, and the north and eastern regions. Also, the cost of freight will reduce

as there will be more content traveling per wagonload. It was found that it works out to

about Rs.10.55p (present Rates) per kilometer, per wagon load. This would help reduce

overall packaging costs. This will help in two ways : i. When selling to institutions, the

items do not have to be repacked. This would help reduce costs of packaging. This

would also bring in some more revenue in terms of sales as it will help tap a new

market segment. ii. Packaging centers closer to the markets serves in many ways a. It

will help the turn around time of the company. b. It will also help in the time it takes to

restock shelves and restock the inventories. c. Help and assist in repacking the goods.

HOW? It can be seen that the crate contains 36 tins. Each tin has a volume of 550 cubic

mm. which gives a total volume of 19800 cubic MM. if this has to be redistributed over

repackaged goods; it will work out to around 72 Rectangular boxes holding the same

550Gms of ...