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KAZIAN GLOBAL SCHOOL
OF BUSINESS
SUBJECT: Business Strategy
___________________________________________________________________________
Case 1 (20 Marks)
Door Darshan is the India
covering 90% of the country’s population across on estimated 70
million homes. It has more than
20,000 employees managing its metro and regional channels. Recent
years have seen growing
competition from many private channels numbering more than 65, and the
cable and satellite
operators (C & S). The C & S network reaches nearly 30 million
homes and is growing at a very fast
rate.
DD’s business model is based on selling half – hour slots of
commercial time to the programme
producers and charging them a minimum guarantee. For instance, the
present tariff for the first 20
episodes of a programme Rs.30 lakhs plus the cost of production of the
programme. In exchange
the procedures get 780 seconds of commercial time that he can sell to
advertisers and can generate
revenue. Break-even point for procedures, at the present rates, thus
is Rs.75,000 for a 10 second
advertising spot. Beyond 20 episodes, the minimum guarantee is Rs.65
lakhs for which the
procedures has to charge Rs.1,15,000 for a 10 second spot in order to
break-even. It is at this
point the advertisers face a problem – the competitive rates for a 10
second spot is Rs.50,000.
Procedures are possessive about buying commercial time on DD. As a
result the DD’s projected
growth of revenue is only commercial time on DD. As a result the DD’s
projected growth of revenue
is only 6-
10% as against 50-60% for the private sector channels. Software
suppliers, advertisers and
audiences are deserting DD owing to its unrealistic pricing policy. DD
has options before it. First, it
should privates, second it should remain purely public service
broadcaster and third, a middle path.
The challenge seems to be exploit DD’s immense potential and emerge as
a formidable player in the
mass media.
i. What is the best option, in your view, for DD?
ii. Analyse the SWOT factors the DD has.
iii. Why do you think that the proposed alternative is
the best?
Case 2
In 2006-07 PTC Food division decided to enter the fast growing (20-30%
annually) snacks segment,
an altogether new to it. It had only one national
competitor-Trepsico's Trito. After a year its wafer
snack brand- Ringo, fetched 20% market share across the country.
Ringo's introduction was
coincided with the cricket world cup. The wafer snacks market is
estimated to be around Rs. 250
crores.
The company could take the advantage of its existing distribution
network and also source potatoes
from farmers easily. Before the PTC could enter the market a
cross-functional team made a customer
survey through a marketing research group in 14 cities of the country
to know about the snacks of
eating habits of people. The result showed that the customers within
the age-group of 15-24 years
were the most promising for the product as they were quite
enthusiastic about experimenting new
snack taste. The company reported to its chefs and the chefs came out
with 16 flavours with varying
tastes suiting to the targetted age-group.
The company decided to target the youngsters as primary target on the
assumption that once they
are lured in, it was easier to reach the whole family.
Advertising in this category was extremely crowded. Every week
two-three local products in new
names were launched, sometimes with similar names. To break through
this clutter the company
decided to bank upon humour appeal.
The Industry sources reveal that PTC spent about Rs. 50 crores on
advertisement and used all
possible media- print and electonic, both including the creation of
its own website,
Ringoringoyoungo.com with offers of online games, contests etc. Mobile
phone tone downloading
was also planned which proved very effective among teenagers. The site
was advertised on all
dotcom networks. Em TV, Shine TV, Bee TV and other important channels
were also used for its
advertisement along with FM radio channels in about 60 cities with
large hoardings at strategic
places.
Analysts believes that Ringo's success story owes a lot to PTC's widespread
distribution
channels and aggressive advertisements. Humour appeal was a big
success. The `Ringo' was made
visible by painting the Railway bogies passing across the States. It
has also been successful to
induce Lovely Brothers' Future Group to replace Trito in their
Big-Bazaar and chain of food Bazaars.
PTC is paying 4% higher margin than Trepsico to Future group and other
retailers.
Ringo to giving Trepsico a run for its money. Trito's share has
already been reduced considerably.
Retail tie- ups, regional flavours, regional humour appeals have
helped PTC. But PTC still wants a
bigger share in the market and in foreign markets also, if possible.
Answer the following questions:
a) What is SWOT Analysis? (4 Marks)
b) What are the strength of PTC? (4 Marks)
c) What are the weaknesses of PTC for entering into
the branded snacks market? (4 Marks)
d) What kind of marketing strategy was formulated
and implemented for Ringo?
What else need to be done by Ringo so as to enlarge its market? (8
marks )
Case 3
Dr. Sukumar inherited his father’s Dey’s Lab in Delhi
Capital Region (NCR). His ambition was to turn it into a National
chain. The number increased to 7 in
2003 across the country, including the acquisition of Platinum lab in
Mumbai. The number is likely to go
to 50 within 2 – 3 years from 21 at present. Infusion of Rs.28 crores
for a 26% stake by Pharma Capital
has its growth strategy.
The lab with a revenue of Rs.75 crores is among top three Pathological
labs in India with Atlantic
(Rs.77 crores) and Pacific (Rs.55 crores). Yet its market share is
only 2% of Rs.3,500 crores
market. The top 3 firms command only 6% as against 40 – 45% by their
counterparts in the USA
There are about 20,000 to 1,00,000 stand alone labs engaged in routine
pathological business in
gone for acquisition or joint ventures. He does not find many existing
laboratories meeting quality
standards. His six labs have been accredited nationally whereon many
large hospitals have not
thought of accreditation. The College of American
Pathologists
to reach clients outside India
In Dey’s Lab, the bio-chemistry and blood testing equipments are
sanitized every day. The bar
coding and automated registration of patients do not allow any
identity mix-ups. Even routine tests
are conducted with highly sophisticated systems. Technical expertise
enables them to carry out
1650 variety of tests. Same day reports are available for samples
reaching by 3 p.m. and by 7 a.m.
next day for samples from 500 collection centres located across the
country. Their technicians work
round the clock, unlike competitors. Home services for collection and
reporting is also available.
There is a huge unutilized capacity. Now it is trying to top other
segments. 20% of its total business
comes through its main laboratory which acts as a reference lab for
many leading hospitals. New
mega labs are being built to encash preclinical and multi – centre
clinical trials questions.
i. What do you understand by the term Vision? What
is the difference between ‘Vision’ and
‘Mission
achieved? ( 8 Marks)
ii. For growth what business strategy has been
adopted by Dr. Sukumar?
. (2Marks)
iii.What is the marketing strategy of Dr. Sukumar to
overtake its competitors?
. (6Marks)
iv. In your opinion what could be the biggest
weakness in Dr. Sukumar’s business strategy?
. (4 Marks)
Case : 4 (20 Marks )
The origins of Deepak Nitrite—the flagship comp any of the Deepak
group of industries-go back to 1970
when Chimanlal K. Mehta, an entrepreneur, sensing an opportunity in India
and import substitution and relying on his trading and manufacturing
experience, ventured into
the chemicals industry. The Company was originally incorporated as
Deepak Nitrite Private Limited in
1970, under the Companies Act, 1956 and was subsequently converted
into a public limited company in
the name of Deepak Nitrite Limited in 1971. The company’s registered
office is at Vadodara and its
corporate office is at Pune with manufacturing plants in Gujarat and Maharashtra . Net sales for the year
ending March 2007 are about Rs. 4172 million and net profit is Rs. 357
million. Exports constitute nearly
half of the sales.
Overt he years, Deepak Nitrite has grown impressively through a
judicious use of integration, related
diversification and internationalization strategies, using the means
of acquisition and restructuring. In
1983, adopting a horizontal integration strategy, the company used
foreign collaboration to start
commercial production of ammonia. In 1989, the group employed
ammonia-based forward integration and
also diversified into the chemicals related area of methanol. In 1992
came the commercial production of
low-density ammonium nitrate, nitro phosphate and nitric acid,
resulting in a multi-product portfolio
consisting of organic, inorganic, fine and specialty chemicals. Deepak
Nitrite has made tremendous
progress over the years and has posted impressive financial results as
well as excellent export
performance. It (the growth of the company), was born out of a process
of deep thinking, strategy and
planning,’ said the managing director Deepak Mehta, who claims that
planned strategy has led to growth.
Environmental scanning led to foreseeing the threats coming from a
dismantled duty regime. Anticipating
this, the company went about implementing strategies that would
convert these threats into opportunities.
The strategic approach was to build on its strengths in niche areas of
the chemicals market, leverage
strong R & D and a robust lab to product ion skills, bring the
strengths up to global levels and work
towards a leadership position.
The success of Deepak Nitrite could be attributed to its focused
strategy. Implementation capabilities. A
series of plans, programmes and project have been initiated and
implemented over the years, in
alignment with its corporate and business strategies. For instance, it
has worked on a number of R&D
projects over the years to develop its skills to swiftly transfer
products from the labs through production to
the markets. It has effectively developed differentiating capabilities
by planning and implementing
projects for handling bulk products to handling batch products,
transforming from a commodity supplier to
a value-added, branded product supplier with customization skills.
Projects in supply chain management
have helped the company in extending its ability to source its own raw
material to tracking customers’
delivery and inventory scheduling. Cost control has been attempted
through wider sourcing; including
international vend ors, and investing in energy-saving equipments.
In the course of strategy implementation, Deepak Nitrite has to deal
with a host of government agencies
for procedural implementation. For example, raising finance has taken
it to SEBI. A continual interaction
takes place with the export and import regulatory authorities. For
instance, anti-dumping duties have
been levied on the comp any for sourcing cheap materials from China
industry, the company is under the scrutiny of environmental
protection agencies. It has been a signatory
to the ‘Responsible Care’ initiative of the global chemical industry.
It has also achieved the ISO 14001
certification. Dealing with explosives, the company has to seek
licenses from the Department of
Explosives, Industrial Safety and Health Departments and State
Pollution Boards of Gujarat and
generation has been through raising money in the capital markets on
the basis of its good reputation,
internal accruals, loans from commercial banks and financial
institutions and sale of factory land at
Pune.28
Questions:-
1. Identify and discuss briefly, the three themes of strategy
implementation of activating strategies,
managing change and achieving effectiveness in the case of Deepak
Nitrite.
2. picking up data from the case, demonstrate how formulation and
implementation of strategy are
interdependent.
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