Page 107 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Entrepreneurship and Small Business Management

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now become obsolete. The machineries were growing old and their efficiency was declining
and purchasing even one single new machinery would mean heavy financial burden,
which the company was not in a position to hold.
But the biggest problem was frequent power cuts, which was leading to dependence on
generators for power generation and hence escalating prices. Even the prices of PP plastics
(the raw material) were fluctuating.
The Market
The market of disposable containers is seasonal and is highly dependent on the Hindu
marriage season. The competition is also rising. Fifteen years back Khushi Plastics, was
the only company in the whole of northern India that was into the industry of
manufacturing disposable plastic containers, but today there are more than 25 similar
industries within the diameter of 100 km. Moreover, a new product-disposable thermocol
containers (which are much costlier yet more handy) were replacing the plastic containers
in the urban market. The distributors who were giving prompt payments had also started
demanding credit purchases.
The Organisation
Khushi Plastics is a registered firm of father and his two children. The strategic decisions
are taken by Pramod himself, whereas marketing decisions are in the hands of his elder
son Vaibhav and finance & accounts in the hands of his daughter Vaishali. The HR operations
are managed by Pramod and Vaibhav. At times Pramod and Vaibhav have differences in
opinion about marketing and operational strategies and they end up in a series of
arguments to prove their points.
There are five loyal supervisors who have more than 20 years of association with Pramod.
The problem employees are front line workers who frequently absent themselves from
their work on occasions of festivals and marriages (which are also the peak season for the
company).

Pramod now wants to shift his business operation from the present area because of the
power crisis, rising competition and declining margins. But Vaibhav is against the locational
shift and they are in an argument again. Through market research Pramod has identified
two alternative locations and he is trying to explain to his son that, “the change has now
become desirable for us.” But Vaibhav is counter-arguing that the problems that are
coming up in the present location would also emerge in any other location after a passage
of time. So how far is it wise to keep shifting from one place to another? It is better to face
and fight the situation than to run away from it Dad”. Pramod retorted, “Son can you
suggest me one good way to come out of it? We have already tried everything suggested
by you and if we don’t take the decision now we would be simply thrown out by the
market forces that have already crushed our margins, our employees and our sheer
existence!” With this they ended up the discussion but Pramod is still not sure that what
would he be doing to actually fight the challenges thrown up by the external environment.
Location
Pramod has been able to short-list two locations: the pros and cons of both have been
taken along with the pros and cons of the present location.
Present Location
Pros

1. Labour and market are in vicinity
Contd...

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