Page 34 - DMGT310_ENTREPRENEURSHIP_AND_SMALL_BUSINESS_MANAGEMENT

Unit 2: Classifications and Models of Entrepreneurship

Notes
The Services
The key services by Shanti Inverters include:
Annual maintenance contract
Warranty repair

Out of warranty repairs
Factory parts
Extended warranties
Technical assistance
UPS start-up assistance

The Price
The pricing plan was that since competition was growing, the best strategy for pricing
would be – maintaining prices that were neither priced too high (to skim the competition
thrown up by national players) nor too low (to lose its premium quality image that the
company had earned in the last 35 years).

The price that was originally set was ` 12,000 but due to rising demands and markets it was
further raised to ` 15,000. The price package included the inverter, free trolley and
installation.
The Manufacturing
Manufacturing was done at the same place because the main component was still batteries
and hence the present plant capacity was able to sustain the manufacturing of the major
components, the secondary components i.e., inverters cabinet and trolley parts were
purchased and assembled in the factory. The cost of setting up the new machines and
assembly plant was as low as ` 1,25,000.
The Growth

Shanti Inverters witnessed immediate returns. The company started getting corporate and
residential orders and all appreciated the product. Sudhanshu shifted the factory to a new
premise four times the present size in terms of area and capacity, bought few more
sophisticated machines and became the leader in the inverter market in Hapur. He also
went ahead and got ISO 9000 quality certification for the product and since then there has
been no looking back. But Sudhanshu’s quest for more has not yet ended and he wants to
venture into something else.
Questions
1. Amongst the various classification of entrepreneur, what kind of entrepreneur is
Sudhanshu? Give reasons for your answer.
2. Do you think Sudhanshu should revise his earlier prices? What should be the criteria
for revising the prices?

3. Do a market research of your local inverter manufacturers and find out what are the
salient features of their product and what challenges do they face in this industry.
Source: Lall.Madhurima, Sahai.Shikha(2008), “Entrepreneurship”. Excel Books Pvt.Ltd.

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