SWAGRUHA FOODS CASE STUDY Made by: Moni Rana Shashi Prakash
Aug 24, 2014
SWAGRUHA FOODS
CASE STUDY
Made by: Moni RanaShashi Prakash
INDEX Overview of Case Introduction Gaining momentum HR Policy in Swagruha Food and Beverages industry in India Competition Product Line Sales and Marketing Investment
CNTD… Profitability Challenges and Obstacles SWOT analysis The Road Ahead
OVERVIEW OF CASE This case is all about the entrepreneurs' in India It Shows that to start a business we just only need
a innovative and creative idea. This case highlights the challenge facing many
small and medium enterprises (SMEs) all over the world. Many SMEs have successfully overcome the initial survival challenge
The case also prospects the packaged foods and beverages Industry in India
CNTD… They have a stable base of loyal customers, are
able to command attractive prices, and have built up a reputation for good quality
INTRODUCTION VijayaKumari and Kishore had an ambitions to start
a business of their own. Ratna Kishore, Vijayakumari and their son Madhu
visited Grand Sweets in Chennai and noticed that people literally waited in a queue to buy the traditional sweets and savouries on offer, especially during festival times.
Vijyakumari feared that the day was not far when awareness about local cusine and traditional sweets would become a thing of the past.
Then she tapped the opportunity to start a business.
CNTD… Swagruha foods was first opened in Vijayawada
residential premises of them It also help to keep a strict check on quality The shop sold traditional sweets and savories The starting investment was 5,00,000 Rs. Vijyakumari took charge of quality control and the
actual preparation process Cash flow were handeled by Kishore Madhu got involved with supply, customer
relationship, managing store etc.
CNTD… They completely concentrated on the traditional
type of food products. (USP) The greatest feedback they received was when
customers told them that the taste of their sweets and pickles reminded them of the homely flavors of their grandmothers’ preparations.
The shops were targeted at women and children, the firm ensured that they were located in peaceful places, not crowed ones.
GAINING MOMENTUM Initially they don’t known about the market. But they knew that they had sure shot success in
this ahead By the end of 1992, Swagruha had opened a third
shop in Guntur. The owner had experimented with the franchisee
model in Chennai. It was become unsucessful and they closed the
store within a year.
MENU… Bengali Sweets• Badam Pista Bogh• Raj Bhog• Malai & Pineapple
sandwich• Chum Chum• Basundi• Agra Rolls & Agra
Paan….
Traditional Sweets• Bobbatlu• Burelu• Aresalu• Kajjikayalu• Chikki• Goru Mithai• Jilebi• Chimmiri……
Ghee Sweets• Agra Halwa• Carrot Halwa• Ghee Mysore Pak
Milk Sweets• Ahra peda• Kova• Butter Cake• Badam, Pineapple and
icecreame burfys
Dry Fruit Sweets• Cashew Sweet• Cashew Seethapal• Cashew Apple• Cashew Flower• Anjur Rolls• Cashew Mysore Pak• Badam Halwa
Savouries Pickels Powders Papads Vadiyalu Specials etc…
Cntd…
HR POLICY IN SWAGRUHA:
Swagruha had about 200 employees. Permanent or temporary. Engaged in making traditional sweets,
savouries and pickles. Male-female ratio was 60:40. College graduates handle more
responsibility.
Firm maintain very cordial relations with the employee by—
Paying them higher salary.Contributing to their children’s
education.Giving bonuses during festivals.Bonuses are also given according to their
performance.
CONTD……. Takes action against imitators. Setup separate counter at its outlet for
NRI customers. Send quality packaged product to
beyond domestic borders by getting order through mail.
Do not want to compromise in quality but believe in change with times.
FOOD AND BEVERAGES INDUSTRY IN INDIA Survey of F&B industry by FICCI had
shown positive growth in February 2006. It was estimated that industry had
achieved 8% growth 2004-05. There are some sectors in F&B industry
which had recorded more than average growth.
These sectors are:-SECTORS GROWTH
Ready to eat ice-cream and wine 20%
Organized/packaged food 14%
Khoa/channa-based sweets 10%
Culinary products/snack food 8%
REASON FOR THE GROWTH IN F&B INDUSTRY: Numbers of initiative taken by the
government such as:-Declaring the development of food
processing industry.Liberal reforms and various tax benefits.Policy initiatives
SOME PERCEPTABLE CHANGES THAT SPURRED GROWTH: Change in income and spending pattern. Change in profile of middle class
segment. Packaging. Promotion and distribution.
CHALLENGES FACED BY INDUSTRY:
Lack of adequate infrastructure. High cost of raw materials and packaging
materials. Multiplicity of taxes and levies charges. Lack of common integrated food law. Hard to implement food standard.
MAJOR STEPS TAKEN BY PRIVATE AND PUBLIC TO SOLVE THE PROBLEMS: Incentives in union budget 2004-05 and
2005-06. Increasing level of institutional credit. Food parks.
SWAGRUHA & COMPETITION… Due to low barriers to entry many
players tried to imitate Swagruha model at its home turf.
Competitors could not succeeded and had to wind up their operations within a couple of years.
Imitators were not only in India but also were abroad.
After becoming a registered trademark it filed 20 odd cases on imitators.
CONT…. On the national level Swagruha had
bigger competitors as Haldiram. Haldiram operates at much bigger scale than
Swagruha. Competitors were using technology and swagruha
wasnot.
WAY TO DEAL WITH COMPETITION.. Do research and develop food products for health
conscious people. Invest on the quality packing and preservation of
the products so that it can be widely distributed. Exploit the online sells and promotions. Innovate their products according to the changing
preferences of customers. Focus more on publicity.
PRODUCT LINE… Swagruha had a product line of almost 300
products. Products variance, like seasonal,for special
occcasions,for festival. Perishable products 70% of the products cant be standardized because
they were made of non standard ingredients. It has increased the product line noticing the
customer taste and spending capacity. It obtained its raw material majorly from Andhra
and Gwalior, Kolkata and Bangalore and salem.
SALES AND MARKETING… Since starting swagruha had focused on word of mouth publicity. For NRI customers it started E- marketing. Outlets were designed so as to attract the
customers. It promoted its outlets in regional news papers and
on local cable TV channel. Ads were also placed on websites.
INVESTMENT POLICY(FINANCING) Working Capital requirement . First seed capital was - 500,000. Capital financed from internal personal
saving and family loan. Second and third stored was financed by
internal accruals.
PROFITABILITY SCENE In the first of operation entire investment was recovered. Swagruha had witnessed a significant growth rate over last 17 years. E - sales is also increasing over the period
of time. Manufacturing cost was accounted for
50% of revenue. Cash sale is accounted as 90%of revenue.• (Cash discount)
CHALLENGES
Lack of skilled labour. Location problem Standardized product. Political pressure Infrastructure support. Swagruha cant operate at bigger scale
because it has acentralized production unit.
STRENGTHS Focus on quality of the product and
services Constant monitoring Personal attention Taste of home made sweets, Focused on traditional goods Target group was women and children Attention to feedback
WEAKNESS
Products perishable in nature Centralization of all the activities New product were promoted only through
direct marketing Risk in providing franchisee
OPPORTUNITIES
Growth in food and beverage industry Demand of traditional sweets by NRI’s in
international market Increase in demand of traditional taste Increase in economic status of people
THREATS Increase in competition Risk of imitation Shortage of labor High attrition rate Political pressure shifts in taste
WAY A HEAD Steady growth rate Decentralization or delegation of
authority Frequent visits to other outlets and
regular stock check New packaging technique Convert the proprietorship to limited
company Leveraging the brand awareness Looking for retail distribution, launching
superstores.
Thank you