b4a6swagruha Foods

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