SWAGRUHA FOODS

SWAGRUHA FOODSCASE STUDY : 

SWAGRUHA FOODSCASE STUDY Made by: Moni Rana Shashi Prakash

Index : 

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… : 

Cntd… Profitability Challenges and Obstacles SWOT analysis The Road Ahead

Overview of Case : 

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… : 

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 : 

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… : 

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… : 

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 : 

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… : 

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……

Slide 11: 

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

Slide 12: 

Savouries Pickels Powders Papads Vadiyalu Specials etc… Cntd…

Hr policy in swagruha: : 

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.

Slide 14: 

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……. : 

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 : 

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.

Slide 17: 

These sectors are:-

Reason for the growth in f&b industry: : 

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: : 

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: : 

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: : 

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… : 

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…. : 

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.. : 

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… : 

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… : 

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) : 

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 : 

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 : 

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 : 

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 : 

Weakness Products perishable in nature Centralization of all the activities New product were promoted only through direct marketing Risk in providing franchisee

Opportunities : 

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 : 

Threats Increase in competition Risk of imitation Shortage of labor High attrition rate Political pressure shifts in taste

Way a head : 

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.

Slide 35: 

Thank you