saw chivda, chaklee (snacks) and amba barfee (sweets) being prepared by hand by the womenfolk of the

Pendharkar family from the confines of

their homes, Pendharkar Bros had
metamorphosed into a household name
not just in and around Shejvi but across
their native state, Maharashtra. The
inspiration behind venturing into the
food business had come from Bal's
grandfather, the late Dattatraya
Pendharkar, who started a dairy
business (Pendharkar Dairy) in
Kolhapur in the 1930s almost single-
handedly.
And it was his eldest son and Bal's
father, the late Vinayak Pendharkar,
who started Pendharkar Bros in Shejvi
in 1950.
While the products remained the same:
chivda, chaklee (snacks) and amba
barfee (sweets), great care was taken to
ensure quality, hygiene, and above all,
fair pricing.
Needless to say, people flocked to these
shops in droves, and as the
Pendharkars fathomed the gravity of the
situation, they realised there was no
way they could meet the growing
demand for their products; not with the
existing scale of operations at least.
Bal's father was quick to cash in on
the opportunity, and after much
deliberation, convinced one of the
suppliers to visit their factory in India
to design a similar machine which
would ease the manufacture of their
main product -- chivda.
That's how automation entered the
hitherto simple lexicon of the
Pendharkars, albeit at a steep price
of Rs 1 crore (Rs 10 million),
definitely a huge investment in the
1980s.
And if the Pendharkars thought they
could reach breakeven point within a
year, the machine helped them reach
their goal for it produced a good 350 kg
of chivda per hour, sufficient to meet
the inflated customer demand.
With further expansion came newer,
more complex challenges. One such
challenge came in 1995, when
Pendharkar Bros decided to streamline
their transactions and billing process.
The result was the implementation of
the then unknown RFID system.
The way this system worked was that
customers were given RFID plastic
cards on entering the shop. Small
machines were kept at every counter
and the cards were fed with the prices of
various items bought. Finally, the cards
had to be redeemed at the cash counter
by paying up the total amount for all
purchases.
The nineties were also the time of the
dot-com boom and the freeing up of the
Indian economy from the shackles of
protectionist policies, among other
things. It came as no surprise then that
these innovations created a great deal
of curiosity and demand around the
products of Pendharkar Bros.
Till 2005, the dairy operated ten physical
servers across two data centers in a
town nearly 500km from Kolhapur. This
was proving to be costly besides posing
a major risk to operations.
Meanwhile, Bal's brother Ram
discovered that while it took about six to
seven hours to fully restore a corrupted
server, using VMware High Availability
brought down the time taken to a mere
ten minutes. So, in 2005, they decided
to implement VMware server
virtualisation, and within a span of two
years, were able to bring down the
number of physical servers to just three,
that too operating out of only one data
center.
The adoption of IT further benefited their
business. It reduced server hardware
acquisition costs by 50% and software
acquisition costs by 75%. Server
deployment times were reduced from
three weeks to just three hours.
Having started almost as a cottage
enterprise, Pendharkar Bros had now
reached a stage where they were
operating out of three manufacturing
concerns: one in Shejvi; another in
Chiplun, under the name Annapoorna
Sweets and Snacks Private Limited; and
the third, by the name Shreeram Food
Industries, in Pawas.
Each manufacturing unit was equipped
with state-of-the-art machinery for the
production of sweets and snacks.
Special machines had been imported
from Japan for the manufacture of
sweets.
Meanwhile, the Shejvi unit exclusively
manufactured Pendharkar Bros'
monopoly product -- chivda. All their
dairy supplies were procured in-house
from Pendharkar Dairy, which produced
up to 200,000 litres of milk per day,
along with milk-based products such as
cream, butter and yoghurt.
And the focus continued to be on
quality, with the entire business activity
HACCP (Hazard Analysis Critical
Control Points) certified.
Apart from the manufacturing units,
Shejvi was now home to two modern
outlets, selling nearly 56 different
varieties of sweets and 31 varieties of
snacks. The shops forecasted demand
for the next day by 5 p.m., and
accordingly, at 5 a.m. the next day,
sweets and snacks were delivered to
them. A fleet of 13 small and medium
vehicles took care of transportation in
and around Shejvi.
Being a family-owned and managed
business, the Pendharkar's took minimal
recourse to advertising, save for word-
of-mouth publicity and the local
newspaper. New product development
usually happened from home, and these
new products were introduced into the
system only after customers and other
family members tested them.
Distribution-wise, there were ten
franchisees in Shejvi, helped along by a
wide network of authorized agents and
distributors across India. Thanks to their
tie-ups with various corporate and non-
corporate entities, Pendharkar Bros
were now counted amongst the major
suppliers of sweets and snacks within
the country.
Slowly but surely, they were also paving
the way toward becoming a major
exporter of these products abroad. In
fact, exports had already started to
countries such as the US, Singapore
and Israel.
By themselves, Pendharkar Bros were
but a part of the larger and prestigious
Pendharkar Group, which had interests
in various sectors including food, dairy,
agro and digital.
Indeed, the Pendharkar Group
comprised several companies, ie,
Pendharkar Dairy, Pendharkar Foods,
Pendharkar Agro Industries Private
Limited, Pendharkar Digitals and of
course, Pendharkar Bros. While each of
these businesses had their own
production, marketing and distribution
networks, the internal synergies were
put to collective use from time to time so
as to improve efficiency of business on
the whole.
To put it in statistical terms, the
current turnover of the Pendharkar
Group was approximately $5bn; with
$4bn from the dairy business, where
profit margins are only about 2%, and
$1bn from the sweets business,
where profit margins are 12% to 15%.
. Delhiwallah's -- their competitors --
were well known for their aggressive
marketing strategy and extensive
distribution network.
Other rivals like Khavaiya's possessed
many quality-control laboratories.
Additionally, rumor had it that Indian
dairy major, Milky Way, was planning to
enter the country's already crowded
$500mn sweets and snacks market.
And just a few days ago, global retail
giant, Big Buy, had announced similar
such plans

SWOT

STRENGHTS
-Three servers with one data centre
-RFID system
-New machines to prepare sweets
form japan
 - Sound distribution system

WEAKNESS
-Lless advertising
-Lack of test marketing

OPPORTUNITIES
-In the field of dairy products
-On international basis they can expand
their business
THREATS
Their rivals delhiwallahs were well known for their aggressive marketing

strategy and extensive distribution network.

- Milky way decided to enter Indian

market