SHAHEEN CHALK MANUFACTURERS:

CASE ABSTRACT

Originated in 1982, Shaheen chalks manufacturers, manufactures chalks of all kinds in different shapes,
sizes and colors. The company has been in business for more than 30 years, and majorly targets; schools,
colleges and universities, whereas half of SCM’s sales obtain from universities. Chalk used in universities
comes in slender sticks approximately .35 of an inch (nine millimeters) in diameter and 3.15 inches (80
millimeters) long. The product mix of SCM’s is carved up into two broad categories:
1. Extruded Chalks (Dustless Chalks)
2. Molded Chalks (Anti – Dustless Chalks)

Extruded Chalks (Dustless Chalks)

Extruded chalks are also known as dustless chalks. They are manufactured through calcium carbonate, and
tends to be dense and dustless, as it is commonly used in School and colleges.

Molded Chalks (Anti – Dustless Chalks)

Molded chalks are also known as plaster chalks. They are entirely manufactured while using calcium
sulphate which later converted into the shape of Jumbo and round soft chalks.

However due to some explicable reasons which include; the stiff market competition, technology
upgradations and ban imposed by Punjab government to not to use chalks and blackboards in class rooms,
affects SHM market share and Profitability.
Mr. Akram being a managing director is concerned regarding company’s declining Profits margins and lost
market share. Therefore, to cope up from the crises he decided to call a meeting of managers where after a
prolonged discussion, he succeeded to generate few thought provoking solution, which seemed to him
relevant to deal with the crisis. The only way to revive from this situation was to take a prompt decision
which benefits SHM’s to recover its share in short term and do not hurt company’s image in long term.
Akram did not want to take any decision in hustle.
Zahoor Ahmed (Finance Manager) at SHM had advised Akram to use Budgeting, as a tool to draw a sound
decision. Akram acknowledged Zahoor’s idea and started working on Budgeting to reach at any sound
calculative decision.
After making an analysis he came to know that they can play with prices but not more than 10% because it
will cause firm to loose further profits otherwise. Afterwards while assessing some external factors he
observed a rising market of Markers, which also proved a good option to opt through calculations as well.
The breakeven can achieved by selling 60,000 markers and the 15% ROI of markers also seemed impressive
to him. However, at first Akram decide to decrease the prices of chalks by 5% which resultantly caused
increase in demand.