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STRATEGIC MANAGEMENT CASELET Torch bear is one of the fastest growing FMCG companies in the world today.

It started its operations way back in the year 2000 with a small manufacturing plant in Gujarat. Initially at its inception, it was a family oriented enterprise owned by three brothers namely Hitesh, Devendra & Balaji. Mr Devendra-the eldest, a scrap vendor always had a keen eye for detail. His ability to think beyond the obvious, risk taking ability and strong networking skills provided him the platform to start his own business. He presented his idea to his close mates Hitesh & Balaji who readily accepted the plan. Funds invested were in the proportion of 4:3:3 respectively. The trios visionary approach, their ability to leverage their strengths & predict the future ensured that the company always has a first mover advantage in different markets. It was the first to introduce flavored Aerated drinks in Brazilian & Chinese markets. In the last decade, it has carved out a niche for itself in the multi-crore F.M.C.G market. With passage of time & increasing competition, the eldest of three brothers Mr Devendra felt the need for corporatization of their practices. As the company began increasing its scale of operation across India, there was a need for transition from a family run enterprise to a professionally managed enterprise. They decided to rope in a Miss Madhurima as the new CEO. This calculated move was taken keeping in mind the robust future plans of the company. The owners always believed in doing things differently, thereby providing value proposition to customers. As Torchbear decided to expand nationally, The Company went public in the year 2008. Today, it has its presence in all the BRIC nations. It has earned a reputation of providing high quality products at low cost. It has aligned its strategies, values, competencies to suit the requirements of the local culture. It spends around 5% of its turnover on advertising. It believes in the product speaking for itself. The company started initially with food & Beverages category and later also entered into Personal Care category.

Its product portfolio is as follows: 1) Food & Beverages 1) Aerated Drinks: Mango, Pineapple, Sweet lime, Cherry, Apple etc. 2) Multi flavored biscuits 3) Fruit juices 4) Tea 5) Coffee 6) Donuts 7) Milk Beverages

Personal Care 1) Skin Care: Humdinger Brand ( Fairness cream, lotions, talc ) 2) Oral care: Myworth Brand ( Toothpaste, Tooth cream, Automatic brush etc) Present Scenario: After tasting success across geographies, it has eventually hit the roadblock. There has been decline in sales & profits. The company has been witnessing very high employee attrition rate of 20%. Employee satisfaction has been on a decline. Top management has had to face the union wrath in the form of strikes & protests for wage hikes. Consumer care Cell has reported steady increase in customer complaints. Inventory pile-up is on the rise. Increase in raw material prices & fuel prices havent helped. The problem has been compounded with laid-back approach of the top management. There have been quality lapses & packaging issues. Shareholders are demanding topManagement rejig, as the companys reputation has taken a severe beating Competitors have had the final laugh. The Founder Chairman, Mr Devendras is expectedly concerned. His dreams seem to have crashed. He needs to introspect and develop a roadmap to the future. Identify the problem and advise the future course of action. Appendix: Income statement of TORCHBEAR Ltd

TORCHBEAR Ltd INCOME STATEMENT FOR THE YEAR 2009,2010,2011( Rs Particulars Sales 2011 ( Rs ) 4176627 2010 5655429

( In thousands ))
2009 5719311

2840111 COGS 1336516 Gross Profit 250597 Operating Income 835325 Operating Expenses 751788 EBITDA 83532 Financial Ohs 668256 Operating Cash Profit 225349 Depreciation 442907 Operating Net Profit 5011 Non-Operating Income 447918 NPBT Income Tax 130728