AFTERSCHOOOL

CENTRE FOR SOCIAL ENTREPRENEURSHIP

S IVA KAMU V E TE R IN A RY HOS P I TAL ROAD
BIKAER 334001
W W W. A F T E R S C H O O O L . T K

SMALL CASE STUDIES

ON
E N T RE P RE N E U RS H I P

CASE STUDIES FOR THE STUDENTS OF

SOCIAL ETREPRENEURSHIP

PREPARED BY : DR. T.K. JAIN

HONORARY CHIEF MENTOR, AFTERSCHOOOL
© : AFTERSCHOOL CAREER GUIDANCE TRUST.

NOTE : THE PURPOSE OF THIS CASE STUDY IS NOT TO SHOW THE RIGHT OR
WRONG METHOD OF DOING SOMETHING. THE CONTENTS OF THESE CASE
STUDIES ARE HYPOTHETICAL AND THEIR SIMILARITIES TO SOMETHING REAL
IS BY CHANCE. THE PURPOSE OF THESE CASE STUDIES IS TO PROMOTE
ACADEMIC DISCUSSION AMONG PGPSE PARTICIPANTS OF AFTERSCHOOOL.
PGPSE IS THE PROGRAMME TO PROMOTE SOCIAL ENTREPRENEURSHIP THIS
PROGRAMME IS AVAILABLE FREE OF COST FOR ANY PERSON WHO WANTS TO
PLAY AN IMPACT MAKING ROLE IN SOCIAL TRANSFORMATION.
 Small Business Cases
TABLE OF CONTENTS

( R E A D A S P E R P G P S E P R O G R A M M E S Y L L A B US )

1. NEW BUSINESS CHALLENGES

2. PRODUCT POSITIONING
3. PRODUCT POSITIONING
4. NEAT AND CLEAN CITY
5. VARUN LOGISTICS
6. VDO ANDSOCIAL TRANSFORMATION PROCESS
7. MOVIES FOR SOCIAL CHANGE
8. MAHENDRA LOGISTICS
9. ORGANISATIONAL TRANSFORMATION BY MADHAVAN
 NEW BUSINESS CHALLENGES

2008 was a year of recession. For many firms, this was the worst year.
Some firms were closing down, and some firms were on the
bankruptcy. Ajay took it as an opportunity. He decided to acquire new
businesses. He realized that this was the golden time to acquire
running businesses. He decided to enter into some evergreen sector.
One such sector was cement sector. In 2008, most of the cement
companies were in troubles. They had built huge capacity, but demand
was slackening. Many builders had cancelled their orders. Mini cement
companies were getting closed down. Ajay took it as an opportunity
and started searching out mini cement units. His plan was to create an
all India brand of cement and to use mini cement plants to produce
and market cement. His plan was further to make special types of
cements – which are not made by other companies (like quick setting
cement). Ajay acquired 4 mini cement plants in four parts of the
country: North, South, East and West. These plants would fulfill the
requirements of these regions. Ajay didn’t want to give head on
competition to the large companies. He knew that there is no point in
competing with a large company, if you are a small company. He
therefore concentrated in niche marketing – particularly on specialized
cements. He could easily make his brand in these segments. As 2008
completed, the blues of recession starting reducing and opportunities
started blooming. Ajay undertook demand analysis. He used Delphi
and Nominal Group technique to anticipate demand in the four regions
of the country. He found the following scenario:
D= demand P = production capacity
North East West South
D 100 120 30 40
P 25 30 120 200

Transportation cost is a big issue in cement companies. Ajay wanted to

minimize his transportation cost also. Average cost of his cement bag
was Rs. 130. His market selling price was Rs. 200. He had to pay
commission to the sales persons, dealers, retailers, and masons out of
this income. If goods are transported from one region to another
region, the transportation cost would be as under :
North to South: 20
North to East: 15
North to West: 5
South to East: 15
South to west: 5

Help Ajay in sorting out the issues.

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 PRODUCT POSITIONING

Ajay had set up a tractor company. He imported Chinese components and

assembles them and sold out tractors in India. His brand was FIELDFORCE. He
popularized his brands through village fairs, trade displays, exhibitions in fairs
etc. He didn’t give any advertisement, but he used to organize Kushti
competitions in villages. He sponsored a national Kushti competition, which
was telecast on TV also. Ajay believed that his customers were farmers, so he
needed to reach the farmers. He wanted to match the expectations of the
farmers. Ajay also used a mascot as his logo. The mascot displayed an
elephant. Ajay symbolized power, rough and tough tractors through his
publicity media.

However, Ajay realized that the sales were not coming up. Ajay hired an
advertisement and media company to give suggestion. The company gave a
presentation that the sale of tractors in India had reached a maturity level. As
per the media company, farmers in India no longer buy small tractors (which
Ajay was selling). The media company suggested Ajay to switch over to big
tractors. Ajay said to them that it was not possible for him to switch over to
higher horse power tractors. Ajay this time asked a student from MBA to
prepare a dissertation report on new products to launch. Ajay asked her to
prepare a report and identity business segments with very high growth
potential, high growth rate and future scope. The student suggested to Ajay
to launch a moped for college girls. At that time there was only one brand of
moped available. Ajay realized that there was great scope in this business.
This was the product, which would sell in huge number. Its market segment
was well defined. Its target customers were increasing in number. There was
not much competition. The existing producer was making a moped which
neither had style nor performance (as per Ajay).

Ajay launched the moped for college girls. This moped was launched with his
existing brand name (as the brand was already popular). The advertising
agency of Ajay got agonized on this. They said that perception of people
about the brand was that of rugged product. The said that product must be
positioned appropriately. They suggested that Ajay should carefully design an
appropriate brand personality and then launch a new brand. Ajay however,
was adamant. He wanted the existing brand to be used. He said that our
brand can be modified as per the new situation. He suggested that instead of
Kushti, now he will sponsor some other events that will attract the attention
of college girls.

Ajay believed that every product passes through four stages: 1. introduction,
2. growth 3. maturity, 4. decline. Ajay believed that his product was in
introduction stage and there was lot of scope in the future.

You are requested to prepare appropriate strategy for Ajay.

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 N E AT A ND C L E A N C I T Y

Use and throw has become the new culture in our society. People in smaller
cities have also become habitual of it. Earlier people used to buy goods in
cloth bags, but now every one takes plastic bags, and they throw away these
bags. These bags pile up as heaps of wastage on the streets and add to the
dirt and sewage of the city to make the living hell out of the beautiful cities.
Now smaller cities are getting worst affected by it. They don’t have effective
sewage treatment plants. They don’t have effective sanitation system. Stray
animals move about on streets and eat the material thrown away by people.
These animals get lots of problems by eating these materials. This further
complicates the problem.

Bikaner is an example of traditional city trying to change itself. The city still
doesn’t have an effective sewage treatment system and sewage
transportation system. People have adopted modern (so called) life style.
The result is the huge pile of waste of plastic material around the streets.
Beautiful ponds of the city have been converted into store house of plastic
waste. People living in lower areas face more problems as during raining
season, their area become a display of the plastic wastes of the city.

Milch animals like cow, buffaloes eat plastic waste thrown by people.
Purushottam Dawra was wondering about this problem. What to do? People
are affected by this problem, but no person was taking an action. Everyone
was looking towards government. Dawra was thinking that it is not the
government, but the people, who should bring solutions to our problems. He
was particularly concerned about milch animals like cows.

Mr. Dawra designed a small open tank, of size of about 1 foot for collection of
waste. Now he started explaining people about what to do with this. He told
the people that you have two types of waste – 1. plastic waste and 2. edible
waste. Differentiate these two wastes. Put plastic wastes separately. Put
edible waste only in the waste tank prepared by Mr. Dawra This tank will be
put outside their house. Milch animals can come and eat this waste. Plastic
waste should be burnt by the people.

People in Bikaner are very religious and believe in what ever is religious. Mr.
Dawra wrote Ram words on these tanks. These tanks soon became popular.
Lot of donors also came forward to help Mr. Dewra. Mr. Dawra took donation
from them and got the tanks prepared. Soon over 3000 tanks were
distributed all over the city. Lot of demand for these tanks was coming. These
tanks have now solved the problem of waste to some extent. These tanks
have helped the milch animals a great deal. People still don’t burn the plastic
waste. This is still a big headache. Mr. Dawra is now planning to take some
more action in this direction. Like him many concerned citizens are getting
disturbed over the increasing plastic use in the city. The younger generation
is excessively using the use and throw products made mostly by MNCs.

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Shopkeepers are being told by concerned citizens to use paper bag instead of
plastic bags.

In your opinion, what should be the next strategy of Mr. Dawra to solve this
problem?

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 VA R U N LO G I S T I C S

Varun Logistics is into transportation of small parcels and packets. The

challenge is to minimize the cost of transportation and ensuring that there
are no lost goods. They try to prepare a transportation schedule to facilitate
faster transportation. This firm is situated in UP Border in Delhi. UP Border is
the main transportation hub. Trucks come from different parts of the country
and they are unloaded there. The firm then moves the packets in the trucks
of the destination. Suppose one truck comes from Bangalore containing a
packet for Chandigarh, then the packets will be loaded in the truck that has
come from Chandigarh, so that the truck from Chandigarh would get
something to take in its return journey. The truck from Chandigarh might
bring something for Bangalore, those items will be loaded in the truck from
Bangalore. The market is daily fluctuating. The rates of trucks are
determined on the basis of demand and supply. If the truckers in South are in
strike, the rates for trucks to south will shoot up. The firm gets a fixed rate of
commission per packet (which is based on weight and length to be covered).
The firm has to find the best possible sources for transportation. Generally it
hires trucks in open market, but there are possibilities of pilferage during
journey. Although the firm doesn’t suffer any loss (as all the goods are 100%
insured), but it mars the goodwill of the firm. You have to help the firm in its
restructuring plans regarding transportation system. The firm is having
following options:

1. Have its own trucks. One truck will cost it Rs. 10 lakhs. Rate
of interest will be 18% per annum. One truck will operate 20
days in a month and will earn Rs. 5000 per day when it is
moving. It will also require Rs. 50000 per annum of
maintenance expenditure.
2. Contract with good companies – where there will be no
possibility for pilferage. In that case the firm will have to
guarantee minimum 200 truck loads in a year. This is a very
small figure considering the business of this firm. However, in
this case the transportation costs of these companies are 1.5
times those of the prevailing market rates (available in open
market). If the firm goes for this option, the firm will also
have to install an automated system, as the other firms will
expect a very quick response from this company. This will
cost another 2 to 4 lakhs.
3. The firm can also go for having a system of performance
based reward system for the drivers of the trucks. If the
drivers and staff ensure safety of material, the firm can give
them reward. Thus it can ensure safety of the goods and
pilferage would be stopped. In this case it will have to spend
about Rs. 2000 per truck hire, which will increase its
expenses by 20% (thus reducing its margins by 20%).

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This firm is making lot of money. As the firm has no fixed investment.
Except an office, the firm has no fixed investment now. Every day the firm
gets about 100 to 150 tonnes of goods to transship. It keeps the goods in
a rented godown and tries to arrange trucks and loads the goods in those
trucks and takes away its profit in the process. It is able to earn about Rs.
5 per tonne of net profit (after deducting all the expenditure). The firm
can easily make the turnover 10 times, as there is great business scope.
Give your suggestions.

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 VDO AND SOCIAL TRANSFORMATION PROCESS

Village Development Group or VDG is now a powerful NGO. It was

started by a group of professionals who had done their masters in
social work and social entrepreneurship. The company works in villages
in and around Bikaner. These villages are inhabitated by people
belonging to backward communities. Shishir is one of the founders of
this NGO. He had undertaking capability assessment of the villages
before starting this NGO. He had carried out PRA (participatory
research and analysis) in these villages. He visited these villages and
identified the skills and abilities of the villages. For other persons,
these villages had no talent, but for Shishir and his group there was a
lot of talent in these villages. They found that villagers in these villages
used to prepare woolen blankets and cotton blankets. Shishir decided
to start with this skill. There purpose was to find a match between
demands the capabilities of the villagers. They organized a group
discussion the village to take the villagers into confidence. They
clarified the villagers about their expectations and what could they do
for the villagers. They told the villagers that they were not from
government department, but wanted to work with the villagers. Honest
working was their basic value and they wanted to work with the
villagers in building an NGO for the development of the villages. The
villagers joined with them in their work.

Their first venture was to participate in an exhibition being organized

by a government department for promotion of handicrafts. They
presented their stall in the exhibition in which they displayed the
creativity of the village in the exhibition. This exhibition gave them an
opportunity to interact with the foreign buyers and to know about their
requirements. They wrote down the expectations of the buyers in
details. Thus this was a major milestone for them, although they didn’t
get any business. They also studied the marketing strategies of other
handicraft selling units. They understood that understanding of tastes
and preferences in different countries would help them in sharpening
their products. The NGO then had an open discussion to carve out the
strategy. The NGO had no financial resource by this time, so they had
to take their decision in financial constraints. One official from
handicraft export promotion council had briefed them about
possibilities for handicraft exports for them. And how they could move
forward

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 M OV I E S F O R S O C I A L C H A N G E

Sharat Babu works as lecturer in the department of commerce in Kolkata

University. He is not satisfied as his role as change agent. He wants to involve
the youth in the process of social change. He wants the youth to look beyond
the present and dream for a better society. Teaching accounting and
bookkeeping is not his cup of tea, but he is doing it because there is no
option. He has a good collection of old classical movies, which are very good
in terms of their lessons. He uses his university auditorium for showing some
of these movies. He finds good response among the youth. He gets an idea to
do something creative. He forms a movie club in the university. He seeks
suggestions from the students regarding movies that they want to see. The
criteria are:
1. the movie should be really different from the conventional movie
2. 2. the movie should have a social message
3. The movie should be useful to the youth.

He gets lots of suggestions. He starts buying those movies and showing

them in the auditorium of the university. He charges nominal charge of Rs.
5 from the students. Soon he has a very rich collection of international
movies. Now he applies to various international forums and funding
agencies regarding his work. His work is now appreciated by other bodies
also and he receives support for this task.

He prepares his website also where he shows the list of movies with their
social theme. Mr. Sharat now receives invitations from premier institutions
from across the globe to show some movies. He takes his collection and
goes to these institutions and shows the movies. He also ties up with
NGOs in different cities and shows these movies in different cities on
different themes.

In 2005, it is the peak time of his activities. He had taken 100 days of
holidays from his university. He spent most of his time traveling in
different places. He organized a 7 day programme in IIM Ahmedabad,
where he displayed 30 movies in different class auditoriums and organized
discussions on those movies also.

Till date, his collection of movies is such as no one can really compete
with him. He has collection of many rare movies.

With spread of information technology, he has got advantage as well as

disadvantage. Earlier he used to get calls from different parts of the
country for showing unique movies, but now these movie clips are
available on internet also and many people download pirated copies of
these movies. Mr. Sharat had obtained license to show many international
movies in different parts of the country, but now it seems to be irrelevant.
Many of these movies are already available as pirated copies on internet.
Downloading speeds have increased considerably and people can easily
download these.

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 Mr. Sharat particularly enjoys the discussions that follow these movies. He
wants the youth to have detailed discussions on the matters of the movie.
Generally, he shows movies of 1.5 hours and organizes discussions for half
an hour. Thus this 2 hour session is something which people like and wait
for.
Mr. Sharat is now having another problem. His university has given him a
notice. He has been asked to discontinue or become regular. He would not
be given any more holidays.

He has to now decide about the future of his life. Should he pursue his
dream career or continue with the university job. Can you frame career
anchors for him?

MAHENDRA CERAMICS

Born in a lower middle class family, Mahendra was working with the Indian
Railways. It was the summers of 1976. He observed that there was one party
in Bikaner which used to send railways wagons full of a particular type of soils
to various parts of country. In a curiosity, Mahendra decided to inquire about
it. During his next visit to Delhi, he inquired about the rates of that soil. He
went with the samples of the soil. He had collected address of the consignee
of the last Railway Wagon and he went directly to that party and inquired
about the rate of the soil. He was surprised to know about the rates of the
soil. The soil was used in ceramics industry. Mahendra got an idea to
experiment. He collected his small savings. It was total Rs. 20000. He
purchased soil from this savings and sent the soil to the firm in Delhi. He
collected the payment. In the process he earned Rs. 50000. Now he took
these 70000 (20000 + 50000) and again purchased soil and sent it to the
firm in Delhi and this time earned Rs. 170000. It was such a huge amount
that he could never earn at a time. Now he decided to do this wholeheartedly.
He got involved in this business. He resigned from his job. He realized that
there are always business possibilities which most people don’t know. People
only look for established businesses, but forget that real profit is in
unexplored or underexplored sectors. Mahendra went to South India to
explore the markets for that soil. He realized that profits could be more in
South India. Now he started focusing on the Southern India. Till 1984,
Mahendra had become established business person and was now considered
a rich person in the city. Considering his success, many people started
following him and now he had many competitors. Mahendra realized that it is
better to earn and diversify so that he could earn more in some other sectors.
Due to competition, his margins had reduced. He went to one of his buyers
and asked him to tell about the process regarding factories. He now wanted
to start a factory to use this soil. He was wondering that when this soil is
purchased by the factory owners, he would be able to make more money if he
sets up a similar factory. He tried for 3 years, but he couldn’t set up his
factory. There were many restrictions in those days. With his savings from his
business, he now purchased a mine of the soil. His margins were constantly

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shrinking. He was pondering on how to increase his profit. He asked his elder
son to take up a course on ceramics engineering. At that time, this course
was available in only a few institutions in India. The admission was through a
rigorous entrance test. It was difficult for a boy from Bikaner to crack the test.
So he decided to send his son to the USA to study. It took him Rs 18 lakhs
(which was a huge amount for him), but the expected benefits were equally
great. After 5 years, his son returned with ceramics engineering. Now his son
started the process of his dreams. His son set up the first ceramics factory in
the region. Now they could use the soil in the factory. The factory started
making insulators. The variable cost of the one insulator of a particular type
used to be Rs. 50. Insulators could be supplied to various government
projects. This insulator could be sold to the government at Rs. 400. The real
profits would depend on volume. Huge infrastructure development work was
going on in South India and in the East India. The governments of Kerala,
Tamilnadu were buying these insulators in bulk. Mahendra went to south India
and got his first contract to supply the insulators. Soon they were able to
establish their rapport with other governments and started supplying
insulators all over India. They were able to make huge profits. Their average
monthly profits were in the range of Rs. 1 lakh to 10 lakhs. The big challenge
was to ensure transportation for supply of these insulators from Bikaner to
South India. They had to incur Rs. 9 per kg on transportation of insulators
from Bikaner to South India. They had to send one truck load every fortnight.
Mahendra realized that he could reduce this cost substantially by using
containers. One container was of 28 tonnes (four times the truck load). The
cost per kg would be Rs. 4. But now he would be required to send more
goods. He contacted buyers and stockists in South India. Thus he was now
able to supply one container of insulators. This reduced his transportation
costs and damages (damage in the process of transportation). His margins
improved further.

Mahendra was now thinking about new business possibilities. With the
surplus profits that he was generating from this business, he could easily
finance some new business. He had different ideas in his mind:
1. set up a vitrified tiles manufacturing plant
2. Set up an institution to impart training in ceramics engineering.
3. To diversify into other unexplored sectors like real estate or
commodity trading.

Give him some guidelines so that he may take appropriate decision. In your
opinion, how should he expand his business?

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ORGANISATIONAL TRANSFORMATION BY MADHAVAN
Madhavan joined as CEO of one of the leading companies of the
country. However, the company was facing problems. Till date the
company was in computer hardware and software support. The
company had opened distribution points for various brands of
computers. The company was having good turnover, the but the sales
were shrinking. Margins were also reducing. The company had good
staff, most of them were engineers. Madhavan decided to give the
company a new shape. He wanted to convert the company from
hardware based company to a software development company. The
idea was to convert this company into higher value addition sectors.
The margins would increase substantially, if the company entered into
software and support sectors. Under the guidance of Madhavan, the
company converted itself into an ERP and support company. The
challenge was to constantly build the skills of the employees.

Madhavan instituted a rigorous training and development department

in the company. Every new recruit had to undergo 3 month rigorous
training in this department. Here Madhavan would personally take at
least one session. All the senior executives would come and take at
least one session. The training sessions were very rigorous. The
trainees would be given daily assignments of at least 4 hours. The
trainees had to undergo class room training for 6 hours and then they
had to complete the assignments. They would be evaluated every
week on their performance and if they failed in performance, they
would be given a warning. If their performance was again poor, they
would be asked to leave the company. New recruits used to say that
they have completed changed after the training.

Madhavan was also very careful in recruitment. Instead of newspaper

advertisements, Madhavan used to visit good institutions and recruit
the students. He had instructed his HR department to prepare a very
rigorous test for recruitment. The recruitment test consisted of two
parts:
1. technical questions
2. Psychological questions to test team work, communication
skills and attitude of the candidates.

Madhavan had also asked all his employees to bring new persons and
if the new recruit would stay with the company for 1 year, the referee
employee would get a cash award of Rs. 40000. These initiatives
enabled Madhavan to recruit motivated, self driven and committed
employees. Madhavan was prepared for low grade recruits, but he
would not compromise on attitude and motivation of the recruits.

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During training and development sessions, at least half the sessions
would be on motivation, team work and positive thinking.

The next one year witnessed massive changes in the company. New
recruits who joined the company, used to be very ambitious. They
would bring projects on their own and share their learning with others.

Madhavan started an intranet across the company. All the employees

were asked to share their experiences on intranet. All the employees
would be evaluated on their contribution on intranet. Further the
employees were also required to give presentations every weekend on
their new projects and their new learning. The company soon
converted into a learning company.

However, there are some questions that you have to answer.

Madhavan realized that old employees were not very fast on intranet.
Due to better performance on intranet, the new recruits were able to
move forward and get rewards. Old employees were having
resentments at the new systems. As the new systems were introduced
almost every day, the old employees were finding it difficult to adapt
themselves and adjust with the fast changing pace of the company.
What should Madhavan do? For Madhavan, the first priority is his
team. He can compromise on profit, but he doesn’t want to
compromise on teamwork, motivation, and morale of his team.

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