NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 03
Submission BCS
Finance
Submission Date & Time: 2021-11-25 12:33:13
Event Name: NMO S4 Sprint One - IIM Visakhapatnam
Solution Submitted By: Paawan Jain
Assignment Taken
FinanceCase Understanding
A successful fast-food restaurant Ramalingam Foods was established by Ramalingam Venkatesh in Bombay was famous for freshly cooked Indian food and filter coffee. After emergency in India, Ramalingam Foods started selling Dosa-Idli Batter and chutneys. Later, his son introduced powder form of batter to grow his business and increase shell life of product. This product became the instant hit. Later the management noticed that some people are buying the product in India and selling it offshore. Taking into consideration this, the management started pondering over taking the brand to next level.BCS Solution Summary
A effective foreign expansion strategy can focus on rising countries in Southeast Asia, where there is a higher population of Indians. As a result of research of the packaged food business in Countries In southeast asia, Thailand, Singapore, Malaysia, Indonesia, and Myanmar were identified as possible locations for the company to develop in the first phase. For the initial phase of expansion, we want to expand through partnerships and strategic alliances, since we have 50 crores set aside for international expansion. Mavalli Tiffin Foods (MTR), an Indian competitor and a subsidiary of Orkla ASA, a Norwegian conglomerate having operations in the Nordics, Eastern Europe, Asia, and Europe, and Indofoods Sukses Makmur in Indonesia are Ramalingam Foods' key competitors in these regions. Ramalingam Foods now offers a limited number of mixes and SKUs, including North Indian, South Indian, Chutney Powder, dessert mixes, and instant coffee mixes. The planned strategy is to expand into a few Southeast Asian markets with existing SKUs while also introducing a few new goods. Printing the instructions in native languages on the packaging additionally helps to reach a broader consumer base and attracts potential consumers.Solution
Solution
With a 50 crore budget, the company is planning to expand in international markets and expand its footprint. The ideal location for expansion would be the Middle East region given the population of Indians in the region along with faster pace of life demanding instant food mixes. The 5 countries that would be an ideal destination based on the demographics and economic viability would be:
- Myanmar
- Indonesia
- Malaysia
- Thailand
- Indonesia
|
Country |
Indian Population |
% of Total Population |
Per Capita Income |
|
Myanmar |
2,594,947 |
7.46% |
49440 PPP |
|
Indonesia |
3,420,000 |
34.58% |
70300 PPP |
|
Malaysia |
448000` |
20% |
26160 PPP |
Pricing Strategy
The pricing strategy is based upon on the per capita income of the three countries. UAE, having a highest per capita income commands the highest premium of 10% over the current prices.
The next highest per capita income is that of Saudi Arabia for which we have raised a premium of 5% above the current prices.
For Oman, the prices have not been changed given the low per capita income.
|
No. |
Name |
Weight |
Price in Oman |
Price in Saudi Arabia |
Price In UAE |
|
1 |
North Indian dishes Instant Mix |
200 Gms |
89 |
93 |
98 |
|
2 |
North Indian dishes Instant Mix |
500 Gms |
199 |
209 |
219 |
|
3 |
North Indian dishes Instant Mix |
1000 Gms |
389 |
408 |
428 |
|
4 |
Desert Mixes |
200 Gms |
110 |
116 |
121 |
|
5 |
Desert Mixes |
500 Gms |
249 |
261 |
274 |
|
6 |
Desert Mixes |
1000 Gms |
499 |
524 |
549 |
|
7 |
Chutney Powder |
200 Gms |
75 |
79 |
82.5 |
|
8 |
Chutney Powder |
500 Gms |
199 |
209 |
219 |
|
9 |
Chutney Powder |
1000 Gms |
329 |
345 |
362 |
|
10 |
South Indian Instant Mix |
200 Gms |
89 |
93 |
98 |
|
11 |
South Indian Instant Mix |
500 Gms |
199 |
209 |
219 |
|
12 |
South Indian Instant Mix |
1000 Gms |
389 |
408 |
428 |
|
13 |
Instant Coffee Mix |
200 Gms |
149 |
156 |
164 |
Revenue from Products
|
Product Type |
Revenue Percentage |
|
North Indian dishes Instant Mix |
33% |
|
Desert Mixes |
12% |
|
Chutney Powder |
8.5% |
|
South Indian Instant Mix |
43% |
|
Instant Coffee Mix |
4.5% |
Budget Allocation
|
Total Budget |
50,00,00,000 |
|
IT |
2,50,00,000 |
|
Marketing |
10,00,00,000 |
|
HR |
|
|
R&D |
10,00,00,000 |
|
Real Estate Development |
15,00,00,000 |
|
|
|
|
Emergency funds |
2,50,00,000 |
Conclusion
Ramalingam Foods initially plans to enter into South East Asia after judging all pros and cons and hence, choose 5 South East Asian countries like Myanmar, Singapore, Indonesia, Thailand and Malaysia where there is a significant presence of Indian population. Moreover, as per thorough market analysis, these are the countries constituting of local people who are highly receptive to cuisine from other countries as well. Post that,the firm can go on for aggressive expansion in the remaining two zones viz. Middle East and UK with an enhanced variety of product mix and SKUs for achieving more global market share in the long run.Attached File Details
Comments
Article Type: Business Case Scenario, Case Study Solution Submission
Business Case Detail
Title: NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 03
Type: Case Study
Stream: Management
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