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CASE ANALYSIS: MAHAGUTHI SHOPS

Submitted to:

Dr. Rajendra Suwal

(Instructor)

Submitted By:

Sunita Bista

Term 6, MBA

March 2, 2011


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Q.1 What should the mission of the organization be?

The mission of the Mahguthi shops should be:

To contribute for development of Nepalese handicraft products for desired customers within

Nepal and all over the world, providing product development and design assistance to the craft

producers, offering an effective retail outlet linking producers & markets and also to work for

social benefits by creating income generating activity for poor & disadvantaged group within

Nepal and by supporting the rehabilitation program for destitute women and children with proper

compensation & benefits programs.

Q.2 Perform a SWOT analysis for MahaGuthi Shops

Strength:

i) First mover advantage: Mahaguthi shops were established in 1944 as a Nepalese

handicraft retailer, wholesaler and exporter. It enjoyed the monopoly as Handicrafts

retailer for about fifteen years thus, it has probably more experience and knowledge in

related field.

ii) Well developed network of suppliers: Mahaguthi has a well developed network of

supplier who were charitable and commercial, rural and urban, men and women so that

they can offer a diverse assortment of products.

iii) Provider of financial assistance :Mahaguthi shops provide moral encouragement,

production advice and financial support to new producer groups who are attempting to

enter in the saturated market. This shows their expertise and knowledge in the handicraft

field which might not be available to competitors.

I) Weakness:

i) Lack of understanding and awareness of quality issues by rural producers: This can be

weakness of an organization since its rural producer are not aware of maintaining quality.


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Q.3 If you were being consulted by Surendra, what strategies would you recommend him

to revitalize Mahaguthi Shops? Suggest a strategic plan that includes functional plans and

policies to be adopted by the organization.

Strategies that I would recommend Mr. Surendra to revitalize Mahaguthi shops are as follows:

i) Background Integration: I think Mahaguthi has been suffering from unreliable and

inconsistent raw material supplier and producer that have degraded its export potential.

So, through backward integration, it could seek control over the firms suppliers so that

supply becomes more reliable.

Strategies plan including functional plans and policies could be:

i) Forming appropriate marketing strategies:

Mahaguthi has to adopt aggressive marketing strategies rather than relying on its first mover

advantage and experience.

It has to allocate some more budgets for appropriate marketing using marketing mix like

Product: Mahaguthi can include brass ornaments besides wood carving, silver

jewelery, Nepali Paper, bamboo baskets, ceramics etc.

Price: After including above mentioned products that attract tourist, it can charge

price on par with products of its competitors like Hastakal and Dhukuti.

Place: It should open its retail in Lazimpat, thamel which is the prominent destination

for every tourists and expatriates locating in Nepal.

Promotion: Mahaguthi can adopt other promotion methods like emphasis on personalselling, giving advertisements on popular magazines

ii) Attention to design:

For handicraft business, it is necessary for organization to appoint full time designer with

attractive salary and incentives to retain him.


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iii) HRM stategy:

Mahaguthi should provide appropriate training for its sales personnel/ store on how to

deal with customers.

It should motivate its staffs by giving incentives based on their sales performance

It should encourage its staff to be technology friendly by teaching them how to do

sales through Internet and Web.

iv) Making new policies regarding customer service:

I think Mahaguthi should make clear policies regarding customer service policies for returns,

discounts or lay away so that sales personnel/ stores feel no complication in dealing with

such issue.

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