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8/2/2019 HL Research Project - Sahakar
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Prithvi Patel, 003810-004
Page 1
Business and management
Higher level.
Internal assessment.
How can Sahakar General Stores in Ghatkopar, Mumbai change its product mix to
fight competition?
Main essay: 2124
Research proposal: 193???
Executive summary: 178
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Research Proposal
Research question
How can Sahakar General Stores in Ghatkopar, Mumbai change its product mix to
fight competition?
Rationale for study
Sahakar General Stores is a shop which started in 1977, and is operating till now,
where the FMCG goods are sold, which helps the owner to earn faster revenue.
Currently, it is facing problems of low profits due to lower sales. M/S Sahakar
General Stores is not able to generate revenue as before due to varied factors. Thus
due to the issues being faced by this store in generating greater revenue this research
is intended to explore the array of ways the owner can take into account to solve theproblem of falling sales.
Theoretical framework
1.2 Types of Organizations 1.6 Organizational Planning Tools 1.7 Growth and Evolution 3.1 Sources of Finance
3.3 Working Capital 4.1 The Role of Marketing 4.3 Product
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Methodology
Sources Methods Information needed
Dharmesh Mehta, owner,
Sahakar General Stores Interview Operating promotional mix
Changes in the market, in
terms of competition
Significant difficultiesfaced by the firm
Current customers of
SahakarQuestionnaire
Their present views and
potential expectations
The effectiveness of the
product mix and analyzing
the market gap
The data accumulated is solely based on the ways of primary research, as there was no
scope of obtaining any sort of existing data of the company in the newspapers or
internet, or any other source of secondary information.
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Action Plan
Januar
y6th
Dece
mber
Nove
mber
October
Septe
mber
August
July
Ju
ne
May8th
onwards
Choosethecompany
Writearesearchproposal
Submittheresearchproposal
Writeanintroductio
n
Writeandfinalizea
questionnaire
Preparequestionsfo
r
interviews
Submitquestionnaires
and
interviewquestions
ResearchSahakarGen
eral
Stores
InterviewS
ahakarsowner
Analyzeandevaluatere
sults
oftheresearch
Preparethefirstdraft
Writeconclusionsand
recommendations
Preparethefinaldra
ft
Completetheproject
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TABLE OF CONTENTS
Executive summary
Introduction
Objectives and methodology
Main findings
Analysis
Conclusions
Recommendations
Bibliography and references
Appendices
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EXECUTIVE SUMMMARY
After establishing itself successfully in the market for more than 25 years, Sahakar has
now been facing healthy competition in the market, with competitors offering
additional services and stealing on the market share. The aim of this research is toanalyze the ways in which Sahakar can regain its market share, mainly by focusing on
its product mix.
Research question:
How can Sahakar General Stores in Ghatkopar, Mumbai change its product mix to
fight competition?
Method:
Analysis in based on information collected only through primary research, like
interviewing the owner of Sahakar and asking its customers to fill in the
questionnaires. Then the data was evaluated using frameworks namely BCG matrix
and SWOT Analysis.
Main findings:
Limitation of budget Seasonal sales fluctuations Improper product mix selection High stock of inventory
Recommendations:
Have reliable sources of finance Keep adequate level of stock during festive seasons Restructure the product portfolio Rearrange the stock to make maximum utilization of the storage space Introduce additional services, such installing a stationery shop
Word count: 178
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Figure 2
As seen from the graph, Benefit has the highest market share, followed by Sahakar
just more than Home Mart, and then others still running with some acceptable profit
levels. Sahakars profit levels fell by 20% compared over the previous years. So inorder to takeover Benefits lead and to recapture the market, Sahakar will have to
primarily focus on its product mix to attract more customers. Thus arises the researchquestion, How can Sahakar General Stores in Ghatkopar, Mumbai change its productmix to fight competition?
Moreover, the competitors offer additional services, which are listed below:
Additional services offered
Stationery
items
Free home
delivery
Credit
facilitiesExchange
Nameofthefirm Sahakar
Benefit
Home Mart
The table clearly indicates what extra facilities the three top contenders provide in
order to achieve market growth. Benefit has all the four services, adding to their
suitable location to satisfy the customer needs and wants. Sahakar offers 2 out of 4services, whereas Home Mart provides the consumers with only the stationery items
Sales in 2010
Sahakar
Benefit
Home Mart
Others
26%
36%
24%
14%
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like photocopying papers etc. Thus recommendations to Sahakar would be to widen
their customer base for home delivery. Previously, they offered this service to
residents living in the radius of 2 km, now they can expand it to 3 or 4 km, and also
the purchase made by the customers should be worth Rs. 200, which can be further
reduced to Rs. 100.
Another important factor that helps Benefit gain a greater market share is its
geographical location, which helps it cover a wider customer base, and even makes it
convenient for a few residents of the locality to walk lesser. Here Sahakar is helpless
as working over relocation would be non-effective, and they cannot afford to relocate
to some other area. Thus, due to lack of financial resources, the stores cannot re-locate
and neither canit indulge in heavy promotions and so the only way to increase revenue
is modify the product mix
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OBJECTIVES AND METHODOLOGY
The prime objective was to work on their product mix and help them re-formulate
their product mix. So in order to improve their performance, the following
methodology can be used:
a. Using SWOT analysis, the stores weaknesses and threats can be worked upon,and its strengths and opportunities can be emphasized.
b. By using the Boston Consulting Group Matrix, the low-selling products can beeliminated and best-selling products can be worked upon.
The methodology incorporates collecting data from sources such as interview withSahakar General Stores owner to converse about their limitations, current productmix and the sales levels. Secondary research includes inquiring from the storesowner, and primary research includes interview with the owner, questionnaires made
for the customers and data collected from the sample. The above combination enables
us to get more or less an equal balance between quantitative and qualitative
information. In order to analyze clearly, tools like SWOT and BCG Matrix are used.
Possible difficulties predicted to come during the research:
Meetings with the owner may not be very often, as being a sole trader he has his own
leisure time and can choose his own hours of work and holidays. Thus to avoid this
problem, appointments can be taken and fixed with the store owner. Moreover, the
customers are likely to give biased information and even complete financial data by
the owner may not be revealed. The personal records are subjective, but to obtain
authentic results from the customers, I can make them feel comfortable about the
discussion and the questionnaire before they fill it, avoiding any intimidating
questions and respecting their time.
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MAIN FINDINGS
The data gathered from the interview of the owner revealed a few drawbacks in the
product mix, which are:
a. Limitation of budget1High financial constraints drift away the owner from taking high risks and
expanding. Even the new released products cannot be ordered due to the fear of
high risk and failure of the product.
b. Seasonal sales fluctuations2Due to the change in the economy and in tastes and fashion, the shop had seen
fluctuation in its sales. Moreover, there have been more sales during festivals.
c. Improper product mix selection3Due to the lack of knowledge of the latest trends in the market, there is a poor
choice of selection in the product line which avoids further sales and larger
closing stock.
d. High stock of inventoryThere is a large amount of inventory kept in order to keep an adequate supply.
But this leads to a cash flow problems as money is stuck in the form of stock.
e. Falling counts of foot-falls4The number of people visiting the store reduced, which meant that there was
certainly a fall in the sales volume.
f. Decreased revenue5The owner of the store revealed that his revenue compared to the last few years
declined by 20%.
The information that was obtained from the customer survey shows some
disappointments like:
1Appendix 9.1
2Appendix 9.1
3
BCG matrix4Appendix 9.1
5Appendix 9.1
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a. Demands not being met oftenCustomers were dissatisfied as the demands were not being met at times, which
led to the decreased visits and going for its competitors.
b. Short radius of home deliveryThe store provides home delivery services, but as per the convenience of the
store. This practice can be changed to help fight the competition.
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ANALYSIS
5.1 SWOT Analysis
Strengths Weaknesses
Loyal customers Already established business Easy access to the store by
customers
Products available for almost allmarket segments
Seasonal demands are also met
Limited variations Insufficient sources of finance No fixed working hours Poor management of inventory No eye-catching displays
Opportunities Threat
Expansion of the business Widen their customer base Modifying the product mix Introduce value added services
New business opened nearby Other stores have better location,
making it convenient for many
existing customers
Competitors have other sub-sections also, like a stationery shop
The loyal customers and the easy access to the store for customers guarantee Sahakar
to have more walk-ins, along with seasonal products, which are mainly during
festivals are also being sold very well. These factors assure fixed sales, which can
further be increased by key factors like expanding the business, modifying their
product mix to widen their customer base and providing more value added services.
But only these factors wont help boost its sales. They have to improve on theweaknesses, which include a certain limit in the variations, which may sometimes
displease the customers and they go empty-handed. Another weakness is that evenafter establishing themselves, there are very less sources of finance, which will make
their expansion plans even more challenging. Another is that being a sole trader, he
works for personalized hours. This might not be appreciated by many customers.
Likewise, a poor display kept for the consumers might disinterest them from buying
goods from here. Not only the outer display, but the inner management of stock blocks
space that can be needed at urgent deliveries.
These are a few problems they can overcome internally, but the problems, like one of
its competitor Home Mart running a stationery shop, and Benefit General Stores
coming up with a better location, cannot be dealt with. Overall they hold much of the
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market due to the support of its loyal customers and a well-established name, but in
the long run they need to revise their product mix to ensure satisfactory sales.
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5.2 Boston Matrix
Market share
High Low
Marketgrowth
High(growing) Stars
Beverages (Coffee) Breads Condiments Paper products Snacks
Problem Children
Baby items Pasta Dairy products Sweets
Low(mature) Cash Cows
Baking Beverages (Tea) Cleaning supplies Health and Beauty
Dogs Breakfast Frozen foods Miscellaneous Beverages (Water, cold
drinks)
Produce Beyblade
Sahakar General Store doesnt have to worry about the cash cow products, which arebaking items, as there is already a huge existing market, with Sahakar having a great
market share. Other products falling under cash cows, namely tea, cleaning supplies
etc help Sahakar in minting money because the purchase of these goods is always high
and nearly everyone in the market buys these products.
The stars are coffee, breads, condiments and others are relatively new in the market,
as people earlier preferred having chapattis instead of breads. But with the
modernization of the world, people became exposed to different products, which is the
case in Ghatkopar East. Thus the market growth is very high, and as Sahakar is one of
those few offering these goods, its market share is also high.
However, there are some products still questionable, as sale of these items is highly
fluctuating. These are the problem children, as the growth in the sales of these
products is unpredictable. Even though the market size of these products is increasing,
these products are not being sold very well by this store. This is because the baby
items and pastas, under the question mark products are being sold by its competitors
in a more appealing way, there is a famous sweets shop and a dairy store located
nearby.
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The last category is dogs, where products like breakfast items, frozen foods and
Beyblades etc are not being sold till the expected limits. The breakfast items are going
unsold because the families prefer having bread and butter with tea over breakfast
items like cereals and cornflakes. Beverages like packaged water bottles and cold
drinks go unsold, because situated right next to Sahakar is a cold drinks and ice-creamshop, which attains more customers. And hence these products are well existent and
have a matured market growth, but the market share of Sahakar for these is low, se
they are considered to be Dogs and need to be phased out.
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6. CONCLUSIONS
The observations we obtain from the analysis will help to come to certain conclusions
about the store, its competitors and the market.
The strengths under SWOT need to stay focused, so as not to lose track of their sales,
revenue and profits. Moreover, Sahakar will have to surmount the weaknesses, which
will make a significant increase in its sales. Also, grabbing the opportunities
appositely will provide it with optimum growth in sales. And even though the threats
cannot be dealt with, coming up with better offers may overshadow the treats. Then,
star products are to be maintained, as they expect rapid market growth; cash cow gods
are working well; hence certainly no changes are to be made. Not only this, but also
the question marks need more attention that will help the store to earn relatively
higher revenue. And finally, there are high probabilities that dogs need to be
eliminated completely from the product mix.
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7. RECOMMENDATIONS
To generate higher revenue, Sahakar General Stores needs to work on their product
mix and predict its the future trends. And here are some suggested changes to beadopted:
a. After evaluating the SWOT Analysis, it is clear that Sahakar needs to makealterations and adopt some solutions to overcome their weaknesses. Primarily,
they should offer more variations for the customers, then try to arrange for
more sources of finance so as to make the expansion easier. Besides, the owner
should keep fixed working hours of the store so the customers are aware of its
timings. Lastly, Sahakar should even re-arrange the display to make it
appealing and attention-seeking.
b. The product mix should be restructured based on the evaluation of the BCGmatrix. The cash cow products should be kept in adequate amounts and on-time
supply. The stars must also be kept at the right quantity so as to obtain
maximum sales. And hence, implementing the just-in-time method for these
goods would be the finest choice. Then, question mark products should be
worked upon, in ways like offering better brands of the same product,
displaying them in an eye-catching way in the store and even ordering them by
adopting the just-in-case method. And in the last section, Dogs, products are
least successful, thus phasing out these goods would be the most appropriatemethod.
As the research is based solely on varying the product mix, more emphasis
should be given to the results of the BCG Matrix, which focuses on the
performances of these products. Thus change is needed in the product mix by
continuing with cash cows, further extending the starts, promoting the question
marks, and phasing out dogs. However, utilizing only this solution will not
have optimum effect on sales. Along with this, suggestions from the SWOT
Analysis should be taken, like working on the displays, fixing proper working
hours etc. And even the changes in competitors behaviors should besupervised carefully, so as to not lose further sales.
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8. BIBLIOGRAPHY AND REFERENCES
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9. APPENDICES
9.1 Interview with the owner
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
Q:
A:
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9.2 Consumer survey
The data accumulated from the questionnaires gave was as observed below:
1. How often do you visit Sahakar General Store?No. of customers % of customers
Daily
2-4 times a week
Weekly
Fortnightly
2. What draws you to the store?No. of customers % of customers
Proximity
Variety of products
Customer service
Other facilities
3. Are you happy with the current product range and the variety?No. of customers % of customers
YesNo
4. Are you happy with the current service at the store?No. of customers % of customers
Yes
No
5. Are you happy with the current home service?No. of customers % of customers
Yes
No