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Individual Project CRM Punit Agrawal
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CRM

A Industry/ Segment OverviewConstruction is an important part of the industrial sector and one of the

core sectors of India's economy. According to IHS Global Insight, US$175

billion was spent on construction in India in 2007 after growing 156% since

20005. Out of US$175 billion, US$140 billion was spent on nonresidential,

and the remaining US$35 billion was spent on residential construction.

Construction spending is expected to increase to US$370 billion by the

end of 2013, with residential totaling US$63 billion and nonresidential

registering US$307 billion. This represents a compound annual growth

rate (CAGR) of 13.3%.

IHS Global Insight's nonresidential construction forecast for India, including

major subcategories transportation, public health, energy, office,

commercial, institutional, and industrial— is expected to rise at a CAGR of

13.9% during 2007-13.

The construction sector is also the second largest employer in the country

following agriculture, employing 18 million people directly and 14 million

indirectly. Exports constitute about 5% of the size of domestic market and

include construction materials, services, and cheap labor. The country's

main international trading partners in this sector are the Middle East,

Africa, and Malaysia. Indian companies have very limited exposure to

large markets such as the United States, Japan, and West Europe.

The Indian construction industry is highly fragmented. This is partially due

to the fact that, for most projects, there are no long-term relationships

between the contractors and clients. For example, government agencies

such as the National Highway Authority of India (NHAI) do not provide any

benefits to the long-term contractors that have worked with them in the

past. Because the sector lacks economies of scale, smaller players may

have better cost structures due to lower overhead costs. The industry can

be broadly classified into two segments— organized and unorganized. The

organized segment consists of firms and independent con- tractors who

manage their business (design, financing, execution, etc.) on a

professional basis. The organized segment operates on small, medium,

and large scales. The unorganized segment primarily consists of

standalone contractors that operate at a small scale. Construction

activities of smaller firms in the organized segment and contractors in the

unorganized segment are mainly focused on simple construction projects

—building houses for individuals, repair, and maintenance for smaller

buildings. Construction activities for larger firms involve complex logistics

management of men, machinery, and materials.

B Company Overview

Aarti Group

Mr. Kamal Agrawal started business of cement in year 1994 which was

started with a capital of Rs.5,00,000. For that a new firm was started

Kailash Associates taking C&F of Narmada Cement Company. Market was

limited to central Gujarat and Kuch part of Gujarat.

At that time a new line was also started of soda chemicals and

organization was named as K Punit Marketing and Om Chemicals with a

initial capital of Rs.5,00,000/- in year 1996 It was started by younger

brother of Mr. Kamal Agrawal Mr. Nandkishore Agrawal and it also started

growing very fast.

At same time in year 1996 Mr. Kamal Agrawal started a new field of real

estate in which dealing in land was started and share market was stated.

A huge investment of around Rs.7,50,00,000/-.

At same time in year 1996 Mr. Kamal Agrawal started exports in textile to

Shri Lanka and which was also done on a great scale with a capital

investment of 2,50,00,000/-. At that as time grew exports also grew with it

and more and more capital was invested.

Then after some years Narmada Cement Company was takeover by L&T

so company started to operate its business functions with L&T but it did

not work well. And same time business faced problems in other field also

due to which Mr. Kamal Agrawal gradually started closing down textiles,

chemicals and real estate lines due to some natural and some political

forces. Due to which business had to face great losses.

So Mr. Kamal Agrawal planned to go for other company along with it JK

cement but same problem was their so our margins fell down gradually

and our turnover also fell down.This resulted in very low profits.

Then it went for a different product in cement, it was a ready to use sort of

cement by taking C&F of company Roofit it was a company from Mumbai.

Organization had put great efforts in it but it was not successful as market

was not so easily excepting that product as it was all to gather a new

product and consumers where not having so faith in it.

Then Mr. Kamal Agrawal approached ACC Cement Company in year 2003

which had made some changes in situation as there was less competition

among company itself as their where only less C&Fs of company but

company said if Kailash Associates was able to achieve the targets given

for that month then only a agreement of C&F would be done and Mr.

Kamal Agrawal was able to meet that targets and he became C&F of

company.

As ACC Cement Company was doing marketing of the TATA Chemicals Ltd

which produced cement but after two years i.e. in year 2005 TATA

Chemicals Ltd took over marketing from ACC Cement Company and

started doing marketing itself and made C&F from its company only. It

started cement division under TATA Chemicals Ltd and product was

marketed in name of TATA Shudh Cement.

So once again table turned and situation became worse and no business

was there so great to go ahead further. But after six months TATA

Chemicals Ltd approached Mr. Kamal Agrawal for being C&F of their

company with another C&F of that company for Ahmedabad and

Gandhinagar district. Mr. Kamal Agrawal agreed and started with firm

name Aarti Agencies which was initially Kailash Associates, with a initial

capital of Rs.50,00,000. All though there was only one other C&F of TATA

Chemicals Ltd for that region but competition was there among both

organization and with other companies C&F also in that market. Then

TATA Chemicals Ltd passed an order that from both organizations who

ever was the highest selling C&F in next six months would continue

further.

After six months time period given by company Aarti agencies was able to

perform excellent so company made Aarti Agencies as single C&F of

company for Ahmedabad and Gandhinagar district. A huge adverting and

promotion activities where done in order to increase dealers and direct

costumers.

A huge sales force was build by a great dealer network in Ahmedabad and

Gandhinagar district. Its sales went up till 10,000mt which is equal to

2,00,000 bags of cement each bag of 50 kg. As Aarti Agencies was only

C&F of TATA Chemicals Ltd.

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting new

business along with cement and they started another business by

becoming C&F of Reliance Industries in that Recron 3s division. A firm

named Aarti Associates was started with capital investment of

Rs.15,00,000 by the end of year 2005. Region under Aarti Associates for

Dr. Fixit brand was central and Kuch Gujarat

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting new

business along with cement, recron 3s and they started another business

by becoming C&F of Pidilite Industries Ltd. in that subsidiary company Dr.

Fixit brand. Operations of business of Dr. Fixit where carried under firm

Aarti Associates. With the capital of Rs.15,00,000 in year 2006. Region

under Aarti Associates for Dr. Fixit brand was whole Gujarat in project

division.

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting new

business by adding another brand of cement in the portfolio by taking C&F

of Shree Digvijay Cement Co Ltd. Operations of business of Shree Digvijay

Cement Co Ltd where carried under firm Aarti Associates and K Punit

Marketing. With the capital of Rs.50,00,000 in year 2007. Region under

Aarti Active Agencies for Roff brand was whole Gujarat in project and retail

division.

Shree Digvijay Cement Co Ltd basket of products includes special cements

like Oil Well Cement, Sulphate Resisting Portland Cement and Railway

Sleeper Manufacturing Cement in addition to other varieties of Ordinary

Portland Cement etc. But they mainly deal in Sulphate Resisting Portland

Cement, Portland Pozzolana Cement in addition to other varieties of

Ordinary Portland Cement in bulkers of cement also.

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting new

business by adding another brand of Pidilite Industries Ltd. Roff by taking

C&F of Roff. Operations of business of Roff where carried under firm Aarti

Active Agencies which was initially Om Chemicals. With the capital of

Rs.15,00,000 in year 2008. Region under Aarti Active Agencies for Roff

brand was whole Gujarat in project and retail division. Pidilite acquired

Roff brand in 2004. Roff is a pioneer in construction chemicals in India and

is well known for modern tile fixing solutions like tile-on-tile and

waterproof tile joints. Pidilite also sells several construction chemicals

under Roff name for application in waterproofing, sealing, flooring,

concrete treatment & plastering.

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting a new

product line in same construction line then they started trading of bricks.

Operations of business of bricks where carried under firm K Punit

Marketing. With the capital of Rs.10,00,000 in year 2008.

Mr. Kamal Agrawal and Mr. Nandkishore Agrawal thought of starting new

business along with cement, construction chemicals, construction fiber

and bricks that business was of steel and became Distributor of Nilkanth

Concast Pvt. Ltd. in year 2009 by adding capital of Rs.25,00,000. Under

firm K Punit Marketing.

C Vision and Mission of the

organization.

VISION:

The vision of Aarti Group is to make this firm the biggest suppliers of

construction material firm in the country. To become One Stop Solution for

distribution of Building Materials & Raw Materials

MISSION:

The mission of Aarti Group is to provide the highest quality finished

product at a fair price within a reasonable amount of time. At the same

time they try to promote a good work environment for their people that

both rewards and satisfies quality workmanship.

D Organizational Chart

Top Management

Aarti Group is a firm, which is owned by the family members only no

outsiders, are having any share in it at present.

Employees

In all there are 15 employees who work for Aarti group and there is no

such specific employee, which would work for a particular firm.

Director-

Pushpadevi

Agrawal(Non

Director-

Sunita

Agrawal(Non

Director-

Meena

Agrawal(Non

Managing Director- Nandkishore Agrawal

Director-

Omprakash

Agrawal

Chairman- Kamal Agrawal

As this group is adopting modern system in which has reduced its work

force as before there were employees to deliver bills but now all are send

by post and collection boys which where their to collect payments are also

cut short by developing a system of collecting payment by RTGS or by

post which has reduced its employees by number of 7 to 8

E Current BusinessCurrent business deals in construction material like

1. Cement – TATA Shudh Cement, Kamal Cement(Digvijay Cement)

2. Steel-Neel Kanth

Workers (2Auditor (1)Account

recorders (2)Engineers (2)Collection

Boys (2)

Distribution manager

HR managerAccounts manager

Marketing manager

Purchase manager

Sales manager

Employees under Top

Managemen

3. Construction fibber-Reliance Recron 3s

4. Construction chemicals-Dr. Fixit, Roof

5. Bricks

Geographical spread

It operates its operations all around India in some products but has main

excess to Gujarat local market in that mainly central and Kachchh part of

Gujarat and very limited excess to other parts of India.

And it has dealer network to access all this parts of India as it has different

dealers in each and every part like in Gujarat in Gandhinagar there is

different dealer and for other part it is different and sometimes it can be

more than one dealer in one location.

Size of the organization

Turnover

The groups over all turnover is around 150 crore.

Firms under Aarti group:

Aarti Agencies(Kailash Associates) with 60 crore,

And rest other contribute around 90 crore

Aarti Associates,

Aarti Active Agencies (Om Chemicals),

K Punit Marketing,

Kamal Textile,

Saraf Sales.

F Current Segment And Offering

Currently organization is catering to

Dealers Builders Government Contractors

Current business deals in construction material like

1. Cement – TATA Shudh Cement, Kamal Cement (Digvijay Cement)

2. Steel-Neel Kanth

3. Construction fibber-Reliance Recron 3s

4. Construction chemicals-Dr. Fixit, Roof

5. Bricks

G Competitive AnalysisORGANISATION ANALYSIS USING MCKINSEY’S 7S FRAMEWORK

Strategy:

Aarti Groups strategy revolves round its customers. They formulate their

strategy of achieving the target of supplying quality materials to

customers in minimum time so as to achieve an edge over their

competitors.

Aarti Group emphasizes on building long term win-win relation between

the firm and its clients by sustaining relations, both personal and

professional.

Structure:

Aarti Group is designed to assist free flow of information and power within

the organization. The de-layered structure acts as a facilitator for free flow

of communication, which adds flexibility and dynamism to the functioning

of this team based organization.

Systems:

The family members who are the owners form rules and regulations,

procedures and practices that are followed to carry out tasks in the

organization. These include both the formal and informal systems, which

complement an organization structure.

Style:

Participative and transparent style of leadership gives the organization an

informal but professional outlook. The functioning of the firm follows a top

down flow but when it comes to innovation and craftsmanship, the flow

hits 360 degree.

Staff:

The staff, as the pillars of this firm, takes an upfront position and paves

way for the professional and qualified delivery of the business. Training

and assistance is provided consistently to keep the employees competent

and technically precise.

Skills:

Technical skills and other qualified communication skills are required to

cater the client. As a trading firm, quality of skills differentiates the firm

from its competitors and is given due diligence. Aarti Group has

strengthened in a number of business areas; however, their key skills

underpin their success in many business areas. Aarti Group is now trying

to achieve more of specialized skills now so as to make the firm more of a

professionally run organization.

Shared values:

To provide one’s clients with the best services, which enables them to

understand and influence the business environment in which, they

operate. Aarti Group believes in working as a business partner sharing the

objectives and vision of the client firm. This helps the firm to customize its

services and achieve their client’s strategic objective in the most efficient

manner.

THREAT OF ENTRANTS-

The threat of entrants in trading of building material is very high because

of less legal formalities required by Indian Government to enter in trading.

Moreover, there are no such great barriers out by government in this field.

Access to the distribution channel in this trade is also not difficult because

of growing industry and upcoming new suppliers and buyers.

There’s no great product differentiation in this industry which makes it

easy for new entrants to offer the same offering as provided by the

present players but huge amount of working capital is required as the

builders and contractors buy in bulk and generally trade on three to four

weeks credit. So some times, the non-availability of huge amount of

working capital may act as a hindrance for new entrants in this industry.

THREAT OF SUBSTITUES-

With the vast potential of R.M.C. plants is virtually replacing old system of

construction with the use of cement to prepare. The qualities of R.M.C. is

very much the same as those of concrete made on site by mixing cement

sand and stones and they are gaining varied application in building project

which are developing very fast. These days labor is not available so R.M.C.

solves problem of that till great extent also. R.M.C. concrete is available in

varied types as per the requirement so that problem also does not arise.

POWER OF SUPPLIERS-

Supplier’s power is high as there’s a concentration of suppliers rather than

a fragmented source of supply building material. A trader has always a

fear that the supplier may contact their buyers personally and supply

them material at a lesser price.

BUYING POWER-

Buyer’s power in this industry is high as the supplying industry comprises

a large number of small operators and there are alternative sources of

supply perhaps because the product required is undifferentiated between

suppliers. Moreover, buyer’s power is high as there’s no cost of switching

a supplier and there’s a threat of backward integration by the buyer.

COMPETITIVE RIVALRY-

In this industry, competitors are of roughly equal size so there’s intense

competition as one competitor attempts to gain dominance over other.

Since the construction industry is at its slump now, construction material

industry in also facing down fall stage welcoming entry of competitors who

are fighting for their share. It being an undifferentiated product, there’s

little to stop customers switching between competitors.

There is a huge competition in case cement, steel, construction chemicals

and bricks which make the organization to leave the profits of margins in

that deal to meet the competition. Even some times organization needed

to make loss in deal also as to get with the new customer or to maintain

the old one.

Sometimes scenario market is not good and there is no good demand may

be due to price or any other external factor then organization is not able

meet the targets given by the company which is adversely affected in

form of the commission which is reduced to great extent which makes

situation worse as already low sales above that low margins and profits on

per unit.

H SWOT Of Company

Strength

Business is capable to do business is adverse condition and can get some realization may it be less so owners need not need to worry as much as they need to worry in other business and its product value will appreciate in future so it creates a strength for business. Family background and

have a good sources for supply of raw material and good leakage with architects and consultants.

Weakness

Great capital and labor-intensive industry so we need to employee great capital and we need to take care very much and at same time it is very high labor intensive so labor problems are very much in this industry.

Opportunity

Fast growing industry that to very high phase and it will grow as population is growing and even building become old so they need to be renewed and they need to be reconstructed so this industry will always grow.

Threat

As such no great threat is there in this industry other then recession, which causes a great problem as during recession industry goes under great loss.

I Future Goals/StrategiesThere is a significant scope for construction material and construction

fieldIndia where requirement may not be large but quality products can be

sold at a better price and payment terms. Such markets are difficult to

locate but can definitely be identified.

Aarti group is trying to explore untapped markets and finding out the

potential of those markets. They are taking part in various fairs now so as

to expand their presence in the emerging global market.

They are now planning to open their ware-houses and offices at other

locations also but nothing has been finalized till yet.

In year 2012 Mr. Kamal Agrawal and Mr. Nandkishore Agrawal are

planning to go for addition of one more product namely white cement to

their portfolio.

Aarti group is even trying to get into construction field i.e. becoming a

builder.

J Business Development Process

Customers are approached frequently Organization tries to take many advertisement things by

distributing gifts Many test facility are conducted for customers benefits Engineers are send on site for demonstration and problem soving

K Sales Order Fulfillment Process

Sales order fulfillment process

Sales order are taken by the booking department Then all orders are compiled on hourly basis Then scheduling is done Then area wise bifurcations are done Then it is send to dispatch department Then material is send as per scheduling done and on the basis of

material received

L Complaint Handling Process

Sales department takes first complaint Then it is forwarded to owners If the complaint is due to the Aarti group then owners or staff brings solution as per

the importance and problem size If the problem is not of the organization but of the supplier then it is forwarded to

suppliers Then a engineer visits site if required Then a solution is brought And if compensation need to be made then necessary compensation is made

M Customer Touch Point And For Which Purchase

Organization mainly keeps in contact to costumers by

Frequent engineers meet, builders and contractors meet. Frequent visits by engineers and sales person of Aarti Group to customers site and

office Regular interval calls and timely visits made by owners to see what all problems they

are facing and what all they require.

N Current Systems In CompanyPayment terms:

At present current turnover comprising of all firms account to

Rs.150,00,00,000 and all firms make payments to creditors in advance

may it be TATA Chemicals Ltd., reliance industries, Pidilite Industries, etc.

It shares a good reputation in the market in payment terms and credibility.

It has a great goodwill in the market. Which is making it as brand virtually

for companies being associated with it as which ever product may deal

under any of the company of Aarti group may it be Aarti Agencies, Aarti

Associates, Aarti Active Agencies, K Punit Marketing, Om Chemicals, Kamal

Textile, Saraf Sales.

Payment Collection Terms:

Aarti Agencies is having generally 4 days credit terms for dealers in

Tata cement.

Aarti Associates is also having generally 4 days credit terms for

Kamal cement(Shree Digvijay Cement Co Ltd.).

For construction chemicals and construction fiber it is around 15

days.

For bricks it is 1 month.

For steel it gives two to seven days credit.

But many times payments are delayed and not recovered also. Which

gives a great loss to business.

Distribution network:

Material like cement, steel, bricks are done from factory of suppliers to direct site of the customer.

Other material may some times be transferred from warehouse in sarkej in Ahmedabad.

O Problem Faced By CompanyNature of problem

Firm is facing fall in cement sales in TATA Shudh cement as the company

is not able to produce as per the requirement so it started with various

related products but now a stage has come to look for more broad line to

grow a great speed and to achieve great levels.

So company is planning to extend its product range in other words to go

for diversified field. So Aarti Group has planned out to go construction line.

For this firm is looking into all the areas, which are required to be taken,

care. Taking into current scenario of downfall in construction line firm is in

dilemma to go for it now or wait and watch for some time.

It has a head office in Kankaria, Ahmedabad and booking and distribution office in Sarkej, Ahmedabad. All companies face a labor problem as labor loading and unloading of material which is duty of the firm need to be completed and no labor is available in market and contractors charge more if labor is available cheap then they some times do cutting in

material during transit period and complains come from customers which spoils good will of the company.

There is a huge competition in case cement, steel, construction chemicals and bricks which make the organization to leave the profits of margins in that deal to meet the competition. Even some times organization needed to make loss in deal also as to get with the new customer or to maintain the old one.

Some times scenario market is not good and there is no good demand may be due to price or any other external factor then organization is not able meet the targets given by the company which is adversely affected in form of the commission which is reduced to great extent which makes situation worse as already low sales above that low margins and profits on per unit.

Rains play a great role as due to rains some time consignment gets wet and material like cement which get spoiled due to water as when it comes in direct contact with water it turns into stone form and it becomes of no use.

Upcoming RMC (Ready Mix Concrete) plants are threat for the organization as if whole market is shifted towards it then demand for cement bags will be finished as a results sales would be affected adversely.

Engineers need to be trained and need to be made aware about our products so that they are convinced and at same time purchase department of builders and contractors need to be convinced in order to get the order. And both need to be convinced from different point of view and different perspective.

Organization even provides test report facility i.e. customers can test the products and they can find deviations if they feel and that expenses is also taken by the organization in order to get faith of the customers and every week batch test reports are send to customers asking for it which comes directly from the company.

Organization also gives catalogs, does wall paintings, special skims and gift articles to promote sales and to get reminding about the product range available. It also makes some mind set in the mind of customers that organization cares for us like dewali gifts given makes them feel as they are associated with the organization and organization feels importance of them.

In last five years Technology played a great role as now a days all MNCs are technological upgraded and we have meet there requirement may it be e payments i.e. now a days these MNCs except e payments only so we can not draw a cheque in favor to them, like that if order need to maid then a server is allotted by the company in which we have to log in and place the order if any thing goes wrong then in that server only we have to

make complaint and if due to any technical reasons like fail of connection of internet then it creates a problem. Staff needs to be trained as credit notes debit notes come though mail and even every bill drawn by them do come from mails and hard copy is received after many days for that time to make entry in books of accounts any entry need to be made then it need to be maid through that soft copy only.

As per the requirement of MNCs organization need to spent unnesacary on technical staff like engineers as two engineers are required instead as per companies rules C&F need to have 3 or 4 engineers then unnesacary additional cost is incurred.

As organization representing many leading companies it is having esteemed sales network in throughout Gujarat State, especially in each and every corner of central & Kutch region. It has about 250 Large & small dealer network in Gujarat. Over and above to these 250 large dealers we are attached with many consumers and Projects for their large and regular need of material.

Decision making process in the organization is done in such a way that all strategic business decisions, planning, employee related and financial decisions are taken by chairman- Kamal Agrawal, managing director- Nandkishore Agrawal and director- Omprakash Agrawal while routine operational decisions about work planning and process are taken by the middle level management.

Mainly from family three people are involved i.e. Kamal Agrawal, Nandkishore Agrawal and Omprakash Agrawal and middle level staff. If any thing other than a routine job or any other big decision is to be taken or any problem comes that is not solved by middle level then the top-level management makes decision. Final authority to make decision is Kamal Agrawal.

Mainly organization is having a diverse culture as people from different cast work in the organization may it be Hindu or Muslim with different beliefs and background but no such discrimination is maid which makes the culture of the organization very healthy and helps organization people to settle very fast if any new comer is their.

Many employees who left the organization due to nay of the reason do come back to meet people of the organization as they fell that they where treated as a family member of the organization so they need to keep relations with the organization.

Employees are working in organization from long years and they are not leaving jog even if they are getting job some where else as they feel they are now part of the organization and organization is like their family and they cant leave their family like that only as the environment in the organization is such good even lower level management people can even directly come to top management if he feels he is not heard and some thing is going wrong in the organization.

Government plays also a great role as due to government rules and regulation delivery need to made between specified time as heavy vehicles cant enter city befor or after the time given by government so some times there is clashes with customers on that issue as their would be no one to get material unloaded as mainly material is unloaded between 8:00 pm to morning 7:00 am


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