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CASE STUDY

ON

SWAGRUHA FOODS

Prepared By:-Jatinder Kaur

Sanjeev Kumar

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Chagarlamudi Vijaykumari, her Ratna Kishore andMadhu are the founder of Swagruha foods . Vijay

Kumari and Kishore worked in a co-operative bank in Mailavaram , Andhra

Pradesh, and were traditional people. But

want to start a business. But they belong toan educated and middle class background

which resulted in their risk averse approach

to life.

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In 1990 they got a chance to visit to Chennai.

The city was going to to celebrate a popular

Tamil festival next day. Travelling around thecity in the afternoon the family chance upon

grand sweets and snaks a large shop selling

traditional Tamil sweet and snaks. The shop

was packed to the hilt. This encounter got

Vijaya kumari thinking . There was a dearth

of outlets such as these in her home state.

Although both states were equally rich in

terms of tradition and festivals.

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Vijay Kumari thought that the day was not

far when awareness about local traditional

sweets would become a thing of past. To hergrand sweet and snaks not only represented an

untapped opportunity to start a business but

also the chance to revive and promote a partof her states tradition.

Initial Years:-The first Swagruha outletstarted Vijayakumaris residential premises in

Vijayawada with the starting investment of

Rs 5 lacs.

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They were confident from the first day that there was

great potential. Vijaya Kumari took charge the quality

control and actual preparation process, while the cashflow handled by the Kishore . Madhu got involved

with the procurement , supplies and the front end, the

customer facing role. The first day the shop opened

did very good business. They christen the shop

Swagruha which means our home. The idea was to

make the customers feel at home. The greatest feed

back they received was when customers told themthat the taste of their sweets reminded them of the

homely flavors of their grandmothers preparations.

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Soon after the success of the first outlet came

the second outlet, which was set up in 1992 in

Vijayawada. Around the same time imitators

started emerging around Vijayawada. By the

end of 1992 Swagruha had opened a third shop

in Guntur. The owners had experimented with

the franchisee model in Chennai but unhappy

with the result, they closed the store with in a

year due to not able to focus on quality.

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Madhu claimed that Swagruhas quickacceptance was primarily due to thefirms unflinching focus on quality andservice. For instance , since the shopwere targeted at women and children,the firm ensured that they located inpeaceful places not crowded ones. People should be able to pick out whatthey want in peace, and in a relaxedatmosphere and ample of parking

space is available .

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Initiation of Swagruha Outlet:-

From a residential Premises ( Cost under control and check on quality

Capital from business:- Borrowings from relatives and own savings

Team:- Family Members

Core Idea:- Traditional homely flavors and tastes

Market and demand analyses:-

No method of analyzing demand so traditional way was adopted bycounting the envelopes.

Followed the seasonal trends for their business (marriage seasons, mango

seasons, new year )

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Expansion:-

2nd outlet was set up in 1992 in Vijayawada

3rd out let was opened as an franchisee in Guntur

4th in Chennai ( But failed because of poor quality.)

Supplies were also made to Vijaykrishna Super bazaar but because ofinability to cope up with demand , supplies were stopped.

Target:-

Women and children so located at peace full places.

Smaller things like parking place were taken care of.

Feed back :- Direct feed back from customers buying products.

Tackling with negative feed back:-

Ask the regular buyers of a particular product to take a break and to change

their taste buying some other products.

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Quality Control:-

High quality raw material without worrying about costs of material.

Ensure regular supply and no wastage of material.

Preparing the items frequently but in small batches to maintain freshness.

Human Resource Management:-

200 employees for product preparation

Categories of employees permanent and temporary.

Maintenance of male and female ratio 60:40

Graduates employees works as supervisors.

Higher salaries and perks ( Bonus and free education to their children)

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Status in 2007:-

Took registered trade mark.

20 legal cases against imitators who duplicated the productsillegally.

Further Expansion:-

Grown beyond domestic boarders.

Opened separate NRI outlet to cope the demand ofNRIs.

But not up to the expansion of Haldirams and

Bikanervala because ethey were not to compromise the quality.

No use of machinery

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Problem:-

Shortage of skilled labour.

Which model to be adopted by the owners for expansion

to cope up competition.

How to assure about quality maintenance in case of

business is expanded .

How to mould business according to changing consumer

preferences.

Location of the business.

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Solution:-

Starting training sessions for existing and new employees.

Outsourcing products from local unemployed ladies and also providingtraining to them regarding raw material procurement, hygiene and homelyflavors.

Opening of new outlets franchises with their trained employees and supply.