Case Analysis (Group-7): What is our Business?

Registration ID 001/1 016/1 017/1 020/1 Name Abhinav Sharma Birma Ram Chandan Gupta Ekansh Kumar Email abhinav.sharma10@email.iimranchi. ac.in birma.ram10@email.iimranchi.ac.in chandan.gupta10@email.iimranchi. ac.in ekansh.kumar10@email.iimranchi.a c.in Contact No. 919939524 9 725023992 5 916254302 1 957005816 9

Business Status Bill Callahan Associates (BCA) is a metropolitan retail business with 40 stores across the area generating 20 million dollars of revenue. They have four chains in different business streams i.e. Supermarket, Garden centre, home-service tools and greeting card stores. Their primary factors for success are highly friendly service and massively incentivized employee compensation scheme. The current extent of expansion across the metropolitan for all the chains is about to saturate. Thus they need to diversify into another new line of business. Decision Alternatives They had shortlisted following two business streams to choose from: Outdoor wear stores featuring products like blue jeans, western shirts and boots Restaurants featuring simple food like steak, chicken and roasted beef Criteria These decisions need to be evaluated on the following criteria for making the choice between the two: 1. Availability of managerial aptitude to handle the new business effectively 2. Long term growth prospects and profitability of the new venture 3. Coherence of the new business ideology with the existing business 4. Utilization of existing network of resources 5. Acceptance of the new business by the current customer base Evaluation Let us apply each criterion to both decisions to determine a recommended decision 1. Managerial Aptitude Current management has grown organically within the company. This essentially means that they are experts in their current business. However, this would also mean that they lack enough knowledge about other business scenarios. Thus, a new business would bring in a new set of challenges. A novel approach would be required to resolve the new issues. Such an approach would evolve over time and thus initially it would create some sluggishness of growth. Outdoor wear stores management is closer to retail management than restaurants. Success of restaurants depends on product quality and brand awareness in addition to existing dynamics of retail business. In common retail scenarios, the products are similar across different stores and the responsibility for brand awareness lies with the product companies. Thus, Outdoor wear stores fit better in this criterion.

Case Analysis (Group-7): What is our Business?

Registration ID 001/1 016/1 017/1 020/1 Name Abhinav Sharma Birma Ram Chandan Gupta Ekansh Kumar Email abhinav.sharma10@email.iimranchi. ac.in birma.ram10@email.iimranchi.ac.in chandan.gupta10@email.iimranchi. ac.in ekansh.kumar10@email.iimranchi.a c.in Contact No. 919939524 9 725023992 5 916254302 1 957005816 9

2. Profitability Since, we already shortlisted the two companies based growth prospects, we are almost indifferent among the two choices under this criterion. 3. Ideology Their current ideology is providing highly friendly service. Since a similar ideology is helpful in both these new markets, both fare equally on this criterion too. 4. Resource They have the necessary tie-ups for procurement and transport infrastructure. However, the restaurant business would also involve some more cost in licensing and manufacturing infrastructure setup. Thus, by choosing to setup Outdoor wear stores, we can avoid these additional overheads 5. Customer Base The customer base of current retails chains varies across the chains. Supermarket caters to the housewives and home owners responsible for procuring the sundry needs. Greeting Cards is a market for the youth. Owing to such large variations in customer base, the BCA brand may have a different impression among different members of family. Restaurants will generally be visited by the entire family. Thus success of restaurants will depend on acceptance of the brand by the entire family. On the other hand, Outdoor wear stores may be visited by the members separately. Moreover, it caters to a market similar to Greeting Cards and the success in that business can directly benefit the attractiveness of the brand in this business. Conclusion Outdoor wear stores satisfy most of our criteria and we are almost indifferent among the two based on other criteria. Thus, we must start a chain of Outdoor wear stores.