Emerging Competitive Scenario

In India had been historically controlled by strong regional player. Such as Kwality in the North and East

 Kwality and Vadilal in the west

Dasaprakash, joy and

later Arun in the south

 More over most hotel,resturants also made limited range of Ice cream flavor in house for their captive need.

In the late eighties MNC, Cadbury India enter the ice cream market with brand name Dollops. Ice cream market in India was completely shaken by Brooke Bond India Limited (BBIL). Leading international brand such as walls and India leading brand such as kwality in its port folio, BBIL emerge as a major player in the ice cream market overnight.

 In Feb. 1997 India govt. announce de-reservation of ice cream manufacture. Even as Arun emerged to the top spot four southern states.

Ownership Structure and Finances

Chandramogan entered the ice cream buss. In 1970. it was through a partnership firm styled Chandramohon & co. In march 1986 Hatsun Foods Private Limited (HFPL) was incorporated in Madras. On April 30th 1986 HFPL took over the Chandramohon & co as going concern.

 The ownership of the brand name ARUN was also transfer to HFPL whereby, the company was allowed to register the brand name ARUN in its own name, subject to royalty payment of 1% on gross ice cream sales. In august 1995 the company name was change to Hutsun Milk Food Private Limited (HMFPL) and was also converted into a public limited company Hutsun Milk Food Limited (HMFL).

 In jan.1996 HMFL was taken public through an initial public offering of 1.80 million shares at an issue price of Rs. 45 per share. By march 1996 HMFL paid up to capital increased to Rs.38.4 million. In the year 1997 nearly12% of its fiscal 1997 sales of Rs.184.1 million. The spending in rupee terms represented a near 100% increase over the previous year

Strategic challenges and dilemmas

The principal worrying factor for ARUN management was the dramatic developments in the market place. For Chandramogan it was clear that he had to quickly rework the competitive strategy for ARUN The key question was whether to aggressively reinforce ARUNs competitive profile.

 Further expand its franchisee network in the face of HLLs competitive onslaught Pursue alternative business opportunities woven around Aruns limited strengths and competencies. He was certainly determine that unlike several other Indian entrepreneurs in the FMGC sector, he would not sell out to the MNCs.