Introduction
and Background
The case introduces us
to the Sula vineyards it is an Indian winery which has started its operation
from early 1998 as the case goes on it was maintained and carried out by the
young entrepreneur Mr. Rajeev Samant. Here the case tells us the story about
their operation it gives us the idea about the strategic objectives, finance
and financial problems that the business has faced during its operation. As the
Sula was the domestic product the entrepreneur was from Mumbai, India.
Talking
about the young entrepreneur Mr. Rajeev he has had BA degree and pursued an
engineering of management from Stanford and after having some experience in
oracle corp. and he explore the outer world where he decided to quit his job
and stand on his own with the novel thinking of starting his own business he
came across to India his own country to serve as a young entrepreneur. After
some exploration he found out that Nasik was a perfect place to grow grapes and
he decided to start a new venture of wines where he talked about this to
another friend and they both agreed to start sula vineyards this is how the
story and the history begins for the sula vineyards.(Sula vineyards)
Sula
vineyards now has not only achieved its market place also it is now considered
as the best wine industry in India and has been successful to achieve several
awards for its continuous improvement in the quality of wine’s would
say Sula vineyards is the best place for the wine and also Rajeev has
generated revenue and he has been a role model to many young entrepreneur who
wants to learn from him. sula vineyard has generated employment opportunities
to the people of Nasik and so forth. It has now been a # 1 wine yards in the
whole world and the first wine industry in an Indian place with its gaining
popularity and market sula has made themselves the bigger than ever.
Analysis
of findings
While making decision
to open up a business in India they have faced many difficulties regarding
finance and debt. Banks were not ready to give them funds as they have not
heard or known before in the market as Mr.Samant borrowed it from his family
and friends to open up the winery business. As his father was also working in a
bank due to his father’s dedication to the bank they granted them some loan to
winery. So, marketing was also a challenge for the Indian people as they have
never heard of the name before nor they were so familiar with the wine brands.
(Sulawines).
After
all this hurdles finally Sula took over the place and they slowly were
successful in their field, even more farmers were attracted to the business but
they could not make quality wineries.
While
they started their operations they mainly focused on four of the cities, where
the customers were rich one of the most tourist place and some expensive hotels
too. Now they are focusing on upper middle class people who can afford wines
and some of the state capitals.
So
according to Mr.Samant “currently there are one percent of people drinking wine
but in the next 10 years the population will firmly increased to 10% which will
be a tremendous market for the Sula vineyards.” So slowly Sula was capturing market
and it started earning revenue from the second year they earned 12 million dollars
in 2008 with one million dollars profit.
As
the market I very vulnerable in India and most of the people see wine as a very
bad thing to drink and it even comes on the luxurious material so the challenge
for the sula vineyards is to see aware those customers and let the market mature.
So the education in wine and awarding customers are hurdles for now for Sula.
They are even facing huge state duties on wines, so free trade zone in India of
wines will create a market growth but till the date they are facing difficulty
on imposed duty.
Challenges
for Sula Vineyard
For any company to grow,
live and sustain they all have to face difficulties in their product life cycle
as for Sula they have also faced a lot of difficulties during product life some
are strategic problems whereas some are financial problems. (Pearce II,
2011)
·
There was negative cash flow at the
beginning period of the Sula vineyard all because of the unfavorable cash flow.
·
In India when Samant decided to carry on
with wine there was no wine industry in India so, he addressed the rigid, bureaucratic
condition of the country.
·
He could not take permit for 2 years due
to the issue of government and the state intervention.
·
India was never a wine lover country so
the market was downturn for the Sula it was really difficult to prove
themselves as the quality wine producing company as the market charges were
even higher in comparisons with other French wines.
·
Banks could not believe that sula would
go this bigger and they don’t have any idea, so banks were not ready to pass
the loan.
·
Indian wine brand were rarely heard so
for the other countries and to export it was hard for the sula to create the
market and capturing market opportunities was also tough.
Recommendation
and conclusion
Sorting
out the problem of the negative cash flow, organization has to concentrate on
creating the market and capturing market opportunities, they have to take their
brand to the different place and market themselves. (G, 2014) India is one of the
fastest growing markets with very high population so they must promote
themselves to the territory of their own country. They must be focused on how
to reduce the tariffs on their wines and how to legalize the wine they are
producing this will also help to broaden up their limits. Certain strategies
must be adopted in order to strengthen their core competencies so that it would
lead them to develop their competitive advantage.
References
(Kvint, Vladimir, 2009) strategic manageemnt
and Economics (https://hbr.org/1980/07/strategic-management-for-competitive-advantage)
No comments:
Post a Comment