VRIO ANALYSIS: Chandelkars Vaishali Foods

By group 2
Akshar Alonekar
Joyston Brito
Ravina Kuttikar
Sumedha.K.Narvekar
Rishikesh Sartadekar
Shreya Vasta
Vandita Nagvekar

Company Information and History

The manufacturing unit of Vaishali Foods is located at Kundaim Industrial Estate. And it
covers an area of about 300 sq. meters with built in area of 175 sq. meters. It is a
partnership firm.
It was started by Late Gopinath Chandelkar in 1970. He started his business along with his
two elder sons. He was a great visionary to strike this idea because those were the days
when people made pickles and spices at home and used for the entire year. That was not
the time when people would buy packed food and readymade spices. The business was in
infancy period then. It needed lots of experiments to gain expertise. With all those efforts in
establishing the business, he suffered a great loss. He died in the year 1975 living behind a
great challenge to his sons Srinivas, Govind, Raghunandan, Mohan and daughter Durga. .
Though he had passed away, he had kept a great idea, a system to carry on the business
systematically.
Slowly, Chandelkars brand started blooming and occupied its space in every Goan kitchen.
As the business started growing, they split the business into two units, Goa Pickles and
Vaishali Foods for the sake of expansion and better administration. Vaishali Foods
manufactures Masala products. Mr. Gopinath Chandelkar, grandson of Late Gopinath
Chandelkar now manages this unit.

Vaishali Foods has recently received Lokmat Gaurav Puraskar Award in food category in
for 2014.

Industry & Competition:

Vaishali Foods serves the Goan market only. The firm faces a stiff competition in the Masala
Manufacturing Industry from local Goan as well as national players.
The Industry has a lot of players in the unorganized sectors which comprises of homemade
Masalas prepared by the households for their consumption as well as for commercial
purpose. In the organized sector, the Goan based competitors are Surya Agro Industries,
Sushma Trading Company. Whereas nation brands include Suhana, Badsha, Everest etc.
which due to their large capital and wide reach are giving tuff competition to Vaishali
Foods.

Customers & Distribution

Goa is the market for the firms products. Its end users are the households and hotels.
The households are reached through retails channels comprising the mom & pop stores
(local shops) throughout Goa. It also has its own shop located at Panjim. The hotel industry
is reached via the agents in Vasco and Margao.
The firm is not involved in aggressive mass promotional techniques like advertising,
publicity etc. Since the business is Goan based and existing for a very long period of time, it
has been able to develop a good network of retailing in the state because of improved
product, goodwill and reputation, good margin to the retailers and agents.

Products & Raw Materials

Following are the products that the firm manufactures:
Major Category
Pickle Masala
Mutton Masala
Garam Masala
Xacuti Masala
Chilli Powder
Turmeric Powder
Coriander Powder

Minor Category
Black Pepper
Cumin seeds

The pickle masala is manufactured from January to June. Others are manufactured all
round the year as per the order.
There are 15-20 kind of raw material which goes into manufacturing of the masala items.
Raw Material is majorly acquired from outside the state. The black pepper is available from
within Goa; chillies come from Andhra Pradesh & Karnataka, corianders from Rajasthan,
and other materials from the state of Maharashtra.
None of their products contain onions and garlic.

Financing
The firm obtains short term credits like cash credit and overdraft from nationalized banks
for their day to day operational activities.
It has a debtor collection period of 30 to 45 days. Its creditor payment period is 15 to 30
days. This shows that the firm

Manufacturing & Packaging

The manufacturing process includes the following steps:
Step 1: Heating or Frying of the spices
Step 2: Coarse Grinding
Step 3: Fine grinding
Step 4: Mixing
The frying or heating is done a day before. The maximum time required for heating per lot
of 400kg is around 5-6 hours. The spices are then grinded using a pulverizer into large
pieces which are then pulverized into fine mixture. Once the fine mixture is ready, it is kept
for 8 hours before packing it as per the requirement of customer.
Packaging is done in two forms: Plain plastic packets & printed plastic packets. The former
packets are for wholesale purpose and latter for retails via shops.
The entire process of manufacturing and final delivery takes 2 days.

Machinery & Equipments

1.
2.
3.
4.
5.
6.

Ovens for heating

Frying equipment
Pulverizer for coarse grinding
Pulverizer for fine grinding
Automatic packaging machines: Printed packets
Manual packing machine: Plain plastic packets

Human Resource
There are total 6 workers at the manufacturing unit for production and packaging. All are
women workers. They work from 9am to 5.30pm. The manufacturing of the masalas is at
its peak during January to May During this period additional workers, around 8, are
required.
Mr. Gopinath Chandelkar is the Manager at the factory. The sale, distribution, finance is
looked into by other partners jointly for masala and pickle business.

Sales & Expansion

The sales of the firm have been rising over the years. So has its cost. The prices are revised
after 2 to 3 years due to rise in the raw materials. Rise in prices of raw material by large
percentage has eaten a large share of their profits. Balancing rise in prices of raw materials
with the share of profits is always a challenge. There also exists a threat from the many
competitors in organized and unorganized sectors.
The partners are working hard to maintain and grow its business. The firm has plans to
expanding their business in neighboring states of Maharashtra & Karnataka. This will
require huge finance, heavy marketing and adoption of new technology.

Applying VRIO framework to Vaishali Foods

At Vishali Foods, valuable resources include its raw materials, suppliers, process and taste,
machinery and equipments, human resources (female workers), managerial expertise,
Channel of distribution, Customer relation.

Raw materials & suppliers:

The firm uses a blend of 15-20 types of raw material for its different products. These raw
materials are known easily in the market but the relationship that the firm has maintained
with its supplies over the years is not easy to imitate. That gives the firm an edge over its
competitors in the market.
Process & taste:
The method/process of making masala is the rare feature of the organization. This gives a
unique taste to the firms product. Certain spices are heated where as others are fried in
order to give them the required taste. The heating/frying is also done in certain
combination.
All of their masalas are without onion and garlic without compromising on the taste. Hence
it can be consumed by vegetarians as well as non vegetarians and also during festival too in
Goa.

Machinery & Equipments:

The manufacturing unit is semi automatic in nature. There are machineries and
equipments adopted to satisfy the production requirement and sales targets of the Goan
market. These equipments are valuable to the firm because it has resulted in saving cost of
labor (earlier more than 6 labors were required) but these machineries and equipments
can be easy copied by the competitors thus bring a competitive parity in the market.

Human resources & Managerial expertise

The firm has all women laborer. The work is mechanical in nature and involves skilled and
unskilled work. But the cultural values inculcated by the firm in its employees are far from
imitability. The expertise of the partners in areas of production, marketing, financing, and
relationship building is beyond imitatbility by the competitors.

Channel of distribution & Customer relation.

The channel of distribution i.e. retailing and selling via agents can be easily copied by the
competitors. Higher margins providing by national brands can pose a threat to the firms
products. But the relationship built by the partners with these customers in Goa since 1970
difficult to challenge.

Table Showing VRIO Framework:

RESOURCE
Raw Materials
Machinery &
equipments
Human
Resources
Channel of
distribution
Suppliers

VALUABLE?

RARE?

COSTLY
TO
IMITATE?

EXPLOITED
BY ORG.

Yes

No

Yes

No

Yes

No

Yes

No

Yes

No

Yes

Yes

Yes

Yes

Sustained
Competitive
Advantage

Yes

Yes

Yes

Yes

Sustained
Competitive
Advantage

Yes

Yes

Yes

Yes

Sustained
Competitive
Advantage

Yes

Yes

Yes

Yes

Sustained
Competitive
Advantage

Taste

Customer
relation.

Competitive
Parity
Competitive
Parity
Competitive
Parity
Competitive
Parity
Temporary
Competitive
Advantage

Yes

Process

Managerial
expertise

COMPETITIVE
IMPLICATION

STRENGTH/
WEAKNESS
Strength
Strength
Strength
Strength
Strength &
distinctive
competence
Strength &
sustainable
distinctive
competence
Strength &
sustainable
distinctive
competence
Strength &
sustainable
distinctive
competence
Strength &
sustainable
distinctive
competence