Center for Family Managed Business S. P.

Jain Institute of Management & Research

FMB 16 A,B P3 C1 Aug 30-Sep 4

ASSIGNMENT SHEET
Theme

NO.

128

Economies of Scope, Scale and Geographic Location Identify what strategy can you use for your business. Evaluate on ALL of the following criteria, and work out if any of these are applicable for your business.

Assignment Horizontal Integration

- Vertical Integration - Outsourcing - Diversification Related or Unrelated

Objective Concepts

To consider what growth strategies can be used for a business Businesses can grow using any of the following strategies: - Horizontal Integration - Vertical Integration - Outsourcing - Diversification Related and Unrelated

Reference

Strategy & Business Landscape by Pankaj Ghemawat

Guidelines

Refer to the lecture notes, and understand and think about what strategic you can used for your businesses, for growth

Answers: We have our core business in real estate since 87 years. About a decade ago we made a brand name Daffodil Group. 6 years ago we decided to Diversify into related field of Infrastructure

Center for Family Managed Business S. P. Jain Institute of Management & Research

FMB 16 A,B P3 C1 Aug 30-Sep 4

development by the name of Bengal Daffodil. 3 years ago we decided to Diversify in unrelated field of Healthcare by the name of Healthetc. Diversification in related field is although manageable as we know the fund flow of this business. The unrelated diversification in Healthcare sector is actually a very bold step and is still eating up funds like anything. We know that we have to fund this business for more 1 year till it reaches breakeven. So our main business has to run very well so that we can keep funding the Healthcare till it stands on its own. Right now I feel we should start a vertical integration in real estate industry. It will integrate the process of TMT bars cutting according to the structural and architectural plan of the respected building. This will reduce the labour and time spent on site by the contractor. It will be more of a Lego game in construction. I will be one of the ready buyers of this product and this will be required by my competitors also. This strategy should work. Outsourcing is also which we are doing recently in our Accounts department. Although we have our in-house team but we have an internal as well as external auditor. The internal auditor is more like a retainer ship job. The external auditor is fully outsourcing job. He is given jobs like SOP making, checking of all systems and processes. This creates a feeling of a examiner on head who will come and check what

Center for Family Managed Business S. P. Jain Institute of Management & Research

FMB 16 A,B P3 C1 Aug 30-Sep 4

you have done, so people are aware that we are answerable for our job. Even the marketing job is outsourced. This helps in marketing our product very fast. I feel the above two strategy of Vertical integration of TMT bar cutting and outsourcing of accounts work will help our organization to grow faster. As you can see for growth steps like Diversification are already taken and we need smart hardwork to stay on growth track. The present time is going good as there is growth in healthare business day by day. We see reaching the breakeven before 1 year. Our real estate division is going slow and steady. We will pick up pace as soon as our new projects get sanction from authorities. In this market we feel it is a boon in disguise to get slow approvals of projects. As buyers are buying a bit slower than earlier.