Archive for December, 2010
It seems that Ford Motors is ready to turn out a lot of the electric vehicles at a price that the consumer can afford and will be more than willing to use on a day to day basis. Ford Motors feels that if the economics work and in order for this happens then a high-volume supplier of batteries has to emerge. The energy storage capacity must be high, the durability of the battery, and the cost must all be within boundaries in order for Ford Motors to go forward in building a lot of electrical hybrids assembly line style. Everyone knows that Mr. Ford was the creator of building vehicles on an assembly line fashion in order to cut costs. All vehicles look the same and work the same but they were consumer friendly and affordable. Leave it to Ford Motors to fix it’s productions on a one style meets all when it comes to the hybrid vehicles.
This may not appeal to everyone but in a time of economic crisis and the world about to spin out of control over the global warming situation this idea just might work. Ford has in the past pulled itself up by the bootstrap and succeeded in building a better business. When left to their own devise it seems that the executives in the corporate offices can come up with some good ideas that will save the company. It is a good thing that our government is will to give us some bailout funds but it must not be the only thing working to help the economy. The good ole American know how has saved our nation many times and it can save us again. We all need to be ready to help and sacrifice when needed but first we all need to know why. Many times Americans have pulled together and saved the nation during times of crisis, wars and depression and it will happen again.
The American worker got its training from men like Henry Ford who started a different style of work ethics and instituted the industrial revolution. It was the courage of the people that made this nation what it has become today and it will be the same courage that makes the nation succeeds. Ford Motors realizes that Washington wants them to have the ability to sell the vehicles at a high volume so that they can be manufactured in a high volume. In turn this will create jobs, spending money, and helping the economy is what the President is looking to do. The high cost of gasoline made the electric vehicle more desirable but now that the price has lowered has complicated the need for electric vehicles.
As technology grows, so will the cars so if you think this is a great step with cars today, wait until the future when things start to really take off not only with the batteries but with everything else from the interior to the exterior. It really is an exciting time here in the US.
MR.R…….. Always a step ahead!
MR.R…….. Always a step ahead!
Coimbatore, the entrepreneurial belt in South India has breaded numerous entrepreneurs during the decades. One such individual was identified to develop into a case. “Mr.R……Always a step ahead!” brings out the real life experience, efforts and outcome of a young technical entrepreneur located at Coimbatore. It narrates his humble beginning with a focus into various factors that influenced him to venture into business. Three different units were established by him during a short span of fifteen years. Autocoats was established in 1989 as a service provider to the painting requirements of pump, automobile and textile industries. Associated Autotex Ancillaries (P) Ltd established in the year 1992 manufacturing bobbin holders and other related textile machinery accessories. 2001 Good luck Syndicate was setup to produce FMCG product, namely mosquito coils and liquid. All the endeavors turned to be a success story. The main aim of this case-let is to highlight and inspire young management students to transform into entrepreneurs by taking the leads found through Mr.R’s experiences. Mr.R could be a role model for budding entrepreneurs who may gain insights into starting a business and strategies to manage with competitive advantages.
Coimbatore -a city in the southern region of Tamilnadu has transformed itself into one of the ten highly industrialized cities in the country and now ranks fourth in terms of the potential for growth. The most striking feature of Coimbatore has been its diversity, enterprise and resilience. In its rise from strength to strength it converted to advantage even its disadvantages. Coimbatore district has achieved sustainable growth by a variety of industries ranging from the traditional cotton textiles industries and foundries to the manufacture of electric motors, pumps, automotive parts and accessories, consumer goods and computer peripherals. It offers unlimited opportunities to the entrepreneurs with diversified industrial activity and an innovative entrepreneurial spirit. There are, of course, countless success stories For instance, Mr.Ramanujam, Managing Director of Associated Autotex Ancillaries (P) Ltd. was chosen and considered in this case description. His initiative, growth and achievements during the last two decades are narrated in detail below.
Mr. Ramanujam is a Coimbatore bred technical graduate. In his newly built administrative office, sitting in his executive chair, he looks with satisfaction and pride at the upcoming three storeys building, which is fully modernized for his business operations. He subsequently thought, about his career and its development during the last two decades. Munching those thoughts was like recharging his potentials for further endeavor.
His thoughts went rolling to 1985. He was then a young, energetic technocrat working as an assembly manager in a Textile machinery manufacturing unit at Ganapathy, Coimbatore. In those days, his urge to start his own enterprise, something new and which was not available in Coimbatore, propelled him to look for opportunities. Incidentally, he identified a great opportunity in a news paper article about powder coated painting process.
He recalled his memories about those days, wherein motor and pump industries in Coimbatore were highly dependent on small and medium engineering (SME’s) units only. They did not own their own paint shop and thereby owners sought the help of part time painters for this purpose. Painting was more of conventional method and more dependency on painters was felt difficult during heavy demand periods. His entrepreneurial character sparkled in him to start a powder coating unit “Autocoats” – a commercial painting unit based on job orders. This was the first of its kind in Coimbatore!
Mr. R recollected as to how well, he had grabbed this opportunity to set up a powder coating unit with an electro static process in 1989 at Peelamedu with an initial Capital of Rs.5 lakhs. His investment included Rs.2 lakhs of his own and Rs.3 lakhs mobilized from bank. The company started to function with the objective of:
- Adaptation of the product and tailoring of coating in accordance with customer needs.
- Taking care of pollution worries.
Initially, marketing was conducted on door to door basis and gradually captured a place in the market. The company had a take off with the motto
“Try our coatings – Try is ensuring
See the difference – Seeing is believing”
It was a great start for him with lot of job orders flowing on his way. He managed to achieve tremendous success with just 10 employees. It was right solution for people who could not afford to have their own paint shop. Thereby motor and pump manufacturers brought their output for painting work creating enormous demand. He justified his success through proper marketing and appropriate quality combined with timely delivery.
Later on, they started serving OEM, industrial and commercial customers with Hi-tech coating solutions. It was a successful endeavor with an ability to secure regular job orders from several OEM giants like Lakshmi Machine Works (LMW), Jeetstex engineering and Sharp group of companies. Also multinational corporations like Bonfiglicli Transmissions Pvt Ltd, Reiter-LMW Ltd.
From the humble beginning as pioneers in this field, Autocoats has developed into one of the leading powder coater with widest range of industrial and comprehensive coating system. After achieving the break even point in five years, the company has grown with 50 employees and turnover of Rs.1 crore in the year 2004. The Fig 2 brings out the sales turnover of Autocoats between years 2000-2004
Mr. R enjoyed the state of monopoly for two years after which few others slowly ventured into the trade. Now, Autocoats has developed into one of the leading powder coater with a widest range of industrial castings and comprehensive coating system starting from Zinc chromate / oxide, Stoving enamel, Polyurethane and Electrostatic power coating.
Fig 2: Sales turnover of Autocoats
In this context, Mr.R is confident of attaining a turnover of three to five times of the current potential with the expansion of Autocoats, using conveyor belt in the forthcoming production process. Also they have an immediate plan to give a face lift to Autocoats by shifting its operation to a new building
Then his thoughts slowly shifted to dwell in depth, the reasons for diversifying his business and how he emerged into a new sector relating to Textile industry. In the art of industrial coatings, there was heavy demand for job orders, but however there was also an inbuilt uncertainty with erratic schedules. At times, they had to wait for orders and other times they were unable to manage the flow of work orders. And so it was more dependent on customers and this made him to think that he cannot continue in the same manner for a longer perspective.
Mr.R thought about how he ventured into a new business owing to these reasons and what factors made him to choose the kind of business. The ideas that were lingering in his mind included-
• It should be their own product
• A light engineering product
• Less dependent on labor and more on systems.
Then he landed up with Autotex.
Coimbatore, the textile hub of South India encouraged him to initiate and produce textiles related product. Guided by the thought that bobbin holders were procured by his previous employers from a manufacture in Ahemadabad from Gujarat, persuaded him to try out manufacture of bobbin holders. Mr.R was reminded of those days when, with an initial investment of just Rs.5000/-, how the product was designed and tested for its acceptability in the market for about one year. He was also reminded of how he had toiled 12 to 15 hours of initial working with commitment, which has resulted in his present achievement.
Based on the results, Autotex Ancillaries private limited was promoted in the year 1992 with an initial investment of Rs.25 lakhs and with 25 employees. The objective of the unit was to manufacture sophisticated plastic components to serve the textile and engineering industry. The resultant outcome was bobbin holders, fluff protectors and plastic automobile components.
Mr.R took over as the first managing Director of the concern. He takes care of CAD, new projects, personnel, and marketing activities of the organization. Mr.R Director of the company was involved in the administration and Finance function of the group. The General Manager who reports to the Managing director takes care of purchase, stores, and assembly and moulding activities of the concern. (Fig 2) Mr.R takes the pride about his company that has grown to be one of the leading suppliers to OEM of Textile machinery manufacturers the world over within a period of ten years.
Fig 2: organization chart of Associated Autotex Ancillaries (p) Ltd.
His major achievement was the development of designed patented Bobbin holders indigenously and further, successfully captured 90 percent of the global requirement. The bobbin Holder with multi break system was the first of its kind was also patented by the organization. They were also the first to secure ISO-9001 certification in this manufacturing segment.
Since inception, Autotex stands always a step ahead in understanding and fulfilling the customers over increasing demands by providing products with outstanding performance and new innovations in bobbin holders. Presently, there is about 124 employee strength and the company had achieved steady growth right from its inception from 396 lakhs to 750 lakhs in 2004-05.
Transformation and acceptability for auto bobbins came to Autotex, when their product was accepted by Reiter the textile machinery manufacturers of Switzerland. In 1994, though only 5000 units were exported to them it was a great breakthrough for Autotex. The other OEMs of textile machinery in India also accepted Autotex for bobbin holder supply. From then on, it was a success story for the organization. It has reached a production of 12000 units / day in 2004 from the start of 50 units / day.
The major scouring for their product was through exhibitions and direct marketing. They channelized their domestic sales and distribution through agents who are already dealing in textile accessories. The expertise, skilled and efficient manpower with added features of quality, service and continuous development programs have contributed significantly to the position of eminence and the trust of client’s world wide
Today the reputation of the company rest on their quality products, customer service and response levels world over. Their global network includes European, Asian, South American and South African countries. Owing to the meticulous effort of Mr.R in procuring export orders, the company has been accredited with EEPC (Engineering Export Promotion Council) regional award for export excellence for the consecutive two financial years.( 2002-04)
. Fig: Indicating Mr.Ramanujam with his working team
Table-1: Showing the sales turnover
Financial Year Sales value
The organization also expanded its service to manufacture Ring frame Tubes, Dye Cones, and Cheeses to cater to the Textile Industry. Now Mr.R, the Managing Director of the group is currently planning to move to large scale manufacturing of ring tubes, Simplex bobbins, separator card case production and other accessories.
MR.R thoughts were now on how he established the third unit. In 2001 after confident that stabilization in both the ventures were achieved efforts were made for diversifying. Guiding factors here included: to go for a product which is really consumable and it should come under the FMCG category.
He thought about how much time he has spent initially to study rigorously the details for the new venture. Yes! it took nearly a year to study about mosquito coil manufacturers, their problems, their sustainability, production technology from the machine manufacturers in Malaysia. So the venture took its shape in 2002 for the manufacture of mosquito coils and liquid vaporizer.
GOODLUCK SYNDICATE was established during the year 2002. This was started with an initial capital of RS.50 Lakhs. They were launched in the brand name of GOODLUCK and MAJOR. During the maiden year of operation the organization was able to achieve a turnover of 250 lakhs by which it was able to secure Third place in the state of Tamilnadu. Second year the unit was able to double its turnover in spite of stiff competition from multinational brands available in the market.
The Reasons for success of this venture flashed one after the other in his mind: efficient technical persons with sound knowledge in manufacturing quality coils suitable for remote pockets of the state and 40 experienced sales personnel who were able to penetrate the market were all responsible for the success of the unit. The unit made inroads market into the neighboring states of Tamilnadu, namely Kerala and Andrapradesh. It is also planning to enter the international market in the recent years. A great pride and satisfaction engulfed him at the recollection of his memories. Then he further thought, there are still miles and miles to go ahead with lot of avenues wide open in front of him.
Mr.R, a Coimbatore bred entrepreneur has thus shown a remarkable ability to survive crises by adapting and innovating. The result is a big entrepreneurial success at the international level. This is widely held to be the main reason for the entrepreneurs of Coimbatore going global ahead of the country.
Questions for discussions:
1. Identify the entrepreneurial traits of Mr.R ?
2. What are the insights one gains through Mr.R’s experience?
3. Is the growth and success of Mr.R during this time period, compatible with Indian industry standards?
4. Comment on his marketing strategies.
5. If you were in Mr.R’s position, what may be the new paradigms for the competitive business world in 2025?
1. Krishna Kumar Asha, 2002, Enterprise and resilience, Frontline, Vol 19, issue 20, oct12-25.
2. Krishna Kumar Asha, 2004, Enterprise and resilience, Frontline, Vol 21, issue 02, Jan 17-30.
3. Krishna Kumar Asha, 2005, Enterprise and resilience, Frontline, Vol 22, issue 03, Jan 29-Feb 11.
Sl.No Name of the Company Details
1. Lakshmi Machine Works LMW is the leader in the manufacture of textile machinery, CNC machine tools and metallurgy products with numerous high profile diversified activities with 60 % of market share in the domestic textile machinery industry. LMW also has global presence over the past seven years.
2. Sharp Group of companies Sharp are the leaders in the domestic water pumps and agricultural water pumps. With its brand well known among the households for Monoblock water pumps in India, has flourished successfully in the pump industry.
3. Jeetstex engineering limited Jeetstex Engineering Ltd started in 1978 is a Manufacturer & Exporter of Textile Machines and Importer of Textile Machinery Components. After a long stint, its turnover is turned to be several crores now.
What is really the allure of purchasing a second hand car during public sale? To tell frankly, most people prefer to buy a repossessed car for both the same reason and for a countless benefits. In fact, most of the repo cars are slightly use, the reason associated why this vehicles are being put to market for a very low price is because the vehicles are being use is association of illegal acts and failure of mortgage payment. One could expect a lot of advantages when it comes to buying a repo car, one of which is that, reclaimed cars can be obtain up to 80% off the original price. Isn’t good deal enough?
Government auction effectively offer a great deal. Usually, the vehicles being put in public sale are normally government surplus and seized by local enforcement agency. And certainly all these cars are on good condition. It acquisition varies depending on the condition of the vehicle. Although, some of them require a very little make up, nonetheless it is worth buying.
Another one is to commercially inform about the auction sale like banks and credit unions. Repossessed car auction sale is actually not their nature of business. They are making this to generate the capital back out of the possible lost. They are not making any profit actually; they are disposing it for the reason of cost avoidance. Those who can afford to pay their dues have the tendency of resorting to giving back the vehicles to the credit investors. Chances are, the investors will sell it below the standard price just to recover the unpaid dues.
After all the long legal process, all cars reclaimed are being sold through auction sale. Repo car sale are now being widely favorable for the average income family. So why don’t you try to visit one of those targeted auctioneer, you might find the dream car you ever long wait to have.