Indcoserve: Stirring Up Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

INTRODUCTION:

In 1962, in Tamil Nadu, many tea processing factories were established on the demand of the tea growers in Nadu, later the factories realized that in order to enhance the co-ordination among the factories efficiently and effectively, an apex organisation should be established. Thus, an apex organization, named Nadu Small Tea Growers Industrial Cooperative Tea Factories Federation Ltd, “INDCOSERVE”, had been established which manages the coordination among the 15 factories established at various locations across Nilgiris district.

INDCOSERVE processes the green tea leaves purchased from small growers into finished tea.The organisation was engaged in selling loose tea as well as Otty tea, in addition to this, Otty teal comprises only 5% of the revenue of the organisation, whereas 95% of the revenue arrives from selling loose tea. The organisation sells 90% of loose tea through electronic auction platform named as TEASERVE as well as the organisation is also engaged in exporting its products to various markets all across the world.

However, due to extensive domestic demand of the tea, the organisation is able to export only 20% of its produce. The organisation has made various strategies in order to control its costs as well as the organisation has made various strategies to enhance the overall profitability of the organisation.

Recently, an increase in the level of income of the consumers motivated the consumers to move towards branded tea rather than purchasing the loose tea, this had decreased the overall demand of loose tea in the market. Looking at this trend, INDCOSERVE has diversified its product line and introduced a new tea brand named “Otty tea”.

The business model of INDCOSERVE needs to be diversified as brand requires many complex procedures which were not required for selling loose tea, such as, introduction of packaging department, introduction of marketing and distribution department, etc.

INSTITUTIONAL ANALYSIS:

Since the consumers in the market are moving towards purchasing branded tea rather than purchasing loose tea, the top management of the organisation is focusing more towards Otty tea rather than focusing on loose tea. The organisation is unable to formulate effective strategies in order to boost up the overall business growth of the Otty tea.

In addition to this, the competition is high in the entire market of branded tea, the top management of the organisation is also unable to formulate effective strategies in order to enhance the overall competitiveness of the organisation and in order to secure a leading position in the entire market.

The organisation is also unable to identify the potential market to be penetrated efficiently and effectively, which is limiting the growth and expansion of the organisation to a considerable extent. Moreover, the organisation has been facing loss and the top management of the organisation is unable to identify the core reasons for such losses. Thus, this is further decreasing the overall profitability and growth of the organisation to a considerable extent.

PROBLEM STATEMENT:

What should be done in order to enhance the overall competitiveness and profitability of INDCOSERVE?”

PROBLEMS IDENTIFIED:

After comprehensively analysing the facts and figures of the case, following potential problems have been identified.

Lack of Proper Marketing:

The top management of the organisation does not market its products efficiently and effectively, this reduces the ability of the organisation to attract the customers towards the organisation. The marketing channel chosen by the organisation gives more cost to the organisation rather than benefit, which also enhances the overall cost of the organisation as well as this also reduces the overall profitability of the organisation.

In addition to this, the organisation sells a large amount of its produce via electronic auction platform, which although saves the cost of broker of the organisation but on the other hand it decreases the revenue of the organisation as the products are sold at low prices as compared to orthodox auction. Thus, this decreases the overall competitiveness of the organisation as well as this also limits the ability of the organisation to enhance its overall customer base.

No customer care services:

The organisation does not offers customer care services to its customers which decreases the ability of the organisation to readily attract the customers of the organisation towards the brand. Thus, this reduces the customer base of the organisation and decreases the overall competitiveness of the organisation..............................

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