Case Study of Polycarb chemicals limited Focus On Strategy


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Dr. R.K. Reddy, Chairman and Managing Director of Polycarb Chemicals Limited (PCCL), was wondering about the future course of action for his company as he realized hat the company had to look for newer and better opportunities. PCCL is in the business of manufacturing PolycarbTM – a high-tech plastic for defence purposes. Since it was an innovative product, there were concerns regarding its application, marketing, etc. According to Dr. Reddy.We at PCCL perceive that the product is ahead of its time in India as many of the applications of PolycarbTM are yet to be exploited by the industry including aerospace engineering, superconductivity generators, etc. There is a strong feeling inside our company that we should not shift our concentration from core capabilities in technology to marketing. However, under the circumstances of MNC entry,
especially successful inventors of the product like Du Pont, can we afford to remain dormant in marketing? The operating revenues are able to meet R&D investment and just the overheads. Hence, we do not attempt brand image exercises. The manpower size is too small to engage in direct field marketing. The bankers have also started expressing concern about PCCL.

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  • Financial Resources:-Financial resources concern the ability of the business to "finance" its chosen strategy. For example, a strategy that requires significant investment in new products, distribution channels, production capacity and working capital will place great strain on the business finances. Such a strategy needs to be very carefully managed from a finance point-of-view. An audit of financial resources would include assessment of the following factors:Existing finance funds- Cash balances- Bank overdraft- Bank and other loans- Shareholders' capital- Working capital (e.g. stocks, debtors) already invested in the business- Creditors (suppliers, government)Ability to raise new funds- Strength and reputation of the management team and the overall business- Strength of relationships with existing investors and lenders- Attractiveness of the market in which the business operates(i.e. is it a market that is attracting investment generally?)Listing on a quoted Stock Exchange? If not, is this a realistic possibility?Human ResourcesThe heart of the issue with Human Resources is the skills-base of the business.What skills does the business already possess? Are they sufficient to meet the needs of the chosen strategy? Could the skills-base be flexed / stretched to meet the new requirements? An audit of human resources would include assessment of the following factors:Existing Staffing resources- Numbers of staff by function, location, grade, experience, qualification, remuneration- Existing rate of staff loss ("natural wastage")- Overall standard of training and specific training standards in key roles- Assessment of key "intangibles" - e.g. morale, business culture Changesrequired to resources- What changes to the organisation of the business are included in the strategy (e.g. change of location, new locations, new products)?- What incremental human resources are required?- How should they be sourced? (alternatives include employment, outsourcing, joint ventures etc.)Physical ResourcesThe category of physical resources covers wide range of operational resources concerned with the physical capability to deliver a strategy. These include:Production facilities- Location of existing production facilities; capacity; investment and maintenance requirements- Current production processes - quality; method & organisation- Extent to which production requirements of the strategy can be delivered by existing facilitiesMarketing facilities- Marketing management process- Distribution channelsInformation technology- IT systems- Integration with customers and suppliersIntangible ResourcesIt is easy to ignore the intangible resources of a business when assessing howto deliver a strategy - but they can be crucial. Intangibles include:Goodwill - The difference between the value of the tangible assets of thebusiness and the actual value of the business (what someone would be prepared to pay for it)Reputation - Does the business have a track record of delivering on its strategic objectives? If so, this could help gather the necessary support from employees and suppliersBrands - Strong brands are often the key factor in whether a growth strategy is a success or failure Intellectual Property- Key commercial rights pprotected by patents and trademarks may be an important factor in the strategy.
  • Information technology- IT systems- Integration with customers and suppliers
  • Case Study of Polycarb chemicals limited Focus On Strategy

    1. 1. Nida Zainab SiddiquiNidhi GuptaSandeep PatelSanjeev MalviyaVineet KhushalaniVijendra Chandravanshi
    3. 3.  INDUSTRY : Polycarb Chemical Limited TYPE : Private FOUNDED : April 1999 LOCATION : Bangalore FOUNDER’S : Dr. Balakrishnan, Dr C. Sachin, Dr. K. Mehta and Dr. Mukherjee. KEY PEOPLE : Dr. R.K.Reddy ( chairman & managing director). PRODUCT : Polycarb Produces in a two forms (Powder & Resin). EMPLOYES : Overall Manpower was 22. INVESTMENT : 21 Million. RECOGNIZED BY : Department of Scientific & Industrial Research.
    4. 4.  Polycarb as a Powder and Resin. Powder:-For laminates with intensives use in printed circuit board (PCBs). Resin:-Used in glass, silica, armid and carbon fibers.
    5. 5. F Financial Resources H Human Resources 1. Existing staffing resources – overall 211. Investment in New Product – 21 million Employees2. Distribution channels – No allocation of sources 2. No. of staff by function,3. Production capacity location.experience, qualification4. Existing finance funds remuneration.5. Ability to raise new funds 3. Incremental human resource. P Physical Resources I Intangible Resources 1. Production facility 1. Goodwill 2. Marketing facility 2. Reputation 3. IT system 3. Brand 4. Integration with customer and 4. Relationship supplier 5. Relationship b/w customer & company
    6. 6. SStrengths Weaknesses• Customize productservice.• Enhancing the W • Low manpower, Ego clashes. • No brand image. • No clear strategicproduct line. direction.• Innovation of polycarbXL.Opportunities Threats• Support from theministry of defence.•Application for existingproduct. O T • Existing competitors. •Introduction of substitute product.•None of the competitors •Growing barganingfirm was as focused power of customer.specilized as pccl. .
    7. 7. Bargaining power of suppliers : Threat of New Entrants: 1.New entrants to an industry can raise the1. Oligopoly market : There are few seller level of competition. & few buyer 2. Economic of Scale 2. The cost of the product is fixed not 3. The entry of DuPont as an independent much profitable margin in the product. unit in India Intensity of Rivalry : 1. The structure of competition. 2. Strategic objectives. 3. It realized that producing polycarb with the expected quality and uniformity was not as easy task.Threat of substitutes : Bargaining power of buyer :1.Buyer willingness to substitute. 1.There are few dominant buyers & many2. The relative price and seller in the industry.performance of substitutes. 2. Not much knowledge about PCCL3. Chose to produce a resin closer 3. Distributors were not willing to take riskto Polycarb-XL with small player