Posted on : 2022-09-05 06:48:15
Article : Good morning, Monday Management solution for TASK 206 - TARA could succeed by switching over to accepting spare capacity leasing for a leading Brand biscuits and utilized small capacity for her brands to appear in markets.
After First year of low sale volumes Tara informally discussed with area bakers and supermarket owners to make them as partners of her company and enlarge her area of operations. But not many have shown interest in her proposal as they are happy with their business activities. She thought of an avenue by undertaking manufacturing of other leading brands to optimize utility of her plant capacity for revenue gain. For that she approached leading brand manufacturers to utilize TARA’s Food products spare capacity.
Park bakeries and confectioneries which has 22% of the market share made a market study and found that there are no other brand manufacturers having units in that area. Initially they made an offer to TARA on takeover of the company or to work as subsidiary of Park Bakers and Confectioneries. Their intention is to have benefit of gaining manufacturing facility with no new additional effort or time loss on infrastructure setting, secondly they can control their logistics cost, and can reach market quickly. But TARA negated their offer and instead expressed willingness to offer spare capacity utility in their unit. As she is food technologist and has modern plant with adequate staff Park has agreed to the terms.
Since Tara has started this biscuits industry with lots of passion and efforts, she wishes that her brands sales should be continued in the market though not to great volumes- due to lack of marketing budget and sales infrastructure. She expressed that the Park can specify their required production volumes so that she can manufacture her brands in the remaining capacity. Park has agreed to TARA’s offer and commenced their brands production and marketing from that unit.
It turned to be advantageous for TARA as her units’ production capacity is optimized and she concentrated on her brands sales in semi urban and rural markets gaining better volumes. In next 3 years of time Tara has become debt free and renegotiated with Park on the capacity increase and to have confectionery brands production from the same unit.
End point- In general, major brands look out for potential locations for establishing their production units to do so they encourage either existing units spare capacity or lease out or new entrepreneurs for their brands co-packing. This is an established beneficial business move in all sectors of industries as the Brand manufacturers can control their investments on infrastructure, manpower and logistics. Even the small units/entrepreneurs look for beneficial offers form major brands manufacturers.
Women entrepreneurs can succeed in any business they establish just they need to be confident on their knowledge and put in right effort efforts.
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