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Essay / HBS Case Simla Dairy - 1320
Incomplete MAIN MANAGEMENT ISSUES Himla Dairy is not among the current major players in the market. The daily production capacity of the market leader (Britannia) is almost 50 times that of Simla Dairy. With nearly 29 varieties of products, Shimla is now trying to further expand its product range. The company currently has 2 plants, one in Shimla and the other in Kiarighat, with a total milk processing capacity of 10,000 liters. As the cheese industry moves towards a growth phase, a sharp increase in competition is expected, both from domestic and foreign players. This gives rise to many questions that concern management. Here they are: • Currently, the company lacks concentration because it offers a diverse product line with too many varieties of cheese products. With so many products, it cannot be safe to decide which market segment to target in order to take advantage of market growth. • Current production capacity is low to face future competition. The dairy currently produces 10,000 liters of milk per person. same day after 30 years of presence on the market. This will definitely affect the chances of benefiting from the current market growth and managing the industry consumption cycles. The question of whether to decide to increase production capacity: With incredible growth expected in the industry, the question that management now faces is whether or not to increase production capacity . This is absolutely necessary because the expansion of production capacity will enable the company to supply and meet demand as well as achieve economies of scale, which can be used as a competitive advantage over new entrants. However, this requires capital investment on the assets needed for expansion. • Another key issue here is to decide which market segments to target and enter as Shimla Diary should now focus its efforts on certain market segments and cater to them according to their needs. on the level of profitability and attractiveness offered by this segment. • Another issue that needs to be addressed is to strengthen the brand equity of the company: the company is very small and not among the major players in the industry. She had never invested in any marketing expenses to promote herself and relied solely on word of mouth. The company recently released flyers and brochure and also started supplying refrigerators with the Shimla Dairy name promoted in stores, where most of the big players have been practicing it since then..