XLRI GMP 2013

Identify the right party

Submitted By:
Amar Kumar Mandar Chougule Ranjit Kokardekar Sanjay Makhija Moneesh Thomas G12007 G12087 G12038 G12043 G12029

A. Selection Criteria
Category 1: Shortlisting criteria Product Kept: The products kept form important criteria. The party should have experience in handling consumer durable or technology products. The product kept should not be of the nature of day to day consumption by customer and should involve some investment on behalf of customer. Gupta Sons (Eveready Batteries) and Laxmi Enterprise (Airtel) satisfy shortlisting criteria. Laxmi Enterprise seems to have better standing as it is selling a complementary product. Pyarelal and sons plays mainly in commodity products and is best kept out of this business Category 2: Essential Criteria Investment capacity: The distributor should have moderate investment capacity as he will be holding the stock on behalf of ABCL and will also be managing operations in entire Harora subdistrict Span of Control: Good Relationship management and excellent reach in whole subdistrict are important. Category 3: Situational Criteria Storage space: Should have his own storage space. (20ft x 15 ft x 10 ft) Location: The location of the distributor should present easy access to the dealers, preferably in the main bazaar of the town.

Infrastructure: The distributor should have right number of own vehicles. However large number of Attitude: The distributor should be go vehicles do not necessarily present getting and should have commitment good governance. to principal. Capability: The service record of the Reliability: As the company will be distributor should be good. The sales making considerable investment in of low price product in the villages developing the market and channel. depends on the availability of the The distributor should be reliable as product. far as commitments and finance are Sales force: The channel partner concerned. should have sizable sales force. Financial Strength: The distributor Again excessive number of sales should be financially strong as he is people will bring down the required to make considerable efficiency. Whether a manager is investment in the inventory of required from distributors end to manage the mobile business alone is handsets. a question. Almost all the distributors more or less seem to satisfy essential criteria, Almost all of the distributors count as all of them have good financial same on Infrastructure, storage space, location and sales force. backing, control and attitude. However Gupta sons seems to incapable of provide the required level of service to the business.

B. Service Requirements Criteria:

Channel Design Parameters Target Group Channel Partner Largely Villagers/Workers, To some extent Businessmen Mobile with core functionality of communicating with each other, Availability of such mobile at retail shop Availability of credit, sustained supply of product Reach in remote areas of the subdistrict Stocking the product, Providing Credit, Training the Retailers, Shipment of the product, Collecting and Reporting Information

Buyers needs

Retailers Needs

Reach

Functions to be performed by the channel

C. Due Diligence:
The final selection of a dealer is made after analysing various factors. It can be done on the basis of the following framework.

a. Gupta S.No. Information Source of Information Rating Who carried it out Who has approved it

Financial Information

Bank Healthy cash flow for last 3 years No history of cheque bounce for last six months Income tax/Sales Tax Turnover- 1.6 Cr

Legal information Commercial Information Physical evidence Large go-down cum office space in his house A team of 6 people two delivery vehicle Owner Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market expansion and servicing. 6

Reputational information

Natives Distribution business since last 8

years For Levers, Proper beat plans for salesman and delivery vehicles For Eveready, no systematic plan

b. Laxmi enterprise S.No. Information Source of Information Rating (1 to 7) Who carried it out Who has approved it

Financial Information

Bank Healthy cash flow No history of cheque bounce

Legal information Commercial Information Physical evidence Go-down cum office in house in the main bazar of the city Single delivery vehicle A team of 6 people Owner Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market 6

expansion and servicing. 4 Reputational information Dealers Personally dealing in case of any disputes Proper beat plans for salesman and delivery vehicles 6

c. Pyarelal and Sons S.No. Information Source of Information Rating Who carried it out Who has approved it

Financial Information

Bank Healthy cash flow for last 3 years No history of cheque bounce for last six months Income tax/Sale tax Business turnover- 11.2 Cr

Legal information Commercial Information Physical evidence Large go-down cum office space in his house A team of 20 people Six delivery vehicle Owner6

 Will not overstock and be under pressure to sale Will do only replenishment job Will work hard Will provide all support in market expansion and servicing. 4 Reputational information Natives Most reputed business house Political background Self Can ensure a huge turnover and deep market penetration due to because of good relations with dealers Exclusive work force and manager for mobile business 4

D. Conclusion On the basis of due diligence criteria, we find that Laxmi enterprise is the right partner to go ahead with. Laxmi has overall excellent performance in financial, commercial and reputational front.