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Arun Ice Cream

Case of Arun Icecream

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HemantPanday
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361 views12 pages

Arun Ice Cream

Case of Arun Icecream

Uploaded by

HemantPanday
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Arun Ice Cream On June 30, 1997, even as he signed the annual accounts of Hatsun Milk Food Limited for the year to March 1997, it was clear to R.G, Chandramogan, Chairman and Managing Director, that his company was at strategic cross-roads, The dilemma related to the strategic direc- tion the Chennai-head-quartered makers of Arun Ice Cream had to take. This in particular involved the issue of market expansion for the ice cream manufacturers be- yond South India vis-a-vis diversification into products that could leverage on the company’s current strengths, Recent years had been momentous for Arun as the com- pany itself had come to be known eponymous with its key brand. Early 1996 saw Hatsun Milk Food Limited (HMFL) going public. With the Indian stock market in the grip of a bearish phase, Hatsun’s initial public offer- ing (IPO) barely managed to sail through. But the greater visibility and emergence of a powerful stakeholder in the form of public investors meant the taciturn management of Hatsun had to play a completely unfamiliar role in ‘managing expectations. With ice cream sales increasing bya healthy 41 per cent, the just completed fiscal, the frst full year after the IPO, Chandramogan reflected, was Probably satisfactory in this respect. This, he felt, how- vet only underscored the urgency to develop a sound short-term strategy to consolidate Arun brand of ice ‘ream in the fast-changing competitive scenario and thus ©2000 indian Instinute of Management, Anmedabad. Revised 2001, ju OF the Indian Institute of Management, Ahmed “Stations of ether correct or incorrect handling of dabad, are prepare idiministrative problems. Abraham Koshy and N. Venkiteswaran establish a solid platform to launch aggressive growth initiatives and attain a critical mass and scale by the year 2000. Arun Ice Cream: Earty History AND STRATEGY Chandramogan, son of a vegetable wholesaler from the South Indian state of Tamil Nadu, set up Arun Ice Cream in 1970 in Chennai (now re-named Chennai), es: sentially motivated by the urge to “do something”, After his college studies were discontinued at the pre-university stage, Chandramogan agonised over several weeks about starting some business without being quite able to nar- row down to any specific line, mainly because of heavy investments entailed, While driven by an urge to succeed asa businessman, he did not quite know how to go about setting up a business. It was his maternal uncle who sug- gested the business of ice cream. Investing 715,000 as his own capital and raising another %21,000 by way of, a bank loan, he set up a small ice candy unit in a rented premise adjacent to his uncle’ retail textile outlet. From a quick survey around the Madras market it appeared to Chandramogan that there were about 350 small-time ice candy manufacturers like him competing in the low end of the market. These were offering no competition to the up- market segment dominated by leading brands

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