Shimla Case Study
A case memorandum on SHIMLA DAIRY
Introduction: Shimla dairy products was a 30 year old family business turned into limited company, which manufactures a wide variety of cheese and other products (including ghee, butter and processed cheese). It manufactures and sells about 29 varieties of cheese. The company currently has two plants with a total capacity of 10000 liters of milk processing. Shimla dairy had been experiencing a growth of 15-20% in sales per annum as opposed to 7-8% growth for the other cheese manufacturing companies in the market. Licensed by the government as a food manufacturer, Shimla is working towards being ISO 9002 accredited and certified with HACCP. Shimla sold its cheese in major Indian cities of New Delhi, Mumbai, Chennai, Kochi, Bangalore and Hyderabad. It had recently extended its operations to the cities of Ahmedabad, Kolkata and Goa. The major customer for Shimla is the hotel industry (Five-star and the mid-low end) which contributes for about 46% of its revenue. Others include restaurants (20%), Retailers (17%) and Pizza chains (17%). It also generates sales through distributors , with one or two distributors in each city. These distributors had exclusive rights for the city and supplied to hotels, restaurants and retail outlets. Shimla dairy has brought about few operational changes, like introducing a night shift to ensure higher quality of milk. Also, the testing for bacteria, yeast and moulds has been improved. Compared to its competitors Shimla dairy has a very low plant capacity and this has lead to the loss of few contracts by the company. Inspite of all these, Shimla had been facing a few problems and is looking out on ways to improve its sales. Few questions, which they are considering are should it explore a particular niche (high or low end cheese)?, which area to concentrate on? How to market its products better? Should the production facilities be expanded? How to create more brand awareness? To analyze
Introduction: Shimla dairy products was a 30 year old family business turned into limited company, which manufactures a wide variety of cheese and other products (including ghee, butter and processed cheese). It manufactures and sells about 29 varieties of cheese. The company currently has two plants with a total capacity of 10000 liters of milk processing. Shimla dairy had been experiencing a growth of 15-20% in sales per annum as opposed to 7-8% growth for the other cheese manufacturing companies in the market. Licensed by the government as a food manufacturer, Shimla is working towards being ISO 9002 accredited and certified with HACCP. Shimla sold its cheese in major Indian cities of New Delhi, Mumbai, Chennai, Kochi, Bangalore and Hyderabad. It had recently extended its operations to the cities of Ahmedabad, Kolkata and Goa. The major customer for Shimla is the hotel industry (Five-star and the mid-low end) which contributes for about 46% of its revenue. Others include restaurants (20%), Retailers (17%) and Pizza chains (17%). It also generates sales through distributors , with one or two distributors in each city. These distributors had exclusive rights for the city and supplied to hotels, restaurants and retail outlets. Shimla dairy has brought about few operational changes, like introducing a night shift to ensure higher quality of milk. Also, the testing for bacteria, yeast and moulds has been improved. Compared to its competitors Shimla dairy has a very low plant capacity and this has lead to the loss of few contracts by the company. Inspite of all these, Shimla had been facing a few problems and is looking out on ways to improve its sales. Few questions, which they are considering are should it explore a particular niche (high or low end cheese)?, which area to concentrate on? How to market its products better? Should the production facilities be expanded? How to create more brand awareness? To analyze