Present situtation 1. High Inventories: 30% of sales, this include finished and raw material inventory. But with limited shelf life products it is a huge concern. 2. Decreasing Capacity Utilization: Increase in competition from domestic players and increase in capacity seems to have broought down the utilization to below 90% (figure in 1998)
Mr. Krishna could be grappling with these issues and hence looking for newer markets. At the same time these issues help in defining the launching strategy. To optimally exist in the market SFL should initiate with exporting its three innovative products by tying-up with the distribution agency. Focusing on innovative products could help in creating the niche and brand recognition leading to a sustainable strategy. At the same time, higher percentage of organized retail as compared to emerging markets will help them to streamline its distribution strategy by aligning with another agency. Lastly and most importantly,one need not launch the products in all the regions simultaneously. The decision should be based on the following analysis
TARGET EVALUATION PARAMETERS REGIONS --------------------------------------------------------------------------------------- ; |Lead time for Distribution cost Intensity of Number of South Indians |transportation competition (potential customers) 1. SA | Low Low Medium/High
