NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 03
Submission BCS
Ramalingam Foods Budget Allocation and Revenue Projections
Submission Date & Time: 2021-11-25 08:13:02
Event Name: NMO S4 Sprint One - IIM Visakhapatnam
Solution Submitted By: Kshitij Vishwakarma
Assignment Taken
Finance Department : Develop and propose a financial plan with allocated budget for International expansion. It also involves reaching optimum revenue generation to find break even point.Case Understanding
Mr. Ramalingam Venkatesh started the venture in the form of a fast-food restaurant in South Bombay in 1965. Due to the political mis happenings in the country in 1975 and food items were being sold at bare prices. TO overcome the situation Ramalingam Foods introduced Instant Mix in different variants to fulfill the demand of varied customers. The product portfolio included Instant Dosa Mix, Instant Idli Mix, Instant Gulab Jamun Mix, Instant Laddu Mix, instant coffee powder Instant Dhokla mix, and other similar products. It allowed the venture to operate at a very low cost and they were able to make considerable profits too. Recently there has been a demand for their products in the foreign market which is being fulfilled by Indians after domestic it from the Indian market and then selling it. Hence in order to capitalize on this situation, the venture is thinking to start its business in the foreign market. The case is about their international expansion and where they can start from with limited capital and resources.BCS Solution Summary
The solution is basically aimed at deciding the optimal budget for setting up the operations in the foreign land of Malaysia and Singapore. The allocation of budget is the prerequisite and the most crucial part of all the departments to perform to their maximum efficiency without facing any difficulties. And based on the demand given by the marketing department, the revenue generated in the first year of operations is Rs.14.91 crores. The revenue for the further years can increase as the market size would increase. Even if we consider a meager growth of 5% across all products in the upcoming our revenue increases to approximately 0.5 Crores. At this rate, the company would take around 3.5 years to break even the cost and generate profits with an investment of Rs. 50 crores and eventually start making profits.Solution
| Budget Allocation (Crores) | ||||||||||||||
| HR | 7.00 | |||||||||||||
| IT | 6.00 | |||||||||||||
| Marketing | 10.00 | |||||||||||||
| Research & Development | 10.00 | |||||||||||||
| Export Activties | 8.00 | |||||||||||||
| Operational Expenditure | 6.50 | Assuming 4% growth in demand across all products | 1.05 | |||||||||||
| Emergency Funds | 2.50 | |||||||||||||
| 50.00 | ||||||||||||||
| Revenue Projections Year 2019-20 | Revenue Projections Year 2019-20 | |||||||||||||
| Demand | Revenue | Demand | Revenue | |||||||||||
| Items | Malaysia | Singapore | Average Price | Malaysia | Singapore | Items | Malaysia | Singapore | Average Price | Malaysia | Singapore | |||
| South Indian Mix | 82830 | 12997 | ₹ 297.82 | ₹ 2,46,68,722.94 | ₹ 38,70,812.41 | South Indian Mix | 86971.5 | 13646.85 | ₹ 297.82 | ₹ 2,59,02,159.09 | ₹ 40,64,353.03 | |||
| Chutney mix | 94023 | 14615 | ₹ 260.88 | ₹ 2,45,28,941.47 | ₹ 38,12,795.59 | Chutney mix | 98724.15 | 15345.75 | ₹ 260.88 | ₹ 2,57,55,388.54 | ₹ 40,03,435.37 | |||
| Dessert Mix | 87192 | 14723 | ₹ 379.71 | ₹ 3,31,07,315.29 | ₹ 55,90,409.71 | Dessert Mix | 91551.6 | 15459.15 | ₹ 379.71 | ₹ 3,47,62,681.06 | ₹ 58,69,930.19 | |||
| North Indian Mix | 54001 | 9680 | ₹ 297.82 | ₹ 1,60,82,768.41 | ₹ 28,82,931.76 | North Indian Mix | 56701.05 | 10164 | ₹ 297.82 | ₹ 1,68,86,906.83 | ₹ 30,27,078.35 | |||
| Instant Coffee | 137492 | 95006 | ₹ 149.00 | ₹ 2,04,86,308.00 | ₹ 1,41,55,894.00 | Instant Coffee | 144366.6 | 99756.3 | ₹ 149.00 | ₹ 2,15,10,623.40 | ₹ 1,48,63,688.70 | |||
| ₹ 11,88,74,056.12 | ₹ 3,03,12,843.47 | ₹ 12,48,17,758.92 | ₹ 3,18,28,485.64 | |||||||||||
| ₹ 14,91,86,899.59 | ₹ 15,66,46,244.57 | |||||||||||||
Conclusion
It would take 3-4 years to cover all the costs and break even and eventually start generating revenueAttached File Details
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Article Type: Business Case Scenario, Case Study Solution Submission
Business Case Detail
Title: NMO S4 SPRINT ONE | BUSINESS CASE SCENARIO - 03
Type: Case Study
Stream: Management
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