Mgn 116 (ca 3).docx

INTRODUCTION Entrepreneurship is an activity that is carried out by an entrepreneur who has an innovative business idea for his/her start up. He is the one who takes calculated risk to start his business venture. Entrepreneurship is the propensity of mind to take calculated risks with confidence to achieve a predetermined business or industrial objective. It is the risk taking ability of the individual, broadly coupled with correct decision-making. For making this report we identified an entrepreneur named, Mr Anil Sachdeva, owner of K. D. Cycles. This is a manufacturing industry that manufactures cycle parts and assembles it in order to make it available to the consumers. This company is established in Ludhiana, Punjab. We are very thankful to our course instructor Mr Ajay Chandel who was always there to help us during the completion of this report. Also, this wouldn’t have been possible without our team who did their best.

1. HISTORY OF THE ENTREPRENUER

1.1.

Brief life history of the Entrepreneur

The history of this company enroots back in the year 1957 when Lt. Dewan Chand Sachdeva thought of establishing his own industry unit. He used to work under someone else and realized that he cannot work under someone. That was the moment he made a decision to establish his own industry rather than working for someone else. After establishing his own industry (known as K. D. Cycles) Lt. D. C. Sachdeva was joined by his son Mr Gurandita Sachdeva when he was in 8th standard. He used to travel throughout the country. Later on, his brother also joined him in the same and then after they started their own factory. Moreover, the one industry which was established in 1957 and now it has split into four different factories. Out of which K. D. Cycles is being owned by Mr Anil Sachdeva. He is the great grandson of Late Dewan Chand Sachdeva who was the actual founder of K. D. Cycles. Mr Anil Sachdeva is a self-motivated person. Whatever comes to him he tries to deal it within himself. He had studied B.COM and has interest in marketing. He knows how to deal with customers and is very friendly with them. On the contrary, he was not having any formal education regarding business as well as about the manufacturing unit. He learnt from his great grandfather as well as his father who helped him in learning these skills. As a result now he is very experienced in his work.

2. ABOUT THE ENTERPRISE 2.1. History and Initial Phase of the Enterprise K. D. Cycle is a manufacturing company that manufactures cycle parts and assembles it to make the final product i.e., cycle. It is a Ludhiana based manufacturing company which was established in 1957 by Lt. D. C. Sachdeva. At that time when the industry was established India was not having so much of technology which created certain problems to establish the business. It was difficult for Lt. D.C. Sachdeva since he was new to the technology at that time. Also he was not having any formal education to start up his own business still he took risk and managed to open his first business venture which turned into success. Gradually, he started learning and made himself self-sufficient to turn his idea into a successful reality. At present, Mr Anil Sachdeva, the great grandson of Lt. D.C. Sachdeva is the owner of K.D. Cycles, which is the third generation to handle the business. Currently, the company also manufactures spare parts of cycle like breaks, bells, basket, axle, chain, etc. and assembles the cycle there itself in there company. The company sells its product i.e., bicycles in Ludhiana as well as throughout the country, especially in Uttar Pradesh and Maharashtra. The company is registered and got the necessary licence from local and state government to establish their manufacturing company and make their product available to their customers.

2.2. Business Model The company’s business model is very simple. They purchase the raw material (iron, rubber, steel, machineries, tools and equipment). Then they process the raw material with the help of machines to convert them into cycle parts and then assemble those parts in order to make the final product available in the market for customers.

Source: On the basis of ideology of the entrepreneur.

2.3. SWOT Analysis

Strength

1. Producing simple and cheap cycles

Weakness

2. Self motivated

1. No formal education regarding business

3. Focused towards their goals

2. Traditional business

4. Family support

3. Absence of innovation

SWOT

Opportunities

Threats

1. Local government's support

1. Increased number of competitors

2. Demand of bicycles in rural areas

2. Availabilty of innovative cycles at relatively high price 3. Old fashioned cycles

Source: On the basis of personal visit.

2.4. Growth Stage At present, K. D. Cycles has attained its maturity stage of development as it had already covered its cost and had generated profits. Now they are heading towards the declining stage due to large number of competitors within the industry. Another important reason of decline in the growth stage of the company is lack of innovation which means the company had failed to innovate their products which has led in the decline of the company. Although Mr Anil Sachdeva said “he won’t be giving it up like that”, further he added they will be making certain changes either in their product or in their company in order to be back into the market.

Graph stating various growth stages of an enterprise.

3. MARKETING PRESPECTIVE

3.1. Marketing Mix Product: Bicycles are the products that are manufactured by “K.D. Cycles” that are to be consumed by the customers. They also manufacture spare parts of the bicycle. Pricing: The products are priced leaving the margin of the profit i.e., after the product has been manufactured the company leaves certain margin of profit above its cost in order to achieve their profit ratios. Place: The Company was being started in Ludhiana, Punjab, as it is known for industrial area within the state. They also sell their product throughout the country especially in Uttar Pradesh and Maharashtra. Promotions: They mostly promote their products through print media, that is, local newspapers, visiting cards and pamphlets. Distribution: The Company follows B2B business model as they deliver their products to the wholesalers and then they further distribute them among customers. The wholesaler gives an order to the manufacturer and then the manufacturer manufactures on the basis of order provided to them.

3.2.

Marketing Strategy

2.Industrial Location

1. Affordable Prices: The products offered by the company are as affordable as a person from rural area can afford. 2. Industrial Location: Ludhiana is basically known for its industrial areas. So starting a manufacturing industry in Ludhiana is a good choice. 3. Short-term credit facility: The Company provides short term credit to its wholesaler so that they can sell their products easily.

PORTER’S ANALYSIS FOR BICYCLE INDUSTRY. Threat of new entrants

Bargaining power of Suppliers.

Rivalry among existing competitors Threat of substitutes

Bargaining power of Buyers

4. PEOPLE PRESPECTIVE Mr Anil Sachdeva is a compassionate leader. He knows to deal with his employees in order to get best of them as well as he also knows to deal effectively with his customers’ and wholesalers’.

4.1.

People Management

In K. D. Cycles, under Mr Anil Sachdeva there are approximately 150 employees/labours working under him. They are properly lead, motivated and inspired by him. Also, the employees are provided with certain benefits, like:     

Favourable working conditions Fair wages and salaries Holidays in unavoidable situations Medical leaves Proper bonuses

Organization Structure

Centralization

4.2.

Production manager Finance manager Quality Control manager

The company follows structure of “Centralization”. Mr Anil Sachdeva is the person having authority to manage the entire company in which there are certain managers employed to govern the work of the labours.   

Production Manager: He is responsible for the all the work related to the production of products (cycle and cycle parts). Finance Manager: He deals with all the finance of the company that helps the company to manage its day to day expenses. Quality Control Manager: He is responsible for all the quality checks of the products that are manufactured in K.D. CYCLES.

5. PRODUCTION AND OPERATION 

  

Firstly, they purchase the raw material (iron, steel, rubber, etc.) and distribute among different departments of the company in order to make different cycle parts. For this they already have machinery installed which is used to manufacture those cycle parts. Then these cycle parts are brought at one place to assemble and make it a single product. After that the cycles’ are sent for finishing where they are being painted and designed as well as they are being labelled by company’s logo. At last they are being packed and are ready to be delivered to the wholesalers.

5.1.

Production process

Ordering of Raw Materials

Assembling

Source: On the basis of Personal Visit.

Painting and Designing

6. FINANCIAL PRESPECTIVE 6.1.

Sources of Finance

Bootstrapping and Family and Friends are the only financial sources for the enterprise.

6.2.

Profit and Loss Statement PARTICULARS

IN ₹

Production Expenses

1500000 - 2000000

Cost per Bicycle

2700 - 3600

Margin Money

300 – 400

Price per Bicycle

3000 - 4000

Wages and Salaries

1642500+720000=2362500

Transportation Cost (one way)

15000

Miscellaneous Expenses

1000000

TURNOVER

50000000

Source: On the basis of personal visit.

NOTE: 1. Mr Anil Sachdeva told us his annual turnover is approximately ₹ 5 crore. According to this we have assumed the rest of the expenses. 2. He also told us the price of per bicycle which is ₹ 3000-4000, which keeps differentiating based on different models. 3. All the expenses mentioned above are imaginary. They are based on certain assumptions.

7. CHALLENGES 7.1.     

Better technologies. For example, bikes, cars, etc. Old fashioned bicycles are losing trends. Gear bicycles are the new trends. Increased competition. Technology has made people work smarter rather than harder.

7.2.     

  

Future Plans and Expansion

Mr Sachdeva is planning to adopt new technologies so as to enhance his business. It will also cut down the time period which was earlier required. Will modify the bicycles with the help of technology. Will be making some fancy and new generation bicycles. Will be expanding the enterprise by switching to new locations.

7.3. 

Problems faced by the Enterprise

Opportunities Available

Since India is a developing country many people are poor who cannot afford to buy bikes and cars. Cycles are the cheapest source of transportation they can afford. People who are health conscious are the target market of bicycle industry. Bicycles are eco-friendly that do not cause any pollution to the environment. They are very much handy to use and are really very much helpful when stuck in a traffic jam.

ANNEXURE

MR ANIL SACHDEVA

CONCLUSION It’s very easy for anyone to say that they want to become an entrepreneur but while working on this report we actually came to know that what it actually costs to be an entrepreneur. Being an entrepreneur is not that easy as we have been thought of. It implies huge amount of risk as well as patience to be an entrepreneur. Meeting an entrepreneur was a real time experience which made us to think out of the box as well as out of the book. It gave us the life time experience about an entrepreneur named, Mr Anil Sachdeva who is the owner of K.D. Cycles which is located in Ludhiana, Punjab. We learnt about many things from this report. Starting from how an enterprise is being started then moving to its business model, SWOT analysis, financial statements, and moreover the challenges faced by these enterprises in setting up their businesses. We have learnt many new things regarding entrepreneurship. It was a life changing experience for all of us and we look forward for starting up our own venture in future.

INDEX 1. Introduction 2. History of the Entrepreneur 2.1. Brief life history of the Entrepreneur 2.2. Business Model 2.3. SWOT Analysis 2.4.Growth Stage 3. Marketing Perspective 3.1. Marketing Mix 3.2. Marketing Strategy 4. People Perspective 4.1. People Management 4.2. Organization Structure 5. Production and Operation 5.1. Production Process 6. Financial Perspective 6.1. Sources of Finance 6.2. Profit and Loss Statement 7. Challenges 7.1. Problems faced by the Enterprise 7.2. Future Plans and Expansion 7.3. Opportunities Available 8. Annexure 9. Conclusion