Académique Documents
Professionnel Documents
Culture Documents
Business Policy
Summer 2015
Section: B
Assignment ID: 1
Bisma Amjad
11-05-2015
Synergy
owner)
Durgeshs family experience can be used to
leverage a competitive advantage
Knitwear
Product-market scope
Growth Vector
Competitive Advantage
branding)
High (Ajays father has a renowned clothing
Synergy
business)
High (Ajays family business can be used to
push the product through channels)
Although according to Ansoffs Matrix both businesses offer good business opportunities but
both of them can be differentiated when seen through the lens of the Mintzberg model. Where
the cold storage business is operating in a slower market with a guaranteed return since farmers
and food producers will inevitably need to freeze produce at the cold storage, Durgesh will need
to take on an adaptive approach where his business model would be more reactive rather than
tapping into newer opportunities. However, in the case of the Knitwear business, Ajay will have
to take an entrepreneurial approach where all the decisions will have to flow from him and he
will steer the company through thick and thin. Why an entrepreneurial approach is necessary in
the latter case is because the business is capital intensive and hell have to take bold decision
with regards to branding in order to differentiate the product from the competition.
Business Policy Pyramid: Knitwear
Major Policy:
Knitwear Business
Conclusion
Both businesses are operating in dramatically different environments. Where one guarantees a
stable stream of income with lower capital costs but with much lesser returns, the other promises
higher income streams but with more risk, more initial capital requirements and the need to do
extensive branding. Both the projects have a payback period of around 3 years which weighs
more heavily in the favor of the Knitwear business since this implies that the Knitwear business
is so profitable that it can pay off its higher cost of capital in as much a time as the Cold Storage
business and after this has been accomplished, the Knitwear business will go on to make much
higher amount of returns on a year-to-year basis.