Abstract
Executive Summary
This case is about Carasid, a manufacturer of pastry and cakes in Goa. It was founded in 2007 by Mr Sunil Shrivastava and Mrs Christabel in the region of Goa. Carasid produced cakes and pastries with quality ingredients and catered to the taste buds of a wide variety of customers, including the upscale Goans and domestic and international tourists. Carasid started off with one outlet moving on to adding one more at Law College Road in Panjim, Goa and later added one more outlet in Margoa. By February 2018, Carasid had one factory in Pilerne Industrial estate in Goa and three outlets. Currently, Carasid is planning to expand its business by opening more than 10 outlets across Goa. The founder Mr Sunil was worried whether the business will be able to scale its business model successfully, as it did with its first three outlets. He was not worried about finances as much as about whether he would be able to inculcate the same foundational culture across its franchisees. He was also worried about its business ability to cater to health-conscious customers, a trend that is catching up like wildfire. Also, another cause of his worry was his concern about whether the single factory at Pilerne will be able to cater to all its outlet across Goa.
Statement of the Problem
The case is trying to find an answer to how the business model could be scalable. After reading through the case, it is evident that both the owners and the business itself has lot of capabilities to scale the business. The business model has many unique characteristics, which could be replicated and build on for its future outlets (Porter, 1989). However, a phased expansion is suggested, considering the fact that the owners have a unique one-to-one relationship with each of their outlets, employees and customers, which is the winning formula for this business. The recommendation would be to maintain relationship building in each of their outlets, which requires tremendous planning, effort and vision from the owners’ side. A simultaneous roll-out of outlets may be counter-productive in this scenario. Instead, it could be done in a phased manner.
Causes of the Problem 1
Maintaining Standard and Quality in Products
Mr Sunil is worried whether he will be able to maintain the standard and quality in products when the business scales-up.
Decision criteria: It is evident from the case that the product was produced with utmost care through a four-step production process such that it has a five-star quality. Carasid started off with producing brownies, moving on to establishing its first outlet in Miramar, in the city of Panjim in Goa. This store was instrumental in acquiring customers for Carasid as it was located on the high-street in a posh locality which was frequented by both affluent local customers and moving tourists.
Recommended solution: From this, it is evident that the business has capabilities for keeping up with its standards. There are in-house processes that are in place to ensure quality. So the business can definitely scale-up by replicating the same standards and quality procedures.
Causes of the Problem 2
Catering to Health-conscious Customers
Mr Sunil is worried about the store’s business ability to cater to health-conscious customers, a trend that is catching up like wildfire.
Decision criteria: From the very beginning, Carasid was positioned not just as a fast food manufacturer, but also was positioned to cater to the health-conscious customers.
Recommended solution: Catering to health-conscious customer can be primarily done through innovation and also through the skills and capabilities. Mrs Christabel being a nutritionist by profession has the abilities and experience to set up a business with innovation at the core of the business model (Amit & Scott, 2012).
Causes of the Problem 3
Augmenting Innovation Speed
Carasid is known for its capabilities for innovation. However, when a business scales-up, one of the challenge is definitely to speed up its innovation processes. Mr Shrivastava’s feeling of this being a daunting task is not out of place.
Decision criteria: Innovation is already at the core of Carasid’s capabilities. Right from the onset, the founders have worked with an innovation mindset. Mrs Christabel has experience of working with business models with innovation at its core (Teece, 2007). For example, Mrs Christabel made it a point to have closer ties to Goan women entrepreneurs, which helped build a connected community that served as incubator and ideator for the business that Mr and Mrs Shrivastava envisaged for themselves. In fact, Carasid achieved success through its strategic practices centred around innovation in workplace and products. Carasid—right from inception—innovated and experimented with its products. Carasid brought out products for health conscious people and patients through innovation. Through innovation, it could do cost-cutting through replacing expensive raw materials like cream cheese and ricotta cheese with in-house substitutes.
Recommended solution: It is evident that Carasid have the requisite capabilities to speed up innovation while scaling-up. It is recommended to have a product development team in place that can take care of bringing out innovative products.
Causes of the Problem 4
Maintaining the Culture
Another one of the significant worries of Mr Sunil was whether the business could maintain its foundational culture that was instrumental in making the business successful.
Decision criteria: Carasid had some unique points regarding its culture. Carasid was also able to successfully inculcate a customer-first business by adopting the doctrine of ‘athithi devo bhava’ and welcomed each and every guests with utmost care and respect. This was achieved through spending quality time with customers and listening to them closely to understand their likes and needs. Carasid had initiated four strategic initiatives to build the culture of the organization, namely, role-based recruitment, team building through product tasting, mother time and college pocket money survey. The four strategies were aimed to retain the employees in an industry that witnessed large-scale attrition. One of the strategies was to provide training by working with each employee personally and also through job rotation. For example, somebody who was good at making cakes was also trained to handle customers which resulted in a retention rate of 88 per cent. Similarly, there was another strategy of weekly team meeting and tasting sessions, where all the employees got together and brainstormed, tasted new products and shared their experiences. Mother time was another strategy that was aimed at informal interactions with parents of school going kids, followed by giving samples of new products, which not only helped in getting real-time feedback about new products but also helped in developing strong ties with Goan women and children. Another strategy was to invite college students to the outlet and giving them a space to experiment with food and spend time with their friends. These strategies helped Carasid to find its niche in the market, which was a big feat considering Goan market is crowded with unorganized bakery product manufacturers. There were more Carasid work culture. It centred around the principle of ‘Bore Kam’, which meant ‘good work’, which was supplemented by rotation of leaders, which made all employees leaders and important stakeholders. This helped in augmenting the communication levels so that information could be passed on easily without being misinterpreted. This helped Carasid to open its second and third outlets without facing much trouble in transitioning and taking up responsibilities in the new outlets.
Recommended solution: Mr Sunil should maintain and reinforce the culture that already has a foothold in the organization while scaling-up. The culture is already set in the organization, he just need to maintain it.
Causes of the Problem 5
Location of Its Principal Factory in Pilerne, Goa
Another cause of his worry was his concern about whether the single factory at Pilerne will be able to cater to all its outlets across Goa.
Decision criteria: The current factory has limited reach, as semi-production units are already set up in the outlets. This means a new factory is required for expansion.
Recommended Solution: It is recommended that Mr Sunil start a new factory that could cater to the new outlets so that products are in perfect shape and fresh. Also, they should continue with the current practice of semi-production units within the outlets to produce some of the products like cakes and breads. It is noted in the case that this provides a strategic advantage relative to competition, and it should definitely be taken forward along with a proposed new factory to cater to the demands of the newer outlets.
To conclude Mr and Mrs Shrivastava have successfully built a sustainable business through their business acumen, an innovation-based business model and a customer-focused strategy (Ansoff, 1987; Baghai, Coley, White, Conn, & McLean, 1996). Business growth is the next step, which is natural considering they have well-trained employees who have the skills to independently take on challenges and can do exemplary work with limited supervision. They should go ahead with the expansion plans and should leverage on its strengths to build a bigger business.