Management Accounting

Group 7

A synopsis on Atria Communication’s Decision to launch ACT Stream TV 4K

105 | Anand Sharma

175 | Abhishek Upadhyay
123 | Komal Gupta
Teaching Notes
Abhishek Upadhyay, Anand Sharma, & Komal Gupta

Subject Area
The study articulates the investment dilemmas in the emerging wired telecommunication
industry which are focused on carrying out profitable strategic business decisions. This is done
through the application of Porter’s five forces model, SWOT analysis, & PESTLE framework.
Different strategies are evaluated through forecasting financials basis existing data to predict the
feasibility of the business decisions. The case takes into account the component ratios to examine
the profitability of business decisions by evaluating the operational efficiency, financial risk, &
efficiency in asset utilization.

Study Level/Applicability
The case is prepared in lieu of the management accounting project & is poised to act as a
teaching tool with applicability in the following courses:

Graduate & postgraduate-level programs in management within-subjects closely aligned with

management accounting, strategic decision making, & cost management. The case can be
employed to study the concepts related to SWOT analysis, Porter’s five forces, & PESTLE
framework. The case can also be studied to understand how to take into account the component
ratios & DuPont analysis to suggest profitable & strategic business decision making.

Training programs in management where employees can learn how to evaluate operational
efficiency, financial risk & efficiency in asset utilization. The case helps in forecasting /
projecting financial budget decisions to understand the margin of safety, & feasibility of the
business decisions.

Case Overview
Atria Convergence Technologies Limited (ACT) founded in 2000 by Mr. Sunder Raju is an
Indian Telecommunication company with its headquarters in Bangalore, Karnataka. ACT offers
optical fiber-based Internet connectivity to the Indian homes under the brand of ACT Fibernet. It
also offers services in Digital Television under the brand name of ACT Digital. The company
started its services from Bangalore Karnataka and later expanded in states like Tamil Nadu,
Andhra Pradesh, Delhi, Gujarat and others. The company has seen massive growth over the past
19 years and is currently serving more than 2 million homes in India. The company aims to be at
the forefront of technology and is moving from cable to broadband business. As a result, the
company has grown with a 35+ CAGR over the past few years and wants to continue its growth
by taking up new product development. The case deals with the evaluation of feasibility of
launching a 4K streaming device in the market preloaded with popular streaming platforms &
games. The company is poised to eliminate inconvenience associated with switching between
two devices/set top box with payment consolidated into one billing. The case discusses how
techniques like SWOT analysis, competitive analysis, DuPont Analysis can be used to make the
strategic business decision.

Expected Learning Outcomes

Use of Porter’s five force analysis to understand the intricacies of the wired telecommunication
industry and assess the market factors guiding growth & strategic business decisions.

SWOT analysis to identify the key performance measures of ACT technologies & evaluate its
current business decisions basis company’s strengths, weaknesses, opportunities & threats.

PESTLE framework to understand the macro-level factor guiding the company’s business
decision.

Forecasting / estimating the financials to assess the strategic business decision.

Assessing the impact of the decision by breaking down financials into component ratios by
evaluating operational efficiency, the financial risk of the decision.

Supplementary Materials
Atria Convergence Technologies Ltd. (March 27, 2018), Public Issues: Draft Offer Documents
filed with SEBI, Retrieved from
https://www.sebi.gov.in/filings/public-issues/mar-2018/atria-convergence-technologies-
limited_38445.html

Charles T. Horngren, Srikant M. Datar and Madhav Rajan (2014), ‘‘Cost accounting: a
managerial emphasis – 15/E’’ Publisher: Pearson.
Practical/Social Implications
The case exemplifies challenge faced by an organized when taking up a call on the various
option available for Business Development. These options can be the expansion of the current
business or venturing into a new stream. The approach is to analyze the option based on the
feasibility and profitability of the project.