Bharat Engineering Works Ltd.

About the company

• Bharat Engineering Works  Is a major manufacturer of industrial machineries, besides other
engineering products.
• This organization has emerged as one of the most prominent manufacturers and exporters of Cast
Iron Castings.
• It has enjoyed considerable market preference due to limited competition thus the company had a
Monopoly in the market for a very long period.
• But the company started facing problems when two new companies entered the market with
modern and foreign resources at their disposal.
• Mr. Arvind Kumar was as the general manager to figure out the problem
The problem
• There was no proper management and planning of how the resources were handled are production was
carried out
• Due to which the production levels were insufficient as they could not match the quantity demanded in
the market.
• The company faced problems in marketing the product due it being inferior than its competition
• Due to lack of modern technology (and the machines and other assets being very old), the cost of
production was very high – meaning they could not lower the prices of their product when competition
entered the market
• With more options available at a cheaper price and a better quality in the market, and the company not
being able to supply enough on time, Bharat engineering started losing its old and loyal customers too
• The companies overall market share also dropped
Planning
• Planning is deciding in advance what to do, how to do it, when to do it and ho to
do it.it involves anticipating the future
• Here we can see that due to lack of planning when the competition was increased
in the market the company faced problems (as mentioned earlier) and lost their
market leader status.
• In order to combat that issue, the company appointed Mr. Arvind Kumar as the
general manager for the industrial machinery division
• To get to the root problem that the company was facing the first step Mr. Kumar
took was to get briefings about the problems within the company, and from this
procedure, Mr. Kumar talked with all the operations managers and listed down all
the problems that each of the department was facing.
Staffing
• Staffing is a process by which mangers built an organization through recruitment
selection and development of individuals as an capable employees.
• The man force available in the firm was not effectively utilized by the earlier
manager
• Earlier due to lack of planning mangers where not able to use the man force as per
the need but Mr. Arvind Kumar re-appointed the staff not as per the vacancy but
as per the skill they needed.
Organizing
• Through a survey Mr. Arvind Kumar got to know that there were poor working
relationships among the employees and the superior staff so as a result it effected
the production process, affecting the production efficiency because of lack of
proper communications, and they could not achieve the set target (I. e. The sales
department had no proper budget or a central organization team like group leaders
to guide them).
• The lack of organization in the company is one of the biggest problems, and to
counter that what Mr. Kumar could do is to make a proper organization chain
within the company where each divisions employees have to answer to their
division manager only, and the division managers to their superiors (like CEO)
Controlling
• History has seen one of the best leaders in the form of Alexander, the great and he has
rightly remarked, " I am not afraid of any of lions led by a sheep , I am an army of sheep
led by a lion." In the case study , we have seen a huge gap between the top executives
and low level managers. The leader need to know how to make maximum utilization of
each and every member of the cooperation in the benefit of their company which was
certainly missing here . Leaders need to lead by examples . A team member is by
default controlled by the working styles of the leader. The leader should ensure that
failure of any plan is his failure and success of any project would be team ' s
success. And since there is a lot of mismanagement in the organization, the company
should adopt a more centralized style of functioning and the employees are only
responsible for their division and only answerable to their division manager. The top
managers also need to decide a certain budget for each division from which they have to
manage, so none of them are left hanging.
SWOT analysis
Strengths Weakness Opportunity Threat
Knows market Use of old machines Because of the company name Foreign competition
requirements well and loyal customers, enhancing
product quality will strengthen
market position
Has customer trust Lack of organization in the Reduce production cost to More efficient
(because its an old company increase profits products available in
and respected market
brand)
High profit margins Mismanagement of funds Fall in market
position
Unable to supply demanded
quantity
Staffing mismanagement
No future planning
• In this case the re-orientation strategies will work the best in the long term for Bharat engineering
since the company is facing a lot of problems at the moment, but it still has a lot of opportunities
(there is high demand in the market) available in the market, if they are able to capitalize on those
opportunities by making changes that can benefit them in the long run
Possible solutions
• The company should hire new engineers.
• Use of latest technology is must, so that the production cost goes down
• R&D could try innovating something new
• Wooing the loyal customers back (by advertising about better products or/and delivering better
products)
Ansoff Matrix
The product development would be the
best strategy for the company where they
will be introducing new and/or improved
products in the already existing market,
because there is a big scope in the current
market for them, and an improvement in
the product would mean that will be able
to compete with the two new foreign
companies.
Solution
The most probable solution can be the use of new machinery and technology instead
of the old ones. It would reduce the cost of production which would ultimately
result into the increase in efficiency and effectiveness of the company. It will result
into lower cost of production which will make the profits higher than before. Plus as
each year passes the value of the machine depreciates, so it would be wise to replace
them soon
But buying new machinery can also result into expensive investment in the starting
and the employees can further face problems to deal with the new machinery unless
proper training and development programs are organized by the company.
Questions and Answers