Vora and Company Case Analysis

1. Should Mr. Vora continue in this business?

Mr. Vora should continue in the business of processing and selling the quick-cooking rolled oats (Blossom Oats) for the following reasons:

1. Blossom Oats is a competitor in a space where there exists only one other player.
2. The quality of the raw white oats used is of the finest quality and the perfected product bears the I.S.I certification mark which rates Blossom Oats as equal to or better than competing product.
3. There exist a few issues related to communication, distribution channels, terms of sale, pricing, operational costs, etc., that can be rectified.
4. The competitor to Blossom Oats extended nationally only after 3 years of experimental marketing, but Blossom Oats extended nationally in 2 years after set-up was quicker and may need more time to bring in profitable sales.
5. Mr. Vora has the capacity to experiment in this business until attaining profits as he also has other project that could engage his resources.

1. What are the major problems faced by Vora and Company?

The major problems that Vora and Company faced with Blossom Oats are:

1. They had no definite data regarding the sales of Quaker Oats before the embargo, nor did they have any sales figures of the competitor, Champion Oats.
2. Mr. Vora prioritized regions to sell by mere discussion with agents and not by proper market research.
3. The packaging did not differentiate Blossom Oats much from its competitor and the words “quick-cooking” were not given an emphasis.
4. Distribution was carried out by agents who were inexperienced in selling competing food products.
5. The agents and sub-agents merely took orders and did not buy, stock and distribute Blossom Oats.
6. Mr. Vora communicated to the agents only through email and did not visit them which would have created a wrong impression in the agents about his seriousness in the business.
7. Vora and Company priced their product less and paid more commission to their selling agents, while their competitor paid less even when their agents were performing like distributers, who bought and carried stocks of Champion Oats in their godowns for delivery to retailers.
8. Advertising did not yield good results and hence it is stopped.
9. The company incurred overall losses. Illustration below.

From June-November 1963,

Average sales = 83 cases/month

Total sales = 83 x 6 = 498

Direct cost/ case = 59.92

Total direct cost = 59.92 x 498 = 29840.16

Overhead costs = 12.18 x 498 = 6065.64

Total cost = 29480.16 + 6065.64 = 35905.8

Considering average income of Rs. 66 per case (average of 64 in North India and 68 in South India)