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Case Study: Cost Analysis For Verka

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3.5.3. Cost analysis for Verka For one cart minimum crates are 12 and maximum crates are 30. The salary given by the ADA of Verka is approximately Rs7000. The people hired on commission basis have variable commission between Rs10-Rs16 per crate. The commission is not fixed and is variable depending upon ADA to ADA. The margin of ADA depends upon the quantity of milk they supply and on the negotiations by the executives of Verka. In order to cover maximum market, Verka has made Agents who receives a direct delivery of less quantity for example 40-50 crates of milk. Hence, the margins provide by Verka is variable. The total investment is as follows: Cost of a new cart=Rs8000 Cost of licensing the cart and the vendor= Rs1500 Cost of maintenance …show more content…

SWOT analysis for VERKA 1. Strength a. Well established brand b. Market leader c. Reasonable price d. Good quality e. Capacity to supply large quantity of fresh products f. Good distribution network g. Loyal consumers h. The plant is situated very near to Chandigarh; hence the transportation time required is very less. 2. Weakness a. Provides less margin to ADAs and retailers in milk as compared to other brands b. Have created many agency holders, hence no clear differentiation in the role of agents and ADA. 3. Opportunity a. Huge market b. High Competition is prevalent only in pouched milk as compared to other fresh products c. Mainly a market of pouched milk d. Less availability of Paneer of any other brand e. Less number of milk booths of major competitors 4. Threat a. Competition from Amul milk b. Various schemes provided by brands like Amul, Mother Dairy etc. c. Presence of other fresh products offering higher margins to retailers 4. DISTRIBUTION CHANNEL OF …show more content…

These carts are either owned by the ADA or are rented. The cart vendors are either hired on salary basis or are given milk at the retailer margin. To increase their viability these cart vendors sell other products like bread, eggs, potato chips, cold drinks, biscuits etc. along with milk and milk products. Figure 10: Cart system in Chandigarh 4.1. Concerns of ADA: 1. The investment is high. For example: The van used by ADA has a cost of approximately Rs5.5 lakhs and each cart costs in approximately Rs9000 (including the customization charges). 2. The ADA also has to pay a fixed amount per month to the secretary of the society or the representative of the locality in order to sell their milk in that particular region. 3. The competition provided by the other milk suppliers like Verka, Goka Pure and other loose milk suppliers. 4. It is difficult to find labor for push carts. Many instances of theft and cheating were observed against the push cart vendors. 4.2. Concerns of the push cart

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