Corporate Social and Ethical Responsibilities of the Caarmania - Assignment Example

? Caarmania Media Kit Company Fact Sheet of the company: CAARMANIA Location: The Company is headquartered in Bangalore, India. Caarmania has five retail outlets in India spread across Bangalore, Hyderabad, Chennai, Pune and Cochin. Year Established: The Company was established in the year 2007 Mission Statement: “Caarmania’s mission is to become the world’s best toy car retailer in terms of quality, variety, price and size. The financial goals of the company are increase the cash flow and invest in the growth of the company and expand the investments for better shareholder value.” Products offered: We sell Scale model cars, radio control cars and other varieties of car toys. Customers targeted: The targeted customers of the company are all car lovers from infants to the elderly ones. We identified that car and speed are real passion for many people and toy cars are one way for satisfying this passion. Therefore, the customer groups of the company include all age groups. Scale model cars are mainly targeted at the elderly people while the radio controlled cars are mainly targeted at the age group below 20. Thus Caarmania intends to be a one stop solution for the car lovers of all age groups. Corporate social and ethical responsibilities of the company: The ethical responsibilities of the company include selling of toys that are not harmful or hazardous to the customer to whom it is sold. We avoid selling products that are manufactured by materials which are potentially harmful for the customers. We make a good analysis of the material quality of the toys before taking the orders. As a social being we understand our commitment towards the society that we operate. Therefore, we support a recycling system under which we take broken or useless toys from the customers and send it to third party recycling units. This way the plastic and other metal wastes arising out of unused toys are reduced. In order to encourage the customers for this, we also pay such customers based on the toys that are returned. Contact Information: Email: info@caarmania.com. Website: www.caarmania.com Businessman Profile Challenges: Caarmania had to undergo various challenges in the initial years of its operation. The main challenge faced by the company is to reach the customers. Unlike other toy retailers, Caarmania is targeted on all the age groups. Therefore, marketing activities had to be carried on to reach all the customer groups. To target children, we focused on schools. We sponsored various events conducted at major schools in the cities. We also conducted painting competitions at the cities where we had presence. This way, we were able to reach the children as well as the parents. The second main challenge we faced is the source of fund for expansion. Though we were established in 2007 we adopted an aggressive strategy on the expansion side. We wanted to capture the market before the competitors would. Expanding to other market even before breakeven was a challenge. Funding by venture capitalists helped to overcome the challenge of raising fund for expansion. Now we are well established in all the five cities and the business is doing very well on all these cities. (Alessandro, 2006) Employees and Motivation: Employees and their commitment has been the back bone of success of our company. We have a total of 80 employees including those who are involved in the transport and logistics. Sales persons represent the largest group among our employees. We treat every single employee as a factor of success of our business. In Caarmania, we address each other by their first name irrespective of their designation. From the observation of what we have practiced over years in our company, we understand that employees are motivated by outcomes and expectations. We follow the kind of practice that was developed by Victor Vroom known as Vroom’s Valence * Expectancy Theory. (Shah and Shah, 2011) We carry out a highly organised and unbiased year end evaluation process in which the employees are rewarded based on their yearend ratings. This way, all our employees work with extreme passion in order to achieve better ratings and rewards. The employee attrition rate is comparatively low in our company. Support for successful business: A good customer need identification system is the main support that is required for our business. We already have a well developed ERP system which is able to track the products sold and the ones that has the highest demand. What is required next for our business is a good data mining system. We will be shortly investing into a highly advanced data mining system by way of which the demand for a product, the changes that is happening to demand and all other attributes related to the customer tastes can be tracked. Even for carrying out this project, support from external funding is an essential element. We are mainly looking for venture capital funding for the expansion of this project. Moreover, we are also planning to focus more on advertising. To target the kids and children, we will advertise on children’s magazines and books. To target the elderly people we will advertise mainly on car magazines. We will also expand our online merchandise system to make purchase easier for customers. Financial Profile Financial Information: From the very beginning we have focused on maintaining a good, credible and transparent financial position. Auditing of our accounts is done by Deloitte Haskins & Sells. In India, auditing of accounts is not mandatory. But as a matter of maintaining better financial credibility, we have our accounts audited at the end of every year. We have always tried to reduce our exposure to debt financing. Our debt-equity ratio has been at a low and healthy rate ever since the beginning. As there is absolutely no sale on credit basis, we have very less accounts receivable on our books. Therefore, unlike other companies we have less funds locked in accounts receivable. At the same time we avail credit facilities granted by our suppliers. Therefore, a good portion of internal financing is met by supplier credit. We operate in a niche market. We have the ERP system which keeps track of the demand for the products. Through this we were able to avoid overstocking or under stocking. Our inventory turnover is at a very healthy position. (NetMBA, 2011) Short and Long-term assets and liabilities: There are very few long-term assets for the company. The main long term asset of Caarmania is the retail outlets itself. Even among the retail outlets, only 3 of them are owned ones. Rest all are leased office space. Therefore, Caarmania has less investment in long-term assets. Being a retail company we invest more on short-term or current assets. These are fast moving assets and are easily converted into cash. The main long-term liability of Caarmania is the shareholder’s equity which also includes the venture capitalists fund. Caarmania has 20 shareholders including the promoters and venture capitalists. The other major long term liability is the long term loan from commercial bank. Though we have depended more on venture capitalists for our expansion, we do have a considerable portion of bank loans. Compared to other companies we have very limited short-term liabilities. Revenues and Expenses: Our major revenue comes from the trading of goods. We have always tried to improve our margin by focusing more on cost reduction rather than premium pricing. But we do have products for which we charge premium prices. We take bulk and continuous orders from the suppliers so that cost per unit remains low. Auto Art, one of the leading scale model car makers is our largest supplier. Our second largest supplier is Maisto. Transportation and logistics, salary of the employees and interest expenses is our major expense item. We don’t adopt the policy o cost reduction by cutting the remuneration or reward program for the employees. Rather, we find cost reduction opportunities in other functional areas. Logistics is the function where we incur huge cost. We are already working on the policies for optimizing the logistics cost so that it will help in reducing the cost of goods sold. Multimedia Organisational Culture Story Organisational culture: We maintain a highly positive organisational culture. We have a culture in which all the employees address each other by their first name irrespective of the designation. We do not believe in hierarchy as it does not bring any benefit in the real sense. Even the sales boy at the outlet has the freedom to talk directly to the CEO of the company. We at Caarmania consider our team as a family as a result of which every member of the family gets their own respect and regard. We have a good ratio of male-female population among our employee groups. In every retail outlets we employ equal number of male and female employees. This will help for better people relationship and well as for better customer relationship. Strategies adopted for maintaining positive organisational culture: We have a rotation program under which every willing employee will be give a chance to visit and work for two weeks in all our outlets in India. If an employee from Bangalore outlet is sent to Hyderabad, a corresponding employee from Hyderabad will be sent to Bangalore. This way the rotation is an ongoing process at Caarmania. We want our people to understand the business and working conditions at each braches. We also permit free communication among the team so that the employees communicate well regarding their concerns and grievances. Moreover, it is also an opportunity for our employee to interact with people from different regions and braches. We also have a mini videoconferencing system at each outlet in order to ensure better communication system between the managers at each branch. This will help in better decision making. While selecting the employees we make sure that apart from the regional language they are also well versed in the national language Hindi. Works cited Ken, Shah., Param, J, Shah (2011) Theories of Motivation. [Online] Available at: http://www.laynetworks.com/Theories-of-Motivation.html [Accessed April 28 2011] Bill, D, Alessandro (2006) Costs and Benefits of Taking Venture Capital Funding. [Online] Available at: http://www.billda.com/vc-costs-and-benefits [Accessed April 28 2011] NetMBA (2011) Financial Ratios. [Online] Available at: http://www.netmba.com/finance/financial/ratios/ [Accessed April 28 2011] Missionstatements.com (2011) Company. [Online] Available at: http://www.missionstatements.com/company_mission_statements.html [Accessed April 28 2011] Symphony Orchestra (2011) Organisational Culture. [Online] Available at: http://www.soi.org/reading/change/culture.shtml [Accessed April 28 2011] Read More