Capro Group: A Growth Story
(5 pages of text)
CAPRO Group is a small electrical engineering services firm operating out of New Delhi, India. In December 2011, with falling revenues due to macroeconomic conditions and increasing competition, the firm’s owner and founder appoints his son to look into restructuring the business. The electrical distribution control panel manufacturing and installation industry is highly fragmented, with only a few big firms and many small firms. Most firms specialize in one niche of the industry, whether it be manufacturing of equipment or panels, installation, or consultancy services. Different niches require different inputs in terms of labour, finances, and technical knowledge. Given the labour problems in India, combined with the country’s spiraling interest rates and slowing economic growth, the owner’s son must decide on a plan to bring his company out of its current slump.
The case is suitable for teaching basic courses in finance and strategy at the post-graduate level. The following courses can also make use of this case: financial management corporate finance and strategy and financial strategy.
- To prepare cash flow statements for the various expansion options and illustrate the use of payback period along with NPV.
- To calculate the NPV and IRR of the various expansion options.
- To illustrate the use of payback period along with NPV.
- To perform a situation analysis: self and competitor, micro and macro market analysis, SWOT analysis.
- Outline a mission statement that defines the key market, contribution and distinctiveness of the organization.
- Formulate the various strategic options available in line with the firm’s mission statement and situation analysis.
- Choose among potential plans of action on the basis of feasibility, suitability and acceptability.
India, Small, 2011
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