Tie Up Pangs

CASE : Tie Up Pangs

Jayant Mehta was pensive. His hectic schedule over the past few days had left him with practically no time to himself, and he had decided to take the weekend off with his family at the beach-house that his father had presented him on his wedding. Ketaki, his wife, and Rinku, his five-year-old son, were dodging the waves in the distance. The December sun on Bombay`s Marve beach was rather strong, and Mehta shifted his position slightly to move into the shade of the beach umbrella. As he closed his eyes, he found it difficult to doze off and, instead, found his mind wandering to how things had progressed in the 15 years since his induction into the family business.

The Backdrop

Mehta was barely 21 years old when he bagged his engineering degree and started work as plant manager at Beacon Appliances Ltd. (BAL) at its factory in Vikhroli, a Bombay suburb, in 1980. His father, the late Govindbhai Mehta, had set up the factory in 1969 after he migrated from a village in Gujarat where his ancestors were wealthy landowners and moneylenders. At that time, BAL`s product range included household appliances like toasters, electric kettles, .and irons - all sold under the Beacon brandname.

History

By 1980, the Beacon brand had established itself as the No. 2 in the marketplace. Its arch rival, and the market leader, was Avon Electrical Appliances, a professionally-managed company.

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QUESTIONS

1. The wind had died down and the tide had gone out. Mehta picked up his belongings and made his way to the beach house. Tomorrow morning, he was to meet the Mounsignex team for the final, and crucial round of negotiations for their joint venture. Should Mehta agree with the conditions that Mounsignex had imposed? Or not ? Give reasons for your answer.

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2. What could he the likely effect of the proposed joint venture on the company ? Discuss.