3. Parent and its child RVI RHL Worldwide marketer whose product line is traced back to 1905. Company’s strategy – meeting distinct customer needs. Overseas market sales growing faster than domestic. One of the 30 subsidiaries founded in 1964. By 1965, 45% equity with Indians and by 1983, a record sales of $23 million.
4. Company in trouble – 1981 Strategies to turnaround: Increase profitability New opportunities for future growth Labour Situation Managing People Strategy Gurucharan Das – Contribution to RHL Think Global Act Local ???
10. Complex and tough tax structure RHL paid effective income tax at rate of 76%. Company’s objective of reducing the tax burden by following means: Directing business investments for social and economic development Manufacturing products which excused RHL from the excise tax payment. Efforts directed to convince the government to eliminate advertising disallowance. Indian Government laws
11. Government regulations led to change in RHL’s shareholders structure. RHL came under FERA as a result of more than 40% RVI ownership. Outgrowing industrial licenses issued by the Indian government. Additional grant requests for increasing production capacity rejected Shareholders structure
12. Employees- Valuable assets RHL’s success attributed to the development of the employees. Creation of an environment which fosters innovativeness and excellence. Investing in the employees to help them grow. Adoption of a consultative and participative management style.
20. Current tax rate of almost 76% Target to improve PAT PAT improved by decreasing tax rate Sales and earning growth means nothing without tax rate reduction PAT Improvement
21. Investment on DXM factory Duty drawback on imported materials Cash incentives on export No income tax for seven years Payback within 2 years Building satellite plant Tax holiday for 8 – 10 years Tax cut on almost 45% of the profit Cut from excise tax Tax Reduction
22. Investing in the manufacturing plant for development of hydro bromide. Launch of new products. Building on the R&D - ayurvedics as the base for new products. Building satellite plant to decrease tax rate. Strategic alliance with major players – strong in manufacturing division. Recommendations