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Eskent Tools Private Limited: A Story of First Generation Entrepreneurs*

CASE STUDY, ENTREPRENEURSHIP & STARTUPS
ET Cases - GSMC, 10 Pages
AUTHOR(S) : Shreya Chakraborthy - Assistant Professor, M Ajoy Kumar - Associate Professor - Siddaganga Institute of Technology, Tumkur

Case Preview

Eskent Tools Private Limited: A Story of First Generation Entrepreneurs

 

It was a rainy afternoon in July 2016. Mr. Narendra Shah (Mr. Shah), Mr. Sankar Chakraborty(Mr. Chakraborty) and Mr. Sunil Ranjan Talukder (Mr. Talukder), three promoter directors of Eskent Tools Private Limited, Bangalore, were engrossed in a discussion related to the future of their firm. Mr. Chakraborty wanted to retire and settle down with his son at Kolkata. He was taking care of production at Eskent, while Mr. Shah managed sales and Mr. Talukder was in-charge of administration. Though Mr. Shah and Mr. Talukder wanted to continue the business, they were neither technically trained nor confident of managing production in the absence of Mr. Chakraborty. They knew that it was time for taking some tough decisions and were contemplating on various alternatives available.................

Eskent Tools: Inception and Early Days

Since late 70s, Mr. Shah, Mr. Chakraborty and Mr. Talukder were working for a machine tool firm, Embee Tools at Bangalore. They were in sales, production and administrative departments respectively. In 1982, they sensed that Embee was declining and might close down in the near future. They wanted to move out and start a similar firm of their own. However, they were hesitant in taking the bold decision of being entrepreneurs as they hailed from middle class families with no business background. This dilemma continued for two years and they finally took the decision to move out and start on their own in 1984..........

The Journey So Far

Product

The major products of Eskent were High Speed Slitting (HSS) Saws, Miniature Saws, Screw Slotting Cutters and other Cutting Tools. The saws were manufactured in three ................

Employees

Starting with eight workers, the staff strength of Eskent stood at 22 in 2016. The workers in production department were mostly not technically qualified and............

Customers

The first customer for the company was the TVS group. As the product had wide ranging applications, they started getting orders from many companies who had metal cutting...............

Competitors

Embee Tools was the only firm in South India to manufacture HSS slitting saws and cutting tools during 1980s. The closure of Embee and the inception of Eskent coincided in 1985...........

Business Strategy

Eskent started at a time when the demand for metal slitting saws was on a rise in India. The company could develop various products for metal slitting based on customer specifications during the initial years. The range of products remained more or less similar to the products of Embee Tools. These products generated...............

Financial Performance

The revenue of Eskent continued to grow till 2013, after which, it started declining every year. On the other hand, the total expenses continued to increase every year during the last six years...........

The Current Dilemma

Since January 2016, Mr. Chakraborty was keen on quitting and moving to Kolkata. Mr. Shah and Mr. Talukder convinced Mr. Chakraborty to continue at least till the end of the financial year. Since neither Mr. Shah nor Mr. Talukder was involved in production anytime,..................

Assignment Questions

I. What are the various entrepreneurial competencies? Evaluate the competencies exhibited by the promoters of Eskent.
II. What are the challenges faced by first generation entrepreneurs? In the light of the case, identify the challenges faced by the promoters of Eskent and critically evaluate their responses to those challenges.
III. ...............

Exhibits

Exhibit I: Background of the Promoters at the Time of Eskent’s Inception

Exhibit II: Product Profile

Exhibit III: Competitors of Eskent Tools

Exhibit IV: Income Statement (Summary) (In INR Lakh)

Exhibit V: Balance Sheet (Summary) (In INR Lakh)

Teaching Note Preview

Eskent Tools Private Limited: A Story of First Generation Entrepreneurs

 

Synopsis

This case study is set in the background of a small manufacturing firm involved in producing metal cutting saws at Bangalore, India. The case traces the journey of the organization through its inception, growth and stagnation. This case study is used to familiarize the participants with the basic concepts of entrepreneurship, entrepreneurial competencies, the difficulties faced by entrepreneurs and the significance of strategic choices. The discussion revolves around (a) the challenges faced by first generation entrepreneurs (b) risk-taking as an important entrepreneurial characteristic and (c) various strategic choices. The case argues that moderate risk-taking coupled with aggressive market development is the key to success in the context of a relatively stable external market.

Prerequisite Conceptual Understandings (PCUs)/Before the Classroom Discussion

The participants are expected to know the basic concepts of entrepreneurship, entrepreneurial perspectives and entrepreneurial competencies. The participants are required to read the following mandatory readings for a meaningful discussion of the case.

  • • Charantimath Poornima M, “Entrepreneurship and entrepreneurial competencies”, Entrepreneurship Development and Small Business Enterprises, 2nd Edition,  Pearson Education, pages 2-16
  • • Charantimath Poornima M, “Problems facing the MSME entrepreneurs”, 102-103
  • • Robert D Hisrich, et al, “Entrepreneurship and Entrepreneurial Mindset”, Entrepreneurship, 9th Edition, McGraw Hill Education, 9-36
  • • Robert D Hisrich et al, “Entrepreneurial Strategy”, 75-84
 
Case Positioning and Setting

This case study can be used in teaching Entrepreneurship and/or Strategic Management at MBA and Executive MBA Programmes and Entrepreneurship Development Programmes.

Assignment Questions

I. What are the various entrepreneurial competencies? Evaluate the competencies exhibited by the promoters of Eskent.
II. What are the challenges faced by first generation entrepreneurs? In the light of the case, identify the challenges faced by the promoters of Eskent and critically evaluate their responses to those challenges.
III.

.....................




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Abstract

Eskent Tools Private Limited is a firm established at Bangalore in 1985, which manufactures steel slitting saws for various industrial applications. Four first generation entrepreneurs promoted this firm with an initial capital of INR12 lakh. This case study is meant to introduce the participants to the various issues and challenges in entrepreneurship. There are many cases on successful entrepreneurs and many on unsuccessful ones. But, there are very few discussing the reasons as to why a venture with lots of potential couldn’t make it to the top. Here, the journey of a small firm is taken as a base to develop an outlook among participants about a small venture and the decisions taken by its promoters with respect to certain strategic choices. Issues like, new product development, penetration into new markets, apprehensions of scaling up, requirement of professional expertise and succession planning are discussed in the case. This case study relates to the strategic fit between the dynamic external environment of business and the abilities of entrepreneurs in exploiting the same. The right combination of skills with education and exposure seems to be the perfect recipe for success!! In the light of this, the participants are hard-pressed through the situations faced by the firm and are required to wear the hat of the promoters and make choices, take necessary decisions and showcase their hidden entrepreneurial traits.



Pedagogical Objectives

  • To introduce the concepts and challenges faced by first generation entrepreneurs
  • To discuss the risk taking abilities and its repercussions in a small firm
  • To highlight the significance of right strategic choices at various stages of growth

Case Positioning and Setting This case study can be used in teaching Entrepreneurship and/or Strategic Management at MBA and Executive MBA Programmes and Entrepreneurship Development Programmes


* GSMC 2017, IIM Raipur

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