Rohit imk-KSBC

CHAPTER-1

INTRODUCTION

INSTITUTE OF MANAGEMENT IN KERALA Page 1

INTRODUCTION

The global spirits industry has proved to be recession-resistant with slowing

economies not having any major impact on the overall growth of the industry. However,

there has been some shift in the business and consumption trends. For example, the

ongoing economic slump has led to a shift from on-premise to off-premise consumption

as off-premise consumption has proved more economical. Likewise, the aging

population, particularly in the United States, has created above-average demand growth

for spirits and wine. Globally, the spirits industry is growing on the back of two

importance factors. First, the emerging markets of Brazil, Russia, India and China

(BRIC) witnessing strong ongoing momentum in spirits and wine consumption as a result

of rise in discretionary spending of consumers. Secondly, the western markets, notably

United States although slow is still well oriented. .

Apart from the favorable demographics i.e. aging population, the shift in the

consumption of alcoholic beverage – from beer to spirits and wine - is helping the growth

of the spirits industry. Within the spirits business, the trend towards premium products

has further helped the industry in value terms. Spirit markets have been premiumizing

across the regions as premium consumers have more and more access to more

sophisticated products and are aggressively willing to pay premium for higher quality

brands.

2007 proved to be a remarkable year for the global distilled spirits market with

strong growth in emerging countries and moderate progress in Western markets within a

worldwide economic context of lower growth. In the year 2008 and beyond, despite of a

difficult economic environment, emerging economies have witnessed a strong growth

with significant moderate growth in other markets that will help the overall industry

growth.


With the advancement of business processes, supply chain gained more and more

importance for each member of business community including manufacturers, retailers,

suppliers, suppliers’ suppliers and even consumer. Strategies were developed in order to

accelerate product sales and distribution. With the expansion of sales from areas to cities

and cities to countries, the need arose for proper tracking of demand and supply as well

as forecasting of materials, supplies, sales and distribution schemas. After the emergence

of Information Technology and business globalization, the concept of integrated supply

chain management was revolutionized. Information technology consists of the tools used

to gain awareness of information, analyze this information, and execute on it to increase

the performance of the supply chain.

OBJECTIVES OF THE STUDY

To study about the organization and its functions.

To have a study on organizational structure (hierarchy) of Kerala State Beverages

(Manufacturing and Marketing) Corporation.

To understand the working of various functional departments.

To make a SWOT analysis of the organisation.

To make an analysis of Porters five force model of the organization.


SCOPE OF THE STUDY

The organization study was conducted at Kerala State Beverages (Manufacturing and

Marketing) Corporation (KSBC) .The Corporation does monopoly business and provides

income to the government. The study is intended to attain a firsthand experience of the

overall functioning of an organization. The study is also undertaken to observe and

analyze the functions of KSBC. As it has various departments for the smooth running of

the firm, it is important to understand how each section within the department’s

functions. The detailed analysis of the activities performed by the departments is included

in the study. The study also helps to make an analysis of company’s strengths, weakness,

opportunities and threats. The findings and suggestions of the study help the company to

improve their overall performance. Moreover to know more about the way it functions

and how they are providing genuine liquor at reasonable prices to consumers and thus

check the distribution of illicit liquor unauthorized shops. Hence the study is significant.

The study is confined to head office of KSBC in Thiruvananthapuram.

1.4 RESEARCH METHODOLOGY

The research methodology used for the organization study is through the collection of

primary and secondary data.

Primary data source

Primary data was obtained through observation, direct communication with the

management staff in one form or other and also through personal interviews. Primary

data for the study is obtained from:

(i) Unstructured interviews with managers, departmental heads, & employees.

(ii) Direct observation


Secondary Data source

Secondary data are collected from

previous annual reports

companies’ official websites

journals

Text book

PERIOD

The research “organization study on Kerala State Beverages Corporation Limited

(KSBC)” was carried out period of fifteen days (15 days) from July 25 th 2011 to

August 7th 2011.

SCOPE AND SIGNIFICANCE

The organization study is conducting in Kerala State Beverages Corporation

Limited. The main aim of this study was to get a first knowledge of the various

activities of Kerala State Beverages Corporation LTD (KSBC) and its history and

make an objective assessment whether the organization is in proper line, observe

the soundness of financial and managerial principles coverable of modern

facilities, capital requirement, etc. Organization structure and management of

various department of Kerala State Beverages Corporation Limited are taken for

the purpose of study.

LIMITATIONS OF THE STUDY


The important limitations encountered during the study are:

1. Since the employees are busy, they could not provide much more information.

2. The company does not provide any information relating to the status of the

company and the data obtained is limited.

3. The study relies largely on secondary data and hence the limitation.

4. The unavailability of the data, which were confidential.

5. Time constraint was the one of the limitation of my study.

CHAPTERISATION

Chapter I - Includes introduction, objectives, scope, methodology and limitations of the

study.

Chapter II - It includes Industry Profile. The Origin of the industry, its growth and

development.

Chapter III - Includes company profile of KSBC, their vision, mission, motto, their

objectives, their quality policy and their product profile.

Chapter IV - Puts forward the organizational structure of KSBC

Chapter V - It includes Departmental Analysis, the detailed analysis of the various

departments of KSBC

Chapter VI - It includes the SWOT Analysis of the company, the strength, weakness,

opportunities and threats of the company. It also includes the Porter’s Five Force Model.

Chapter VII - Involves the various findings, conclusions and suggestions about KSBC.


CHAPTER - 2

INDUSTRY PROFILE


2.1 HISTORICAL ASPECT OF ALCOHOL IN INDIA

Beverages believed to contain ethanol are mentioned in ancient literature dating

back to the Vedic period around 2000 B.C. Two varieties of drinks are described soma

and sura along with their effects and the harms that might result from excessive

consumption. Soma the drink of the social elite was credited with positive qualities. On

the other hand, sura was consumed by warriors to enhance their valor and courage

among, among other things. Soma receives no further mention in post-Vedic literature,

but sura and its variants have remained a part of Indian literature ever since. For example

South Indian literature contains descriptions of fermented palm sap drinks that may be

similar to present day toddy. Alcohol was also an ingredient in many medicinal

preparations in the traditional Ayurvedic medical system. Ancient Indian medical texts

describe in detail the harmful effects of excessive or indiscriminate drinking on the mind

and body.

Despite the knowledge and availability of alcoholic beverages, they were never a

routine part of the diet in India. Strict rules and guidelines governed who could drink and

under what circumstances. Manu, the ancient Hindu sage, strictly forbade drinking by

Brahmins, the learned ones. Members of other social classes were allowed to drink, but

only on special occasions.


Although the Islamic tradition has stronger prohibitions against alcohol than the

Hindu does, drinking was common among the Mughal emperors and their subjects.

Soldiers were encouraged to drink habitually and other social sectors were allowed to

join in mass drinking at festivals or other public functions. While it does not favor

alcohol use, the Sikh religion tolerates drinking, especially by the military class.

Therefore it comes no surprise that Punjab-the traditional Sikh homeland-has one of the

highest alcohol consumption figures in contemporary India. In contrast to these other

religious traditions, the Buddhist and Jain religions strictly forbid alcohol use in any form

under any circumstance.

In sum, ancient Indian society had the knowledge of how to prepare beverage

alcohol, but did not support routine alcohol use and regarded abstinence as a virtue for

most people. Although alcohol never became a part of daily food and drink, its occasional

use was permitted. The available evidence suggests that alcohol use didn’t pose a

significant or social problem in ancient and medieval India.

The period of colonial rule saw a slow but steady rise in alcohol consumption,

with significant changes in the beverage consumed, the pattern of drinking, and social

attitudes towards alcohol use. Distilled beverages of a much higher alcohol content

gradually replaced traditional fermented beverages. Better fermentation and distillation

process and the introduction of new packaging technology resulted in alcoholic beverages

becoming mass- produced commercial items.

Improved transportation facilities contributed to wider alcohol availability

everywhere in India. While this played a role in increasing alcohol consumption, there

was a more fundamental change in the pattern of drinking. As conventional rules and

guidelines for alcohol use weakened, drinking changed from ritualistic and occasional to

become a part of routine every day social inter course and entertainment. This European

pattern of drinking was accompanied by a change in attitude towards alcohol, which

came to be regarded more positively.


2.2 TYPES OF ALCOHOLIC BEVERAGES

Because India has great variety in topography, climate, vegetation, culture, and traditions,

it is unsurprising that hundreds of kinds of alcoholic beverages are made and consumed.

All of them however, can be grouped into the following for broad categories.

Indian Made Foreign Liquor

This category, created for revenue purposes, consists in Western style distilled

beverages such as whiskey, rum, gin, vodka and brandy. These are made in India under

government licenses and the maximum alcohol content allowed is 42.8%. Whiskey is by

far the most popular drink in this category, with hundreds of brands available, at least 20

of which have an all India presence. Several dozen brands of rum, gin and brandy are also

available. Wines fall under this category of liquor too, although until recently wine

production and consumption in India was almost nonexistent. Some wines are now made

in the country, and small amounts of wine are imported for selected consumers.

Country Liquor

These distilled alcoholic beverages are made from any cheap raw material

available locally, e.g. sugarcane, rice, or coarse grains. Country liquor is produced in

licensed distilleries and sold from authorized outlets within the same district. Common

varieties of country liquor are arrack, desis harab, and toddy. Excise duties are paid, but


since production costs are low, the retail prices are also low. The licensing system and

some governmental monitoring of the production process ensures a uniformity in alcohol

content (around 40%) and basic safe guards against adulteration with other harmful

intoxicants. Northern and western India are sugar producing areas and a large amount of

molasses is available in these states at a very cheap price.

Consequently molasses is the main raw ingredient for country liquor there. In

south India, coconut and other palms are used for the same purpose. In addition,

inexpensive are grains are used for country liquor all over India

Illicit Liquor

Besides lisecensed distilleries, a number of small production units operate

clandestinely. The raw materials they use are similar to those in country liquor, but since

they evade legal quality controls the alcohol concentration in their products varies and

adulteration is frequent. It is common to find samples containing up to 56% alcohol. One

dangerous adulterant is industrial methylated spirit, which occasionally causes mass

poisoning of consumers who lose their lives or suffer irreversible eye damage. Since no

government revenues are paid, illicit liquor is considerably less expensive than licensed

country liquor, and thus finds a ready market among poor. In many parts of India illicit

liquor production and marketing is like a cottage industry, with every village having one

or two illegal operations. In addition to the commercial production of illicit liquor, home

production for personal consumption also is common in some parts of the country.

Beer

Beer is relatively recent arrival in India, which remains largely a spirits-consuming

society. However, beer production and consumption have grown rapidly. Indian beer is

manufactured in large licensed breweries and is available under more than 60 brand

names whose alcohol content ranges from 5% to 9%. Beer is available mostly in bottles,

but cans have been introduced recently. Since for the same amount of alcohol the price of


beer is much higher than distilled liquor, beer is a drink for the middle and upper

economic classes. Beer also becomes a favorite beverage of the urban young.

2.3 TOP COMPANIES

Andhra Pradesh Beverages Corporation Limited

The Andhra Pradesh Beverages Corporation Limited (APBCL) was established in

the year 1986 as a fully owned undertaking of the Government, with the main objective

of supplying pure and hygienic packed arrack to the consumers and is incorporated under

Companies Act, 1956. The Corporation had set up 22 field units for carrying arrack

operations at various districts.

Karnataka State Beverages Corporation Limited

Karnataka State Beverages Corporation Limited (KSBCL) is a Government of

Karnataka undertaking registered under the Companies Act, 1956 in the year 2003.

Pursuant to Government of Karnataka notification No.FD 16 PES 2003 (viii) dated

30.06.2003; the Corporation is a distributor licensee under Karnataka Excise (Sale of

Indian & Foreign Liquor) Rules, 1968 in the State of Karnataka. The core activities of the

Corporation are to procure liquor and spirit from manufacturers/suppliers and sell the

same to wholesalers/licensees. The scope of activities extends to cover all initiatives,

steps and activities that are incidental and ancillary to carry out the core activities.


In accordance with its Articles of Association, the Corporation is managed by a Board of

Directors constituted by the Govt. of Karnataka from time to time. The Principal

Secretary, Finance Department is the Chairman and the other Board members are

appointed from amongst senior IAS officers. The Managing Director is vested with

substantial administrative and managerial powers. The Government has also appointed

two Executive Directors in the Corporation.

Rajasthan State Beverages Corporation Limited

Rajasthan State Beverages Corporation Limited (Company) was incorporated

(February 2005), in wake of the Excise Policy of Rajasthan for the financial year 2005-

06, with the main objective to carry on business as manufacturer, producer, processor,

grower, trader, buyer, retailer, wholesale supplier of rectified spirit, all kinds of alcohol

and other spirits suitable for industrial use. The Company was provided with exclusive

rights for sourcing and pricing of Indian made foreign liquor (IMFL) and beer in the

state. The purpose was to make available proper quality and quantity of liquor to the

consumers at a uniform rate throughout the state and to remove middlemen between

manufacturers/suppliers and retailers so that the state could avoid revenue leakage.

The Company framed (March 2006) a Liquor Sourcing and Pricing Policy (LSP) under

the Excise Act for carrying out its commercial activities. The Company operates its

business activities through 39 depots in the State of Rajasthan.

All depots have been equipped with IT infrastructure for performing their

commercial functions. The manufacturers, both within and outside the state, keep their

stocks in the Company’s depots for distribution to the retail licensees for which the

Company collects two per cent margin on the landed cost of IMFL/beer sold from these


depots. The turnover of the Company was Rs. 734 crores and Rs. 1003 crores in the years

2005-06 and 2006-07 respectively.

2.4 ALCOHOL CONSUMPTION IN INDIA

Alcohol consumption has been steadily increasing in developing countries like

India and decreasing in developed countries since the 1980s. The pattern of drinking to

intoxication is more prevalent in developing countries indicating higher levels of risk due

to drinking. 62.5 million alcohol users estimated in India Per capita consumption of

alcohol increased by 106.7% over the 15-year period from 1970 to 1996. Due to its large

population, India has been identified as the potentially third largest market for alcoholic

beverages in the world which has attracted the attention of multinational liquor

companies.

Sale of alcohol has been growing steadily at 6% and is estimated to grow at the

rate of 8% per year. About 80% of alcohol consumption is in the form of hard liquor or

distilled spirits showing that the majority drink beverages with a high concentration of

alcohol. Branded liquor accounts for about 40% of alcohol consumption while the rest is

in the form of country liquor. People drink at an earlier age than previously . The mean

age of initiation of alcohol use has decreased from 23.36 years in 1950 to 1960 to 19.45

years in 1980 to 1990. India has a large proportion of lifetime abstainers (89.6%). The

female population is largely abstinent with 98.4% as lifetime abstainers. This makes India

an attractive business proposition for the liquor industry.

Changing social norms, urbanization, increased availability, high intensity mass

marketing and relaxation of overseas trade rules along with poor level of awareness

related to alcohol has contributed to increased alcohol use. Taxes generated from alcohol

production and sale is the major source of revenue in most states (Rs.25, 000 crores) and

has been cited as a reason for permitting alcohol sale. Four states - Gujarat, Mizoram,


Manipur and Nagaland - have enforced prohibition. Profile of clients in addiction

treatment centers in 23 states (including states with prohibition) showed that alcohol was

the first or second major drug of abuse in all except one state.

The Real Cost of Alcohol

Large amount of revenue is generated from sale of alcohol. Yet, the hidden,

cumulative costs of health care, absenteeism and reduced income levels related to heavy

alcohol use are higher. These costs were estimated to be 60% more than the revenue

generated in a study.

Health And Safety

Trauma, violence, organ system damage, various cancers, unsafe sexual practices,

premature death and poor nutritional status of families with heavy drinking fathers are

associated with alcohol use. Hazardous drinking was significantly associated with severe

health problems such as head injuries and hospitalizations. 15 to 20% of traumatic brain

injuries were related to alcohol use. Thirty seven percent of injuries in a public hospital

were due to alcohol. Seventeen point six percent of psychiatric emergencies were caused

by alcohol Thirty four percent of those who attempted suicide were abusing alcohol

Work Place

Twenty percent of absenteeism and 40% of accidents at work place are related to

Alcohol. Annual loss due to alcohol was estimated to be Rs.70 000 to 80 000 million In a

public enterprise, number of workplace accidents reduced to lesser then one fourth of the

previous levels after alcoholism treatment.


Family

Eighty five percent of men who were violent towards their wives were frequent or

daily users of alcohol. An assessment showed that domestic violence reduced to one

tenth of previous levels after alcoholism treatment. 3 to 45 % of household expenditure is

spent on alcohol. Use of alcohol increases indebtedness and reduces the ability to pay for

food and education. Alcohol abuse leads to separations and divorces and causes

emotional hardship to the family. The emotional trauma cannot be translated in terms of

mo n e y but the impact it has on quality of lives is significant.

2.5 GLOBAL ALCOHOL/BEER INDUSTRY OVERVIEW

The US beer, wine, and liquor store industry includes about 30,000 stores with

combined annual revenue of about $30 billion. No major companies dominate; individual

states have different laws regulating liquor stores, complicating the ability to form

national chains. The industry is highly fragmented: the top 50 companies account for less

than 20 percent of sales.

Competitive Landscape

Personal income, consumer tastes and entertainment trends drive demand. The

profitability of individual companies depends on effective marketing and competitive

pricing. Large companies offer wide selections and deep discounts, but small companies

compete by offering specialized merchandise, providing superior customer service, or

serving a local market. The industry is labor-intensive: average annual revenue per

worker is about $200,000.

Liquor stores compete directly with grocery stores, warehouse clubs, convenience

stores, and gas stations, and indirectly with restaurants, bars, and other establishments

that serve alcohol.


Products, Operations & Technology

Major products include distilled spirits, beer, and wine. Spirits or liquors account

for almost 40 percent of sales, beer for 30 percent, and wine for 25 percent; Liquor (or

hard liquor) includes gin, vodka, rum, whiskey, brandy, and liqueurs. State laws dictate

the type of alcohol sold in a particular venue. In some states, only liquor stores can sell

hard liquor.

Liquor stores may also be known as “package stores,” referring to the post-

Prohibition law requiring stores to cover or “package” alcoholic beverages in public.

Each state has an alcohol control agency, and state laws regulate the sale of alcohol,

including specifying what types of retailers may sell alcohol, and limiting days and hours

of operation. Most states are open or license states, and allow private ownership of

retailers. In control states, the state government controls liquor distribution, and may

operate retail liquor outlets. State-run liquor stores may be referred to as ABC (Alcoholic

Beverage Control) stores.


CHAPTER - 3

COMPANY PROFILE

3.1 HISTORY OF KSBC


The judicial commission of inquiry appointed by the Government to

streamline the liquor trade in the state recommends:

(1) To provide genuine liquor at reasonable price, through Government agencies.

(2) Exploitation through increased taxation and exploitation by middleman should be

stopped and consumer protection must be the guiding policy.

For achieving the above, nationalization of entire liquor trade was

suggested.In line with the suggestion the Government decided to set up a Public Sector

Corporation to procure spirit and arrange blending, bottling, sealing and distribution of

arrack and also for dealing with the sale of IMFL. An amendment was made in the

Abkari Act in 1984 to give effect to the same

KSBC was formed on 23.2.1984 to take over the wholesale distribution of

liquor in a phased manner and to eventually set up distilleries and blending units to

produce spirit, arrack and IMFL. Since then the distribution of liquor has been brought

under the control of the Corporation. By a decision in 2001 the majority of the retail

outlets also have been entrusted to the Corporation. As at present the whole activity of

IMFL from procurement to distribution and sale to the consumer is controlled by the

Corporation except for loose vending of liquor by Bars / Clubs and a small portion of the

retails by Consumer Federation

COMPANY DETAILS

UNITS

The Head Office of the Beverages Corporation is situated in Sasthakripa Office

Complex, Sasthamangalam, Thiruvananthapuram. There are 18 Warehouses in different

Districts and 337 FL1 shops under the Corporation.

TABLE 3.1

Name and address of KSBC warehouses


Name Place

Alappuzha Kommady

Aluva Choondy

Attingal Near ITI

Chalakudy Chalakudy

Kannur Thavakkara

Kollam Karikode

Kottayam Ayarkunnam

Kottarakkara Kottarakkara

Kozhikode Vellayil

Nedumangad Pazhakutti

Palakkad Coimbatore Rd

Pathanamthitta Kodumthara

Perinthalmanna Angadipuram

Trippunithura Pettah

Thiruvalla Valanjavattom

Thodupuzha Olamattom

Vengola Perumbavoor

Thrissur Kuriachira

EMPLOYEES


TABLE 3.2

Number of employees working in KSBC

Permanent staffs

Deputation

Daily wages

Labeling workers

Abkari workers

Arrack workers

232

1104

209

46

952

233

MIDDLE LEVEL OFFICERS

Regional Managers

3 Regional Managers placed in South, Central & North having supervisory

control over the Warehouses and Shops under their respective Regions.

Managers

One each placed in 18 Warehouses. The Managers are in charge of the wholesale

business activity of the Warehouses and supervision of the retail business of the KSBC

337 outlets, with the assistance of Assistant Managers / Accountants.

Line Officers


Assistant Grade Employees placed in Head Office, Warehouses and Shops are

assisting the middle level and Senior Officers.

Helpers and Abkari Workers

Placed as supporting staff in the shops to attend the counter, in the warehouses for

attending the supportive work and in Head Office for assisting Staff and Officers.

Labeling Workers

Placed in the Warehouses for attending to labeling of liquor bottles.

Internal audit and Vigilance department.

After the takeover of the Retail Trade, the Internal Audit Department of the

Corporation based at Head Office was strengthened by setting up 14 District Audit teams

with total staff strength of 52. In addition to this, the Audit team and Vigilance teams also

conducts enquiries in to customer and the complaints.

MANPOWER IN FL-1 SHOP


The overall staff strength has increased from 350 in 2000-01 to around 2700 after the

takeover of the retail shop. The staff in each retail shop comprises the following.

Table 3.3

Manpower In FL-1 Shop

Shop-in-charge 1

Shop Assistant 1

Billing Machine operator/Cashier 1

Helpers 4

Total 7

OBJECTIVES OF BOARD

To provide genuine quality liquor to consumers at reasonable prices.

To make available supplies of liquor commensurate to demand.

To evolve a proper system to prevent misuse, distribution of spurious liquor

through unauthorized sources and evasion of duties and taxes by middlemen.

Consumer protection and satisfaction.

Safeguarding of governments interests.

3.4 PRODUCT PROFILE OF KSBC

KSBC deals with the whole sale distribution of liquor which involves:

IMFL

Beer

IMFL involves Brandy, Whisky, Rum, Gin, Wine, Vodka. Some of the brands which

comes under IMFL and BEER are


Brandy

Tifani’s xo brandy

VSOP premier EXCL

Elcanso prem fre GPE BDY

French BSOP brandy

Mc Caesar genuine GRP Brandy

Whiskey

Bagpiper DLX whiskey

Amrut prestige BLND MLT W

Mc dowel’s no.1 res WKY

Bag piper gold prem whiskey.

Black and white choice OS whiskey

Rum

Hercules SPL res 3X MTD R

White rum

Amazon matured white rum

Mc dowell old cash white rum

Tickling white rum

Mc dowels no.1 white rum

Hecules white rum

Bacardi classic superi rum

Gin

High birds lem flav Dr GI

MCD prem blue riband

Wine

Port wine no.7

Vinko de Goa PRM port] wine

Zinzi red wine]


Vodka

Arizona apple vodka

Red sun vodka

Muscovy fini vodka

Smirnoff vodka

Johars Krystal vodka

Romanov red vodka

Prem power orange vodka

Beer

Foster’s export PRM lager

Kingfisher strong

Kingfisher Premium


CHAPTER 4

ORGANISATIONAL STRUCTURE


INTRODUCTION:

An organizational structure is a mainly hierarchal concept of

subordination of entities that collaborate and contribute to serve one

common aim. It is a frame work within which the manager’s decision

making behavior takes place. Organizations are a variant of clustered entities

An organization can be structured in many different ways and styles,

depending on their objectives and ambience. The structure of an

organization will determine the modes in which it operates and performs.

4.1 ROLE OF ORGANISATION STRUCTURE:

Organizational structure allows the expressed allocation of

responsibilities for different functions and processes to different entities such

as the branch, department, workgroup and individual. It can be viewed as

established pattern of relationships among the components of the

organization. An organizational structure is capable of serving many

functions at the same time but cannot serve all functions equally well over


unlimited time. It is important for managers to determine the outcomes

desired from organization structure, and to match the organization with

changing needs. While talking about KSBC its structures starts with board of

directors followed by managing director, general managers and so on

The Managing Director controls the Beverages Corporation, Thiruvananthapuram.

He is the chief executive officer.

Appointment of Managing director

The governor may appoint any one of the directors to the managing director on such terms and for such period as he may think fit for the conduct management of the business of the company subject to the control and supervision of the board of directors

Hierarchy of the Organisation Structure

Under managing director there is Company Secretary, Internal Auditor,

Finance Manager, and General manager who are Senior Executives. The

middle level Officers are the Managers and the Assistant

Managers/Accountants. The lower level consists of staff and workers.

BOARD


Board of Directors

Chairman

Board of directors is the supreme authority and exercises all the powers and

all policy matters of the corporation are taken by them.

COMPANY SECRETARY

The responsibility of secretary is to conduct legal and Courts, Company

meetings and secretarial aspects as per company law.

FINANCE MANAGER

Finance Manager is responsible to pay all the statutory requirements

like. Finance manager has the overall control of this department

GENERAL MANAGER

He is in charge of Aministration& full additional charges of company

secretary. He is in charge of Administration of establishment and

personnel,labour,industrial relations EDP etc

ORGANISATION STRUCTURE OF KSBC


CHART 3.1 ORGANISATION CHART


CHAPTER- 5

DEPARTMENTALIZATION

4.1 FUNCTIONAL AREAS


KSBC is comprised of different functional areas and they can be classified into:

FINANCE DEPARTMENT

PURCHASE DEPARTMENT

SALES DEPARTMENT

PERMIT DEPARTMENT

EDP SECTION

AUDIT DEPARTMENT

SECRETERIAL SECTION

WARE HOUSES

FINANCE DEPARTMENT


Finance manager

Purchase Sales Cash Permit

Accounts officer

Accounts manager

Accountants

Staff

Finance department is responsible to pay all the statutory requirements like sales

tax, income tax, etc. Its main function is to pay all the taxes at appropriate time.Finance

department includes:-

Purchase

Sales

Cash

Permit

The structure of Finance Department is shown below:

CHART 4.1: FINANCE DEPARTMENT


The Financial department makes the plan annually. The tax policies of IMFL-

100% and Beer- 60%. The department is computerized with and the software is

Tally.Every shops and warehouses have insurance coverage.

The Organization is financially sound and it faces no risk as the payment is made

immediately in cash. The transactions are recorded in the books of accounts.That is all

transaction are generally entered in the journal and put into different ledger accounts like

cash account, bank account, sales account etc. The major banks associated with KSBC

are

1. State Bank of Travancore

2. Canara Bank

3. State Bank of India

4. Indian Bank

5. Syndicate Bank

6. Centurion Bank

7. Vijaya Bank

8. Dena Bank

9. Union Bank of India

10. Punjab National Bank

Finance manager has the overall control of this department. The main functions of

accounts department are:


1. Receipt and payment of bills

2. Maintaining books of accounts

3. Meet the statutory requirements such as

Sales tax

Income tax

Vending fee

Excise duty

Kist charge

Activities of the finance department includes:-

Review funds, Disburse funds, Account Finalize to Present Audited

Figures.

To arrange for Imprested cash in all the units.

Remit funds from Head office to treasury.

Collect Expense Details, Pass Sheets, Bank reconciliation, Vouchers etc.

Daily Sales unit wise verification.

Process goods received and to arrive voluminous payments to Suppliers.

To handle tax matters and to Comply with Others

Preparation of monthly Trail balance and Balance sheet

Preparation of Annul accounts

MIS Reports , Reports to Financial Institutions ,banks, etc.

Budget and Budgetary control

Capital sanctions, maintenance of fixed asset registers ,periodical

verification of asset , provision for depreciation etc.

Arranging insurance for Fixed assets, current assets, money in transit,

fidelity etc.

Liaison with Statutory Auditor, Government Auditors and Tax

Auditors(I.T)


Processing, settlement and accounting of Miscellaneous bills and

personal claims, including travel claims

Any other matters assigned to the group by the Department head

PURCHASE DEPARTMENT

Purchase of Indian Made Foreign Liquor and BEER are based on the average monthly sales of the respective supplier. The average is of the previous three month sales. The


MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

average monthly sales are reviewed every month and a re-order quantity (ROQ) based on the requirement is placed. The ROQ is normally 30 days, 40 days, 45 days requirement as the case may be. When the stock plus the order pending execution falls below the ROQ, the shortfall is replenished on a daily basis. The day to day management of the purchases is by a committee consisting of Senior Officers and Middle Level Officers under the Managing Director.

The structure of is shown below:

CHART 4.2 : PURCHASE DEPARTMENT

Key Functions:

Verification of purchase requisition

Sending enquiries and getting quotation

Preparing comparisons and negotiation with the suppliers

Proposing order for approval and releasing the same

Follow up for material

Material clearance

Rejection of return and replacement

Payment to suppliers and final settlements


Purchase Procedure:

Invitation of Offer

Every year, the Corporation invites offers from prospective Indian Made Foreign

Liquor/BEER suppliers situated throughout the country by inviting tenders for entering

into rate contract for sales and supply of “Indian Made Foreign Liquor” /BEER for the

ensuing financial year (April to March). This is being done as per directions of the

government. From Financial Year 2001-2002 the offer was extended for supply of

“Foreign Made Foreign Liquor” also.

The invitation to offer is advertised positively by February/every year in

important newspapers. Notices are also sent individually to the existing suppliers in this

regard. The offer document stipulate the conditions for supply, the quality specifications,

payment terms, general conditions to be complied etc. The offerors have also to submit

an earnest money deposit of Rs.10 lakhs each for FMFL / IMFL / Beer for a value of

business upto 15000 cases and shall progressively increase by Rs.1 lakhs upto addition of

every 15000 cases transacted.

Security Deposit for Suppliers

The maximum Security Deposit is Rs.75 lakhs. For exclusive Wine suppliers the EMD is

Rs.50,000 and for value of business of Wine above 550 cases and upto 1100 cases,

Security Deposit will be Rs.1 lakh and shall progressively increase by Rs.25,000 for

every additional sale of 550 cases of Wine. The maximum Security Deposit will be Rs.3

lakhs.


The documents received within the stipulated date are tabulated and presented to

the Board of Directors. Suppliers who satisfy the conditions stipulated for supply are

accepted by the Board. The rate contract agreement for supply of liquor is not a

competitive tender. Each supplier has definite approved brands.

Only the approved supplier who owns the brand can supply the respective

brands to the Corporation Eg. Mc Dowelll brandy can only be supplied by Mc Dowell &

Co. Ltd., Hercules Rum by M/S Khoday Industries and King Fisher by Premier

Breweries Ltd. Therefore the choice of the Corporation is to accept the rate offered or to

decide not to purchase the brand. As per the provision in the rate contract agreed the

Board of Directors of the Corporation is empowered to fix the supply prices.

Supply price Fixation

Accordingly the Board of Directors fixes the supply prices at the time of

finalization of the rate contract agreement, which will be FIRM during the rate contract

period. The Corporation has however fixed a minimum price of Rs.235/- for a case of

“Indian Made Foreign Liquor”.

This is done on consideration of cost analysis of various elements that constitute

cost and thereby the minimum price at which supply could be made is arrived at. The

quality of Foreign Made Foreign Liquor and Indian Made Foreign Liquor and BEER

supplied confirm to the standards indicated in the offer condition. This has been fixed in

consultation with the Chief Chemical Examiner to the Government of Kerala.

Certification and Chemical Examination

The Chemical Examination Certificate has been used in production (in case of

Indian Made Foreign Liquor) is to be sent to the Corporation against dispatch of each


batch of Indian Made Foreign Liquor/Beer. For Indian Made Foreign Liquor such

Chemical Certificates should be duly authenticated by the Chief Chemical

Examiner/Authority recognized by the State and ENA Certificate by the Chief Executive

of the distillery authenticated by Excise Authority. Chemical Examination Certificates of

Beer should be authenticated by the Chemist/Brew. Master of the Brewery and duly

authenticated by Excise authority of the Brewery.

The Corporation also reserves the right to periodically subject the samples for

Chemical Examination/Verification of standards and the Expenses incurred by the

Corporation for such Chemical Examination/Verification will have to be borne by the

supplier. These stipulations are strictly adhered to.

Replacement/Replenishment basis of Purchase

Government have issued guidelines vide G.O.No.24112/DL/85/TD dated

28.10.1985 to place orders “by and large only on replacement/replenishment basis”.

Accordingly purchase of Indian Made Foreign Liquor and BEER are based on the

average monthly sales of the respective supplier. The average is of the previous three

month sales. The average monthly sales are reviewed every month and a re-order quantity

(ROQ) based on the requirement is placed. The ROQ is normally 30 days, 40 days, 45

days requirement as the case may be. When the stock plus the order pending execution

falls below the ROQ, the shortfall is replenished on a daily basis.

The arrangement to replenish stock could be applied only if a supplier has an

average monthly sales. Unless an order is given to companies who quote for the first time

there cannot be an average monthly sales for the respective supplier and consequently the


norm cannot be implemented. It is to ensure this the initial order of a few loads are given

for new suppliers at the commencement of the financial year. In order to ensure

uniformity in placing purchase orders at the commencement of the year all the companies

are uniformly given initial orders. Thereafter from the next fortnight onwards, orders as

per formula indicated above is being given.

Special Orders

Special orders are also placed on trade discount basis to the supplies depending

upon the requirement. That is if a company offers a trade discount of 10% for IMFL and

5% for Beer, special orders are placed to the extent of a maximum of two loads when the

stock is nil or meager.

Purchase committee

A Purchase Committee consisting of the Company Secretary, Internal Auditor,

Finance Manager, Administrative Officer, Regional Manager and Senior Manager

reviews the procedure above. Recommendations of the Committee are placed before MD,

who gives final orders for placement of purchase orders. The orders so placed are

subsequently ratified by the Board of Director.

TABLE 4.1

LIST OF SUPPLIERS


SLNO.NAME OF SUPLIER STATE

1 Adarsh Winery Karnataka

2 Alcobrew Distilleries India Private Limited Punjab

3 Amrut Distilleries Ltd Bangalore

4 Amrut Distilleries Ltd, Palakkad Kerala

5 Arthos Brewewries Limited Tamil nadu

6 Bacardi Martini India Ltd Karnataka

7 Basantdar Bottlers Jammu & Kashmir

8 Brindco Sales Ltd New delhi

9 Carls Berg india private Ltd Maharashtra

10 Cassanova Distilleries Pvt Ltd Karnataka

11 Chamundi Winery & Distillery Karnataka

12 Deekey Exports Ltd Pondichery

13 Diageo India Pvt Ltd Madhya Pradesh

14 Diageo India Pvt Ltd Maharashtra

15 Diageo India Pvt Ltd(FMFL) Maharashtra

16 Elite Distilleries and Breweries co, Thrissur Kerala

17 Elite Distilleries Pvt Ltd Tamil nadu

18 Empee Distilleries Ltd Kerala

19 Empee Distilleries, Chennai Tamil nadu

20 Globus Spirits Ltd New delhi

21 Grover Vineyards Karnataka

22 Hampi Heritage Wineyards Pvt. Ltd Karnataka

23 Heritage Grape Winery Karnataka

24 Imperial Spirits Ltd Karnataka

25 India Glycols Gorakhpur

26 India glycols Uttarkhand

27 Indo Scotish Brand Pvt Ltd Kerala

28 Jagatjit Industries Ltd Punjab

29 John Distilleries Ltd, Goa Goa

30 John Distilleries Ltd, Goa (Wine) Goa


31 K.S . Distilleries Kerala

32 Kals distillery Pvt Ltd Tamil nadu

33 Karnak Distilleries Assam

34 Kaycee Distilleries Kerala

35 Kerala Alcoholic Products Ltd Kerala

36 Kesar Enterprises ltd Uttar Pradesh

37 Khoday Breweries Ltd(IMFL) Karnataka

38 Khoday Breweries Ltd(Wine) Karnataka

39 Leela Distilleries Goa

40 Malabar Breweries ( Unit of Skol Breweries) Kerala

41 Mohan Breweries and Distilleries Ltd(IMFL) Tamil nadu

42 Mohan Breweries and Distilleries Ltd(WINE) Tamil nadu

43 Mysore Breweries Ltd Karnataka

44 Nashik Vinters Maharashtra

45 National Industries Corporation Ltd Goa

46 Naveen Distilleries Goa

47 Netravati Distilleries Karnataka

48 Nita Industries Goa

49 Normandy Breweries & Distilleries Pvt Ltd Kerala

50 Ojas Industries Pvt Ltd Rajasthan

51 Overseas Beverages Pvt Ltd Goa

52 Polsons Distillery Pvt Ltd Kerala

53 Potrivit Distilleries Goa

54 Prathamesh Wines Pvt Ltd Maharashtra

55 Radico khaithan Ltd, Andhra Pradesh

56 Radico khaithan Ltd, Rajasthan

57 Radico khaithan Ltd,Rampur New delhi

58 Radico khaithan Ltd,baspur Uttar Pradesh

59 Saraya Distillery Uttar Pradesh

60 SDF Industries Kerala

61 Sevenseas Distilleries Ltd Kerala

62 Simbholi Sugars Ltd New delhi


63 Skol Breweries Ltd, (units of pals) Maharashtra

64 Skol Breweries Ltd( units of sica) Pondichery

65 SNJ Distilleries Pvt Ltd Tamil nadu

66 South Travancore Distilleries and Allied products Kerala

67 Southern Agrifurane Industries Private Ltd, Chennai Tamil nadu

68 Sovereign Distilleries Karnataka

69 Spring field India Distilleries, Goa Goa

70 Subhash Distilleries Pvt Ltd Maharashtra

71 The Devicolam Distilleries Ltd Kerala

72 Tilak Nagar Industries Ltd Maharashtra

73 TSCL Kerala

74 Ugar Sugar Works Karnataka

75 United Breweries Ltd, Bangalore Karnataka

76 United Breweries Ltd, Bombay Maharashtra

77 United Breweries Ltd Kerala

78 United Breweries Ltd, Goa Goa

79 United Breweries Ltd, Mangalore Karnataka

80 United Breweries Ltd, Palakkad Kerala

81 United Breweries Ltd, Calicut Kerala

82 United Spirits Limited Karnataka

83 United Spirits Limited, Cherthala Kerala

84 United Spirits Limited, Kumbalgode Karnataka

85 United Spirits Limited, Nashik Maharashtra

86 United Spirits Limited, Palakkad Kerala

87 Vinbros & Co, (IMFL) Pondichery

88 Vinbros & Co, Pudussery, Pondichery (Wine) Pondichery

89 Vinsura Wine Pvt Ltd Maharashtra

90 Vintage Wines Pvt Ltd Maharashtra

Details of purchases affected till date is given below.

TABLE 4.2


PURCHASE DETAILS

YEAR IMFL BEER NET VALUE1984-85 10.82 5.51 32.791985-86 9.78 4.02 35.681986-87 11.82 4.43 40.871987-88 12.49 5.49 41.821988-89 10.36 2.93 24.341989-90 14.59 5.19 38.621990-91 16.02 10.11 59.031991-92 17.67 13.30 73.991992-93 18.84 14.95 84.501993-94 22.76 19.12 102.281994-95 26.38 26.91 135.031995-96 31.74 31.34 166.031996-97 31.96 32.36 146.381997-98 59.78 28.07 256.691998-99 62.92 27.28 270.801999-00 64.52 25.55 290.132000-01 72.19 28.93 293.652001-02 89.42 31.15 338.762002-03 99.62 35.24 347.952003-04 109.63 34.04 396.172004-05 110.98 38.92 465.042005-06 110.69 41.86 524.322006-07 129.56 48.21 605.482007-08 148.81 60.68 664.562008-09 174.87 70.22 855.582009-10 187.42 83.06

SALES DEPARTMENT

Sales are affected from the Warehouses and FL-1 Shops. Licensees through

Consumer fed and Bars authorized to Purchase approach the Corporation’s Warehouses

for purchases. The amount payable is first remitted into the respective bank accounts of

the Corporation and only after receipt of the remitted challans for the value thereof the


MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

goods are released to the purchasers. For the requirements of the Corporation’s FL-1

Shops goods are just transferred.

The structure is shown below:

CHART 4.3 : SALES DEPARTMENT

The Sales department consists of a Sales Manager who has to control the whole sales

wing and there is an Assistant manager to give necessary support and reduce the work

load of Sales manager under them a group of clerical staff to perform the task

From the FL-1 shops, goods are sold in bottles to consumers direct on cash basis. Details of sales made till date is given below.

TABLE 4.3

SALES DETAILS

YEAR IMFL BEERNET SALES

VALUE GROSS SALES

VALUE1984-85 9.34 5.05 43.51 55.461985-86 9.98 3.63 50.42 67.121986-87 12.09 4.78 60.86 81.541987-88 12.56 5.16 58.93 81.421988-89 9.99 3.07 47.11 82.42


1989-90 14.66 5.24 67.12 117.411990-91 15.43 9.53 89.93 142.331991-92 16.36 13.09 113.93 124.671992-93 18.22 14.53 139.33 208.021993-94 23.79 19.03 168.03 287.151994-95 24.61 26.79 207.95 353.911995-96 32.52 32.15 280.56 477.601996-97 32.42 30.85 441.04 762.931997-98 57.25 27.93 580.58 1000.831998-99 62.92 27.28 644.27 1112.231999-00 64.34 25.17 676.20 1184.652000-01 72.19 28.93 732.96 1337.582001-02 92.02 28.66 818.66 1694.822002-03 97.08 33.86 977.51 1847.402003-04 105.98 39.45 1105.96 2071.262004-05 108.92 37.98 1237.40 2320.152005-06 109.47 40.19 1406.93 2635.812006-07 132.65 50.05 1679.56 3145.292007-08 148.01 58.62 1961.96 3669.142008-09 171.17 70.60 2485.65 4631.002009-10 188.03 85.19 2974.07 5538.90

CONTRIBUTION TO STATE EXCHEQUER

The following were the amounts contributed to the State Exchequer during previous

twenty one completed years by way of Sales Tax, Excise Duty, Vending Fee, and License

Fee etc.

TABLE 4.4

CONTRIBUTION TO GOVERNMENT

YEAR CONTRIBUTION TO STATE EXCHEQUER1984-85 25.63


1985-86 30.861986-87 40.061987-88 40.741988-89 57.351989-90 78.331990-91 92.071991-92 112.591992-93 133.001993-94 179.721994-95 215.581995-96 315.511996-97 611.191997-98 753.481998-99 847.561999-00 903.562000-01 1025.932001-02 1310.172002-03 1468.162003-04 1622.302004-05 1824.042005-06 2055.712006-07 2424.492007-08 2914.102008-09 3621.152009-10 4259.80

SECRETERIAL SECTION

The Secretarial Section consists of Company Secretary as Head of the department

who is the Reporting Officer to the Managing Director regarding the matters concerned


with this department. He also interacts with the third party on behalf of the corporation

for the settlement of the issues or legal problems.

The Company Secretary is assisted by an Assistant Secretary who has the power

in his Absence. After taking over the Retail trade the Internal Audit Departemnt of the

Corporation based at Head Office was strengthened by setting up 14 district Audit teams

and Vigilance teams with a total staff strength of 52 in the Head office.

Functions:

Legal matters

Board meetings

Company law matters

Insurance general and vehicles

Rent payment of ware houses

Other matters regarding the opening of warehouses

Taking over of buildings

Additional space license agreements

Details pertaining to the fl1 shops

Opening of new shops

Authorization of the shops

Renewal of license of shops

Sanction for renewal of lease of fl1 shops

Sanction for increase in rent

Taking over of new buildings or additional space in respect of fl1 shops

Files relating to the vehicles of KSBC and its repair maintenance.

Rent relating to the head office and other accommodation works

Medical claims of staffs in this section


COMPANY SECRATARY

ASSISTANT SECRATARY

CLERKS

COMPUTER OPERATOR

Work relating to wages, overtime allowance of drivers and daily wages of staffs

in the secretarial section

Matters relating to labeling work in the warehouses.

ORGANISATION STRUCTURE OF SECRETERIAL DEPARTMENT

CHART 4.4 : SECRATARIAL DEPARTMENT

Internal Audit and Vigilance Department

The Internal Audit of the Corporation is based at Head Office and has a staff strength of 82 comprising of a Head Office Audit Team and 18 Warehouse Audit teams. In addition


PEON

Internal Auditor

Assistant Internal Auditor

Assistant Internal Auditor

Permit StaffAuditors

Peon/Sweepers

to frequent inspections, the Audit team and Vigilance teams also conducts enquires into customer and the complaints. The Audit teams annually conduct about 3000 inspections.

Functions

Verification and monitoring of fund inflow and outflow

Breach of trust, fraud , pilferage

Around 4000 inspection staff required every year

District audit teams for fl1 shops

Audit teams changes every year

STRUCTURE OF AUDIT DEPARTMENT

CHART 4.5 : AUDIT DEPARTMENT

WARE HOUSES


There are 18 Ware houses, which are set up in various district where the liquor

supplied in cases by the suppliers are accumulated and distributed to the FL1 shops and

bars according to the order received.

CHART 4.6 : WAREHOUSES

ADMINISTRATION DEPARTMENT


MANAGER

ASST MANAGER

ACCOUNTANT

ASSISTANT

LABELLING WORKERS

SWEEEPERSHELPERS

In KSBCadministrative department has much importance. The functions included in this

department are

Recruitment

Selection

Training

Wages and Salary administration

The administrative department as per the report coming from the concerned departments

controls the attendance, salary, disciplinary actions

Increase in Staff Strength from 2617 from 339 which include Deputation, Daily Wages

and Abkari workers

Functions:

Recruitment

The staff members are mainly selected through written tests conducted by the

government and interviews are also conducted

Training

On-Job-Training is given to employees

Promotions

Promotions are given on basis of their seniority skills ad ability

Wages and Salaries

Wages and Salaries are on the basis of basic pay, DA, HRA etc

Leave

Leave facility is provided to the employees. There are three types of leave.

Sick leave

Casual leave

Maternity leave

Recreation facilities


Recreation facility club is provided to employees by KSBC

Labor Union

The staff unions consist of AITUC INTUC and CITUC

Administration is Centralized.

Matters from Appointment till Retirement of a Staff is handled here..

There is reporting officer and reviewing officer for the performance appraisal.

Salary, Verification of Medical Reimbursement, TA etc

Interactions by correspondence and otherwise with statutory bodies viz LIC, PSC,

Govt Dept, Abkari Welfare Fund.

Purchase of stationery.

Legislative Assembly Interpellations.

Interactions with Secretariat

Other matters related to general administration of the corporation.

Two Additional Posts of Managers are suggested effectively for controlling the

establishment and disciplinary matters of 2617 employees.

To cope up with the increase in work load, 12 posts of Assistants are Proposed.

One Assistant Manager for every 5 Assistants.


GENERAL MANAGER

REGIONAL MANAGER REGIONAL MANAGERREGIONAL MANAGER MANAGERS

ASSISTANT MANAGERS ASSISTANT MANAGERSASSISTANT MANAGERS

CLERKS CLERKS

COMPUTER OPERATOR

PEON

COMPUTER OPERATOR

PEON

CLERKS

COMPUTER OPERATOR

PEON

STRUCTURE OF ADMINISTRATION DEPARTMENT

CHART 4.7 : ADMINISTARTION DEPARTMENT


MANAGER

ASSISTANT

CLERKS

COMPUTER OPERATOR

PERMIT SECTION

Sales Proceeds from the warehouse are received by the Permit Section for Eligibility.

(Eligibity of Suppliers = Reorder quantity – Stock + Unexecuted Stock ISSUES =

SALES Availing Stock DAILY ORDERS, Current Stock = Opening Stock +

Receipts – Issues, Current Unexecutory = Opening Unexecutory – Receipts + Availed

Quantity) ROQ is the average of Previous 3 months Sales.

Permit helps in acquiring the Goods Requisition and Preparing the PERMIT

Application for Excise DEPT.The Process of filing of Permit Application for the

suppliers with the Excise Dept happens on a DAILY basis.

STRUCTURE OF PERMIT DEPARTMENT

CHART 4.8 : PERMIT DEPARTMENT


EDP SECTION

The EDP or Electronic data Processing Section provides necessary technical

assistance to the other departments mainly the Accounts department and Permit Section.

The Sale Updates from the warehouses are processed in this section with proper technical

support which will make the data in an arranged form so that it can be used for the

Managerial decision making.

Functions

Cross Checking of the Eligibility Details of the Suppliers by taking daily Supply

and Stock reports

Giving Necessary Assistance to the Permit Section and Accounts Section.

Daily report of the Orders.

Generation of summary of performance

Generation of monthly performance report

Generation of annual survey report

STRUCTURE OF EDP SECTON

CHART 4.9 : EDP DEPARTMENT


MANAGER

COMPUTER PROGRAMMER

COMPUTER ASSISTANTS

The most important activity performed in this department is the cross checking of

the Eligibility details given by the Permit Section in accordance with supply Updates

received from the Warehouses.

Daily Reports regarding the Supply and Sales of the liquor from the various

Warehouse are generated with proper GOODS RECEIVED NOTE in the case of supply

and GOODS TRANSFER NOTE in the case of sale of Liquor


CHAPTER - 5

ANALYSIS


SWOT ANALSIS

A scan of the internal and external environment is an important part of the

strategic planning process. Environmental factors internal to the firm usually can be

classified as strengths (S) or weaknesses (W), and those external to the firm can be

classified as opportunities (O) or threats (T). Such an analysis of the strategic

environment is referred to as a SWOT analysis.

The SWOT analysis provides information that is helpful in matching the firm's

resources and capabilities to the competitive environment in which it operates. As such, it

is instrumental in strategy formulation and selection. Sometimes a business does poorly

not because its department lacks the required strengths but because they do not work

together as a team,

A leading consultant suggests that winning companies are those that have achieve

superior in company capabilities, not just core competencies. Every company must

manage some basic processes such as new product development, sales generation and

other fulfillment. Each process creates values and requires inter-departmental team work.

Although each department may posses’ specific core competencies the challenge is to

develop superior competitive capability in managing the company’s key process.


STRENGTH

One of the greatest Strengths of KSBC is its Monopoly in liquor business in the

State.

One of the greatest sources of income to the Government of Kerala

Another important Factor is the never reducing demand for its Product because

increase in the price of the product is not all a threat for the Sale of the Liquor

Supplied by the KSBC.

A pool of very experienced professional managers and workforce

Trust among people due to its age old tradition and govt control.

WEAKNESS

Congested Working environment in the Head Office.

Political Influences in a large scale affects the Industrial Peace leading to the

clashes between various trade unions.

There Staff consists of AITUC, INTUC, and CITUC but they are not united for

the Welfare of the Workers.


OPPORTUNITY

KSBC has taken over Travancore Sugar mills and Planning to take over another

Sick units which will open

THREATS

The main threat is the Product itself which is a harmful one for the health of

people.


PORTER’S FIVE FORCE ANALYSIS


PORTER’S FIVE FORCE ANALYSIS

The model of pure competition implies that risk-adjusted rates of return should be

constant across firms and industries. However, numerous economic studies have affirmed

that different industries can sustain different levels of profitability; part of this difference

is explained by industry structure.

Michael Porter provided a framework that models an industry as being influenced

by five forces. The strategic business manager seeking to develop an edge over rival

firms can use this model to better understand the industry context in which the firm

operates.


Supplier Bargaining Power

The Suppliers bargaining power depends on various factors such as:

Supplier concentration

Importance of volume to supplier

Differentiation of inputs

Impact of inputs on cost or differentiation

Switching costs of firms in the industry

Presence of substitute inputs

Threat of forward integration


Cost relative to total purchases in industry

There is sufficient suppliers concentration in KSBC but they have but they have

no bargaining power because it holds the monopoly trade of liquor in the state.

Buyers Power

The Buyers bargaining power depends on various factors such as:

Bargaining leverage

Buyer volume

Buyer information

Brand identity

Price sensitivity

Threat of backward integration

Product differentiation

Buyer concentration vs. industry

Substitutes available

Buyers' incentives

The prospective buyers are driven by the addiction tendency rather than any other

demand and Supply factors so they are ready to purchase even at higher costs

without bargaining in the case of KSBC.

Barriers To Entry

The Entry of the new firms depends on various factors such as:

Absolute cost advantages

Proprietary learning curve


Access to inputs

Government policy

Economies of scale

Capital requirements

Brand identity

Switching costs

Access to distribution

Expected retaliation

Proprietary products

The Corporation holds the monopoly of liquor trade in the State so there no new

firm can enter into the market.

Threat of Substitutes

Threat of the Substitutes depends on various factors such as:

Switching costs

Buyer inclination to substitute

Price-performance

trade-off of substitutes

The monopolistic feature once again protects KSBC from the Threat of

Substitutes.


CHAPTER – 6

FINDINGS, SUGGESTION

AND CONCLUSION


FINDINGS

1. Unlike other government organizations KSBC’s employees are highly

satisfied with the performance of this organization.

2. But facilities of these warehouses are not up to mark. Computer

facilities, storage capacity of warehouse, etc are not up the standard.

3. The increasing numbers of shops are good for the growth of KSBC.

4. The quality of IMFL and Beer was checked and certificates are issued

by the Chief Chemical Examiner of the state.

5. The arrangement of products in warehouse is based on demand.

6. In most demanded situation the availability of all the brands are poor.

7. The business diversification of KSBC is good for the growth of this

organization.

8. All retail shops keep a definite level of inventory.


SUGGESTIONS

1. Computerize all the warehouses and retail shops of KSBC. This helps them to

lower paper works.

2. Improve infrastructure facilities of warehouses, retail shops and head office.

3. KSBC must implement a WAN (wide area network). This helps them to get

instant information from warehouses and retail shops.

4. In most demanded situation the warehouses must keep a definite amount of safety

inventory.

5. Working ambience can be changed accordingly so that the boredom and feeling of being

monotonous does not exist


CONCLUSION

KSBC was formed to take over the wholesale distribution of liquor in a

phased manner and to eventually set up distilleries and blending units

to produce spirit, arrack and IMFL. Since then the distribution of liquor

has been brought under the control of the Corporation. By a decision in

2001 the majority of the retail outlets also has been entrusted to the

Corporation. As at present the whole activity of IMFL from procurement

to distribution and sale to the consumer is controlled by the

Corporation except for loose vending of liquor by Bars / Clubs and a

small portion of the retails by Consumer Federation.


BIBLIOGRAPHY


BIBLIOGRAPHY

1. Sekaran Uma,(2006), “Research Methods for Business: A Skill Building Approach”, John

Wiley & Sons, Inc., New Delhi

2. Kothari C.R, (2005), “Research Methodology Methods & Techniques”, New age

international publishers, New Delhi:

3. Annual Reports of KFC &other articles

Websites

1. www.ksbc.com

2. www.wikipedia.com


http://www.wikipedia.com/

APPENDIX


Documents

Rohit imk-KSBC