Well into these days of globalization, merger & acquisition, Foreign Direct Investment and what not, we tend to forget that some of our pioneering business houses adopted many of these latest model and strategies long before their time.
One such case was that of the little-known Mer C D (C Ult) enterprise – MCDC here under.
Starting in the fast food industry, MCDC’s phenomenal growth and success bears recall for all of us who cut their teeth in westernized business management in the class-room environment.
MCDC started as a privately held enterprise. It sold fast food and beverages to itinerant customers. MCDC found it profitable to offer them what is now known as ‘frequent-flier mile’ schemes. Later the clientele extended to customers with low purchasing power, and much of the business had to be conducted on credit stretched to its limits. Still MCDC captured a major market share in the market it operated in, and strategized and expanded business at will.
Here is an excerpt from a QA session we conducted with the proprietor that formed the basis of this case study.
Q. What would you attribute your success to?
A. Time-tested strategies, particularly related to F&A and M&A.
Q. Would you please elaborate on the F&A?
A. This related to our finance and accounts. You see, we catered to customers with low purchasing power. For them we introduced cult – that is capital C, blank, capital U, small l, small t. It stands for Credit Unlimited.
Q. Oh! Would you please clarify?
A. To one sectors of our clients we offered unlimited credit, at least initially, till we won the individual’s trust. Then we introduced credit-cards – small chits on which we wrote down credit sales by customer. At pay-time we marked up the credit by 10 – 15% which the customer seldom noticed, often having partied with friends flocking in and out. So, effectively our cash flow was buttressed by a sublime advance collection. This credit unlimited policy induced the customers to host many debate sessions and seminars. There was one I recall on ‘Carl Marx versus Full Marks’. Then there was this seminar on Dialectical Materialism, often held in some foreign dialect with a lot of nasal sing-song intonations. … But let me not digress.
Q. We have heard of your ‘frequent flier miles’ scheme. What was that?
A. Actually we called it ‘Frequent Flier Smile’. We had pilots and their cash-strapped co-pilots coming in for a break. We greeted them with an affected smile, because they seldom paid up. But they brought in good business, I must admit.
Q. Pilots, really? And Cash-strapped co-pilots?
A. Yes, those days the buses were ‘piloted’, the pilot getting in and out through a separate door marked “Ekhaney Pilot Bosibek”. The co-pilot guided the pilot leaning out of the other door. He also doubled as the cashier collecting fare in a bag of cash strapped over the shoulder. Sometimes they left this bag at the counter when going for a wash, giving us a business opportunity to recover some of our losses.
Q. How did it help to entertain them for free?
A. We served the pilots/ co-pilots immediately, but delayed the service to the passengers they herded in. Believing in customer-education, we had trained the pilots to finish their tea fast, clamber into the bus, start up and rev the engine, press and depress the clutch, and blow the horn. At the same time the co-pilot banged on the sides of the bus. Most passenger customers, fearful of ‘missing the bus’, paid in a hurry saying “Keep the change”, even as we pretended to look for the change. This was posted as ‘Income from other sources’ in our P&L account.
Q. Well, well. Now, please throw some light on your M&A.
A. Ah! Merger and acquisition, my favourite game-plan! I had started as a single proprietor. My first unit was located in an industrial area divided by a trunk route bifurcating it. One side of this was mostly brown-fields with little vegetation. This is where I had my brown-field unit. The other side, where paddy was grown, presented many green-field opportunities. But, first I expanded my brown-field unit, inducting my brother into the executive board. I had to restructure the capital with the fund he brought in. But we ended with a vertical split. Then I moved my unit into the green-field, not just because ‘the other side looked greener.’ Later I was constantly on the move, selling off my existing unit and rebuilding new ones. The customers would for some time flock to the old place and then re-discover my new unit. This good-will that went with the sold units fetched handsome capital gains.
Q. Really? This must have led to some ups and downs in the business.
A. Not much, except when we had to move our plant and machinery across the trunk route which was built at a good height. Then we had to climb the ups and downs.
Q. Did you practice ‘equal-opportunity’ ever?
A. We did indeed. I was the first to employ a female, and that too my own wife, as the dish-washer. Later I inducted three more female employees through the same route, and my brother followed suit.
Q. What about environmental issues? Did you discharge your social responsibilities vis-a-vis the environment?
A. Yes. In fact, we did not discharge anything in the environment. We recycled everything – from left-over food to dish-washing water. The latter was scarce those days. So the used water was left in the sun for UV treatment of the bacteria and settlement of the solid matters. Then we skimmed the scum and decanted the clear liquid for reuse. Occasionally we needed a top-up if a stray dog or cow had lapped up some.
Q. Right Sir. One last question – what does your business name stand for.
A. Why, it is ‘Mehmuder Chaayer Dokaan (Credit Unlimited)‘ at G T Road crossing. I thought you would have got it by now!
Q. Yes, of course! Well , Sir, thank you for your time. By the way, you seem to resemble a famous comedian.
A. What nonsense! All such resemblance is purely coincidental. Please issue that caveat in your case-study.