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Coimbatore Financial Corp Case Study Insights

The document summarizes a case study about Coimbatore Financial Corporation, an Indian asset financing company. It provides background on the company, noting it operates in 12 states and focuses on first-time vehicle buyers and small customers. It then lists some potential pain points, such as the need for extensive customer support and the time gap between loan approval and vehicle delivery. Finally, it summarizes solutions proposed by groups, such as investing profits in customer education, downsizing sales/collection teams, following industry standards for management costs, refinancing debts, and pursuing growth in new markets.

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Kunal Bagade
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8 views2 pages

Coimbatore Financial Corp Case Study Insights

The document summarizes a case study about Coimbatore Financial Corporation, an Indian asset financing company. It provides background on the company, noting it operates in 12 states and focuses on first-time vehicle buyers and small customers. It then lists some potential pain points, such as the need for extensive customer support and the time gap between loan approval and vehicle delivery. Finally, it summarizes solutions proposed by groups, such as investing profits in customer education, downsizing sales/collection teams, following industry standards for management costs, refinancing debts, and pursuing growth in new markets.

Uploaded by

Kunal Bagade
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Services Marketing

Group 1
Harsh Agarwal (01)
Siddhant Agarwal (02)
Kunal Bagade (03)
Kamalnayan Bawaskar (04)
Aniket Bhale (05)
In the last lecture we discussed the case study of Coimbatore Financial Corporation. This was the
case of missing profits of the company.

The Case:

Mr Shanmugam of Coimbatore, founded Coimbatore Financial Corporation Limited in 1993 - starting


this “asset financing” business. Creating a new India using a “bottom up” approach wanted to create
a layer of entrepreneurs from the middle and lower strata of the Indian society. 80% of customers
are either first-time vehicle buyers or small customers with 0-5 vehicles or equipment. Operates in
12 states – asset financing is under-penetrated; consumer aspirations are growing; hence attractive
returns. Understand the customers and advise them towards the right product selection – lasting
relationships. 80% branches in semi urban & rural areas; 67% customers from hinterlands. Hub-and-
spoke system for wide geographical coverage: Regional Offices, Branch Offices and Pocket offices.
Tie-up with local dealers of companies like Tata Motors, Mahindra & Mahindra, Ashok Leyland,
Eicher Motors, JCB, L&T etc.

Probable Pain Points:

Target customers need a lot of support, convincing, handholding and training. Need to maintain a
close proximity with our customers. Finance products like Commercial Vehicles, Construction
Equipment and Tractors – capital intensive in comparison to customer’s earnings. 5000+ front line
employees – could be large in comparison to industry. Company pre-books certain number of
vehicles from dealers –time gap between sanctioning of the loan (interest starts accruing) and the
delivery of the vehicle (loanee starts earning) is reduced. Strong and robust IT backbone. Collections
come throughout the month because the sales and collection teams are different – double cost
incurred.

Solution given by the groups:

These 61 crores are not hidden profits but in a way an investment for a better future with better
recoveries from better educated people about the entire process. The company is not only growing
itself but educating, empowering and are carrying the customers along with us to great heights.

Also, the labour cost per unit maybe the same but the units maybe high. There may be separate
sales and collection team. So, the company should consider downsizing the team as per the
customer satisfaction level and the salary cost. Even the management cost is much high in profit and
loss account. The company should follow the industry standard for the same. Also, the company is
over leveraged. They are in early stage of company life cycle and they have high interest expenses.
They should consider refinancing the debts. Also, they should consider a growth strategy as they
have smaller market. they should expand in the new geographies and also new customer segments.

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