JINANTONYX INC. Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

JINANTONYX INC. Case Solution

Introduction

Jinantonyx Inc. is a hardware retail company which is situated in Jharkhand, India.The company is currently facing some issues regarding expiration of its sales tax exemption and some issues with their dealer’s network. The managing director of the company is worried regarding this expiration as he believes that the business will be hurt severely by this action and the shareholders of the company might have to lose their wealth.The Managing Director has asked his guest, who is a professor from a reputable university,to provide his opinion about the company position and performances.The Managing Director has told the professor regarding the conditions in India for businesses and also the history of developing IT industry in India. The MD believes in the agency theory as he is only concerned about the shareholders while the guest professor here is trying to explain him the stakeholder theory and to widen his thinking. He is asked to look from a broader view and consider the competition in the market.

Computer Industry in India

The Indian economy is in a state of rapid growth each sector of the country is growing at a considerable pace. This has resulted in the overall growth of GDP by 6.5% as compared to other developing countries. The economy is currently seeing a shift from agriculture based to industry based economy. Although the business is growing widely in all parts of India however the distribution of wealth is still not justifiable and the business is controlled by a very small segment of population of the country. However, there is vast prospective for growth in the country for positive and negative returns.(Heeks, 1996)

The Information Technology industry in the country is very developed, especially the software sides. The constraints by IT businesses are similar to any other business such as shortage of utilities. Computer usage in India is currently low as only 19% people use computer,therefore there is large potential for growth in the industry, as the infrastructure in the country has developed and the living standards of people have improved.The major consumers of the industry are businesses who are increasing demand at a considerable rate. Tata and Wipro are the dominating companies in the sector and are also considered the world leaders.Moreover, the university system that is considered to provide high quality engineers at a good rate also helps the booming industry. Due to some tax implications, the products produced in the Indian markets are expensive as compared to the neighboring country China. The tax system in India is very complex as different regimes are applied to locally produced goods and imported goods.(K Srikanth, 1990)

Problem Statement

The main problem identified in this case is that Mr. Sidhu believes that after losing the status of Tax Exempt Company, Jinantonyx Inc. will not be able to grow as it has grown in the past, therefore the shareholders will be affected by this incident.

Another problem is that the company believes that the market has a lot of future opportunities however,due to significantly high competition in the market it is hard to avail those opportunities,especially when the company is not receiving any subsidies from the government.

Parties Involved

The main parties involved in this case are the following;

Jinantonyx Inc.

Jinantonyx Inc. is a computer hardware manufacturing company, which was formed by the city government in the 1980 s.It was initially formed as a government agency whose purpose was to provide the government offices with computer networks and workstations. As the company grew, it showed potential for providing services to the general public therefore it was privatized but the government held 50% equity.

The company developed to become successful and formed deals with many large organizations such as Samsung. The management desired to make the company a reputable brand; therefore it focused its products on quality by forming connections with reputable suppliers. The company was into manufacturing instead of purchasing parts rather than assembling and installing them for its customers................

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