Gold Seal Engineering Products Pvt. Ltd.: Challenges facing a Developing Country SME

Published 06 Dec 2002
Reference 5035
Topic Operations
Region Asia
Summary

Gold Seal Engineering Products Pvt. Ltd is an Indian, 44-year old second generation family firm, manufacturer of rubber and polymer extruded and moulded seals for the automobile industry. For more than three decades, the company grows undisturbed in a protected environment with limited foreign competition. In the early 1990s, with the liberalization of the automobile market and the passenger cars segment in particular, the company faces new market opportunities and challenges. The company views the arrival of a horde of automobile manufacturers and automotive component suppliers as a growth opportunity as well as a menace to its survival. The case describes the company’s situation and reactions to the radical shift that takes place in its external environment.

Teaching objectives

The case can be used to discuss the issues faced by developing country SMEs confronted, overnight, by the challenges of globalization and the demanding requirements of multinational corporations. Given the complexity of issues and decisions at hand – strategic choices, owner-manager constraints, obsolete technology, poor production systems and working practices – the case provides a real-life example of the challenges facing family-run businesses in fast changing environments.

Keywords
  • Family firm
  • SME
  • Globalisation
  • Expansion
  • Automotive components industry
  • Multinationals. RD0502
  • AR2002