Entrepreneurship as Innovation and Problem Solving — Entrepreneurship STD 11 Commerce — Question
CBSE BoardEnglish MediumSTD 11 CommerceEntrepreneurshipEntrepreneurship as Innovation and Problem Solving5 Marks
Question
Application based exercise:
Explain the success story of Lijjat Papad.
✓
Answer
Lijjat Papad
Started with a loan of ₹ 80. the cooperative now has annual sales exceeding? 301 crore.
Lijjat was the brain child of seven Gujarati women from Bombay (now Mumbai).
The women lived in Lohana Niwas, a group of five buildings in Girgaum. They wanted to start a venture to create a sustainable livelihood using the only skill they had i.e. cooking.
The women borrowed ₹ 80. from Chhaganlal Karamsi Parekh, a member of the Servants of India Society and a social worker.
They took over papad making venture which was running in loss owned by Laxmidas Bhai, and bought the necessary ingredients and the basic infrastructure required to manufacture papads.
On March 15, 1959, they gathered on the terrace of their building and started with the production of 4 packets of papads. They started selling the papads to a known merchant in Bhuleshwar.
Initially, the women were making two different qualities of papads, in order to sell the inferior one at a cheaper rate.
Chaganbapa advised them to make a standard papad and asked them never to compromise on quality.
Lijjat expanded as a cooperative system. Initially, even younger girls could join, but later eighteen was fixed as the minimum age of entry.
Within three months there were about 25 women making papads.
Soon the women bought some equipment for the business, like utensils, cupboards, stoves, etc. In the first year, the organization’s annual sales were ₹ 6196. The broken papads were distributed among neighbours.
During the first year, the women had to stop production for four months during the rainy season as the rains would prevent the drying of the papads. The next year, they solved the problem by buying a cot and a stove. The papads were kept on the cot and the stove below the cot so that the process of drying could take place in spite of the rains. By the second year of its formation, 100 to 150 women had joined the group, and by the end of the third year it had more than 300 members. The members were called as Ben/ Sister.
They have accountants in every branch and every centre has to maintain daily accounts.
Profit (or loss, if any) is shared among all the members of that branch. They have a committee of 21, that decides how the profits are to be distributed.
Each branch calculates its profit and divides it equally among all its members.
Mumbai has 12,000 members, the rest of Maharashtra has 22,000, and Gujarat has between 5,000 to 7,000 members.
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