Case Detail

Case Summary

Diskit Khartsan Ltd. in 2013: Hatching a Solution

Case Number: 5-214-253, Year Published: 2014

HBS Number: KEL807

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Authors: Sarit Markovich; Evan Meagher

Key Concepts

Accounting, Cash Flow Analysis, Competitive Strategy, Decision Making, Distribution Channels, Financial Analysis, Financial Planning, Financial Strategy, Pricing Strategy, Strategic Planning

Abstract

Tel Aviv–based Diskit Khartsan Ltd. sold sprays, traps, and netting to combat Blatta lateralis, the Israeli flying cockroach. The insect, slightly over one inch (2.54 cm) long and capable of flying short distances, was noisy, unsightly, and posed a risk of food contamination. Every heat wave brought more infestations, and consumers across the Mediterranean armed themselves with Diskit's HLH™ brand products.

HLH products generated nearly two-thirds of Diskit's annual revenues. During periods of low demand, local retailers resisted devoting significant shelf space to the bulky products, which meant that during periods of high demand stockouts occurred frequently and Diskit lost sales. To address this problem, the company had implemented a trust receipts program that raised prices for retailers by 3 percent but allowed them to take Diskit products onto their balance sheets without payment until the products were sold.

At the recent end of the fiscal year, Diskit CEO Reut Cohen needed to evaluate the trust receipts program and discuss ways to improve it for 2014.

Learning Objectives

After analyzing and discussing the case, students should be able to:

  • Understand the relationship between a firm's credit policy and its product market strategy
  • Explain the effect of growth on firms' strategy when product market strategy is capital-intensive
  • Understand how exogenous change in the market's structure affects firms' product market strategy and, consequently, its inventory and credit policies

Number of Pages: 14

Extended Case Information

Teaching Areas: Strategy

Teaching Note Available: Yes

Geographic: Israel

Industry: Consumer Products

Organization Name: Fictional

Organization Size: Medium

Decision Maker Position: CEO

Decision Maker Gender: Female

Year of Case: 2013