Electrochem, Inc Case Study

ElectroChem, Inc Case Study

1.0 Case Summary

This case study is about an entrepreneur named Radha Jalan and about her entrepreneurial journey. The Radha Jalan entrepreneurial journey started when she was taken over and become a president of ElectroChem, Inc. after her husband, Vinod Jalan death on suffered a fatal heart attack in 1992. She noticed that ElectroChem, Inc. faces cash-flow deficits and also faces short-term debt obligations. Although the sales were more than $400,000, but the firm was not profitable. She had to use her husband’s life insurance to run the firm. She knew little about ElectroChem’s operations, especially about fuel cell technology because her education background was different and pursue an academic career.

ElectroChem had been largely supported by government grants but some of the existing grant expired and some of them nearly expired. Radha became increasingly concerned about generating further revenue. Radha wanted to change the firm’s focus from research and development toward commercial fuel cell applications because she believes that more difficult to get funding for basic research and development. Surprisingly, Electrochem received a six month government research grant with the possibility of continuation for two years.

The incident faced by Radha with Bill West and Peter Clinton, made her much smarter about contract negotiation and made sure that Electrochem was protected in case the utility changed its mind about the structure of the relationship. In 1996, ElectroChem generated its first annual profit and continue growth.

In 1998, George Landau, the chairman and founder of Texas-based Global Technologies, Inc. was ready to retire and was considering selling the company. Radha takes this opportunity and made discussions about a possible merger between ElectroChem and Global Technologies. Global Technologies larger than ElectroChem and more importantly had a number of commercial customers. The merger will enable Radha to eliminate a rival and increase market share.

Radha was worried about future revenue growth. Radha also wanted to reduce dependence on government research and development grant to establish ElectroChem more firmly in the commercial market. Radha continues to organize ElectroChem became a serious competitor in the commercial market. The electrical product line included PEMFCs and PAFCs as well as fuel cell systems, models, test stations and fuel cell supplies and components, moving away from government contract works. She builds the organization and getting recognition for its technological strengths and potential was a priority to compete with her larger rivals.

In 2002, after ten years became a president of ElectroChem, Radha had decreased the company’s large debt. Radha realized that Electrochem continued financial success depend on her ability and the prospects for fuel cell development and commercial use had become increasingly brighter.

3.0 ISSUES/PROBLEMS WITH THE CASE STUDY

In this case study, Radha business adventure was started with a problem when her husband Vinod Jalan unexpectedly passed away. Then she takes over the business and facing many difficult things with several problems and issues. It came to a point where she needs to make a decision of whether to invest more in the company, sell it or to close down.

3.1 Facing financial problem as a small firm in emerging high-tech

Radha entrepreneurial journey in ElectroChem, Inc. which is a small firm dealing with high-tech industry to manufacture polymer electrolyte membrane (PEM). Since the firm attached with high-tech industry, it was facing a financial problem as it required a huge capital. As this case points out, ElectroChem, Inc. heavily depends on the government contracts as a sources of funding. From the financial statement ElectroChem, Inc. experienced difficulties of company liquidity, asset management, debt management and profitability.

Solution : In order to solve this issue, at the starting point, Radha must push the technology development and industry potential. Radha will use the industry potential and bring it to the government attention. In order to fostering the growth of the industry, Radha must make it visible due to its potential impacts, especially for government agencies such as the Department of Defense, Department of Energy, Department of Transportation, and NASA.

3.1 Challenges for Radha as an entrepreneurial woman in a male

dominated industry with limited education and experience in the fuel cell industry.

In this case study, describes the financial and management challenges faced by Radha who are an entrepreneurial woman in an emerging high-tech industry that dominated by the male entrepreneur. Radha did not have education and experience in the fuel cell industry. The lack of her human capital deficiencies made difficult for her to run the company and she was relying heavily on the advice of investors who have not had the same interest in the firm direction. Since Radha is female entrepreneur, she was a victim discriminated by Bill West and Peter Clinton, who take advantages of her lack of managerial ability.

Solution: Radha should take an advantages from the close working relationship with the firm existing employees to learn fast on the company workflow and direction. In order to have financial capital without help from a cheated angel investor, she needs to explore and focus more on the “human capital” and “social capital”. Human capital describes Radha effort to know and familiar with hiring a good employee and right candidates that knowing doing related tasks in the fuel cell industry without any other intention. The social capital describes on her ability to expose herself with appropriate impressive business connection with government and a good investment for fund purpose, also to the customers need and competitor direction in order to become successes as an emerging firm.

3.3 Challenges to struggles for taking control

As presented in the text of the case study, Radha felt the pressure from the demoralization from Bill West and Peter Clinton who take advantages of her lack of managerial ability. Radha saw herself as a victim and felt West and Clinton was playing a game taking advantage of her. Clinton