BTR Ltd. Rampur, UP (Diagnostic Case)

Abstract

BTR, a manufacturer of turpentine oil and rosin, is a member of a consortium of eight state-level public sector units in Uttar Pradesh, Himachal Pradesh and Jammu & Kashmir. The Consortium fixes uniform selling prices for the members' output —rosin and turpentine oil. BTR's competitors are public and private sector units and importers of rosin. Supply and prices of resin, the main raw material, are regulated by each state government based on availability and cost of collection, which vary considerably. The managing director of BTR wonders whether BTR should continue its membership of the Consortium. The case raises many other issues: what objectives can and should the Consortium serve? what are the objectives served by the regulatory policies of the state governments? Will getting out of the Consortium help achieve BTR or state government objectives?