Moser Baer:

Growth through
Diversification
PRESENTED BY :
VIPUL CHAWLA
Jaipuria Institute of Management, Lucknow
 Introduction
• “Moser Baer keeps on attempting to improve
them. When their products start maturing or
declining, they are ready with the next one.
When the floppies went out, they moved onto
CDs, and when CDs were in the mature phase,
they moved onto DVDs, which are now in the
growth phase. When the DVDs go into the next
phase of maturity, they will be ready with the
next product.”
- Raghavendra Rao, Analyst, Frost & Sullivan
 Intro…….
• Moser Baer was founded by Deepak Puri in 1983 as a
provider of time-keeping solutions in a joint venture with
Moser-Baer AG of Switzerland. The venture did not
succeed due to labor problems.
• In 1986, Puri retained the Moser Baer name when he
ventured into manufacturing floppy disks. Right from its
initial days, the company concentrated on maintaining
high quality standards at the lowest cost.

• However, its long-term success was due to its ability to

keep up with changes in storage media technology.
 Intro……
• Moser Baer started producing digital
storage media (floppy disks) in the year
1986 and went on to become the second
largest optical storage media (CDs, DVDs,
etc.) company in the world by 2007.
 Challenges
• Moser Baer operates in a market which is
highly dynamic and volatile.

• This is a market which is full of disruptive

innovations . One can never predict the
lifecycle of a product. A small
technological innovation can make a
product irrelevant.
 Anticipatory / Proactive Change

• To operate in such a volatile environment

requireas high flexibility in operations and
strategy and keep on innovation.
• The simple fact that Moser Baer was able
to handle the Floppy to CD and then DVD
transition is a remarkable example of its
Proactive approach & flexible product
strategy.
 Reactive Change
• The year 2006 has been very bad for the company owing to
the increase in the production cost and decrease in demand
due to competition from other categories. One of the raw
material for CD/DVDs is polycarbonate which is a
byeproduct of oil industry. The rise in oil prices has
increased the cost for this raw material.

• Which forced Moser Baer to undertake many

related and unrelated diversification.
• The company launched an entertainment division
which focused on distribution of movie CD/DVD.
The company procured around 10,000 movie titles
and aggressively started distribution.
Low Cost Leader Ship Strategy
• The company concentrated on maintaining high
quality standards at the lowest cost.
• Moser Baer shocked the movie industry by
launching movie CDs and DVDs for as low a
price as Rs 28 and Rs 34 respectively. At that
time, a DVD used to cost minimum Rs 150 and
CDs at around Rs 80.
• The move made lot of sense because the
expense for Moser Baer was limited to
promotional and distributional expenses.
 Change Strategy
• As I have already discussed company is
proactive and the reason for the company
to be proactive is because of the
employees training & Development .

• Also the big part of the success of the

Moser Baer goes to its change strategy
they follow.
 Collaborative Change
Strategy
• All employees are engaged in the change
process, typically through cascading
workshops or meetings. They will be kept
up to date on the issues. Their views will
be actively sought and acted upon.
Feedback will demonstrate how their input
has been acted upon.
 Success Mantra
• “The factor responsible for the success of
the company, namely, its ability to be
proactive in the market is because of its
organizational design while staying at the
forefront of technology which it achieved
through its strong research and
development team.”
 Conclusion
• Although the company was a little late in
entering the CD-R market, it managed to
quickly expand its CD-R production
capacity by the late 1990s.

• Hence by 2007, Moser Baer had become

the world’s second largest manufacturer of
optical storage media (CDs and DVDs).
 Learning

• Anticipate Change
• Monitor Change
• Be Ready To Change Quickly
• Enjoy the Change
THANK YOU