TTK PRESTIGE LTD.

WHISTLING ITS WAY TO THE TOP…

SUBMITTED TO

DR. HIMANI SHARMA

BY, P.S.RANJIT BINU KUMAR SRINIVAS ACHARYA RIBHU MAHAJAN VINEET GOEL SRIJIT CHATTERJEE (27) (33) (41) (44) (60) (61)

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INDEX
SL. No
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DETAILS EXECUTIVE SUMMARY INTRODUCTION

PAGE No 3 7

2)

3)

MAJOR PROBLEM IDENTIFICATION

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4)

SITUATIONAL ANALYSIS
a) b) c) d) e) f) g) h) i)

GRAND STRATEGIES GENERIC PORTFOLIO PORTER’S 5 FORCES MODEL PESTLE CAP SWOT VALUE CHAIN ANALYSIS SOLUTION/STATEGIES ALTERNATIVES

24 26 30 38 43 44 49 46 53

5)

CONCLUSION

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6)

REFRENCES

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EXECUTIVE SUMMARY
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TTK PRESTIGE LTD.
A TTK Group Chennai based company, TTK prestige is one of the leading players in the domestic kitchen appliances industry. Its product portfolio spans from domestic cooking vessels to electrical appliances and has recently forayed into modular kitchen designing. TTK’s products include pressure cookers, non-stick cookware, electrical appliances & gas stoves all of which command high brand recall and a price premium over competitors.

The company’s topline has grown at 150%+ CAGR over the last 5 years. Profitability also improved and grew by 30%+ over the same time period. The strategy for maintaining growth and improving profitability has been product innovation, brand building and financial prudence The company has over the years evolved from being a mere pressure cooker product brand to a full-fledged kitchen appliances brand. Its wide product portfolio and wide spread retail initiative will help company grow faster than the industry, while branded industry itself will grow at 5-6% The pressure cooker industry, which has a penetration of mere 30-35% in India, has a lot of scope of growth with increased availability of LPG & piped natural gas in the next few years. While the non-stick cookware segment will grow on the back of replacement demand, urbanization and growing health consciousness in cooking styles We believe the macro demographic trends in India will drive the growth of the kitchen appliance industry per se. The company’s vision for new business opportunities such
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as modular kitchens and its product innovation provides good business visibility for the company

Mainstay Pressure Cooker Segment Growing at a Stable Rate
• Pressure Cookers is TTK’s single largest segment which contributes around 54% to the topline currently. TTK’s pressure cookers are different from other cookers on account of its outer lid-closing feature. This feature provides the user with some additional cooking capacity vis-à-vis inner lid cookers The Indian pressure cooker market size is approx. 9 million pieces p.a., which is equally divided between organized and unorganized sector. TTK enjoys 30%+ market share in the pressure cooker market of which it is the market leader in the outer lid market segment with 65% market share and 5% of its recently entered into and a highly competitive inner lid market The branded cookers market has been growing at 5-6% over the last 4-5 years while TTK has witnessed volumes growth at 13-15%. We expect this segment to continue to clock similar volumes growth over the next 2-3 years Apart from that, TTK has introduced a niche product through the launch of pressure handi a few years back.

TTK’s strategy in this segment has been to innovate and give the user a better product experience. TTK has introduced both aluminum and stainless steel cookers, the latter of which has given boost to the overall average realization
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TTK’s product innovation, superior quality and product technology has always enabled it to command a superior price realization over its peers. Prestige cookers are targeted towards middle class and the upper middle class and enjoy a 3-5% price premium over other branded manufacturers

De-Risking Business by focusing on the Non-Stick Cookware Range

In a bid to de-risk its business from single product dependence TTK forayed into the cookware segment. Over the years TTK has emerged as the market leader in the nonstick segment. It was only recently in FY07 when the company was flushed with demand and hence operated at 200%+ capacity utilization. TTK increased it’s capacity from 500,000 units to 1,800,000 units in FY08. TTK competes primarily with local and regional players such as Premier in this segment. Growing urbanization, health consciousness in cooking styles of customers and the segments unique ability for bulky sales (majority consumers do not buy a single pan but a set of non-stick items) will help TTK to grow at a healthy rate. The life cycle for the non-stick cookware is 2-3 years hence giving rise to a large replacement market. Hence we expect the cookware segment to grow at a CAGR of 15-17% for the next 23 years.

Investing in setting up In-house Kitchenware (Electrical Appliances) Factory in Uttarakhand

Electric kitchenware is the company’s third business segment and has been growing much more aggressively than the other segment. This segment includes all types of electric kitchen appliances such as mixer, toaster, chimneys, etc. The company’s strategy is mainly to offer complete range of kitchen appliances while encashing on its existing retail network setup & existing brand which symbolizes quality, reliability, and safety for all kitchen products for a housewife The finished products of this segment are primarily outsourced at present. The growing demand for TTK’s electric kitchen appliances has enabled this segment to grow much faster. On the back volume growth the company plans to set up its own unit in Uttarakhand at a cost of INR 11 crs. This will enable TTK to control outsourcing cost, monitor quality and at the same time aggressively penetrate this segment. It is important to note that the contribution of this segment to topline has gone up in the last one-year from 13% to 17%. We expect its contribution to go up to 20% once the new plant is commissioned by at the end of this fiscal

Evaluation and Outlook

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5 • • • Company Profile Corporate Office 6 .• The company has over the years evolved from being a mere pressure cooker brand to a full-fledged kitchen appliances brand.1x its FY10E & FY11E EPS of INR 32.65/. has a lot of scope of growth. insourcing of electrical appliances and lower interest cost. Margins are set to improve on the back of product mix. Its wide product portfolio and wide spread retail initiative will help company to grow faster than the industry The pressure cooker industry. The company’s increased profitability are set to improve its cashflows as the company is almost debt-free Company expect topline & bottomline to grow in the range of 15-17%+ for the next 2-3 years. which has a penetration of mere 36% in India.the stock trades at 9. While the non-stick cookware segment will grow on the back of rising urbanization & growing health conscious trends.1x and 8. At the current CMP (Current Market Price) of INR 295. The company has seen topline growth of more than 20% over the last 5 years with profitability also improving.5 and INR 36. We believe the macro demographic trends in India will definitely drive the growth of the kitchen appliance industry TTK is one of the leading players in the Indian kitchen appliances industry.

Hence. The company has transformed its distribution model by launching exclusive retail outlets known as ‘Smart Kitchens’. The company’s topline has grown at 150%+ CAGR over the last 5 years. It’s product portfolio spans from domestic cooking vessels to electrical appliances and has recently forayed into modular kitchen designing. Website: www. Profitability also improved and grew by 30%+ over the same time period. The strategy for maintaining growth and improving profitability has been product innovation. The pressure cooker industry. Its wide product portfolio and wide spread retail initiative will help company grow faster than the industry.11th Floor Brigade Towers. Bangalore . urbanization and growing health consciousness in cooking styles. The company has over the years evolved from being a mere pressure cooker product brand to a full-fledged kitchen appliances brand. While the non-stick cookware segment will grow on the back of replacement demand. we initiate coverage on the company with a “BUY” recommendation. The company is well placed to capitalise on the consumption boom led by the demographic shift towards nuclear families in India. The company’s vision for new business opportunities such as modular kitchens and its product innovation provides good business visibility for the company.ttkprestige. Karnataka. TTK prestige is one of the leading players in the domestic kitchen appliances industry. electrical appliances & gas stoves all of which command high brand recall and a price premium over competitors. 7 .560 025.com Chariman: T T Jagannathan Business Group: TTK A TTK Group Chennai based company. has a lot of scope of growth with increased availability of LPG & piped natural gas in the next few years. which has a penetration of mere 30-35% in India. TTK’s products include pressure cookers. non-stick cookware. brand building and financial prudence. We believe the macro demographic trends in India will drive the growth of the kitchen appliance industry per se. while branded industry itself will grow at 5-6%. 35 Brigade Road.

8 . including kitchenware. TTK Prestige is aggressively expanding the number of exclusive outlets. mixer-grinders. Retail foray to increase visibility. domestic kitchen appliances. which has helped in boosting brand image and demand. coupled with higher incomes. COMPANY BACKGROUND TTK Prestige is a leading player in the pressure cooker market in India.KEY TRIGGERS Increasing urbanization. It has refurbished its product portfolio by introducing gas stoves. and modular kitchen solutions. non-stick cookware. which in turn have increased demand for kitchen appliances. are expected to drive demand for household products. diversification to boost market share TTK Prestige has evolved from a pressure cooker company to a total kitchen solution provider. Innovation. Shrinking household sizes due to nuclearisation. which is expected to go up from 164 in 92 towns to over 200 outlets by the end FY09. UK. It commenced manufacturing in 1959 with technical support from the Prestige Group. chimneys. demographics to spur demand Increasing urbanisation and fast-changing demographics have led to a growing demand for additional homes. hobs. penetration The company has entered the fast growing retail space with its exclusive ‘Smart Kitchen’ outlets.

Walmart. Germany. AFNOR – France. It is the first kitchen appliances company in India to receive the ISO 9001:2000 certification and to be certified by all international standards which include the British Standards. PATH – US. It is in the process of decommissioning the Bangalore plant by the end of current financial year. non-stick cookware. INVESTMENT RATIONALE THE MAINSTAY PRESSURE COOKER SEGMENT TO GROW AT A STABLE RATE Pressure Cookers is TTK’s single largest segment which contributes around 54% to the topline currently. It commenced production at its new Coimbatore plant in April 2006 and is also setting up a plant in Uttaranchal. the company is now repositioning itself as a ‘total kitchen solutions’ provider. It also has tieups with leading overseas retail chains like Macy’s. It also has manufacturing facilities in Bangalore and Hosur. gas stoves and domestic kitchen appliances under the brand name Prestige. Target. USA. Superbrands India Private Ltd.Long synonymous with pressure cookers.The company deals in pressure cookers. an independent company engaged in valuation of brands declared Prestige a ‘Superbrand’ in the kitchen appliances category in 2009. which is likely to be operational in FY10. K-mart and Sears. This feature provides the user with some additional cooking capacity vis-a-vis inner lid cookers. DLF – Germany. BISIndia. ENERSOL – Australia and PED/CE certification by TUV. TTK’s pressure cookers are different from other cookers on account of its outer lid-closing feature. Kohl. 9 . It sells pressure cookers in the US under Indianowned brand Manttra through a wholly owned subsidiary Manttra Inc. UL-USA.

Nuclear families are becoming the norm in cities and towns and the number of people comprising a household has been gradually decreasing.The Indian pressure cooker market size is approx. This coupled with growing incomes and rising aspirations of the middle class has led to an increase in demand for household products. The branded cookers market has been growing at 5-6% over the last 4-5 years while TTK has witnessed volumes growth at 13-15%. including kitchen appliances. 9 million pieces p. which is equally divided between organized and unorganized sector.a. demographics to spur demand Increasing urbanization has led to the traditional Indian joint-family system breaking down. This has resulted in an increased demand for additional homes. Apart from that.. (I) Increasing urbanisation. We expect this segment to continue to clock similar volumes growth over the next 2-3 years. 10 . TTK has introduced a niche product through the launch of pressure handi a few years back. TTK enjoys 30%+ market share in the pressure cooker market of which it is the market leader in the outer lid market segment with 65% market share and 5% of its recently entered into and a highly competitive inner lid market.

This increasing urbanisation is creating incremental demand for residential housing and related products. For the urban woman.The change in the family structure in India is clearly reflected in the reducing number of persons per household. the pressure cooker has become indispensable. either an individual or a nuclear unit of a larger family (husband. The figure is expected to increase further to 11 . This has meant a steady migration of people from rural to urban areas in search of employment opportunities. more women are also entering the workforce. Going forward. which has fallen from 5.3 in 2001. we expect the trend towards nuclear families to intensify.India is also fast moving from an agriculture-based to a services-driven economy.8% in 2001.1 by 2011. whether she is a working woman or a housewife.7 persons in 1971 to 5. the number of people classified as urban has increased from 17% of the population in 1951 to 27. Further. with the average number of people in a household set to fall to 5. In a typical rural-urban migration. wife and children) shift to a town or city. According to the 2001 census. This means they need to be able to complete their cooking in a short time.

It has introduced high-end appliances. grills. It earned more than 70% of its sales during FY09 from products launched in the last three years.30% by 2011. non-stick pressure cookers and pressure indicator. toasters and food processors. The total number of variants introduced across product categories during FY09 was around 54.  Non-stick coated pressure cookers with attractive colours in unique ‘handi’ and ‘kadai’ shapes. It also introduced small appliances like kettles. product diversification to boost market share Unorganized players dominate the kitchen appliances segment in India. Here. etc. Inner-lid cookers are used mainly in the eastern and northern regions. The 10th Five Year Plan (2002-2007) forecasts that the urban population will reach 40% (based on a population of 135 crore) by 2025. as well as value share. This should give it the opportunity to penetrate in the north and eastern region and increase its market share both in volumes.  India’s first pressure cooker with the unique pressure indicator that serves as a visual confirmation when it was safe to open the cooker. and other new products. 12 . TTK Prestige has introduced many innovative and quality products and its portfolio now includes non-stick cookware. irons. microwave ovens. which was present only in the outer-lid segment of pressure cookers. Hawkins is the market leader. (ii) Constant product innovation TTK Prestige pioneered the concept of pressure-cooking in India. which have now become standards for other manufacturers.  India’s first metal spoon friendly non-stick cookware. All these have added significantly to the growth potential of the company. (II) Innovation. apart form the pressure cookers. vary across different regions. a multipurpose cooking appliance in which one can fry. coffee makers. Outer-lid pressure cookers account for one-third of the pressure cooker market and are largely used in the southern and western regions where TTK Prestige is the market leader. rice cookers. These products include chimneys. it has launched many unique and innovative products. (i) Inner-lid pressure cookers The pressure cooker market in India can be broadly divided into two – outer-lid and inner-lid categories. has now introduced a new product in the inner-lid segment. TTK Prestige. Over the years. which are currently being sourced from China. for either of these. sauté and pressure-cook (iii) Enhancing presence across the kitchen value chain The company has successfully extended its Prestige brand beyond pressure cookers to cover the entire kitchen value chain. It has introduced many new concepts in pressure cookers like new shapes.  Pressure Kadai. LP gas stoves and electrical appliances. mixer grinders. hobs. Customer preferences.

Though these outlets currently cover barely 3% of the retail business.The product extension has enabled the company increase its product portfolio and reach a wider spectrum of customer and geographical segments. This clearly shows the declining dependence on pressure cookers and increasing contributions from high-margin products like electrical appliances. of total sales of Rs 189.2% of the total sales of Rs 231. super markets and hypermarkets have started attracting huge footfalls (number of visitors). (III) Retail foray to increase visibility Over the last few years. accounting for 59. organized retail like large format stores.83 crore. their share is likely to grow significantly going forward.3% in FY08 when pressure cooker sales accounted for Rs 121. as it now has de-risked itself from being a single product company. We believe this will lead to a stable earning and minimize its dependence on a particular segment. Sales from pressure cookers amounted to Rs 137. The percentage was lower compared to 64. or 64. especially in urban areas.3 crore in FY09. TTK Prestige is establishing an extensive network of its dedicated retail outlets.8 crore. 13 .3%. They cater to a variety of customer segments at several price points.37 crore. malls. To capitalise on this new emerging opportunity.

The margin on modular kitchen is around 25% The Kitchen Boutiques would have a large floor space of more than 3. chimneys and high-end cookware.(i) Prestige Smart Kitchen As part of an aggressive retail initiative. The company open 5 such boutiques in FY08. We expect this proportion to increase going forward. the company made an entry into the retail space in 2003 by launching its ‘Smart Kitchen’ outlets. which it currently sells through its Smart Kitchen outlets. 14 . and the first of these was launched in Bangalore. About 55% of sales are from products other than pressure cookers. This will add to revenue and improve margins at the operating level. where TTK Prestige invests in stock. The strategy of expanding its reach through these exclusive retail outlets has yielded rich dividends.000 square feet. and the franchisee bears the lease/ rental cost. The launch of Smart Kitchens has helped the company increase its turnover and also boosted its bottom line in terms of increased margins. These outlets are a one-stop shop and offer the entire range of Prestige products and kitchenware in a modern ambiance that is able to draw significant customer footfalls. The model is designed to generate a 20% return on Investment after deducting the expenses.more than 10% of the domestic sales were from its exclusive retail network. (ii) Prestige Kitchen Boutiques The company entered into the modular kitchen segment in June 2005. These will be company-owned stores and the investment is likely to be about Rs 75 lakh per boutique. for a franchisee to be able to continue its business as a franchisee of Smart Kitchen. During FY08. where it will be exhibiting 3 to 4 different kinds of modular kitchens and other furniture like hobs. it plans to sell them through a new retail format ‘Prestige Kitchen Boutiques’. Now. Smart Kitchen outlets have also helped the company diversify its sales mix. Margins in direct retailing are higher than those in traditional dealer sales. The Smart Kitchen is operated through the franchise model.

TTK Prestige has priced its modular kitchens at a starting range of Rs 75. With a focus on the value-for-money segment. The competition is mainly in the form of foreign. The need for a beautiful and efficient kitchen has been felt across the spectrum and a modular kitchen more than fulfills this need. and currently operates Smart Kitchen outlets in rural 15 . TTK Prestige forayed into the rural segment in FY08. The cheapest branded modular kitchen of that size costs around Rs 1. All house in the US are equipped with modular kitchens. This means there is a significant opportunity to expand modular kitchens. modular kitchens account for a meager 0. They are also getting popular in Europe and countries in the Far East. The company is set to dominate this highend market because its price points are competitive compared to other branded players. especially in urban areas. The material is sourced from Italy as well as from some domestic manufacturers. Foreign players have priced their sets at Rs 300.With the growing importance on aesthetics and simple functionality. The cost for a TTK Prestige modular kitchen having an area of 10 ft x 8 ft would be Rs 100. Demand for such products can be increased in rural areas with increased awareness and proper distribution reach.000.2 crore by 200708.000 – 100.000 and upwards. the modular kitchen market is set to grow to Rs 1. In India.000 onwards. (iii) Rural opportunity Penetration of pressure cookers in the urban market has reached saturation levels and future growth is expected to come from rural households. The National Council for Applied Economic Research (NCAER) calculated the number of people in the high income bracket (annual income of over Rs 5 lakh) at 46. including a chimney and hob.1% of the total kitchens. unorganised and a few regional branded players. The growth of nuclear and double-income families has also fueled the demand for modular kitchens.000 crore in a few years. We believe the sale of such high-end products will grow exponentially in the next few years.50 lakh.

It trained a team of 50 women from Mehboobnagar district in Andhra Pradesh to demonstrate pressure-cooking to the villagers there. The idea is not to sell.85 lakh square feet will become available for development. It has already applied to the Bangalore Development Authority for developing this property and based on the approval it would take a decision. We believe that with an increased penetration of LPG. but simply promote the concept. maps and atlases.800 per sq foot in Bangalore. pharmaceuticals & supplements. which we have not factored in our estimates. In order to increase the awareness of cookers in the rural areas. About 50-60% of products sold from these stores are expected from the TTK Prestige stable.500 outlets in the rural areas to sell products of the group. (IV) Unlocking of land value TTK Prestige is phasing out manufacturing operations from its Bangalore unit by the end of the current financial year. the gross rental realisation annually would come around Rs 10 – 12 crore based on a monthly rental price of Rs 30-35 per square feet. The group has unveiled an ambitious plan to open 1. bio-medical devices. and health-care services. The TTK group has significance presence across several segments of industry such as consumer durables. This land near Old Madras Road is valued at around Rs 75 – 80 crore going by the current market price of around Rs 2. by developing it commercially. The options are either to totally dispose off the land in totality or let it out on a rental or lease basis. TTK Prestige has started a unique concept.Karnataka. and the land. This rental income will add another Rs 8 to the EPS. which we believe is likely to increase further with increasing demand for commercial property. estimated at about 2. demand for pressure cookers in rural areas will be higher and help TTK in its rural initiative.500 – 2. The company has hired an international consultant to look for various alternatives and suggest the best method to avail maximum benefit for all stakeholders.000 per month. These outlets have been drawing good footfalls and are delivering an average sales volume of Rs 40. If it is able to develop and rent out the property. The company will also be part of the TTK Group’s strategy to make a retail foray in rural regions. KEY CONCERNS Rising prices of key raw materials 16 .

The major raw materials are aluminium and stainless steel. Globally. The company has been able to pass on the hike in inputs to the end customers and we believe a diversified product range will help it mitigate some of the risks.A sharp rise in key raw material prices could impact the profitability of the company. metal prices have been very volatile in the recent past. MAJOR PROBLEM IDENTIFICATION TTK Prestige Cooker Problems Identification 17 .

TTK enjoys 30%+ market share in the pressure cooker market of which it is the market leader in the outer lid market segment with 65% market share and 5% of its recently entered into and a highly competitive inner lid market. 18 . Rising Competition • The Indian pressure cooker market size is approx.1. The company faces tough competition from the unorganized sector Apart from that. TTK has introduced a niche product through the launch of pressure handi a few years back.. which is equally divided between organized and unorganized sector. The major competitor for Prestige in organized Pressure cooker market is Hawkins. Launched in 1959. Hawkins is neck to neck with Prestige in market share estimated to be around 25%. We expect this segment to continue to clock similar volumes growth over the next 2-3 years. 9 million pieces p. The branded cookers market has been growing at 5-6% over the last 4-5 years while TTK has witnessed volumes growth at 13-15%.a.

it has to discover some core values of the brand and position the brand around it.e. a regional brand “Preethy “which is a major player in the Mixie category is using a homemaker (model of course) to endorse the brand by using the tagline “I guarantee” which can be extended to any product categories. Futura has cornered a niche in the market but the growth is limited because of unreasonable price The early campaigns of Prestige brand has been able to create the brand equity.Difference between Sales Growth of TTK Prestige and competitor I i. For example. Hence Indian consumers gave thumbs down to this range. the share of voice of this brand still remains low. In order to increase the share in the market this brand has to transform it to be a small appliances brand. • Hawkins in 1993 tried to break into the premium range of cookers by launching its Futura range of Pressure cookers. Hawkins has been seen as neck to neck competition in past 5 years. Although the design and the ads were catchy the price was around 200% more than the ordinary cookers. • • Prestige has to strategically position the brand in order to use it as an Umbrella brand to endorse multiple categories 19 .

and to 20.2% in FY2009 to 51.5% respectively in the September quarter. benefits accrued on account of the government’s stimulus of an across the board excise duty benefit to boost consumption.7% in the September quarter. the price of aluminium. Hawkins posted earnings per share (EPS) of Rs 32. against Rs 36. although there’s stiff competition from the unorganised sector. leaving the rest to regional players. Operating profit margins (OPM) for TTK and Hawkins were at 9. the ratio of raw material cost/net sales fell from 55. for Hawkins. In fact.7% in the June quarter of FY2010. This hampers the company’s ability to freely pass on any cost increases. Increasing Cost of Raw Materials • • In the last few months. though. This jumped to 12. though. cookers and even electrical appliances.5 for the first half of FY2010. now has around 33% of its revenues coming from kitchen appliances. Likewise. Also.1% respectively during FY 2009. TTK posted Rs 19 against Rs 20. the two companies have pulled off strategies to maintain a fair share of the market. “How much of the cost increase can be passed on depends on market factors. In the last few months.8% and 15.2. Likewise. Both these companies have a 62-65% slice of the market. For now.9% and 20.9% during the same period. during the same periods. which have helped sustain the jump in profit margins seen in the first two quarters of the current financial year.8% to 35.2 during the full year FY2009. But a similar performance in future is an uphill task. Lack of Scope for Innovation 20 . the ratio dropped from 44. both companies have done very well on the earnings front. the next two quarters could be a test of brand strength and pricing power. TTK which was only into cookware. which accounts for 5055% of the material cost has seen a price increase of around 10%. For example. In fact.” said an official from TTK Prestige. Analysts state that the rise in margins is a function of cost rationalisation and also some pipeline low-cost inventory. • • • • • • 3. Perhaps another judicious strategy which has paid off is that the two companies have expanded the product range to include a host of kitchenware items like non-stick pans.6% and 12. the price of aluminium. which accounts for 5055% of the material cost has seen a price increase of around 10% The unabated rise in aluminium prices and a possible roll back of excise duty cuts could adversely impact profit margins in the cookware segment of TTK Prestige Ltd. although history states that we have been able to handle this. For TTK Prestige.

Pressure Cooker is inarguably one of the most important utensil of an Indian Kitchen.99 4 Litre Hawkins Pressure Cooker .Aluminum $49.99 Both companies have exactly same range of prices in every single range of pressure cooker Models Three types of Cookers of both companies that you will find at stores areTypes: 1. Futura Types . Launched in 1950’s this brand has popularized pressure cooker as an essential cooking device 21 .Gook Looking and expensive. It has the disadvantage of losing its shine after prolonged usage. But.Look similar to the normal ones you see all the time but they are also expensive 3.Aluminum$49. 4.aluminum $44.99 3LITRE Prestige Pressure Cooker .Aluminum $44.99 2LITRE Prestige Pressure Cooker . If you are doing a serious cooking.e.aluminum $54. In the name of product differentiation there is a very less difference between the variety of pressure cookers of Prestige and Hawkins i.99 3 Litre Hawkins Pressure Cooker .They are widely sold model and is cheap.99 4LITRE Prestige Pressure Cooker . as pressure cooker is a single kind of cooking appliance there is a very small area for innovation in this segment. 2.Aluminum $54. Saturation of Urban Pressure Cooker Market • Prestige pioneered the pressure cooker market in India. Alumnium Made . you are bound to use a Pressure Cooker. Steel Made . on the basis of- Price 2 LITRE Hawkins Pressure Cooker .Black Ones .

• When Prestige was launched. The pressure cooker market is estimated to be around 9mn pieces p. to tap the premium segment. It launched India’s first Metal friendly nonstick cookware range The reason for the brand extension is that the market for pressure cookers was not growing. Not resting on laurels. it came out with the first Pressure Pan which can cook a variety of Indian dishes • • • In 2003. The unbranded cookers corner about 50% share in this market. Indian consumers were somewhat afraid about using pressure cookers. The company was leveraging the brand equity of Prestige to this new category. Prestige started highly successful house to house demonstrations to popularize the efficacy of this product category. The product category was looked upon by the consumers with suspicion and fear. The brand using careful communication messages were able to establish itself as the safest cooker • Prestige brand was able to address the initial concerns of the consumers like the nutrients getting destroyed using the cookers and more importantly the normal inertia in changing the way of cookers Long before the Product Demonstrations began to be popular among marketers. Prestige changed all that. 22 • • . Prestige was careful enough to innovate. These steps enabled the market to grow very fast. In 1980. The branded cookers faced lot of competition from unbranded cheap products.a. There also Prestige tried to provide freshness through innovation. Prestige launched the Deluxe range of pressure cookers. Later Prestige ventured into Non stick cookware category extending the brand. The safety features like “Gasket Release System” and the “Gasket Offset Device” was invented by Prestige • Prestige also introduced a unique concept of separator cooking which means that two dishes can be cooked in the pressure cooker at the same time thus increasing the utility and reducing the fuel costs.

the increase in popularity of other cooking appliances like microwave oven. Changing Cooking Habits of Working Women • The main users of pressure cooker or target customers for pressure cooker are women and in the big urban market where most of the women are working and have lack of time for cooking and other activities the trend is changing in cooking habits and women are turning towards using packaged food as they save much of the time and are easy to use and cook • Moreover. making it more sensible for the company to extend the brand 5. are lowering down the popularity of pressure cookers 23 . electric stoves etc. Moreover. people of India are doing pressure cooking from a long time but still there is a perception in the mind of people that cooking food through pressure cooking is still a quite complex work.• The pressure cooker market plus the nonstick market is worth around 600 crores. the changing lifestyle due to decline of joint (big size) families phenomena and with the evolution of nuclear families where there are few members in a family those who like to spend some of their time together outside house every week are likely to cook food lesser time in their houses • Although.

Prestige is one name that will come to mind. chairman of TTK group. If you think of pressure cooker. which the chairman says is a 24 . says “We’ve always kept in touch with our consumers and have constantly been innovating.SITUATIONAL ANALYSIS Grand strategies GROWTH Why no one will give their Prestige cooker away…. That the brand has managed to sustain loyalty over the many years is because as T T Jagannathan. one being Prestige Deluxe cooker that has a pressure indicator. Godrej and Tata are part of growing up in modern India.” During this current financial year for instance. it has launched a variety of products. Prestige like other brands like Bata.

"When more and more people have LPG in rural areas. remains the preserve of unbranded products. There is very little differentiation in the category . besides. TTKs proposed new ERP implementation will further improve the internal controls.beyond inner lid and outer lid and stainless steel and aluminium . Senior Vice-President (Marketing) says. Kalro. The company is continuously improving the internal control system in all the areas of operation including the effective monitoring of Prestige Smart Kitchens established across the length and breadth of the country. There are rural households who have disposable incomes but the impulse to buy pressure cookers or other kitchenware has not been generated due to inadequate distribution reach. while largely unpenetrated. The rural market. so they had to move on from being just a pressure cooker company to a cookware company. The long-term vision is to be the country’s number one small appliance kitchenware company.and. hopefully. is buy a pressure cooker. with some numbers only in the addon. the first thing they will do. TTK Group has drawn up a strategy for rural retail foray to deliver all the products of the group relevant to the rural customer. There are 100 such stores planned. Prestige started the chain of exclusive franchise stores with the following objectives: To create a retail ambience for kitchenware and showcase the vast range the brand has to offer. like the Prestige Smart range of cookers launched last year." Penetration of pressure cookers in the domestic urban market is very high and the future growths have to come from rural households. Recently. most villagers still use firewood. despite some innovations. If this strategy works out well the Company will be a major supplier to these stores. the urban market is almost saturated. replacement and gift segments. TTK also wanted to have a one-on-one contact with the end consumers to understand their needs better and to rekindle interest in an otherwise low-involvement category. The company opened two Prestige Smart Kitchen outlets in rural areas in Karnataka during the year under report and both the outlets have been drawing good foot falls and are delivering good sales volume.result of customer research which indicated that cooks wanted to know when the cooker could be opened. This was not happening in the multibrand traditional kitchenware outlet that was cramped and far below expectations of the fast-changing customer. This will be in addition to TTKs stand alone rural smart kitchen outlets. which account for roughly 40 per cent of the value share of the total market. 25 . the group forayed into modular kitchens and launched its trendy Prestige Smart Kitchen across major cities.

Some of these outfits belong to one or more national chains. While this modern format currently covers hardly 3% of the retail business this share is likely to become significant in the coming years especially in the urban areas. The dealer network which has been largely supporting the traditional product categories consisting of pressure cookers and cookware is now stocking a larger range of TTKs products and the dealers are keen to increase the shelf space of its products. malls. Coimbatore and Bangalore and 19 sales branches located across the country to cater to the needs of specific markets Over the last few years. the company is looking at opportunities 26 . There is a moderate growth opportunity for pressure cookers in the non US markets. modern retail formats like large format stores. As pressure cooker is not a significant part of kitchen appliance market in USA. However the sales in the non US markets are encouraging. The company is in the process of ensuring its presence significantly in these modern format stores. Owing to a dynamic trade policy which affords satisfactory return on investment to the dealer. Germany.TTK Prestige is the first kitchenware company in India to receive the ISO 9001 certification and the PED / CE certification by TUV. TTK witnessed a decline in the export sale during the current year especially in the US market. TTK Prestige Ltd is listed on both BSE & NSE. the contribution through traditional dealer network is also growing. They cater to a variety of customer segments at several price points. super markets and hypermarkets have started attracting huge foot falls especially in the urban areas. The company presently has manufacturing set-ups in Hosur. The Company recognizes the immense value of its traditional dealer network.

The interest cost as a percentage to sales has dropped from 8. This standby use will be phased out during the next twelve months.4% during the year under report INVESTMENTS The company further recapitalized its wholly owned subsidiary Manttra Inc by investing Rs. With this TTK has dealt with all its unrelated investments. As mentioned in the earlier director’s reports.4% two years back to 2. There was a further reduction in the interest burden as compared to the previous year by about Rs. The capacity has been established by adding new machinery as well as transferring machinery that has been rendered surplus in the Bangalore facility. pursuant to right-sizing the Bangalore Unit is being used a stand by unit as part of supply chain optimization measures.41crores.for tapping the high end cookware market in USA.30 crores. It may be noted that over the last three years prior to the year under report. FINANCES AND INTEREST RATE STRUCTURING During the year there was no change in the equity capital. If this opportunity can be exploited then it affords an opportunity to increase the distribution for pressure cookers also in this market.1.20 crores. During the first quarter of 2005-06 the investments made in TTK Services Private Ltd was also encashed.86 lakhs. EXPANSION AND CAPITAL EXPENDITURE The company has during the start of the current financial year i. which brought in cash of Rs. As the domestic economy is growing rapidly.e. TTK reduced its debt burden by over Rs. TTK is also in the process of establishing a new manufacturing undertaking near Roorkee in 27 . The company was able to finance its growth through internal accruals without increasing debt capital.4. TTK will be committing larger resources to the domestic market and hence export opportunities will be considered only step by step to optimize the overall earnings of the company. April 2008 commenced commercial production of pressure cookers in the new facility created at Myleripalayam Village near Coimbatore.

a unit established in the notified areas in the State of Utharanchal is also entitled to excise duty exemption and income tax concession for a period of 10 years.85 lakh square feet will become available for development. Further.the State of Utharanchal. As stated earlier. This unit will manufacture all types of pressure cookers and cookware. Industrial relations were cordial throughout the year. DEVELOPMENTS IN HUMAN RESOURCES The direct employment strength stood at 724 as compared to 708 in the previous year. 28 . the manufacturing activity in the Bangalore Unit will be phased out during the course of next 12 months and the land therein admeasuring around 2.20 crores spread over the financial years 2009-10 and 2010-11. This unit is expected to commence commercial production during the course of the financial year 20092010 All the above initiatives together with normal capital expenditure will result in a capital expenditure spend of over Rs. which enabled the growth possible. Facility for assembly of other domestic kitchen appliances will also be incorporated in this unit. The Board has a massive opportunity to take appropriate decisions in dealing with this property in the best interests of the shareholders to ensure considerable revenue windfall. There were no unclaimed deposits which remained unpaid as on that date. Improved training and development programmes are in place to achieve improved productivity in all departments.310 lakhs as on 31st March 2008. The Public Deposits aggregated to Rs. As the demand for company’s products exist in northern India a manufacturing facility in the North affords logistical advantages and incidental cost savings. Your company maintained its morale of human resource at the highest level.

feature and value addition. The company needs to be less dependant on one product by aggressively promoting & consolidating rest of its kitchenware products in the segment. although the company’s revenue is still dominated by Pressure cooker sales. The company operates in a single segment-Kitchen Appliances. Kitchen Electrical Appliances and Gas Stoves. Though there is high mortality of these players they tend to impair the rapid growth of quality conscious branded players by putting their legitimate margins under pressure. customer education and brand promotion to stay above these unorganized players. The products include Pressure Cookers. 2007-08 Domestic Pressure Cookers Non-stick Cookware Kitchen Electric Appliances Gas Stoves Others Total 12249 Export 1481 Total 13730 2006-07 Domestic 9717 Export 2463 Total 12180 3542 32 3574 2424 43 2467 2163 2163 1136 -- 1136 2254 1375 21583 87 1600 2254 1462 23183 1766 1336 16379 -52 2558 1766 1388 18937 29 . As has been the policy. the company continues to invest in innovation.The long term settlement with the union in the Hosur manufacturing complex expires during the financial year 2008-09. The directors must work toward concluding a settlement with more thrust on employee productivity. Non-stick Cookware. These have two impacts namely commoditization of product categories and unrealistically low pricing. THREATS In the domestic market the threat continues to be from the mushrooming unorganized players and regional brands.

2. Employ cost-cutting methods to further lower prices especially during recessionary pressure. and portfolio analysis. The product lines/business units form a portfolio of investments that top management must constantly juggle to ensure the best return on the corporation's invested money.In the export market. Investing more heavily in Research and Development so as to make more innovative products to compete better PORTFOLIO ANALYSIS FOR TTK PRESTIGE: One of the most popular aids to developing corporate strategy in a multibusiness corporation is the portfolio analysis. Two of the most popular approaches are the BCG growth share matrix and the GE business screen. Launch large-scale promotions to make consumers aware of advantages of branded kitchenware appliances. Alternatives to combat these very problems are as follows: Option : 1. the influx of cheaper supplies from China continues to put pressure on margins as well as expansion of sales. Portfolio analysis is the wide set of tools to analyze elements of a firm's product mix to determine the optimum allocation of its resources. strategic management. Two most common measures used in a portfolio analysis are market growth rate and relative market share. Each of the corporation's product lines or business units is plotted on the matrix according to the 1> growth rate of the industry and 2> its relative market share. This helps the company allocate resources and is used as an analytical tool in brand marketing. product management. Placing products in the BCG matrix results in 4 categories in a portfolio of a company: 30 .In portfolio analysis top management views its product lines and business units as a series of investments from which it expects a profitable return. 3. The BCG MATRIX is a chart that had been created by Bruce Henderson for the Boston Consulting Group in 1968 to help corporations with analyzing their business units or product lines.

because high demands and low returns due to low market share . Question Marks (= high growth. high market share) . The non stick cookware segment is one in which prestige has a strong position and although the urban market is saturated the rural market is growing at a high rate. low market share) . . cash cows and dogs according to the markets in which they are in i. The modular kitchen and the electrical appliances markets are experiencing a high growth rate in the urban markets. Although the urban markets are mostly saturated with low growth rates in the pressure cooker segment the rural market is experiencing a rapid double digit growth rate with the penetration into rural households being the hope for this segment. and because of the low growth. a dog.e.deliver cash. 2. question marks. Dogs (=low growth. Cash Cows (=low growth.avoid and minimize the number of dogs in a company.Foundation of a company 3.1. Keep profits high .beware of expensive ‘turn around plans’.If nothing is done to change the market share. . otherwise liquidate 4. TTK prestige forayed into the rural markets in FY 06 in the modular kitchen segment in rural Karnataka and is drawing heavy footfalls in the retail outlets. as the growth stops. . question marks will simply absorb great amounts of cash and later.use large amounts of cash and are leaders in the business so they should also generate large amounts of cash. according to the 31 .profits and cash generation should be high . Thus in the BCG matrix the products of TTK Prestige can be divided into stars. because the rewards will be a cash cow if market share is kept.frequently roughly in balance on net cash flow. investments needed should be low. Stars (=high growth.Either invests heavily or sells off or invest nothing and generate whatever cash it can. Increase market share or deliver cash MARKETS: The markets of prestige products can be mainly divided on the basis of some common characteristics into urban markets and rural markets. However if needed any attempt should be made to hold share. . high market share) . low market share) .have the worst cash characteristics of all.

non-stick cookware DOGS: Gas stoves RURAL MARKETS: STARS: Pressure cookers. modular kitchens.urban and rural markets. URBAN MARKETS: STARS: NONE QUESTION MARKS: Electrical appliances. non stick cookware. electrical appliances. gas stoves QUESTION MARKS: none CASH COWS: none DOGS: none BCG MATRIX FOR TTK PRESTIGE: URBAN MARKETS 32 . modular kitchens CASH COWS: pressure cookers.

HIGH RELATIVE MARKET SHARE LOW HIGH MARKET STARS Electrical appliance s ppliances sss QUESTION MARKS GROWTH Modular kitchens LOW Pressure cookers C CASH CASH COWS Non stick cookwar Gas stoves DOGS 33 .

McKinsey & Company 34 Electric al .BCG MATRIX FOR TTK PRESTIGE: RURAL MARKETS HIGH RELATIVE HIGH MARKET SHARE LOW MARKET GROWTH Pressure cookers Modular kitchen s QUESTION MARKS Non stick cookwa re Gas stoves STARS LOW CASH COWS DOGS GE MATRIX FOR TTK PRESTIGE: In consulting engagements with General Electric in the 1970's.

and multiplying that value by a weighting factor.developed a nine-cell portfolio matrix as a tool for screening GE's large portfolio of strategic business units (SBU). The GE / McKinsey matrix is similar to the BCG growth-share matrix in that it maps strategic business units on a grid of the industry and the SBU's position in the industry. This business screen became known as the GE/McKinsey Matrix. The GE matrix has nine cells vs. Industry attractiveness and business unit strength are calculated by first identifying criteria for each. COMPETETIVE STRENGTH MARKET ATTRACTIVENESS HIGH HIGH PRESSURE COOKERS MODULAR KITCHENS MEDIUM NON STICK COOKWARE ELECTRICAL APPLIANCES LOW MEDIUM GAS STOVES LOW Criteria for market attractiveness: • Size of market 35 . determining the value of each parameter in the criteria. attempts to improve upon the BCG matrix in the following two ways: • • The GE matrix generalizes the axes as "Industry Attractiveness" and "Business Unit Strength" whereas the BCG matrix uses the market growth rate as a proxy for industry attractiveness and relative market share as a proxy for the strength of the business unit. four cells in the BCG matrix. The result is a quantitative measure of industry attractiveness and the business unit's relative performance in that industry. The GE matrix however.

Industry maturity is very similar to the Product Life Cycle (PLC) and could almost be renamed an 'industry life cycle. Often this is associate with some form of monopoly position or customer lock.LITTLE MATRIX FOR TTK PRESTIGE: The Arthur D Little (ADL) Strategic Condition Matrix offers a different perspective on strategy formulation. Branding and promotions success. product and place. The product or service which it markets. Competitive position is driven by the sectors or segments in which a Strategic Business Unit (SBU) operates. A. Dominant . Brand loyalty Efficiency. 36 . It is a combination of the two aforementioned dimensions that helps us to use ADL for marketing decision-making. Place (or distribution). Competitive position has five main categories: • 1.This is a particularly extraordinary position.competitive position and industry maturity. Management profile. ADL has two main dimensions . R & D.' Of course not only industries could be considered here but also segments. the law and energy effeciency Criteria for competitive strength: • • • • • • • • • Market share. Now let's consider options in more detail.. and the accesses it has to a range of geographically dispersed markets that are what makes up an organization's competitive position i.e.D. Cost reduction. Quality of products and services.• • • • • Market rate of growth Nature of competition and its diversity Profit levels Ability to differentiate Impact of technology.

Here product strengths and geographical advantages come into play. Tenable . 5. For example they might use a Gap Analysis. It is difficult for them to compete since they do not have a sustainable competitive advantage. Weak . Managers then need to decide upon the best strategic direction for the business. 4. Strong . and therefore to take an organization to a more favourable.As the term suggests companies in this undesirable space are in an unenviable position. STAGES OF INDUSTRY GROWTH 37 . Technology strategies. Retrenchment strategies.• • • • 2. Of course there are opportunities to change and improve. Favourable . strong or competitive position.Here companies may face erosion by stronger competitors that have a favourable. Product strategies. According to ADL. Management and systems strategies. From here the strategic position of an organisation can be established. Operations strategies. there are six generic categories of strategy that could be employed by individual SBU's: • • • • • • Market strategies. No single global player controls all segments.Here companies have a lot of freedom since position in an industry is comparatively powerful 3. strong or even dominant position.Companies with a favourable position tend to have competitive strengths in segments of a fragmented market place.

COMPANY’S COMPETITIV E POSITION DOMINANT EMBRYONIC GROWTH MATURITY AGEING PRESSURE COOKER STRONG NON STICK COOKWARE FAVOURABL E ELECTRICAL APPLIANCES GAS STOVES KITCHEN ACCESORIES TENABLE MODULAR KITCHEN WEAK Porter’s 5 forces model:38 .

by applying unique business models. profitability is low and yet individual companies. The overall industry attractiveness does not imply that every firm in the industry will return the same profitability. and two forces from 'vertical' competition: the bargaining power of suppliers and the bargaining power of customers. to contrast it with the more general term macro environment. have been able to make a return in excess of the industry average.Academic Information Porter referred to these forces as the micro environment. and the threat of new entrants. the threat of established rivals. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a business unit to re-assess the marketplace given the overall change in industry information. business model or network to achieve a profit above the industry average. Porter's five forces include three forces from 'horizontal' competition: threat of substitute products. A clear example of this is the airline industry. As an industry. The threat of substitute products or services 39 . Firms are able to apply their core competencies.

This results in many new entrants. Substandard product Quality depreciation The threat of the entry of new competitors Profitable markets that yield high returns will draw firms. rights. etc. which eventually will decrease profitability. Unless the entry of new firms can be blocked by incumbents. • The existence of barriers to entry (patents. Economies of product differences Brand equity Switching costs or sunk costs Capital requirements Access to distribution Customer loyalty to established brands Absolute cost advantages Learning curve advantages Expected retaliation by incumbents Government policies Industry profitability.)The most attractive segment is one which entry barriers are high and exit barriers are low. today competitors need only a website to enter a market • • • • • • • • • • • • The intensity of competitive rivalry 40 . as online product can easily replace material product. Information-based products are more prone to substitution.The existence of products outside of the realm of the common product boundaries increases the propensity of customers to switch to alternatives: • • • • • • • • Buyer propensity to substitute Relative price performance of substitute Buyer switching costs Perceived level of product differentiation Number of substitute products available in the market Ease of substitution. Few new firms can enter and nonperforming firms can exit easily. the profit rate will fall towards a competitive level (perfect competition). the more profitable the industry the more attractive it will be to new competitors Internet era.

which also affects the customer's sensitivity to price changes. This applies to products and services.For most industries. and innovation. particularly in industries with high fixed costs Buyer volume Buyer switching costs relative to firm switching costs Buyer information availability Ability to backward integrate Availability of existing substitute products Buyer price sensitivity Differential advantage (uniqueness) of industry products RFM Analysis The bargaining power of suppliers 41 . the intensity of competitive rivalry is the major determinant of the competitiveness of the industry. Vertical integration is a strategy to reduce a business' own cost and thereby intensify pressure on its rival. The bargaining power of customers (buyers) The bargaining power of customers is also described as the market of outputs: the ability of customers to put the firm under pressure.brick-andmortar Level of advertising expense. click-and-mortar -v. until competitors imitate them. • • • • Sustainable competitive advantage through innovation. How will competition react to certain behavior by another firm? Competitive rivalry is likely to be based on dimensions such as price. Powerful competitive strategy used by a company which can intensify competitive pressures on their rivals. Technological advances protect companies from competition. Companies that are successful with introducing new technology are able to charge higher prices and achieve higher profits. Competition between online and offline companies. quality. • • • • • • • • • • • Buyer concentration to firm concentration ratio Degree of dependency upon existing channels of distribution Bargaining leverage. Examples of recent technology advantage in have been mp3 players and mobile telephones.

• • • • • • • Supplier switching costs relative to firm switching costs Degree of differentiation of inputs Impact of inputs on cost or differentiation Presence of substitute inputs Supplier concentration to firm concentration ratio Employee solidarity (e. advertising and promotion spending and direct selling efforts. market share.g. or. non-stick cookware. and modular kitchen solutions. Suppliers may refuse to work with the firm. kanchan. domestic kitchen appliances.g. labour unions) Supplier competition . TTK Prestige has evolved from a pressure cooker company to a total kitchen solution provider. components. Prestige Cooker is affecting its rivals by its price and the technology of being balanced cookers all through the world containing aesthetic styles and better technology efficient.The bargaining power of suppliers is also described as the market of inputs.. It has established superior production operations and processes due to experience. On the other hand new entrants would have to undertake huge capital investment to build out their networks and match the scale advantage of established companies. and services (such as expertise) to the firm can be a source of power over the firm. Increasing urbanization and fast-changing demographics have led to a growing demand for additional homes. Jaipan. chimneys. with its variety of ranges seems to have advantage of price. Competitive Rivalry The competitive struggle is fought through price. This is especially true as Prestige Cooker is already in fierce competition with other more established brands like Hawkins. charge excessively high prices for unique resources. when there are few substitutes. which have now 42 . or management skills. equipment. perceived quality and thus. Thus fierce competition does exist but at the moment Prestige. non-stick pressure cookers and pressure indicator. Suppliers of raw materials. mixer-grinders. such as labor. TTK controls more than 60% of the pressure cooker market thus actions of other companies affect the market share of it but the growing need for cookers tend to moderate competition by providing scope for growth to the company. It has refurbished its product portfolio by introducing gas stoves. The threat of new competitors is one of the forces of Porter’s model which in this case is less because of the cost advantage they provide to their customers on various sizes available in the market. It has introduced many new concepts in pressure cookers like new shapes. hobs. e.ability to forward vertically integrate and cut out the buyer New entrants Prestige cooker is a brand of the company TTK which is known for its food kitchen utensils. labor. materials. patents and exercise huge control on particular inputs required for production. which in turn have increased demand for kitchen appliances. TTK Prestige pioneered the concept of pressure-cooking in India. distribution.

The trend of pressure cooker has grown so widely that people from rural are also using the pressure cookers as even the government is stressing upon these people to use pressure cookers so that usage of liquid petroleum gas can be lessened. which has helped in boosting brand image and demand. Going forward. Its varied variety and its design which are very common and known to many people makes usability very easy which tends the people to purchase. Bargaining power of buyers When the buyers purchase in large quantities then buyer can use their purchasing power as leverage to bargain for price reductions. for the urban woman.3 in 2001. The change in the family structure in India is clearly reflected in the reducing number of persons per household.7 persons in 1971 to 5. it must be remembered that TTK not only has its manufacturing plants but also the capability of importing with research and development units as. The switching costs are low so buyers can play off the supplying companies against each other to force down prices. Prestige at present has many outlets. Bargaining power of suppliers Suppliers are weak as the company has the opportunity to force down input prices and higher quality inputs. so it could threaten to enter the suppliers industry and make the inputs as a tactic to lower down the prices of the input. we expect the trend towards nuclear families to intensify. the pressure cooker has become indispensable. also for its long time sustainable in the market makes them the first priority to purchase. TTK Prestige is aggressively expanding the number of exclusive outlets. nearly half of which comes from its pressure cooker. which has fallen from 5. Threat of substitutes 43 . with the average number of people in a household set to fall to 5. the retail chains are exercising sufficient power over major brands of cookers.become standards for other manufacturers which makes difficult for other competitors for rivalry. As mentioned earlier. whether she is a working woman or a housewife. the company has entered the fast growing retail space with its exclusive ‘Smart Kitchen’ outlets. which is expected to go up from 164 in 92 towns to over 200 outlets by the end FY07. TTK Prestige is having a huge turnover.India is also fast moving from an agriculture-based to a services-driven economy. Also.1 by 2011.

Technological. imports/ exports. Environmental: what is happening with respect to ecological and environmental aspects.e. cost of living. they can prepare strategically for any changes that need to be made in the organization or simply to have the awareness of the external market to give them a competitive edge over other firms in the industry. In this way. Some brand concern persons who think that prestige cooker pressure is a low class cooker might shift to other brands like Hawkins. Sociological. health consciousness. trade restrictions. Legal and Environmental. The PESTLE analysis examines each factor to assess what their impact or potential impact on the organization. cultural norms and expectations. PESTLE [Political. pressure kadai. credit availability. This may impact employment. The threat is minimal as Prestige has some flamboyant designs where all the utensils and other cookware are matched with to increase the uniqueness. Technological: new technologies are continually being developed. There are also changes to barriers to entry in given markets Legal: changes to legislation. as these come with some very good western aesthetic designs. who might migrate to cheaper. Economic. Technological.e. kanchan or Jaipan. pressure handi etc. Also. Legal and Environmental Profile] PESTLE analysis factors are Political. population growth rate. tariffs Economic: what is happening within the economy i. has low range or the low cost brand variant. 44 . unemployment (local and national). for the price conscious customer. Sociological: what are occurring socially i. economic growth/ decline. career attitudes. Economic. minimum wage.TTK Prestige cooker provides cookers with different sizes like pressure cooker. resources. access to materials. therefore the threat of having substitute is reduced as customer can buy according to his own preference within the same brand. etc. Social. TTK prestige cooker. taxation etc. Examples of each PESTLE analysis factor are: • • • • • • Political: what is happening politically with regards to tax policies employment laws.

• • • 45 . it has launched many unique and innovative products. COST OF INPUTS URBAN INDIA TRENDS TO EAT OUTSIDE ISO CERTFIED AND WITH US HELP TECHKNOWLEDGE KNOW HOW CAN BE TRANSFERED MANTRAA. which have now become standards for other manufacturers.EXTERNAL FACTORS POLITICAL ECONOMIC SOCIAL TECHNOLOGICAL LEGAL ENVIRONMENTAL EXTERNAL FACTORS AFFECTING ORGANISATION GOVERMENTS TAX POLICYAND OTHER SUBSIDARIES FOR USAGE OF PRESSURE COOKERS INFLATION. Company recognizes the immense value of its traditional dealer network. the contribution through traditional dealer network is also growing. Owing to a dynamic trade policy which affords satisfactory return on investment to the dealer. Penetration of pressure cookers in the domestic urban market is very high and the future growths have to come from rural households.VARIANT OF COOKER WHICH IS EXPORTED TO US. AND OTHER METALLURGICAL MEASURES Competitive Advantage Profile [CAP] of TTK Prestige Pressure Cooker brand in India • TTK Prestige pioneered the concept of pressure-cooking in India. There are rural households who have disposable incomes but the impulse to buy pressure cookers or other kitchenware has not been generated due to inadequate distribution reach. non-stick pressure cookers and pressure indicator. AND LESS LAYOFF AT THE TIME OF RECESSION STRINGENT SPECEFICATIONS FOR MAINTENANCE OF PRODUCT QUALITY. Over the years. It has introduced many new concepts in pressure cookers like new shapes. RECESSION/ DOWNTURN. TTK which was only into cookware now has around 33% of its revenues coming from kitchen appliances.

The company will enjoy higher revenues as the market grows in size with no additional capex/interest. Company’s proposed new ERP implementation will further improve the internal controls. • SWOT analysis 46 . But as it is running only at 50 per cent of its capacity. The company’s current installed capacity in pressure cookers is 40 lakh units. there is room for scaling up production with demand expected to rise in the coming years. which is the single largest brand.• • The company is also into the modular kitchen segment. Company is continuously improving the internal control system in all the areas of operation including the effective monitoring of Prestige Smart Kitchens established across the length and breadth of the country.

• Threats: external conditions which could do damage to the objective. • The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. Matching is used to find competitive advantages by matching the strengths to opportunities. An example of conversion strategy is to find new markets. finance. • External factors – The opportunities and threats presented by the external environment to the organization.SWOT Analysis is a strategic planning method used to evaluate the Strengths. If the threats or weaknesses cannot be converted a company should try to minimize or avoid them. Opportunities. Internal and external factors The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities. the decision makers have to determine whether the objective is attainable. • Opportunities: external conditions that is helpful to achieving the objective. First. SWOT analysis groups key pieces of information into two main categories: Internal factors – The strengths and weaknesses internal to the organization. manufacturing capabilities. These come from within the company's unique value chain. What may represent strengths with respect to one objective may be weaknesses for another objective. Strengths: attributes of the person or company that is helpful to achieving the objective. Matching and converting Another way of utilizing SWOT is matching and converting. and so on. The factors may include all of the 4P's as well as personnel. • Weaknesses: attributes of the person or company that is harmful to achieving the objective. The external factors may include 47 . A SWOT analysis must first start with defining a desired end state or objective. A SWOT analysis may be incorporated into the strategic planning model. and Threats involved in a project or in a business venture. • Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. Weaknesses. It involves specifying the objective of the business venture or project and identifying the internal and external factors that are favorable and unfavorable to achieving that objective. given the SWOTs. If the objective is NOT attainable a different objective must be selected and the process repeated.

Customers review 48 . 6. Price of these cookers ranges in all income group people. 5. For example. it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. weak opportunities may appear to balance strong threats. reliability and safety as our hallmarks. for example. 3.macroeconomic matters. technological change. SWOT ANALYSIS OF PRESTIGE S (Strength): 1. The product is treated as a matter of prestige which gave good brand image 2. It also presents the resulting lists uncritically and without clear prioritization so that. The results are often presented in the form of a matrix. as well as changes in the marketplace or competitive position.Pioneers in this industry. and socio-cultural changes. SWOT analysis is just one method of categorization and has its own weaknesses. legislation. . with years of trust. Prestige has the largest range of pressure cookers in the country. 4.

2. 3. O (Opportunities): 1. Cleaning: Ease ofNot able to beat out Hawkins. Capture the range of market namely low-medium users. 2. Wide range of availability of competitors products. 4. 5. Competitors future cookers are being planned to manufacture with Anodized aluminum.W (weakness): Ease of Use: 1. Safety techniques like Gasket Release System” and the “Gasket Offset Device” add points in safe use for beginners T (Threats): 1. VALUE CHAIN ANALYSIS: 49 . Unable to reach huge sales volume. Incapable fitting lead pressure cooker market with nearly 70-80% of market share of competitors’ like Hawkins. They are declining the direct promotion to attain good market. No innovative marketing strategy been adopted so as grab the market. 5. Unbranded cookers in market are swallowing 50 percent of market share. They have mudra communications as their marketing agent which is a good opportunity to explore. The expected moving of high income group towards the black berry of Hawkins is nearly threat. 2. Currently the season which is going begin is marriage season so new families form they can target those customers in bulk pack. Launching of anodized cookers in front challenge before all pressure cookware. 3. Style & Design:and kanchan Butterfly Service & Support: in dominating the outer 4. Lacking in high diversified segmentation. 5. 4. Durability: 3.

Competitive Advantage (1980). They are stored until they are needed on the production/assembly line. The goods are now finished. Porter in his book. and they need to be sent along the supply chain to wholesalers. The chain consists of a series of activities that create and build value. retailers or the final consumer. Individual operations could include room service in an hotel. Inbound Logistics. It was created by M.The value chain is a systematic approach to examining the development of competitive advantage. Operations. Here goods are received from a company's suppliers. Primary Activities. Goods are moved around the organisation. This is where goods are manufactured or assembled. packing of books/videos/games by an online retailer. Marketing and sales: 50 . Outbound Logistics. E. They culminate in the total value delivered by an organization. or the final tune for a new car's engine.

In true customer orientated fashion. training and so on. prestige believes as the leader in the segment. INBOUND LOGISICS MARKETING AND SALES The dealers and distributors played a very important role in success of prestige. The dealers and distributors are dealing with the prestige products alone. 51 . To improve the visibility in terms of display the entire range of products. Prestige smart kitchens have been one of the most innovative marketing moves by prestige. This area focuses strongly upon marketing communications and the promotions mix. complaints handling. Prestige strongly believes in trade partners and is committed to strengthen them and prepare them for the challenges ahead. This includes all areas of service such as installation. They educate and instigate change in the trade partners and help them get to next level. to improve the distribution of our new products and to offer the customer right ambience to shop and educate and communicate the right things about prestige. PSK was conceptualized to do three things. Service. at this stage the organization prepares the offering to meet the needs of targeted customers. With the current trend of organized retail growing. after-sales service.

The goods are now finished. and they need to be sent along the supply chain to wholesalers. contributes 12% of the revenue.ft of retail space. Outbound Logistics. It has prepared to take the challenges of organized retail. The concentration would be on the tier 11 cities in south India and tier 1 in non south markets. retailers or the final consumer.After three years of successful operation and over 100 stores PSK today offers that edge over the competition. By the end of this fiscal they shall be 400 in numbers with 80000sq. They have plans to expand the stores across the country. SERVICE: 52 . Besides the three benefits. PSK has instigated the nearby traders to keep the entire range of products. This has actually resulted in prestige increasing its market share for its entire range in that area dramatically. that PSK offered. which cannot be replicated. The same traders were not ready to stock and sell the entire range.

New Zealand. We specialize in Pressure Cookers and their Spare Parts and have sourced quality products from around the world (several brands are exclusive to the Pressure Cooker Centre) so that we can offer you a complete choice of quality pressure cookers for all budgets.The Pressure Cooker Centre has been supplying and servicing pressure cookers since 1968 when we started in a little shop in West Perth. You will find a large range of SILAMPOS saucepans. and ZWILLING HENCKELS knives also from Germany and much more. still provides the personal friendly service that helped us grow to a truly National dimension. to all corners of Australia. the top quality SILIT cookware from Germany with its unique SILARGAN ceramic non-stick and scratch-proof coating. The "little store". Malaysia. now in Subiaco. Western Australia. STRATEGIC ALTERNATIVES/ SOLUTIONS 53 . on a daily basis. frypans. various countries throughout SE Asia (including Thailand. This top-of-the range cookware with Thermoplan base (guaranteed for 25 years) is made of the finest 18/10 stainless steel and is imported directly from Portugal. stockpots. Philippines. We also carry a select range of quality kitchenware and kitchen accessories so that we can offer you world renowned top-of-the-range cookware and kitchenware. We also offer exclusive to Pressure Cooker Centre. Indonesia) and beyond and spare parts to all corners of the world. With a devotion to a quality service to our customers. design and finish and is offered to our customers at the lowest retail prices. steamer sets and double boilers. our business has expanded to the point of supplying pressure cookers now. The Silampos cookware range is of excellent quality. WA. Goto Kitchenware.

With the improved research and development EXPORTING to USA according to their standards may prove to be advantageous Recommended Strategy In spite of all the aforementioned strategies would help Prestige compete. Jaipan and Kanchan but would also help in wooing the 80% of the consumers of India who rely on pressure cookers. This would not only ward off the significant competition from other players like Hawkins.The main issues for Prestige pressure cookers are regarding the threat from other kitchen ware products. Launch large-scale promotions to make consumers aware of advantages of variant pressure cookers released by prestige 2. 54 . is also likely to increase TTK Prestige Pressure cooker profit margins which at the moment is a luxury that none of the competing others players enjoy. It is our understanding that the vast rural sectors subscribe most to the cookers as they are seen to be cheaper and efficient than normal cooking methodology. differentiating its products further so as to fend off competition. Investing more heavily in Research and Development so as to make more innovative products to compete better 4. Pouring money into promotion of products that aren’t selling in the market is unwise Increase in sales and market share while further cutting down costs. Alternatives to combat these very problems are as follows: Option 1. Similarly with more revenue. sustainable and profitable. grow and sell better. the rest of the strategies and alternatives can be easily implemented post evaluation to find the best practices to make TTK Prestige growth in India both. the best option for now would be to employ cost-cutting methods to decrease prices further. By employing cost-cutting methods this price difference and the associated perception can be bridged to increase Prestige market share. ensuring growth in kitchenware market. Employ cost-cutting methods to further lower prices while discontinuing unsustainable products 3. It is also imperative for the brand to discontinue the products in its portfolio that are not doing well.

the products. the variants. the value it has created. We have 55 . the problems faced specifically by the brand and those faced by the industry as a whole in recent times. we have been able to analyze the brand.Conclusion By studying products of TTK Prestige India specifically its cooker brand.

Pdf TTK Prestige report. All in all. is here to stay and its market share is only bound to soar with the definite shift towards packaged cookers by the rural and urban population given to the growing density. 2. In light of our study. TTK_Prestige-Techno_Research_Report.pdf 56 . REFRENCES 1. we have been able to formulate certain solutions to the issues identified by us. while recommending the most suitable on for a variety of reasons.been able to evaluate to an extent the strategies that are conspicuous to us while noting whether implementing these strategies have helped Prestige or not. it is certain that Prestige brand of pressure cookers. backed by the parent company TTK Ltd.

easy2source. 6.annual-report-ttk-prestige-2008-2009.mouthshut.prestigesmartkitchen.html 4.pdf 12.prestige cookware/State-of-art-Microwave-ovenslaunched-by-TTK-Prestige.com/products2171.com/ http://www.com/iw/2009/10/19/stories/2 009101950210400.americanchronicle.html http://www. www.html 57 . 8.com www.com/articles/view/105565 14.thehindubusinessline.reviewstream.3. 7. http://pressure-cookers.com/productreviews/Prestige_Pressure_Cooker-925003557. http://www.html 5.com/ttkprestige/productpr ofile2.com/reviews/?p=25542 13.blogspot.htm pressure-cooker-cheap-solution.htm http://www. http://www. www.com/2009/05/prestige- 11. 9. http://www. 10.hawkinscookers.com/downloads/pc_catalog. www.html http://corporategifts.a-review-of-the-royal-prestige-hy-cite-corp-incomeopportunity-579302.reviewcentre.