In the partial fulfillment for the award of Bachelor of Technology Degree In MECHANICAL ENGINEERING From Kurukshetra University, Kurukshetra

SUBMITTED TO:Er. Gaurav Mehta AP-ME Deptt. June-2012

SUBMITTED BYABCDZ (2708200) Mech. 8Th Sem.



ACKNOWLEDGEMENT It gives us a great pleasure to present this SSI project report on XYZ Pvt. Ltd. I would like to express our sincere thanks, with a deep sense of gratitude to our Guide Er. Gaurav Mehta, AP-ME Department for his keen interest, valuable guidance and constant motivation which is primarily responsible for completion of this Project report. I am thankful to all the Mechanical Engineering Department for their valuable guidance, suggestions and timely help. The well experienced and skilled staff of Mechanical Department imparted us technical knowledge to a great extent by preparing this Project Report under the guidance of our guide and Mechanical department.

ABCZ (2708200) B. Tech. (Mechanical Engg.)


CERTIFICATE This is to certify that me the students of B.Tech. VIIIth Semester (Mechanical Engineering) have successfully completed the SSI project report entitled “Concrete pipe” in the partial fulfillment for the award of Bachelor of Technology Degree in Mechanical Engineering from Kurukshetra University, Kurukshetra during the academic year 2011. I wish him a prosperous & bright future with all the great silvery success in their career.

ABCZ (2708200)

Er. Gaurav Mehta AP-ME Deptt.

Er. Rajdeep Singh HOD -ME Deptt.


Ltd.PROJECT REPORT Under Small Scale Industries Schemes 1. . Firm Name:.500 Units per month. 4 . Sirsa (Haryana)-125055 3. Phase-II.XYZ Pvt.2. Target: .Plot no 41. Nature of Business: -Manufacturing of XYZ Products. 4. Address:. Industrial Area.

7 8 9 31 32 34 36 40 41 47 48 50 73 74 87 89 5 .CONTENTS Description  Introduction to Small Scale Industry  MSME  How to Start a Small Scale Industry  Financial Requirements  Small Industrial Development Organization  Important schemes of Financial SFC  Concept of Marketing  Steps In Marketing Management  Product Classification  Organization Structure of SSI  Organization Under SSI  SWOT analysis  Market Potential  Basis and Presumption  Raw Material  Conclusion Page No.

Irrespective number of worker engaged is small scale industry unit. is generally not attracted. The strategy adopted by the government is:1. Public entrepreneurship should remain confined only to those industries & sector where private enterprise. The investment scale in this industry from 5 lakh to 1crore for fixed assets. guidance etc.INTRODUCTION TO SMALL SCALE INDUSTRY The SSI (SMALL SCALE INDUSTRY) today is immense for the growth of the country. In India these type of industries are permuted to meet with the problem of excess population & unemployment so the government of India praise entrepreneur to step up small scale industries by aiding him by giving loans. Existing public entrepreneurship be improved through better management & by 6 . Small scale industries are the industries which are run with the help of hired labors and which also use some simple machine and power. individual or corporate. land.

Program for their development be drawn up and should be effective implemented. There is need to development management education and industrial training. entrepreneurship implies positive action and individual with the right kind of combination of ability can pursue their goal with unremitted courage and enthusiasms. It should be realize that the central core of entrepreneurship is the motive force since by its nature. it should be realized that entrepreneurs are not the grief of a particular classes. The development of backward region / area constitutes a new challenge. In this context. 2. There is need to streamline the R&D wing of public sector enterprise. 3. 4. 5. Adequate measure is a must for mobilizing & casting the entrepreneur‟s talent in the country.putting relative greatly emphasis on research &development. All possible efforts are made very seriously (not casually) for the development of an industrial culture. 7 .

Financial institute should provide adequate and timely credit and timely create and technical assistance.The enterprises engaged in the manufacture or production of goods pertaining to any industry specified in the first schedule to the industries (Development and regulation Act. The Manufacturing Enterprise are defined in terms of investment in Plant & Machinery. Economic administration by the state should be improved and made more effective so that economic policy may be fully achieving their objective in the overall interest of economy. 2006 the Micro. Small and Medium Enterprises (MSME) are classified in two Classes: (a) Manufacturing Enterprises. especially to the small and medium sized enterprise. They may also impart knowledge about the need of economy and they should file their massive data in term of growth of new entrants or entrepreneurs in the field of industry. Small & Medium Enterprises Development (MSMED) Act.6. Definitions of Micro. Small & Medium Enterprises In accordance with the provision of Micro.1951). 7. 8 .

8 million enterprises and the labour intensity in the MSE sector is estimated to be almost 4 times higher than the large enterprises. the sector accounts for about 39% of the manufacturing output and around 33% of the total export of the country. As per available statistics. In India. Further. It is estimated that in terms of value.(b) Service Enterprises: The enterprises engaged in providing or rendering of services and are defined in terms of investment in equipment. The major advantage of the sector is its employment potential at low capital cost. the Micro and Small Enterprises (MSE‟s) sector plays a pivotal role in the overall industrial economy of the country. this sector employs an estimated 31 million persons spread over 12. in recent years the MSE sector has consistently registered higher growth rate compared to the overall industrial sector. 9 .

Pursuant to this amendment. “ MINISTRY OF MICRO. namely. Ministry of Agro and Rural Industries (Krishi Evam Gramin Udyog Mantralaya) and Ministry of Small Scale Industries (Laghu Udyog Mantralaya) have been merged into a single Ministry. SMALL AND MEDIUM ENTERPRISES ( SUKSHMA LAGHU 10 . 1961. SMALL AND MEDIUM The President under Notification dated 9th May 2007 has amended the Government of India (Allocation of Business) Rules.Enterprises Investment in plant & machinery Micro Enterprises Does not exceed twenty five lakh rupees Small More than twenty five lakh rupees but Enterprises does not exceed five crore rupees Medium More than five crore rupees but does not Enterprises exceed ten crore rupees Service Sector Enterprises Investment in equipments Micro Does not exceed ten lakh rupees: Enterprises Small More than ten lakh rupees but does not Enterprises exceed two crore rupees Medium More than two crore rupees but does not Enterprises exceed five core rupees MINISTRY OF ENTERPRISES MICRO.

The labour Intensity of the MSME sector is much higher than MSME constitute that of the large enterprises.1 survive the recent economic downturn and million enterprises. the sector has shown admirable innovativeness and adaptability to recession. the micro small and medium enterprises (MSME) have been accepted as the engine of economic growth and for promoting equitable development. It is estimated that in terms of value. In India too. In recent years the MSME sector has consistently registered higher growth rate compared to the overall industrial sector. this sector employs an estimated 59. As per available statistics (4th Census of MSME Sector). MSME sector accounts for about 45% of the manufacturing output and 11 . With its agility and dynamism. The major advantage of the sector is its employment potential at low capital cost. The over 90% of total enterprises in most of the with generating the highest rates of economies and are credited employment growth and account for a major share of industrial production and exports. the MSME play a pivotal role in the overall industrial economy of the country.AUR MADHYAM UDYAM MANTRALAYA)” Worldwide.7 million persons spread over 26.

Small and Medium Enterprises (NIMSME) (Formerly National Institute of Small Industry Extension Training (NISIET)) Indian Institute of Entrepreneurship (IIE). Kannauj Process-cum-Product Development Centre. Ram Nagar Institute for Design of Electrical Measuring Instruments. Agra & Chennai Fragrance and Flavour Development Centre. Agra Electronics Service & Training Centre.around 40% of the total export of the country. Guwahati   Others        MSME Development Institutes Tool Rooms Central Footwear Training Centres. TRAINING INSTITUTES National Entrepreneurship Development Institutes  National Institute for Entrepreneurship and Small Business Development (NIESBUD). Mumbai 12 . NOIDA National Institute of Micro.

87 million units in the year 1980-81 to over 3 million in the year 2000. it instills confidence in the resilience of the small-scale sector. When the performance of this sector is viewed against the growth in the manufacturing and the industry sector as a whole.scale units has increased from an estimated 0. It contributes almost 40% of the gross industrial value added in the Indian economy.62 million worth of goods or services with an approximate value addition of ten percentage points.ECOMOMIC PERFORMANCE Production The small-scale industries sector plays a vital role in the growth of the country. The number of small . of investment in fixed assets in the small scale sector produces 4. It has been estimated that a million Rs. Employment SSI Sector in India creates largest employment opportunities for the Indian populace. next only to Agriculture. It has been estimated 13 . The small-scale sector has grown rapidly over the years. The growth rates during the various plan periods have been very impressive.

Paper products & printing.1%). In Chemicals & chemical products.48 million persons (13. Assam and Tamil Nadu. In all other industries contribution was less than 5%. Rajasthan.45 million persons (12. Machinery parts except Electrical parts. Wood products. tobacco & tobacco products mainly due to the high employment potential of this industry particularly in Maharashtra.2%). providing employment to 0. the total contribution by these eight industry groups being 49%. Basic Metal Industries. Hosiery & garments.that 100.2%) and Metal products with 0.000 rupees of investment in fixed assets in the small-scale sector generates employment for four persons Generation of Employment . Next came the 14 .metallic mineral products with employment of 0.37 million persons (10. The next two industry groups were Non .Industry Group-wise Food products industry has ranked first in generating employment. Repair services and Rubber & plastic products. Per unit employment Per unit employment was the highest (20) in units engaged in beverages . Andhra Pradesh. the contribution ranged from 9% to 5%.

Machinery parts except Electrical .2% of Employment.7% to employment generated in rural areas. Basic metal industries and Electrical machinery and parts.Cotton textile products. Per unit employment was the highest in metropolitan areas and lowest in rural areas. wood products and chemical products shared between them 17. Non. Food Products accounted for 21. Urban As for urban areas. Machinery and parts except electrical and Paper 15 .5%. Food Products and Metal Products almost Equally shared 22. Location-wise Employment Distribution – Rural Non-metallic products contributed 22.metallic mineral products. However.1%. In metropolitan areas the leading industries were Metal products. Non-metallic mineral products. tobacco products (31 persons) followed by Cotton textile products . Non-metallic mineral products and Basic metal industries per unit employment was higher in rural areas as compared to metropolitan areas/urban areas. and Chemicals & Chemical products between them accounted for 26. Basic metal industries and Non-metallic mineral products.8% of employment. In urban areas highest employment per unit was in Beverages. in Chemicals & chemical products.

It has been mostly fuelled by the performance of garments. it is estimated that smallscale industrial units contribute around 15% to exports indirectly. The product groups where the SSI sector dominates in exports. are sports goods. The exports from SSI sector have been clocking excellent growth rates in this decade. Direct exports from the SSI Sector account for nearly 35% of total exports. readymade garments. processed food and leather products. It would surprise many to know that non-traditional products account for more than 95% of the SSI exports. plastic products. Export SSI Sector plays a major role in India's present export performance . trading houses and export houses. This takes place through merchant exporters. They may also be in the form of export orders from large units or the production of parts and components for use for finished exportable goods. woolen garments and knitwear. leather and gems and jewellery units from this sector. The SSI sector is reorienting its export 16 .45%-50% of the Indian Exports is contributed by SSI sector . Besides direct exports.products & printing .

strategy towards the new trade regime being ushered in by the WTO. Opportunity The opportunities in the small-scale sector are enormous due to the following factors: :-Extensive Promotion & Support by Government :-Less Capital Intensive :-Reservation for Exclusive Manufacture by small scale sector :-Project Profiles :-Funding .Finance & Subsidies :-Machinery Procurement :-Raw Material Procurement :-Manpower Training :-Technical & Managerial skills :-Tooling & Testing support :-Reservation for Exclusive Purchase by Government :-Export Promotion :-Growth in demand in the domestic market size due to overall 17 .

:-economic growth :-Increasing Export Potential for Indian products :-Growth in Requirements for ancillary units due to the increase in number of green field units coming up in the large scale sector. given some safeguards. :-Small industry sector has performed exceedingly well and enabled :-our country to achieve a wide measure of industrial growth and diversification. It may be said that the outlook is positive. Thisexpectation is based on an essential feature of the Indian industry and the demand structures. The diversity in production systems and demand structures will ensure long term co-existence of many layers of 18 . This is the opportune time to set up projects in the small-scale sector. By its less capital intensive and high labour absorption nature. indeed promising. SSI Sector has made significant contributions to employment Generation and also to rural industrialisation. capital and innovative marketing practices. by infusion of technologies. Thissector is ideally suited to build on the strengths of our traditional skills and knowledge.

SSI sector has made significant contributions to employment generation and also to rural industrialization. So this is the opportune time to set up projects in the small scale sector. It may be said that the outlook is positive. by infusion of technologies. This sector is ideally suited to build on the strengths of our traditional skills and knowledge. This 19 . Small industry sector has performed exceedingly well and enabled our country to achieve a wide measure of industrial growth and diversification. particularly in consumer goods. The promotional and protective policies of the Govt. given some safeguards . However. the bugbear of the sector has been the inadequacies in capital. There will be flourishing and well grounded markets for the same product / process. attract the infusion of just these things in the sector. capital and innovative marketing practices. indeed promising. have ensured the presence of this sector in an astonishing range of products . The process of liberalization coupled with Government support will therefore . differentiated by quality. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. By its less capital intensive and high labour absorption nature.demand for consumer products / technologies / processes. value added and sophistication. technology and marketing.

expectation is based on an essential feature of the Indian industry and the demand structures. technology and marketing . particularly in consumer goods . The diversity in production systems and demand structures will ensure long term co-existence of many layers of demand for consumer products / technologies / processes. MSME sector role in the socio economic development of India needs to be 20 . have ensured the presence of this sector in an astonishing range of products. There will be flourishing and well grounded markets for the same Product / process. value added and sophistication. This characteristic of the Indian economy will allow complementary existence for various diverse types of units. The process ofliberalization will therefore. However with the changing focus from economic growth to inclusive growth. differentiated by quality . The promotional and protective policies of the Govt. However. the bug bear of the sector has been the inadequacies in capital . attract the infusion of just these things in the sector. MSME and their role in socio economic development The importance of Micro. small and medium enterprises (MSME) for its contribution in the Indian economy growth is a matter of record and needs no further elaboration.

9 million registered one which are spread out across the length and breadth of India. • Big employment generator. including 1.4million directly or indirectly which is roughly 10% of India‟s population. Looked from social angle. They may be touching the lives of 123. • Wide spread reach: There are around 12. What is so significant about MSME that makes them special in their economic development of the country? Here are few facts which may give answer to this question. explored and facilitated. It provides employment to more than 20 million people which is roughly 2 % of country‟s population. MSME sector is the second largest manpower employer in the country next only to agriculture sector. • Facilitates balanced regional development: Dispersion of 21 . it helps in solving the unemployment and under-employment relation to socio problem in the society.understood.34 million (1) MSMEs. • Major share in GDP: MSMEs combined output is roughly 7% of country‟s Gross Domestic Production (GDP).

MSME can be found everywhere. desert. sanitations etc. This decentralized concept also helps in reducing the other problems like pollution. backward/ forward areas.MSMEs in all parts of the country helps in removing regional imbalances by promoting decentralized development of industries. mountains. • Helps in equitable distribution of wealth/ income: When the entrepreneurial talent is allowed to grow in different regions and areas. congestion. housing. to experiments. HOW TO START A SMALL SCALE INDUSTRY The steps involved in starting a small scale industry are:22 . Through this platform. the latent/ raw talent available locally can hone their skills and talents. the income is also distributed instead of being concentrated in the hands of few. • Act as nursery for entrepreneurship: MSMEs provide a natural habitat for entrepreneurs. urban. This help in solving a big social issue of bridging the gap between rich and poor. forest. which may be rural. coastal. to innovate and transform their ideas into goods and services needed by the society.

Analyze them as regards their utility.  Find whether can be exported. etc.  Study similar product available in the market that can be probable competitor. Product Identification: Conduct market survey and study the product as regard their demand in the market. raw material and financial requirement. on the basis of:a) Market Survey b) Financial implication involved c) Technical knowhow available d) Experience in the line. quality and cost.  Check whether it is a seasonal product or it has demanded throughout the year.  Preparation of preliminary project report to get rough idea on machinery.  Select a proper site for locating the unit. 23 .  Decide the product that you are going to manufacture.

Working Capital for a unit time ix. Machinery. Selling and distribution overheads viii. Ministry of Industry. Get yourself conversant with the rules and other information available from small-scale industries. Indirect labour v. Direct material cost vi. Depreciation x. New Delhi. Direct labour iv. 3. Take a building for factory on hire or construct your own factory building. Total production cost per unit time 24 . Indirect material cost vii. Land and building ii. 2. tools and other equipment iii.1. Prepare a scheme in detail to manufacture the selected product such a scheme should include the requirement of and the approximate cost of:i.

 Recruit personnel.  Apply for income tax and sales tax numbers.xi.  The scheme after it has been prepared is sent for approval to the Directorate of Industries of the particular state. such as:I.  A small scale unit has to get itself registered with the Directorate of industries in order to avail various facilities provided by the government.  Make a detailed project report  Apply for registration. 25 . IV. II. Financial assistance Raw materials water and power Import license Factory accommodation Government order  If required apply for loan. V. III. Percentage of profit.

INCENTIVE FACILITIES 26 . The registration of SSI is of two types:1) Provisional registration.REGISTRATION REQUIREMENT OF SMALL SCALE INDUSTRIES Even if State Directorate of Industries does not demand for licensing under development of SSI‟s but we should go for its registration for our profit. The provisional registration is provided to the unit for starting two years. If still the firm could not run in actual production it can also be renewed by state directorate of industries. This is provided before production. 2) Permanent registration. The incentive scheme provided by the government is also provided to those firms which are registered so for this reason registration is beneficial. Some special things are there which are necessary to be licensed.

In every state various incentive schemes are provided for development of these SSI‟s. capital investment. The methods and amounts are depending on the industrial policy and financial state of that area. Various facilities are: Capital subsidy  Diesel generator subsidy  Electricity subsidy  Project report subsidy  Technical know how subsidy  Interest subsidy  Sales tax subsidy  Interest free loan against commercial taxes  Seed money assistance TYPES OF CONSTITUTIONS The criteria of classification may be depend on limits of statutory norms. annual income etc. 27 . quantum of loan.

workers. The only problem in this case is that all losses and accidents happened are only suffered by the owner only.  Private limited company: in private limited company there is minimum two and maximum fifty promoter director. The firm is drive according to these terms. According to INDIAN PARTNERSHIP ACT 1932 a partnership deed is prepared in which all the terms and conditions are included. all facilities.  Partnership: in this type two or more person shared the firm. In case of any problem all the partners will suffer equally. Company 28 . All the machinery setup. He is the only responsible person for all types of profits and losses. money investment is in the hand of a single body.Basic names of constitutions are: Proprietorship: as its name implies only one person is the owner of the company. The registration is done under the company act 1956 under REGISTRAR OF COMPANIES.

FINANCIAL REQUIREMENT Since independence. The group can be minimum of ten members.  Public limited company: private limited and public limited are almost of same configuration with the only difference that public limited company can sale its shares in general public but private limited company is not authorized to do so. These are also work under the norms and conditions made by its own memorandum and articles of association.made its MEMORANDUM & ARTICLES OF ASSOCIATION and all the scope of work is regulate under these.  Co-operative society: under co-operative society act the firms are registered by state co-operative department. A number of organizations have been step up by the government of India to provide assistance and 29 . government of India has been giving all possible encouragement of SSI.

National Level 2. These packet ages of assistance are providing to SSI by a large number of organization operative at national &state level. State Level AGENCIES WHICH WORK AT NATIONAL LEVEL ARE:a) Small Scale Industrial Board (SSIB) b) Small Scale Industries Development Organization (SIDO) c) National Small Scale Industrial Corporation (NSIC).incentive to small scale industry. Development program are being carried out at two level 1. AGENCIES WHICH WORK AT STATE LEVEL ARE:a) State Directorate of Industries (SDI) b) District Industrial Centre (DIC) c) State Small Industrial Corporation (SSIC) d) State Financial Corporation‟s (SFC‟s) e) Commercial Banks f) Small Industries Development Bank of India (SIDBI). NATIONAL LEVEL SSIB 30 .

new Delhi headed by the development commissioner (SSI) has a network of small industries Service Institute (SISIs) one in each state which help In economical. advice &coordinate the activities of center and state government. Its functioning is to plan. NSIC Its headquarter at New Delhi & regional office at Kolkata. technical. Chennai. Mumbai. However. Guwahati etc.It is all advisory body and comprises state government ministry office and representative of several institution & association. SMALL INDUSTRIAL DEVELOPMENT ORGANIZATION (SIDO) Its headquarter at Nirman Bhavan. it helps to government in involving new polices and program for small scale sector. Facilities provided:31 . industrial information services. training & marketing. management casualty services. As such it does not render direct help to entrepreneur.

Under this scheme they are financed to the extent of Rs. 6 Lakh and these are repayable in equal installments spread over a period of 10-12 years. 4. STATE FINANCIAL CORPORATION Almost every state has its own financial cooperation to provide machine and long term loans small and medium sale industries.) Operating a credit guarantee scheme for those units which are registered within.000 and the interest rate is very low.Supply of machine and equipment on hire purchase 1.) Assistance to SSI in securing order for railway and defense. 32 .) Distribution of scare raw material imported components. Important schemes of financing SFC are 1) A loan scheme for financing of village and cottage industries. 5000 to Rs. 2.) Marketing assistance 3. 25. Amount of loan varies from Rs.

2.00 lakh at very low interest rate to such technical entrepreneurs who have acquired a diploma or degree in any discipline of engineering .2. 3. 3) Scheme for technical entrepreneur –in order to encourage self employment these corporation provide financial assistance up to Rs. 4) Loans to hotel industry 5) Scheme for SC/ST –Grant financial assistance to SC/ST entrepreneurs at a nominal margin rates are charged at the rate of 10%.00 lakh.00 lakh at a rate of 10%. COMMERCIAL BANKS SBI and its subsidiary banks and other nationalized banks provide liberal term loans and working capital to small scale entrepreneurs and these loans are advanced for purchase of machine and material 33 .2) Assistance to tiny units – these grant assistance up to Rs. 6) Scheme for physically handicapped –these provide financial assistance up to Rs.

Central Institute of Hand Tool Jalandhar. Ludhiana and Kolkata. National institute of small Industry Exton.and to the technical entrepreneurs to encourage self employment. Specialized institute like. Workshops. Hydrabad and National Institute for Entrepreneurship and Small Business Development. Hyderabad. and SIDBI are providing financial supports to various SSI units CONCEPT OF MARKETING 34 . Central Tool Room. They conduct special courses. To provide credit support to the various SSI units various policies have been formulates by the GOI. Institute for Design of Electrical Measuring Instruments (IDEMI) Mumbai. Integrated Trading centre. Various institutes like SFC. Central Institute of Tool Design. Nilokhedi. SIDC. NISC. Credit Support Credit is the prime input for sustained growth of small scale sector and its availability continued to be a matter of concern. programmers. training programmers for the benefits of small scale industries.

The other important aspect of marketing such as concern for the customer. Product concept. Production concept. the generation of the venue satisfaction. Marketing concept. But a proper scrutiny of the marketing would readily reveal that marketing is very much broader than exchange. Sales concept. 3. It is found that at least 5 distinct concept of marketing have guided and are still guided business terms. Exchange concept.the exchange concept of marketing as the name indicates hold that the exchange of a product b/w the seller a buyer is a central idea of marketing.Studies reveal that different organizations have different perception of marketing and these different perceptions have led to the promotion of different concept of marketing. 1. 4. 5. the creative selling and integrated action for service 35 . Exchange concept:. 2. They are: 1.

Customers after all are motivated by a verity consideration in their purchases.According to the production concept marketing is a merely related to production .The product concept is somewhat stiff from the production concept where as the production concept seeks to 36 . Easy availability and low cost are not only parameters governing the costumers buying action and the production concept thus fails to drive as the right marketing polices for the enterprise. Yet they often do not get customer as they expected. The concept hold that consumer would as a rule supported these product that are product in a great volume and allow unit cost organization voting for this concept are influenced by a drive to produce all that they can .They do achieve high production efficiency and a substantial reduction in the unit cost of production. Production concept: . 3.They believe that marketing can be managed by managing production. 2.the customer get completely overshadowed in this concept of marketing. Product concept: .

Sale concept: . They fail to find what the customers actually needs and what they would gladly aspect.the sale concept maintains that a company cannot expect its product to get pick up automatically by the costumer. They get totally embraced with the product and almost forget the customer for whom the product is actually meant. improved product. large scale sale promotion. Time and money own research and development brings in a verity of new product. They do not bother to study the market and consumer in depth. heavy price discount and strong publicity and public 37 . 4. Origination that subscribes to the product concept of marketing believes that customer goods automatically vote for products of high quality they spent considerable energy. new products and ideally design and engendered products. high power personal selling. the company has to consciously promote and push its heavy markets & profits via high volume of production and low unit cost of production. The product concept to seek to archive the same results via product excellence. It also places emphasis on quality assurance.

Marketing concept Importance of marketing to the society:a) Marketing helps to achieve maintain and rise the standard of living marketing bring new variety of good to the consumer and better and rigorous marketing gives soon for mass production. 5. Under mass production the cost of product is low people can more goods for their money. 38 . Its lead to wrong or inadequate understanding of the market and consequently a total failure in the market place. Evidently the sale concepts too generate marketing myopia just as a exchange concept. which results in high standard of living. c) Marketing helps to increases national income. d) Marketing is a connecting link between consumer and producer. production concept and product concept. b) Marketing increases employment opportunity.relation are the normal tool used by the origination that relay on the concept.

If production is more then demand the access goods cannot be sold at acceptable prices then stokes of goods would be picked up and there would be glut all the market in fall in price. Pricing Policy 4. In such a situation marketing maintains the economic stability by balancing production and consumption. if production is less then demand price is shooting up resulting in higher price. Role of Advertising (personal selling) 39 . Product planning 2. Distribution Strategy 5. Similarly. Sale Forecasting 3. STEPS IN MARKETING MANAGEMENT 1.e) Marketing helps to maintain stability:-economic stability is the sine of any efficient and dynamic economy and economy stability is maintained only when there is balance in supply and demand.

Product planning:-product planning may be defined as “the act of marketing out and supervising the search. Industrial products 3. Product can be classified as:1. screening. Customer products 2. Quality 1.” Product planning involves three important considerations a) The development and Induction of new ideas. Defense products 40 . development and commercialization of new product. c) The discontinuance of elimination of marginal or unprofitable product.6. modification of existing line. b) The modification of exiting lines as may be required in term of changing costumer‟s need and performance.

3. Industrial products:-goods which are designed to be sold primarily for use in producing goods destined to be sold primarily to the ultimate consumers.a sales forecast is an estimate for the amount or unit sale for a specified future period under a purposed marketing plan or program.” Marketing of proper sale forecast require an assessment of:1 The outside uncontrollable forces likely to influences the company sales. Costumer products:-goods design for use ultimately by the costumer or household and in such from they can be used without commercial processing. Sale Forecast Defined: . 2. 41 .1. As define by American marketing association it is “an estimate of sales in dollars or physical units for a specified future period under a purposed marketing plan or program and under an assumed set of economic and other forces outside the unit for which forecast is made.

According to the time period. the sales forecast can be divided under three types1. 42 . Medium Range Forecasts: . Sales forecast can be for a specified product line or can be for a market as a whole or for any portion of it. 2. The internal proposed changes in the marketing strategies and tactics of the company which are likely to affect the sale. Short Run Forecasts: .which extends from one year to about four years into future. b) Determining dividing policy c) Deciding rate of maintenance expenditure d) Determining schedule of operation.which generally extends from a few weeks to about six months or at most one year in future. budgeting expenses etc. This type of forecasting is important for a) Estimating profits.2. Companies mostly do this as day-to-day forecasts for their production control needs and to plan for long term financial needs.

Estimating companies long range personnel needs. It is useful in following ways:1. d) Estimating working capital needs e) Setting production runs for each product f) Fining sales quotes 3. Determining probable trends and range of cash inflow from sales. 2.Extending to least five years into futures and in case of really large organization extending over a longer period up to ten years or even more. 43 . Long Range Forecast: . Highlighting futures problems. Anticipating the magnitude and timing of capital expenditures required for new facilities in the future. 3. 4.It is use full for the following purposes:a) Estimating inventory requirement b) Providing adequate shipping facilities c) Assessing production worker requirements.

Distribution strategies 44 . which physically bring goods manufactured or produced by only particular manufactured into the hands of the final consumers to the users. Pricing decision is not easy to make.Pricing is a very critical decision. 4. Hence sound pricing policies must be adopted to ensure that the originations secure satisfactory profit.distribution may be defined as an operation or a series of operation. Besides. Distribution Strategy: . Pricing polices: . competitive environment and government control whenever applicable. He has to consider various pricing factor which infusing price a part from cost such as costumer characteristics.3. The pricing of the product materially affected the demand for it as well as the origination competitive ability for expenditure if the quality of the product is to be improved this may be possible only if the costumer are willing to pay higher price for it. if the product is not properly priced there might be reluctance from the channels of distribution. For pricing decision a marketing manager has to be familiar with economic concept useful in pricing decision. the economical product characteristics.

is the organizational aspects. For this general marketing policy is responsible for deciding the various channels for distribution. 45 . (ECGC) 2) State Trading Corporation. including the warehousing storage and transportation costs as well includes. First. (STC) 3) Trade Development Authority. Secondly.consist of distribution or sub-dividing the total products of a manufacturer on a geographical basis to various specific markets.1) Export Credit Guarantee Corporation Ltd. it is concerned with moving of goods from one place to other. a National Market or even a worldwide market for the production while defining a strategy we have to deal with two aspects. it is concerned with how and through what channels we should distribute. is the operational aspect of distribution or the physical distribution. There may be a state market. These aspects are sometimes described as “logistics of distribution” Advertising: To counter the market at National and International level the GOI set up various institutes like:.

.4) National Small Industries Corporation. (NSIC) Organizational Structure of SSI: . -Production index.Project profiles. . -Market surveys. -Quality control and up gradation. -Export promotion.Motivational campaigns. -Intensive technical assistance. . The main activities of these institutions are as follows: -Assistance/Consultancy of prospective entrepreneurs. -Entrepreneurship development programmes.Management development programmes. 46 .There are 28 SISIs set up in State Capital and other industrial cities all over the country. -Energy conservation.

5) Product-cum.Organizations under SSI:1) Regional Testing Centers (RTCs) 2) Field Testing Stations (FTSs) 3) Tool Rooms / Tool Design Industries (TRs/TDs) 4) Trading institutes: . -Integrated Training Centre (Industries).Kannauj for Essential Oils. Nilokhedi (Haryana).National Institute of Small Industry Extension Training (NISIET) -National Institute for Entrepreneurship and small business development (NIESBUD).Meerut for Sports Goods and Leisure Time Equipment. New Delhi. . 47 . .Process Development Centre (PPDICs) Six centers are in existence. -Mumbai for Electrical Measuring Instruments. .Agra for foundry and forgings.Ramnagar for Electronic Industries. There are:. .Firozabad for Glass Industry.

The main motive of these centers is to upgrade the technology of the manufacturer and help in energy conservation. 48 . 2) Repair to diesel engine and agricultural water pumps. Training Institutes:.These institutes provide training by imparting seminars and workshops on topical issues .e. Nilokhedi is the only institute that imparts training to the junior field staff i.Their objectives is to identify and motivate traditional /nontraditional entrepreneurs and to provide training at National and International level .All the three training institutes mentioned above are an autonomous body and are under the administrative control of the office of DC (SSI). 3) Servicing and repair to automobiles (cars and scooters). Investigators / SIPOs to expose to and educate them in the programmes and policies of development and promotion of small industries. At present its training consists of courses like 1) Rewinding of electric motors and house wiring. The integrated Training Centre (Industry).

SWOT Analysis Introduction Environmental opportunities are only potential opportunities unless the organization can utilize resources to take advantage of them and until the strategic leader decides that it is appropriate to pursue the opportunity. It is therefore important to evaluate environment opportunities in relation to the strengths and weaknesses of the organization‟s resources, and in relation to the organization‟s resources, and in relation to the organizational culture. Real opportunities exist when there is a close fit between environment, values and resources. An evaluation of an organization‟s strengths and weaknesses in relation to environmental opportunities and threats is generally referred to as a SWOT analysis. The following report will look closely into the SWOT‟s concept, its main aspects, and criteria for successful and effective SWOT analysis. SWOT is an acronym for Strengths, Weaknesses, Opportunities, Threats. Occasionally, it may also be found as a „WOTS up‟ analysis or the TOWS analysis. A SWOT analysis is a planning tool used to understand the Strengths, Weaknesses, Opportunities,


and Threats involved in a project or in a business. It involves stating the objective of the business or project and identifying the internal and external factors that are either supportive or unfavourable to achieving that objective. SWOT is often used as part of a strategic or business planning process, but can be useful in understanding an organisation or situation and decision-making for all sorts of situations. The concept Any organisation undertaking strategic planning will at some point assess its own strengths and weaknesses. When combined with an inventory of opportunities and threats in the organisation‟s external environment, the organisation is effectively making a SWOT analysis, that is it is establishing its current position in light of its Strengths, Weaknesses, Opportunities and Threats. There are several ways of graphically representing the SWOT analysis matrix or grid. Examples are shown later in this factsheet.

While at first glance the SWOT looks like a simple model and easy to apply, experience shows that to do a SWOT analysis that is both effective and meaningful, requires time and a significant resource. It requires a team effort and cannot be done effectively by only one

person. The SWOT methodology has the advantage of being used as a 'quick and dirty' tool or a comprehensive management tool, and that one (the quick) can lead to the other (the comprehensive). This flexibility is one of the factors that has contributed to its success. The term „SWOT analysis‟ is in itself a curious term, for a SWOT is not an analysis in itself, but a number of elements when used together form a valuable framework for analysis. It is essentially a summary of a set of previous analyses – even if those were just 15 minutes of mini-brainstorming with yourself in front of your computer although this approach is not recommended! The analysis, or more correctly „interpretation‟, comes after the SWOT summary has been produced. History The SWOT analysis technique is credited to Albert Humphrey who led a research project at Stanford University in the 1960s and 1970s using data from leading companies involved in long range planning processes. The original goal was to identify why corporate planning failed. Humphrey created a „team method for planning‟ originally called SOFT analysis (Satisfactory,

Opportunity, Fault, Threat) which was used by organisations like


costs and investments? Administration: how do we manage all this? 52 . What is good in the future is an Opportunity. What is bad in the future is a Threat. The thinking behind the tool was:     What is good in the present is Satisfactory. What is bad in the present is a Fault.WH Smith who made it part of their long range planning programme for almost 20 years. Humphrey‟s work has developed the implementation to use the SOFT in the context of six categories which provide a framework by which issues can be developed into actions and managed using teams:       Product: what are we selling? Process: how are we selling it? Customer: to whom are we selling it? Distribution: how does it reach them? Finance: what are the prices.

Another major factor is to determine how organisations can continue to grow within the marketplace.These can be defined as follows and can of below type for industry or organization:- STRENGTH:. but also more importantly. not only from its point of view. from customers.Determine an organisation‟s strong points. social patterns. This should be from both internal and external customers. After all. An opportunity is a major situation in a firm‟s environment. and so on. Strength is a “resource advantage relative to competitors and the needs of the markets a firm serves or expects to serve”. WEAKNESS:. It is a distinctive competence when it gives the firm a comparative advantage in the marketplace. government policy. such as the changes in technology.SWOT / TOWS ANALYSIS: .Determine an organisation‟s weaknesses. A weakness is a “limitation or deficiency in one or more resources or competencies relative to competitors that impedes a firm‟s effective performance” OPPORTUNITIES:. Although it may be difficult for an organisation to acknowledge its weaknesses it is best to handle the bitter reality without procrastination. opportunities are everywhere. Key 53 .

Identification of a previously overlooked market segment. but we still have to face them.No one likes to think about threats. changes in competitive or regulatory circumstances. 54 . slow market growth. increased bargaining power of key buyers or suppliers. despite the fact that they are external factors that are out of our control. The entrance of new competitors. the recent economic slump in Asia. It is vital to be prepared and face threats even during turbulent times. technological changes. A threat is a major unfavourable situation in a firm‟s environment. and new or revised regulations could represent there threats to a industrial‟s firm‟s success. technological changes. for example. Threats are key impediments to the firm‟s current or desired position. THREATS:.trends are one source of opportunities. and improved buyer or supplier relationships could represent opportunities for the firm.


56 .

57 . • Avoid vague. • Improvements is not the same as strength – do not confuse the two. and include enough detail. weakness. and why it can be considered as a strength. Include precise evidence. general opportunities and threats that could be put forward for just about any organisation under any circumstances. • Be a specific as you can about the precise nature of a firm‟s strength and weakness.How to Write a Good SWOT Analysis In order to write a good SWOT the following criteria must be taken • Make your points long enough. and cite figures. where possible. • Do not mistake the outcomes of strength (such as profits and market share) for strengths in their won right. to make it plain why a particular factor is important. Do not be content with general factors like economies of scale. opportunity or threat.

Come to a reasoned conclusion about whether the good points outweigh the bad ones. Customer (to whom are we selling it?) 4. costs and investments?) 6. Situational analysis – SWOT ANALYSIS Translating SWOT issues into actions under the six categories 1.• Avoid contradicting yourself in the course of the analysis. by having strengths and weaknesses that are essentially different aspects of the same strategy of resource. Distribution (how does it reach them?) 5. Product (what are we selling?) 2. Process (how are we selling it?) 3. Finance (what are the prices. Administration (and how do we manage all this?) 58 .

Microsoft and American Online companies follow this intensive development strategy. The firm faces a lot of opportunities and with complimentary internal strengths to execute those opportunities. The firm faces many environmental threats and it is in a weak position. That situation supports growth oriented strategies to exploit or capitalize on the match. The least favourable situation would be quadrant 4. This situation will call for strategies that reduce or redirect involvement in the products or markets examined by SWOT 59 .SWOT ANALYSIS DIAGRAM Quadrant 1 is the most desirable position.

costs. profitability and productivity. However it does not detail or show how firms try to identify or spot internal strengths and weaknesses. Transportation firms such as Greyhound bus company when faced with long term threats such as increased competition from rail and airlines and rising costs diversified into non passenger services such as freight and financial services. Finance Information Systems and Operations are thoroughly examined to detect past trends of sales. SWOT analysis provides an excellent means through which managers can examine their firms current positions. These results are compared with industry standards. A firm in quadrant 2 with key strengths would face an unfavorable environment. This further reduces the analysis to Value 60 . A firm in quadrant 3 encounters impressive and favourable market opportunity but is constrained by internal weaknesses. A Functional Analysis whereby departments such as Marketing. A lot of companies in an insolvent situation may fall into this segment.analysis. The strategy for this firm is to focus on eliminating the internal weaknesses so that market opportunities can be pursued more effectively. The strategies here is to use current strengths to build long term opportunities in better product markets.

much of which may not be highly relevant. Situation Analysis / Internal Analysis / \ \ External Analysis / Opportunities \ Threats Strengths Weaknesses | SWOT Profile The internal and external situation analysis can produce a large amount of information. SWOT analysis is a simple framework for generating strategic alternatives from a situation analysis.Chain Analysis . Text and Cases (Homewood. The following diagram shows how a SWOT analysis fits into a strategic situation analysis.dividing the firm into sets of separate activities that add value. a firm can better leverage its strengths. The SWOT framework was described in the late 1960's by Edmund P. The SWOT analysis classifies the internal aspects of the company as strengths or weaknesses and the external situational factors as opportunities or threats. Roland Christiansen. Guth in Business Policy. IL: Irwin. correct its 61 . By understanding these four aspects of its situation. Learned. and William D. C. 1969). Kenneth Andrews.

Factors should be evaluated across the organization in areas such as:              Company culture Company image Organizational structure Key staff Access to natural resources Position on the experience curve Operational efficiency Operational capacity Brand awareness Market share Financial resources Exclusive contracts Patents and trade secrets The SWOT analysis summarizes the internal factors of the firm as a list of strengths and weaknesses. 62 .weaknesses. Internal Analysis The internal analysis is a comprehensive evaluation of the internal environment's potential strengths and weaknesses. and deter potentially devastating threats. capitalize on golden opportunities.

Many of these changes can be perceived as threats to the market position of existing products and may necessitate a change in product specifications or the development of new products in order for the firm to remain competitive. Changes in the external environment may be related to:              Customers Competitors Market trends Suppliers Partners Social changes New technology Economic environment Political and regulatory environment Markets (customers) Competition Technology Supplier markets 63 .External Analysis An opportunity is the chance to introduce a new product or service that can generate superior returns. Opportunities can arise when changes occur in the external environment.

2. 3. strategy formulation. 3. 2. a SWOT profile can be generated and used as the basis of goal setting. The completed SWOT profile sometimes is arranged as follows: Strengths 1.    Labour markets The economy The regulatory environment The last four items in the above list are macro-environmental variables. and are addressed in a PEST analysis. Weaknesses 1. SWOT Profile When the analysis has been completed. The SWOT analysis summarizes the external environmental factors as a list of opportunities and threats. and implementation. Opportunities Threats 64 .

1. Applications and when to use it A SWOT analysis can be used for:         Workshop sessions Brainstorm meetings Problem solving Planning Strategic planning Product evaluation Competitor evaluation Personal development planning decision making 65 . 3. 2. 3. 1. 2.

start-up cashdrain Innovative aspects Location and  Continuity. likely returns  Timescales.Subject of SWOT analysis: (define the subject of the analysis here) Strengths Weaknesses  Advantages proposition of  Disadvantages proposition of    Capabilities Competitive advantages USP's points) (unique selling   Gaps in capabilities Lack strength of competitive  Resources. presence and reach  Experience. People Assets.  Reputation. knowledge. data   Financials Own vulnerabilities known  Financial reserves. supply chain 66 . awareness   Cash flow. and pressures deadlines  Marketing - reach.  distribution.

etc Processes and systems. certifications Effects on core activities.geographical   robustness  Price.  Cultural. plan predictability  Processes. IT. value. 67 . qualifications. systems.  Management succession cover. leadership commitment. distraction  Reliability of data.   Accreditations. etc  Management succession cover. behavioural attitudinal. quality Accreditations. communications  Morale.

surprise. import export. horizontal  services.   Global influences New markets. major contracts. ideas Vital partners  contracts and   Niche target markets Geographical. etc   Loss of key staff Sustainable financial  Business and product 68 . vertical. Sustaining capabilities internal   Obstacles faced Insurmountable weaknesses   New USP's Tactics .Opportunities   Threats    Market developments Competitors' vulnerabilities? Political effects Legislative effects Environmental effects IT developments Competitor intentions various  Industry trends or lifestyle    Technology development innovation and   Market demand New technologies.

distribution? agencies.  Volumes. Enables a management team to focus on strengths and build opportunities. abroad Seasonality.   Encourages the development of strategic thinking.home. weather. 69 . effects weather  Partnerships.  Seasonal. fashion influences Advantages and disadvantages of using SWOT analysis Advantages   Simple four box framework. economies production. Facilitates an understanding of the strengths and weaknesses of the organisation.  Can enable an organisation to anticipate future business threats and take action to avoid or minimise their impact.development  backing and   Information research Economy .

 The best reviews require different people being involved each having a different perspective.  The pace of change makes it increasingly difficult to anticipate developments that may affect an organisation in the future. Can enable an organisation to spot business opportunities and exploit them fully.  The data used in the analysis may be based on assumptions that subsequently prove to be unfounded (good and bad).  To be effective this process needs to be undertaken on a regular basis. Lacks detailed structure – so easy to miss key elements.  Access to quality internal data sources. 70  .  The risk of capturing too much data is that it may make it difficult to see the wood for the trees and lead to „paralysis by analysis‟. this can be time consuming and politically difficult (especially in more complex organisations – parent company etc).  Flexible. Disadvantages  Some users over simplify the amount of data used for decisions – it is easy to use scant data.

DO exploit any expertise and resources that are already available within the organisation. PRIMO-F analysis. competitor analysis or scenario planning etc.  DO incorporate your analysis within an ongoing process for monitoring changes in the business environment.   DON‟T try to do this on your own.  DO use SWOT analysis in conjunction with other techniques. Porter's five forces.SWOT analysis dos and don’ts   DO get other people involved. such as PESTLE analysis. 71 . DON‟T jump to conclusions about the future based on the past or the present.

Sign up to vote on this title
UsefulNot useful

Master Your Semester with Scribd & The New York Times

Special offer for students: Only $4.99/month.

Master Your Semester with a Special Offer from Scribd & The New York Times

Cancel anytime.