SGL Ltd. has been a manufacturer of fabricated equipment for the chemicals processing industry since 1970.

The product range includes distillations towers, chemicals reactors heat exchangers and other process equipment made to order for specific customer needs. Over the years the chemical process equipment market has witnessed entry of a large number of players and is in fact over crowded on the supply side and has been decelerating on the demand side following liberalization, demand recession and lack o f new projects. The margins have been continually falling and survival of the fittest and the leanest has never been truer.

GMML Ltd. is also a chemical equipment supplier to the process industry and their major product line is not only the run of the m ill equipment but corrosion resistant glass lined equipment up to 40000 litre for agro chemicals, bulk drugs, dyestuffs, speciality chemicals and pesticides segments of the chemical industry. The maximum capacity offered by competitors is 10,000 litres on ly. GMML Ltd. were the pioneers in glass lined equipment as imports substitute way back in 1965 and since 1994 has a joint venture with a US based multinational company. The Company enjoyed monopoly for over 20 years and had an NPBT of over 25% till the m id 1990¶s. The order book was always overflowing and the equipment were delivered after a waiting period of almost 8/12 months. The interest income from deposits/advances taken from the market amounted to more than Rs.2.5 Crores per year. However, since 1996, the Company has been experiencing squeeze on margins and is affected by the business conditions in the Country and to an extent by competition.

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In 1987, a Hyderabad based Company ± Mile Ltd. entered the glass lined reactor business in technical collaboration with a Japanese company. The venturing into glass lined equipment was in fact a forward -integration exercise, as one of the group companies had equipment fabrication facilities. However, the sales and profitability situation during the last 7/8 years have not been very flattering and in fact has been dismal.

The market also has witnessed entry of cheaper Chinese glass lined reactors which are being sold at almost half the price of the market leader viz. GMML Ltd. The Chinese equipment also is delivered in about 2 months only.

Mr. Mehta, the CMD of SGL Ltd. h as been wondering what to do next. In 1994, SGL Ltd. decided to enter the glass lined equipment business with indigenous technology. The use of technology being no other than a well qualified, experienced but disgruntled employee of GMML Ltd. Mr. Mehta¶s SGL is located a few kilometres from the GMML factory in Gujarat.

Mile Ltd. will come out unscathed in the war? SGL is a relatively late entrant in this business. What do you think will happen to Mile Ltd.Analyze the above case starting with a SWOT analysis and answer the following questions with special reference to buyer behaviour but do not confine yourselves to the questions alone.. Discuss the customer/buyer behaviour towards SGL Ltd. a. and SGL LTD. Suggest a Marketing Strategy for SGL . b. Do Ansoff possibilities exist for GMML? d. Suggest a market share protection strategy for GMML L td. f. If Mile employs a pricing policy of undercutting the price by as much as 30% vis -à-vis GMML Ltd.? e. in the tug of war between GMML Ltd.. how should the GMML respond? c. and the Chinese sources. GMML Ltd. Do you think GMML Ltd..

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