INTRODUCTION

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Havell’s India Limited was established in 1958 and is a part of the QRG group, a leading solution provider in the power distribution-equipment industry in India. The company is one of the foremost manufacturers and suppliers of low-voltage electrical equipment in the country. Havells India was incorporated in 1983 is a billion-dollar company. It is engaged in manufacturing of electrical and power distribution equipments. Havells has created brands like Crabtree, Sylvania, Concord, Luminance, Linolite, and SLI Lighting that are known globally. The Havells group originated as a small trading business in Central Delhi’s Bhagirath Place, which is a wholesale market for electrical goods. It was promoted by Mr. Qimat Rai Gupta and Mr. Surjit Kumar Gupta, who commenced their trading operations in the year 1958. A former teacher in Punjab, the entrepreneur Qimat Rai Gupta bought the Havells brand from one Haveli Ram Gandhi, thereby moving up from trader to manufacturer. The Company was incorporated as Havells India Private Limited on 8th August, 1983 under the Companies Act, 1956 and subsequently the name was changed to Havells India Limited vide certificate dated 31st March, 1992. This company manufactures electrical and power distribution equipments ranging from building circuit protection, Industrial & Domestic switchgear, cables & wires, energy meters, fans, CFL lamps, luminaries for domestic, commercial & Industrial application and modular switches.

MILESTONES:
Year 1958 1976 1979 1980 1983 1987 1990 Achievements Commenced trading operations in Delhi. Set up the first factory for Changeover Switches at Kirti Nagar, Delhi Set up a factory for HBC Fuses at Badli, Delhi. Started manufacturing high quality Energy Meters at Tilak Nagar, Delhi. Took over Towers and Transformers Ltd and turned it around in one year to profitably. Started manufacturing MCBs at Badli, Delhi in Joint Venture with Geyer, Germany. Set up a manufacturing unit at

1992 1993 1995

Sahibabad in UP for Changeover Switches. Anil Gupta joined family Business Set up another factory at Faridabad, Haryana for Control gear Products. Ameet Gupta joined family Business Entered a Joint Venture with Electrium, UK for manufacturing Dorman Smith MCCBs and Crabtree Modular Plate Switches. Took over Electric Control & Switchboards at NOIDA for manufacturing customized packaged solutions customized packaged solutions Introduced high-end Ferraris Meters in Joint Venture with DZG, Germany. Acquired controlling stake in Duke Arnics Electronics (P) Limited and an industry major-Standard Electricals Ltd. Acquired business of Havells Industries Ltd, MCCB of Crabtree India Limited Merged ECS Limited in the company to consolidate in its area of core competence. Standard Electrical Company becomes a 100% Subsidiary of the company. Set up factory at Badli (H.P.) for manufacturing of Domestic Switchgea Set up a plant for manufacturing of CFL at existing Faridabad Works Set up a plant for manufacturing of Ceiling Fans at Noida Set-up marketing office in London through wholly owned subsidiary Company Havells U.K. Ltd. Set up factory at Haridwar (Uttaranchal) for manufacturing of

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Fans. Acquired a Greek Company : First International Acquisition Crabtree India merged with Havells India. Acquire SLI Sylvania’s lighting business, head quartered in Frankfurt 2007 acquired 70% stake in a 140-bed super specialty hospital - Central Hospital and Research Centre, Faridabad

VISION STATEMENT:
To be a globally recognized corporation that provides best electrical & lighting solutions, delivered by best-in-class people .

MISSION STATEMENT:
To achieve our vision through fairness, business ethics, global reach, technological expertise, building long term relationships with all our associates, customers, partners, and employees.

PESTLE ANALYSIS (PEST analysis)
Political (Global, national, regional, local community and trends) Economic (world, national and local trends) Social (development in society – culture, behaviour, expectations). Technological (developments: computer hardware, software, applications) Legal (world/ EU/ national legislation). Environmental (global / EU/ National issues).

PESTLE Analysis is a simple technique which can be used in a fairly sophisticated way, particularly when it is combined with Risk Analysis, SWOT Analysis, an Urgency/Impotency Grid and expert knowledge about the organisation and its external factors. PESTLE Analysis is normally used to help organisations identify and understand the external environment in which they operate and how it will operate in the future. PESTLE Analysis can be used by the individual for personal development planning. Some people will argue that this is a use for which it was never designed and for which it may be inappropriate.

The shorter version is a PEST Analysis – missing out Legal and Environmental factors. At the end of this document is an explanation of the use of PESTLE for organisational change.

SOCIAL FACTOR

Havell acquires companies and builds internally, havells Group never loses sight of its responsibility as a good corporate citizen. Havells believes that serving people with meager or no means is the duty of every well-to-do person. It consistently puts that philosophy into action and has initiated several projects for social causes. This has greatly increased the number of children attending school regularly and also alleviates hunger.

Corporate Social Responsibility (CSR) at havells portrays the deep symbiotic relationship that the group enjoys with the communities it is engaged with. As a responsible corporate citizen, we try to contribute for social and environmental causes on a regular basis. Kitchen with Modern Facilities The company has acquired land for constructing a large kitchen with all the modern facilities to serve the meal to around 40000 to 50000 students. Mid Day Meal Being a responsible and concerned corporate citizen, QRG also undertakes other welfare activities in and around its plant locations, In Alwar region; the company is providing mid-day meal close to 15000 students of primary schools. Check-up Camps Blood Donation Camps Contribution towards Tsunami and Kargil National Relief Fund.

TECHNOLOGICAL FACTOR

Research and Development Innovation is the hallmark of every vital development at havells Group. New ideas, inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. Havells’s technological strengths and its endeavour towards continuous research & development have allowed it to fulfils its responsibilities towards its customers. The responsibility of providing its customers the best products and zero defect services to enable them to be comfortable and secure in usage of electricity. Havells has recently invested 50 crores in the QRG Center for Research and Innovation, set-up at the company's Head Office premises in Noida, U.P. The objective of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design.

as well as its relationships in all key spheres of influence: the workplace. and environmental impacts. Realising and respecting the basic needs of customers to feel more secure. Building customer confidence through teamwork is a top priority to provide a wide variety of products and services.Quality Control The essence of quality is closely wrapped in the way we think. It finds its true expression when we extend beyond ourselves to exceed our customer’s expectations. it's not quality ECONOMIC FACTOR The Havells Group defines corporate governance strategically. which encompasses not only what we do as a company with our profits. the community. We're committed to managing a responsible and diverse supply chain that's consistent with our high standards for environmental and business practices. social. but also how we make them. safer and smarter than what he or she is looking for. enabling them to not only save money and protect their capital investment. Our ability to build communities and promote the exchange of ideas through assistive technologies. Each time. every time. sustainable. energy-efficient solutions that don't compromise on capacity and security. All our products are as per IEC standards. and the public policy realm. we've committed ourselves to make our products better. QRG has a simple rule on quality. participation programs. thus fulfilling our CSR responsibility of sustenance of depleting environmental resources. We strive to bring corporate responsibility to every aspect of our business. Our eco responsibility initiative also focuses on how we run our business. . plan and work. It goes beyond philanthropy and compliance and addresses how our company manages its economic. and thus reduce the environmental impact of our operations. Our customers rely on us and it is our responsibility to give them the very best. Breaking down the barriers that constrain innovation is a challenge. the supply chain. We as a company have been in lead in offering a portfolio of eco responsible products and services that deliver powerful. We offer our customers holistic energy-efficient solutions. and includes efforts to develop an alternative-energy strategy. the marketplace. we have readily embraced right from the start. If it doesn't exceed customer expectation. faster and simply better. To deliver products those are safer. That's a passion that began 30 years ago and that's how it continues to be even today. and standardization is transforming the way people experience our products. but also lower their energy usage and protect the environment.

We have achieved this by giving them development and advancement opportunities along with competitive compensation and benefits that appropriately reward performance We communicate widely with employees to demonstrate how their efforts contribute to our success and to listen to their concerns. Corporate governance as practiced by our Group translates into being fair and civic-minded. and. They also help employees implement company policies. meet high standards of conduct and ensure their behavior reflects company values and policies. We started on sound and straightforward business principles. integrity and ethics have served us in good stead. We seek to meet leading health. These sessions provide assessment of employee satisfaction and are inputs for business planning. explicit rules and regulations supplement the traditional values on which our group companies have been shaped. Employee Relations Our people are the key to our success. including an internal web portal and company website along with communication sessions with the top management of the company. trust. diverse workforce and employees who fulfill their potential. We have high-quality.CORPORATE GOVERNANCE AND ETHICS An implicit sense of ethical business conduct has been the cornerstone of the havells way on corporate governance. most importantly. safety and wellness standards to enhance our business performance while optimizing employee health. Their skills. We are committed to open communications and a workplace where everyone's voice is heard. On issues ranging from customer care and business excellence to financial propriety and more. considering the interests of our shareholders and welfare of our employees as foundation of our long term success. The group's adherence to ethical business conduct is rooted in the vision of its Founder Mr Qimat Rai Gupta. We also encourage them to align with our vision. knowledge. This is what we have endeavored to do in the 50 years of our existence. ideas and enthusiasm drive our business. Our facility policies are designed to continually reduce the risk of occupational injury and illness while promoting employee health and wellbeing. The 'leadership with trust' philosophy that has come to play such a vital role in how our customers perceive us is all the more remarkable given the climate of unparalleled public distrust of people in positions of authority today both in business and politics. management decision-making and company strategy development. Our values of understanding. making integrity an article of faith across all our operations. We wish to be a company that is known for its leadership in corporate ethics and . fulfilling our duties to the entire spectrum of stakeholders. We use several channels to communicate with employees.

Weaknesses. Matching and converting Another way of utilizing SWOT is matching and converting. • Strengths: attributes of the person or company that are helpful to achieving the objective. opportunities and threats [citation needed]. 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. the decision makers have to determine whether the objective is attainable. partners and suppliers want to do business with. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities. • Weaknesses: attributes of the person or company that are harmful to achieving the objective. If the objective is NOT attainable a different objective must be selected and the process repeated. and Threats involved in a project or in a business venture. Threats: external conditions which could do damage to the objective. given the SWOTs. Opportunities. SWOT Analysis: SWOT Analysis is a strategic planning method used to evaluate the Strengths. • • Opportunities: external conditions that are helpful to achieving the objective. The SWOT analysis is often used in academia to highlight and identify strengths. It is particularly helpful in identifying areas for development [citation needed]. 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. An example of conversion strategy is to find new markets. including SWOT and SCAN analysis. A company where employees are proud to work. weaknesses. . Matching is used to find competitive advantages by matching the strengths to opportunities. First. has been the subject of much research. Strategic Planning. and customers. 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.responsibility.

as well as changes in the marketplace or competitive position. SWOT analysis is just one method of categorization and has its own weaknesses. The results are often presented in the form of a matrix. technological change. and so on. J. .If the threats or weaknesses cannot be converted a company should try to minimize or avoid them. for example." This old version did not require that SWOTs be derived from an agreed upon objective. (1999) and Hill and Westbrook (1997) have shown that SWOT may harm performance. The external factors may include macroeconomic matters." Findings from Menon et al. finance. and socio-cultural changes. These criticisms are addressed to an old version of SWOT analysis that precedes the SWOT analysis described above under the heading "Strategic and Creative Use of SWOT Analysis. Evidence on the Use of SWOT SWOT analysis may limit the strategies considered in the evaluation. Examples of SWOT analyses that do not state an objective are provided below under "Human Resources" and "Marketing. it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. as well as personnel. As an alternative to SWOT. legislation. • External factors – The opportunities and threats presented by the external environment to the organization.Use a PEST or PESTLE analysis to help identify factors The internal factors may be viewed as strengths or weaknesses depending upon their impact on the organization's objectives. The factors may include all of the 4P's. weak opportunities may appear to balance strong threats. The importance of individual SWOTs will be revealed by the value of the strategies it generates. Scott Armstrong notes that "people who use SWOT might conclude that they have done an adequate job of planning and ignore such sensible things as defining the firm's objectives or calculating ROI for alternate strategies. A SWOT item that . For example. What may represent strengths with respect to one objective may be weaknesses for another objective. It also presents the resulting lists uncritically and without clear prioritization so that. These come from within the company's unique value chain. manufacturing capabilities. Armstrong describes a 5-step approach alternative that leads to better corporate performance." 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. SWOT analysis groups key pieces of information into two main categories: • Internal factors – The strengths and weaknesses internal to the organization. It is prudent not to eliminate too quickly any candidate SWOT entry.

SWOT analysis may also be used in pre-crisis planning and preventive crisis management. this needs to include an assessment of the present situation as well as a portfolio of products/services and an analysis of the product/service life cycle • Analysis of existing strategies. capital value fluctuations). A SWOT item that generates no strategies is not important. SWOT analysis may also be used in creating a recommendation during a viability study.produces valuable strategies is important. SWOT . Examples include: non-profit organizations. This may include gap analysis which will look at environmental factors • Strategic Issues defined – key factors in the development of a corporate plan which needs to be addressed by the organization . SWOT-landscape also indicates which underlying strength/weakness factors that have had or likely will have highest influence in the context of value in use (for ex. this should determine relevance from the results of an internal/external appraisal. governmental units. • • Set objectives – defining what the organization is going to do Environmental scanning o Internal appraisals of the organization's SWOT. Use of SWOT Analysis The usefulness of SWOT analysis is not limited to profit-seeking organizations. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business and environmental factors. Projects (or other units of measurements) that could be potential risk or opportunity objects are highlighted. Changes in relative performance are continually identified. then that organization will use a systematic/rigorous process known as corporate planning. and individuals. query-able 3D landscape.landscape analysis The SWOT-landscape systematically deploys the relationships between overall objective and underlying SWOT-factors and provides an interactive. Corporate planning As part of the development of strategies and plans to enable the organization to achieve its objectives.

resources and competencies. management often conducts market research (alternately marketing research) to obtain this information. projects plans for strategy implementation • Monitoring results – mapping against plans. Such an analysis of the strategic environment is referred to as a SWOT analysis. competitive positioning and product differentiation. Marketing managers will examine each competitor's cost structure. The SWOT analysis provides information that is helpful in matching the firm's resources and capabilities to the competitive environment in which it operates. it is instrumental in . As such. such as focus groups Quantitative marketing research. resource. and those external to the firm can be classified as opportunities (O) or threats (T). Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. sources of profits. historical responses to industry developments. marketers build detailed profiles of each competitor in the market. but some of the more common include: • • • • Qualitative marketing research. and other factors. Marketers employ a variety of techniques to conduct market research.• Develop new/revised strategies – revised analysis of strategic issues may mean the objectives need to change • Establish critical success factors – the achievement of objectives and strategy implementation • Preparation of operational. taking corrective action which may mean amending objectives/strategies. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W). Marketing: In many competitor analyses. SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. degree of vertical integration. such as statistical surveys Experimental techniques such as test markets Observational techniques such as ethnographic (on-site) observation • Marketing managers may also design and oversee various environmental scanning and competitive intelligence processes to help identify trends and inform the company's marketing analysis. Accordingly.

For example. each of the following may be considered weaknesses: • • Lack of patent protection A weak brand name .strategy formulation and selection. Examples of such strengths include: • • • • • • Patents Strong brand names Good reputation among customers cost advantages from proprietary know-how Exclusive access to high grade natural resources Favorable access to distribution networks Weaknesses The absence of certain strengths may be viewed as a weakness. The following diagram shows how a SWOT analysis fits into an environmental scan: SWOT Analysis Framework Environmental Scan /\ Internal Analysis /\ /\ Opportunities Threats External Analysis Strengths Weaknesses | SWOT Matrix Strengths A firm's strengths are its resources and capabilities that can be used as a basis for developing a competitive advantage.

a weakness may be the flip side of strength. Take the case in which a firm has a large amount of manufacturing capacity.• • • • Poor reputation among customers High cost structure Lack of access to the best natural resources Lack of access to key distribution channels In some cases. Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such threats include: • • • • Shifts in consumer tastes away from the firm's products Emergence of substitute products New regulations increased trade barriers The SWOT Matrix . Some examples of such opportunities include: • • • • An unfulfilled customer need Arrival of new technologies loosening of regulations Removal of international trade barriers Threats Changes in the external environmental also may present threats to the firm. While this capacity may be considered a strength that competitors do not share. it also may be a considered a weakness if the large investment in manufacturing capacity prevents the firm from reacting quickly to changes in the strategic environment.

SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses. SWOT Analysis Discover New Opportunities. . abilities and opportunities. • W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. and here for Personal SWOT Analysis. Used in a personal context.A firm should not necessarily pursue the more lucrative opportunities. The SWOT matrix (also known as a TOWS Matrix) is shown below: SWOT / TOWS Matrix Strengths Weaknesses Opportunities S-O strategies W-O strategies Threats S-T strategies W-T strategies • • S-O strategies pursue opportunities that are a good fit to the company's strengths. the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. Manage and Eliminate Threats. Used in a business context. a matrix of these factors can be constructed. To develop strategies that take into account the SWOT profile. it helps you develop your career in a way that takes best advantage of your talents. it helps you carve a sustainable niche in your market. • S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. W-O strategies overcome weaknesses to pursue opportunities. Click here for Business SWOT Analysis. In some cases. Rather. and for looking at the Opportunities and Threats you face.

Be realistic: It's far too easy to fall prey to "not invented here syndrome". you can manage and eliminate threats that would otherwise catch you unawares. with a little thought. so that you can compete successfully in your market. Then answer the following questions: Strengths: • • • • • What advantages does your company have? What do you do better than anyone else? What unique or lowest-cost resources do you have access to? What do people in your market see as your strengths? What factors mean that you "get the sale"? Consider this from an internal perspective. Tip: For help finding your company's Unique Selling Proposition (USP) or crafting your competitive edge. think about them in relation to your competitors . (If you are having any difficulty with this. read our USP Analysis article. it can help you uncover opportunities that you are well placed to exploit.for example. How to Use the Tool ? To carry out a SWOT Analysis. try writing down a list of your characteristics. if all your competitors provide high quality products. it is a necessity. then a high quality production process is not sstrength in the market. Some of these will hopefully be strengths!) In looking at your strengths. And by understanding the weaknesses of your business.Business SWOT Analysis What makes SWOT particularly powerful is that. start by downloading our free template. Weaknesses: • What could you improve? . More than this. by looking at yourself and your competitors using the SWOT framework. and from the point of view of your customers and people in your market. you can start to craft a strategy that helps you distinguish yourself from your competitors.

Local events. lifestyle changes. products or services changing? Is changing technology threatening your position? Do you have bad debt or cash-flow problems? Could any of your weaknesses seriously threaten your business? . A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Changes in social patterns. look at your weaknesses and ask yourself whether you could create opportunities by eliminating them. Opportunities: • • Where are the good opportunities facing you? What are the interesting trends you are aware of? Useful opportunities can come from such things as: • • • • Changes in technology and markets on both a broad and narrow scale.• • • What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales? Again. consider this from an internal and external basis: Do other people seem to perceive weaknesses that you do not see? Are your competitors doing any better than you? It is best to be realistic now. Threats: • • • • • • What obstacles do you face? What is your competition doing that you should be worried about? Are the required specifications for your job. population profiles. Alternatively. and face any unpleasant truths as soon as possible. Changes in government policy related to your field.

For this reason the SWOT Analysis is sometimes called InternalExternal Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool. If you're using it as a serious tool. • Supplement it with other option-generation tools – none is likely to be completely comprehensive. verifiable statements ("Cost advantage of US$10/ton in sourcing raw material x". rather than "Good value for money"). you'll start to see how and where you should compete against them.this tool is useful for understanding the 'big picture' of the environment you are operating in and will help you identify the opportunities and threats within it. and in putting problems into perspective. .Carrying out this analysis will often be illuminating – both in terms of pointing out what needs to be done. Tip 1: Make sure you visit our next article 'PEST Analysis' . make sure you're rigorous in the way you apply it: • Only accept precise. • Make sure that options generated are carried through to later stages in the strategy formation process. and prioritize factors so that you spend your time thinking about the most significant factors. or in a more sophisticated way as a serious strategy tool. rather than at the much vaguer whole company level. Opportunities and threats often relate to external factors. Strengths and weaknesses are often internal to your organization. As you do this. Example A start-up small consultancy business might draw up the following SWOT matrix: Strengths: • We can respond very quickly as we have no red tape. You can also apply SWOT Analysis to your competitors. • Apply it at the right level – for example. no need for higher management approval. at product or product line level. • Ruthlessly prune long lists of factors. Tip 2: SWOT can be used in two ways – as a simple icebreaker helping people get together and "kick off" strategy formulation.

Weaknesses: • • • • Our company has no market presence or reputation. We have a small staff with a shallow skills base in many areas.• We can give really good customer care. . We are vulnerable to vital staff being sick. leaving. Our competitors may be slow to adopt new technologies. Threats: • Will developments in technology change this market beyond our ability to adapt? • A small change in focus of a large competitor might wipe out any market position we achieve. The consultancy should keep up-to-date with changes in technology where possible. to get the greatest possible market presence for a set advertising budget. We have little overhead. Key Points SWOT Analysis is a simple but powerful framework for analyzing your company's Strengths and Weaknesses. Our local council wants to encourage local businesses with work where possible. minimize threats. good value services to local businesses. Marketing would be in selected local publications. and take the greatest possible advantage of opportunities available to you. This helps you to focus on your strengths. Opportunities: • • • Our business sector is expanding. with many future opportunities for success. Our cash flow will be unreliable in the early stages. We can change direction quickly if our approach isn't working. • • • Our lead consultant has strong reputation within the market. and the Opportunities and Threats you face. as the current small amount of work means we have plenty of time to devote to customers. The consultancy may therefore decide to specialize in rapid response. so can offer good value to customers.

The product is not of strategically importance for the customer. Examples of switching costs: -effort needed to inform friends and relatives -costs related to learning -time lost due to the paperwork necessary when switching -other costs include: exit fees. and social risk. there is a concentration of buyers. emotional costs. Bargaining Leverage. The pain of giving up a benefit is much more significant than the pleasure of gaining that benefit. Customers bargaining power is likely to be high when · · · · · · They buy large volumes. For how they evaluate the advantages disadvantages 3) People exhibit loss aversion.Porter’s 5 force model The Bargaining power of customers How much customers can impose pressure on margins and volumes. . search costs. Bargaining Leverage. must be significantly better 2) Different people have different reference points. The customer knows about the production costs of the product There is the possibility for the customer integrating backwards. cognitive effort. Switching to an alternative product is relatively simple and is not related to high costs. Switching Costs : .any impediment to a customer's changing of suppliers. . financial risk.Customers could produce the product themselves. installation and start-up costs. psychological risk. learning costs. Gourville several rules: 1) People are sensitive to the relative advantages and disadvantages of any change from the status quo. -product. equipment costs.consumer must see a clear benefit to offset the perceived sacrifice Andy Grove’s 10x rule.

>Existing players have close customer relations. The Threat of new entrants Pressure of possible new competitors entering the market and changing environment (e. e. e.g. from long-term service contracts. Supplier bargaining power is likely to be high when: The market is dominated by a few large suppliers There are no substitutes for the particular input. >Distribution channels are controlled by existing players. >Capital Requirements.g. qualified expert staff >Access to raw materials is controlled by existing players. The Bargaining power of suppliers Pressure suppliers can impose on sources for inputs that are needed in order to provide goods or services.High initial investments and fixed costs >Cost advantages . >High switching costs for customers >Brand Loyalty >Legislation and government action The Threat of substitute products Pressure from alternative product substitutive .g. market shares.Due to switching costs. The switching costs from one supplier to another are high. >Economies of scale (minimum size requirements for profitable operations). prices. efficiencies.there must order-of-magnitude improvements in costs. licenses etc. Will depend on the extent to which there are barriers to entry. Threat of forward integration by suppliers The buying industry has low barriers to entry.due to experience curve effects of operation >Brand loyalty of customers >Protected intellectual property like patents. and benefits to the consumer. >Scarcity of important resources. customer loyalty).

industry profits declines . there is much price competition. > Low market growth rates (growth of a particular company is possible only at the expense of a competitor). Close customer relationships.only a few firms holding a large market share. The Intensity of competitive rivalry Competitive pressure on prices. Current trends. Switching costs for customers. and hence.Market volume and potential sales volume may be affected for existing players. > Barriers for exit are high (e. The Bureau of Census periodically reports the CR for major Standard Industrial Classifications (SIC's). on profitability due to rivalry Competition between existing players is likely to be high when > > There are many players of about the same size Players have similar strategies > There is not much differentiation between players and their products.g. This category also relates to complementary products. hence. margins. the competitive landscape is less competitive (closer to a monopoly). expensive and highly specialized equipment). The relative price for performance of substitutes. Concentration Ratio (CR) – Economic indicator of measure of rivalry by industry concentration. A low concentration ratio indicates. Treat of substitutes is determined by factors like > > > > > Brand loyalty of customers.that the industry is characterized by many rivals (competitive) Profitability: -An industry’s profit potential is largely determined by the intensity of competitive rivalry -As rivalry among competing firms intensifies. Shows percent of market share held by the largest firms A high concentration ratio indicates.

low power by the buyers PORTER’S FIVE FORCE MODEL IN HAVELLS Threat of New Entrants LOW Supplier Bargaining Power LOW Rivalry/ Competitio n Among existing firms MEDIUM Buyers Bargaining Power MEDIUMHIGH Threat of Substitute Products LOW Reference- altadynamics.doc .com/Baruch/Porter%205%20forces%20analysis. low supplier power. limited entry. few substitute products.Profitability highest in industries with: 12345low rivalry.

and there’s plenty of opportunity for everyone to make money.individual sales last year Individual sales last year Markets experiencing high growth are ones where the total market share available is expanding. measured either in revenue terms or unit volume terms. Stars Question marks Cash cows Dogs . III. IV. the higher proportion of the market you control. II. MARKET GROWTH RATE MGR = Individual sales this year . RELATIVE MARKET SHARE RMS = Business unit sales this year Leading rival sales this year The higher your market share. Market share is the percentage of the total market that is being serviced by your company. It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories: I.BCG Matrix BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s. According to this technique. businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. Market growth is used as a measure of a market’s attractiveness.

. equipment and personnel to keep up with the fast growing market and because it wants to overtake the market leader.These are Businesses that operate in high. Market development III. 1. Market penetration II. QUESTION MARKS: . The relative market share serves a measure of the company’s strength in the market segment. The two axes are divided into high & low. H Stars Market Growth Rate Question Marks Cash Cow L H Relative Market share Relative Market Share Dogs L On the vertical axis is the Market Growth rate of the market in which the business operates. The growth matrix is divided into four cells each indicating a different type of business profile. Product development IV. A question mark requires a lot of cash because the company has to spend money on plant. A market growth rate above 10 percent is considered to be high. The company has to think hard about whether to keep on investing money into this business or put an end. Which are all intensive strategies or divestment? . It refers to the Strategic Business Unit’s market share as compared to the firm. I. The matrix comprises of four quadrants each describing the size and position of the strategic business unit owned by an organization.It is based on the combination of market growth and market share relative to the next best competitor. On the horizontal axis is the Relative Market Share. Strategic options for question marks include. which is its largest competitor in the segment under consideration.growth markets but have low relative market shares.

Joint ventures 3. Less successful products that never gain market position will move straight from question mark to Dog. CASH COWS: . The company must spend substantial funds to keep up with the high market growth and to fight off competitor attacks. Classifying the SBU’S on the basis of BCG matrix. Strategic options for Dogs include I. Market development IV. Market penetration III. Divestment (if you can find someone to buy!) Successful products may well move from question mark through star to Cash Cow and finally to Dog.Stars with a falling growth rate that still have the largest relative market share and produce a lot of cash for the company is called a cash cow. Product development V. Strategic options for stars include.It is a market leader in a high growth market. Retrenchment (if it is believed that it could be revitalized) II. The company should consider whether they are expecting a turn around in the market growth rate or a new chance for market leadership else they should divest this business. Assessing and comparing the prospects of each SBU according to two criteria 1. B.Businesses that have weak market shares in low-growth markets are in the dog category. I.2. DOGS: . Integration – forward. Concentric diversification b). MAIN STEPS OF BCG MATRIX A. backward and horizontal II. . Divestment 4. A star is a potential business which has the competitive advantage to be a market leader in an industry that is growing fast. The company uses its cash cows to pay bills and support other business. Weak position :.strategic options are I. It would be fruitless to spend and money on this matrix business. The company does not have to finance expansion because the markets growth rate has slowed because the business is the market leader it enjoys economies of scale and higher profit margins. a). Liquidation III. Strong position:-strategic options are I. STARS: . Retrenchment II. 2. A star does not necessarily produce a positive cash flow for the company. Growth rate OF SBU’S industry. Product development II. SBU’S relative market share. C. Identifying and dividing a company into SBU.

Companies will frequently search for a balanced portfolio. It ignores interdependence and synergy. With continued investment in power sector they expect Company to grow at 15% CAGR over FY08-FY12. since. RCCBs. E. including the quality conscious European countries. The Company is the number one player in domestic switchboards with more than 20% market share and is the 4th largest in Industrial switch boards. Growth rate is only one aspect of industry attractiveness and high growth markets are not always the most profitable. BCG MATRIX IN HAVELLS:Indian Operations of the Company are divided into 4 key segments: Switchgear: Havells is the largest manufacturers of MCBs. B. It assumes that market share and profitability are directly related. It ignores the impact of small competitors whose market share is rising fast. They expect margins in this business will remain stable above 30% over long term. Market share is only one aspect of overall competitive position. The use of high and low to form four categories is too simplistic. It helps you to quickly and simply screen the opportunities open to you. C. Definition (qualitative and quantitative) of the market is sometimes difficult.Switch Gear division had EBIT margins of 32% for Q3FY09.D. 5420 million to its overall revenue.4% in FY09. BENEFITS A. F. In FY08. This segment is the most profitable one with operating margins to the tune of 33% in the FY08. and helps you think about how you can make the most of them. BCG MATRIX is simple and easy to understand. LIMITATIONS A. D. It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability. I. It considers the product or business in relation to the largest player only. H. Cable and Wires: The cable & wire segment generated Rs 2133 million in the Q3FY09 registering y-o-y de-growth of 14% EBIT margins fell from 9. G. C. B.5% 9M YTD FY08 to 5. Too many stars may lead to a cash crisis too many Cash Cows puts future profitability at risk and too many question marks may affect current profitability. Fall in revenues was . Developing strategic objectives for each SBU.With the market share of around 25% in the market for MCBs. and distribution boards in India . switchgear contributed 25% at Rs. The Company currently exports MCBs to over countries.

Airconditioner have the ability to gain market share.7% margins as against 12. 11% up from same period of previous year. -76 million on revenues of Rs. domestic/FRLS wires. The Company has increased its share form 3% to 13% in the organized fan market of INR 17 bn. first quarter revenues stood at 650 million. Currently 60% of the CFL and only 30% of the fixtures market is organized. Company had negative EBIT of Rs. They believe the electric fan segment. 18% A H 16% R 14% K 12% E 10% T 8% 6% 4% 2% 0% G R O W T H Stars • Switchgears as the number one player in domestic switchboards with more than 20% market share With high growth rate. the Company expanded its CFL capacity to become the largest CFL manufacturer in the country.registered due to drop in prices of cables and wires and huge margin drop in was due adjustment in inventory due to massive reduction in prices of Copper in this Quarter. With strong brand image among domestic consumers. Electrical Consumer Deliverables & Others Havells also offers products like electric fans. Question Marks • Electrical consumer Deliverables & Others products like CRABTREE switches. They expect Company to aggressively pitch this segment by launching a range of products in lightings and fixtures as it brings products from the stable of Sylvania into the Indian markets.190 million with 26. meters and ‘Crabtree’ brand bath fittings which are largely consumer products and add diversity to Havells product profile. and generates operating margins in excess of 20%.They expect Company’s top line to grow at CAGR of 25% as industry growth likely to 20% M pickup and organized players increase their share in the market.The Company is recognized as quality manufacturers of cable & wires and offers a complete range of low and high voltage PVC and XLPE cables. Their estimates put Lightings and Fixtures business growth at 25% CAGR FY10E –FY12E as industrial growth is likely to pick up. . the turnover of the division grew at 25% y-o-y to Rs 2900 million. The Company generated operating profit of Rs. Havells may launch new products like Geysers in this segment. besides. which contributes 10% to consolidated revenues.3% margin last year. 2133 million for Q3. Lightning and Fixtures During FY08. In this division. Geyser. from FY05 to FY08. Co-Axial TV and telephone cables. is the key focus segment.

REFERENCE http://www. • During the FY08. they expect demand to go down in near future and will pick up slowly.csgstrategies.L Cash Cow • Lighting and Fixtures Products like Sylvania due to cultural difference and cost rationalization undergo retrenchment.pdf Books. Havells’ strong brand value and aggressive marketing to help it grow its top line for its cables and wires segment. H Relative Market Share L Key focusing strategies for future growth – • Since Construction and real Estate sector has slowed down.Strategic management by Hill and Jones . • Although investments in power sector will continue to rise but Havells will not be able to take complete advantage as it does not manufacture some range of High Tension cables. Dogs • Cables and wires Low growth as well as market shares in market.com/ www. the Company had almost doubled its capacity.. basically outsource its products from India.com/fairwealth/fairwealth_havells_30Jan09.valuenotes. and divestment in Europe.

which is determined by i. Customer preferences ii. II. Available alternatives (including substitute products) iii. Supply of related or supplementary goods .VRIO Framework:A FRAMEWORK FOR ANALYSIS: VRIO Resource-based analysis of the firm determines which resources and capabilities result in which strengths or weaknesses b) Strategies are to be implemented which exploit (or build) strengths and avoid (or eliminate) weaknesses c) What constitutes a strength or weakness is partially a function of the external environment d) Framework for analysis: VRIO .resources and capabilities should be  Valuable  Rare  Inimitable  Organization can effectively exploit them a) VALUE of resources and capabilities a) A VALUABLE resource or capability (or a combination thereof) must I. Contribute to fulfillment of customer's needs At a price the consumer is willing to pay.

value is partially a function of external environment (product market. Legal restrictions on imitation : i. technology. Dependence on historical circumstances . ii.. etc. Impediments to imitation : Impede rivals from duplicating critical resources and capabilities. quotas on operating rights) b. Impediments to imitation: a. copyrights. Market size and scale economies d. can result in changed value d) Resources of different firms can be valuable in different ways (e. demand forces) c) Changes in consumer tastes. Superior access to inputs or to customers c.b) Thus. Causal ambiguity ii. Cost asymmetries ("Do firms without a resource or capability face a cost disadvantage in obtaining it compared to firms that already possess it?") Capabilities of competitors c) Sources of cost asymmetries / cost disadvantages fall into two categories : i. Governmental control over entry into markets (licensing. Intangible barriers to imitation i. Early-mover advantages : Set in motion a dynamic that increases the magnitude of that advantage relative to other firms over time A. industry structure. Timex versus Rolex) e) Value = Lowered costs or increased revenues or both SCARCITY of resources and capabilities Resources and capabilities must be in short supply to create competitive advantage (and go beyond competitive parity) b) An analysis of the firm's resources and capabilities must include critical assessment whether they are unusual when compared to those of competitors c) How rare does a resource have to be in order to have potential for generating a competitive advantage? d) To be a source of sustained competitive advantage the rarity of the resource must persist over time a) INIMITABILITY of resources and capabilities a) Requirement for sustained competitive advantage b) Ease of imitation depends on i. trademarks ii. certification. Patents. ii.g.

Easy to imitate: Cash. ii. iii. ii. unique assets.iii. iii. v. Degrees of resource and capability imitability i. economies of scale. Cannot be imitated: Patents. iv. Other path dependencies iv. unique locations Difficult to imitate: Brand loyalty. Can be imitated (but may not be) Capacity preemption. iv. employee satisfaction. Social complexity B. Structure Management and control systems Compensation policies Business processes Complementary resources and capabilities THE VRIO FRAMEWORK FOR CRABTREE SWITCHES Is a resource or a capability or a combination of resources & capabilities? Resource/ Costly to Exploitable Valuable Rare by the capability Imitate Organization Competitive implications Economic performance Strengths or Weaknesses Marketing Yes No No Yes Competitive Parity Normal Strength . reputation for fairness. commodities ORGANIZING to exploit competitive potential of resources and capabilities The following elements must be in place in order to effectively exploit the resource(s) and/or capability(s): i.

p. marketing. Montgomery. The term VALUE CHAIN refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value. information systems. . material management.Environmenta l strategy Yes Yes No Yes Temporary Competitive advantage Normal Strength Product reliability Yes Yes No Yes Temporary competitive advantage Above normal Strength and distinctive competence Leadership Yes Yes Yes Yes Sustained competitive advantage Temporary competitive advantage Strength and Above normal sustainable distinctive competence Strength and distinctive competence Strategic alliance Yes No Yes Yes Above normal Source: C. service. R&D.163. and human resources-have a role in lowering the cost structure and increasing the perceived value of the products through differentiation. The process of transformation is composed of a number of primary activities and support activities that add value to the product. Tables 1. Harvard Business School Case N1-792-064 Source: Barney. 1997. "Resources: The essence of Corporate Advantage". Value chain analysis The Value Chain All of the functions of the company –such as production.

58x 30 quarters of consecutive growth* 10-year EBDITA and PAT CAGR in excess of 40% Organic growth led by gaining market share in existing Products. launch of new branded.27x and PAT . Consumer pull evenly matched with a well entrenched distribution network High RoCE and RoE creating shareholder value.Research & Customer Development service Production Marketing Primary Activities & Sales Company Infrastructure Information Systems Materials Management Human Resources Support Activities Consistent value creation: • • • • • • • • Consistent profitable growth over the last 10 years 40% CAGR Sales . . consumer products Significant brand emphasis to create a strong differentiator with FMCG like packaging. promotions and advertisements.

Increased brand awareness for hitherto commoditized products –wires and cables. Structural changes in the underlying buying patterns. Large opportunities for quality. Increasing affordability and willingness to pay for quality products. Significant investment planned with greater focus on infrastructure development. power and construction key user segments.Buoyant end user segments: • • • • • • • • • Infrastructure. Distinctive shift from un-organized to organized Segment. Large investment in real estate and power sectors. branded and well distributed product companies like Havell’s. Growing protection awareness. .

The task of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering.Innovation is the hallmark of every vital development at QRG. inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. . The Group has also decided to dedicate 2% of it's turnover towards R&D.O. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design. QRG technological strengths and its endeavor towards continuous research & development has allowed it to fulfill its responsibilities towards its customers. Centre For Research and Innovation (CRI) QRG has recently invested 20 million dollars in a new center for research and innovation. The responsibility of providing its customers the best products and zero defect services to enable them to be comfortable and secure in usage of electricity. New ideas. premises in Noida. This centre has been set-up at the company's H.

(2) Perform one or more of the value creation functions in a way that allows for differentiation and gives a company pricing options. A diversified or multibusiness company is thus one that is involved in two or more distinct industries. or (3) Help the company to manage industry rivalry better. 2) Leveraging competencies to create new businesses. The managers of a diversified company can boost profitability in five main ways: 1) Transferring competencies among existing business. a diversification strategy should enable a company or one or more of its business units to (1) Perform one or more of the value creation function at a lower cost. To increase profitability.Diversification Diversification is the process of adding new businesses to the company that are distinct from its established operations. .

 CRABTREE “Havells is not shy of investing in unrelated field. or activities. we are likely to go for more such facilities” -. In the next phase. Related diversification is diversification into a new business activity in a different industry that is related to a company’s existing business activity. The acquisition marks the beginning of our entry into the healthcare segment. The two main types of diversification are related diversification and unrelated diversification. by commonalities between one or more components of each activity’s value chain.Qimat Rai Gupta 1976: Rewirable switches and changeover switches. and 5) Exploiting general organizational competencies that enhance the performance of all business units within a diversified company. Unrelated diversification is based on entry into industries that have no obvious connection to any of a company’s value chain activities in its present industries. 4) Using diversification as a means of managing rivalry in one or more industries. 1979: HBC fuses at Delhi 1980: Energy meters .3) Sharing resources to realize economies of scope. We have spent over Rs 20 cr for the acquisition and are investing an equal amount in expanding the existing facilities in the hospital.

2000: Acquired controlling stakes in Duke Arnics Electronics meters. 1992: Technical JV with Schiele Industrieworke. . Standard electrical became 100% 2004: Manufacturing plant for CFL’s and Ceiling Fans Noida Ceiling fans Noida. 2005: Manufacturing plant for fans in Uttaranchal. JV with Electrium for MCCBs and with Crabtree for MPS. Germany. 1998: Introduced high-end Ferraris electronic meter in JV with DZG. for customized package solutions. Germany. 1996: Acquired a Manufacturing plant for power cables and wires. and in industry major Standard Electricals. 2001: Acquired MCCBs business of Crabtree and merged ECS ltd in the company. 2002: Attained IEC & CSA certification. for ELCBs.1983: Acquired towers and transformer ltd 1987: MCB’s JV with GEYER Germany 1990: Manufacturing plant for changeover switches. 1997: Acquired Electric control and switchboards Noida.

How to implement structure. vehicle that companies can use to enter new industries or countries. QRG group entered healthcare business acquiring majority Stakes (70%) in Central Hospital and Research centre Faridabad. and culture to manage a new acquisition is important because many acquisitions are unsuccessful. Consolidation of CFL manufacturing plant at Neemrana for domestic and export purposes MERGERS & ACQUISITION The phrase mergers and acquisitions (abbreviated M&A) refers to the aspect of corporate strategy.2006: CFL plant at Haridwar 2007: Acquired Lightning business of Sylvania group. Mergers and acquisitions are the third.  CRABTREE • Towers and Transformers Ltd in 1983. or help a growing company in a given industry grow rapidly without having to create another business entity. selling and combining of different companies that can aid. 2008: Ventured into Motor business. control systems. corporate finance and management dealing with the buying. . finance. 2009: Set up of fully automatic switchgear manufacturing plant at Baddi. And one of the main reasons acquisitions perform poorly is that many companies do not anticipate the difficulties associated with merging or integrating new companies into their existing operations. and most widely used.

CB.5 million Euros led by Barclays Capital finances • Entry into Europe. but will create additional capacities in low cost India • Havells substitute Chinese export to Sylvania • Havells will leverage Sylvania distribution in Europe. Latin America and Asia Pacific Factors for Success: 1. • LEARNING FROM MISTAKES: Lost bid for Electrium to Siemens by 8 million pounds. • Entry into international markets. etc For its various products. KEMA. SEMKO. • GRAND TAKEOVER March 2007:• SLI SYLVINIA: 235. The production of Fans in tax free zones of Uttaranchal 4. Learned how to mobilize funding and to deal with complex issues of merger and acquisitions. AENOR (Spain). Duke Arnics. CE. SIRIUM (Malaysia). 2. . Integrating into stores How Strategic the Acquisition was? • Can keep existing manufacturing facilities in Europe. International approvals: such as CSA. Strategic Alliances and Continuous enrichment of existing business 3.• 1996 Joint Venture with Crabtree Modular Plate Switches. DZG Germany. ASTA.

but the activity adds much of the value to the end product. outbound logistics. since a rough diamond is significantly less valuable than a cut diamond. Typically.USA and Latin • America for margin rich switch gear products • Sylvania R & D practices can transform Havells • Havells can use Sylvania multi brand strategy for different markets "Sylvania's acquisition is a first step towards attaining leading position in the global lighting industry with a strong presence in the developed markets of Europe and high growth Latin American markets. The business unit is the appropriate level for construction a value chain. The chain of activities gives the products more added value than the sum of added values of all activities. The value chain. The "primary activities" include: inbound logistics. Products pass through all activities of the chain in order and at each activity the product gains some value.g. A diamond cutter can be used as an example of the difference. This acquisition will provide us a platform with strong brands and established distribution channels on which Havells can build on. the management team responsible for SLI Sylvania's turnaround will continue to remain with the business and grow the combined organization" "The management team is extremely excited about the Transaction and believes that SLI Sylvania is well-poised to effectively exploit the opportunities ahead with significant synergies to be realized by the combined organization”. is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller. the described value chain and the documentation of processes. Competitive Advantage: Creating and Sustaining Superior Performance. A value chain is a chain of activities for a firm operating in a specific industry. and services (maintenance). The cutting activity may have a low cost. operations (production). not the divisional level or corporate level. e. ISO 9001. marketing and sales (demand). The "support activities" include: administrative . assessment and auditing of adherence to the process routines are at the core of the quality certification of the business. Further. It is important not to mix the concept of the value chain with the costs occurring throughout the activities. also known as value chain analysis. The value chain categorizes the generic value-adding activities of an organization.

Havells has recently invested 50 crores in the havell’s Center for Research and Innovation. New ideas. Havell’s technological strengths and its endeavor towards continuous research & development have allowed it to fulfill its responsibilities towards its customers.infrastructure management. The costs and value drivers are identified for each value activity. Services. human resource management. or Processes Production Marketing & Sales Distribution Customer Service HAVELL’S RESEARCH AND DEVELOPMENT Research and Development Innovation is the hallmark of every vital development at havell’s Group. Six business functions of the Value Chain: • • • • • • Research and Development Design of Products. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design.P. had some success in the early 1990s. and procurement. The objective of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. Quality Control . a cross-functional process which was developed over the next decade. technology (R&D). The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. The responsibility of providing its customers the best products and zero defect services to enable them to be comfortable and secure in usage of electricity. set-up at the company's Head Office premises in Noida. U. inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. The simpler concept of value streams.

they’ve committed themselves to make their products better. customers rely on havells and it is responsible to give them the very best.The essence of quality is closely wrapped in the way they think. power capacitors. commercial and industrial electrical needs. fans.commercial and industrial applications. Realising and respecting the basic needs of customers to feel more secure. plan and work. luminaires for domestic. cables and wires. To deliver products those are safer. every time. safer and smarter than what he or she is looking for. That's a passion that began 30 years ago and that's how it continues to be even today. It finds its true expression when they extend beyond themselves to exceed our customer’s expectations. and bathfittings covering the entire range of household. motors. Building customer confidence through teamwork is a top priority to provide a wide variety of products and services. Havells has a simple rule on quality. Each time. it's not quality performance. All their products are as per IEC standards. modular switches. If it doesn't exceed customer expectation. faster and simply better. Company products Havells manufactures products such as industrial and domestic circuit protection switchgears. CFL lamps. • • • • • • • • • • • • • • • • • • • • Building Circuit Protection Capacitors Fans Bath fittings and Accessories Industrial Circuit Protection Lighting Modular Plate Switches Motors CFL Cables and Wire Building Circuit Protection Miniature Circuit Breaker Isolator Changeover Switch Residual Current Circuit Breaker RCBO Distribution Board Indicator Light Capacitors Normal Duty .

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • Heavy Duty Super Heavy Duty Agriculture Duty Motor Run Capacitors Fans Ceiling Fans Table Fans Wall Mounting Fans Pedestal Fans Air Circulator Fans Ventilating Fans Industrial Circuit Protection Air Circuit Breaker MCCB Panel Board System Changeover Switch By-Pass Changeover Switch Automatic Transfer Switch Switch Disconnector Load Changeover Switch Control Gear Switch Disconnector Fuse Fuse Switch and Switch Fuse Chamber System Fuse Holder Nylon Fuse Base Fuse Link and Fuse Base Lighting LED Lighting Consumer Lighting COmmercial Lighting Down Lighter Landscape-Bunker Lighting Industrial Lighting Area Lighting Road Lighting Speciality lamps Accessories Aura Lighting Modular Plate Switches Havells Modular Switches .

Copper Copper Flexible Cables Integrated service: AIL have the ability to provide customers with an integrated range of casting. MAJOR PRODUCTS OF CRABTREE: • • • • • • • MODULAR SWITCHES RANGE THAMES PICCADILLY ATHENA UNDEFLOOR BOX CASA DIGITAL DIMMING AND ENERGY MANAGEMENT SYSTEM . machining and sub-assembly capabilities. Moving down the value chain into casting has enabled the company to increase the product range.• • • • • • • • • • • • • • • • • • • • • • • • Crabtree Modular Switches Motors Foot Mounting Flange Motor Flange Motor Foot Cum Flange Inverter Duty Motors with Forced Cooling Crane Duty Motors Brake Motors CFL Retrofit Non Retrofit Higher Range Liliput FPL Cables and Wires Power Cables . The company makes a number of casting modules for engines and transmission components.Aluminium Control Cables . which are typically complementary to each other. provide a budled service to its customers and control more effectively raw material prices. process and wastages.

the Government has approved the strategy formulated by the ministry of power for distribution reforms. Havells produces a complete range of low and high voltage PVC and XLPE cables besides domestic FR/FRIS wires. The eleventh five year plan has earmarked capacity addition of 62. Havell's has a strong brand name in electrical consumer goods and a brand leader in compact fluoresce INVESTMENT RATIONALE: Huge investments in power sector: As a part of power sector reforms. Focus on utilities such as . resulting in fast growth in volume. The company is recognised as quality manufacturers of cable with a major presence in the country. contractors etc.• • • • AURA PRO AURA IWD AURA IWS MOTION SENSOR HAVELL’S BUSINESS SEGMENT Havell's India operates in the business of switch gear. RCCBs and distribution boards in India. Co-Axial TV and Telephone cables. fuse switches. This company is largest manufacturers of MCBs. Increasing focus on transmission and distribution scheme. This company also manufactures a comprehensive range of industrial switchgear products including MCCBs. rural electrification and rural electrical supply augment revenue visibility. cable & wire and electrical consumer durables. fuses.000 MW of power from FY07 to FY12. changeover switches.

Havell’s recorded a export turnover of Rs.Havell's India has made capital expenditure to the tune of Rs. India’s incremental energy demand for the next decade is projected to be among the highest in the world spurred by sustained economic growth. the energy demand is expected to grow at 5%. It is a wholly owned subsidiary company of Havell’s India Limited set up primarily . rise in income levels. Dubai.60 crores in FY06 and is making capital expenditure amounting Rs. TQM.Havell has incorporated Havell’s (UK) Limited in London. Growing focus on exports: Havell’s caters its international clientele spread over 51 countries with offices in London.70 Crores in FY07 & FY08 respectively.120 Crore in FY07 and upto Rs 150 Crores in FY08. Foreign subsidiary. Sri Lanka and distribution networks in all major countries. 5-S. Despite the intense competition in the global electrical industry. a company registered under the company law of UK.power and infrastructure sector is expected to drive growth initiatives of the company. China. the company bagged an export contract for 2 years from Eaton Electrical group for supply of switchgear amounting US $10 million. Kaizen at all units of the company. Dhaka. Going forward it is expected to clock a turnover of Rs. Additional Capital expenditure. 130 Crores and Rs. Havell’s is a company which is poised to benefit from this. Capital expenditute will bring in additional capacity resulting in increase in topline. and increased availability of goods and services. High GDP Growth: With an expected GDP growth of 8% by the end of the Tenth Five-year Plan. Cost Competitiveness – Cost competitiveness has been enhanced through improvements in process using tools like six sigma. In March. 75 Crores in FY06. Nigeria.

service. Havell's has got the approval from its board of directors to acquire a greek company for Euros 10 million. and the company interacts with dealer on a regular basis to get a fair pulse of the market. The better your business performs against one of these factors.Managements of Havell's is actively looking for inorganic growth which will have synergies with their existing product portfolio. Competitive Advantage A company has a competitive advantage over its rivals when its profitability is greater than the average profitability for all companies in its industry. Overseas acquisition . quality. or imbedded customer base. Crabtree India started out as a jointventure between Crabtree UK and Havell's India Ltd.to promote the business in European market and will result in increasing export turnover to a great extent. Strong trade network in electrical industry. location. These products will be a growth driver in future. .50 Crores for this products nt lamp. New Product launch: The company is also diversifying into new products of capacitors and motors. Havell's recognises the strength of trade channel.Havell's has one of the largest and strongest network in India. Competitive advantage can come in one or combination of the following factors: Price. The goal of much of business strategy is to achieve a sustainable competitive advantage.It has a sustained competitive advantage when it is able to maintain above average profitability over a number of years. the more likely you are to succeed. has been merged with Havell's India Ltd along with brandrights assignment for Indian subcontinent. It is expected to incur a capex of Rs. Crabtree India Ltd.

T. A resource-based view emphasizes that a firm utilizes its resources and capabilities to create a competitive advantage that ultimately results in superior value creation. a competitive advantage enables the firm to create superior value for its customers and superior profits for itself. The following diagram combines the resource-based and positioning views to illustrate the concept of competitive advantage: P. Cost and differentiation advantages are known as positional advantages since they describe the firm's position in the industry as a leader in either cost or differentiation. or deliver benefits that exceed those of competing products (differentiation advantage). Thus.O A Model Of Competitive Advantage: Resourc es Distinctive Competenci es Cost Advantage Or Differentiation Advantage Value Creation Capabiliti es .Two basic types of competitive advantage: • • Cost advantage Differentiation advantage A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage).

Without this superiority. all of which can be leveraged to create a cost advantage or a differentiation dvantage. in order to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. These competencies enable innovation. The following are some examples of such resources: • • • • • Patents and trademarks Proprietary know-how Installed customer base Reputation of the firm Brand equity Capabilities refer to the firm's ability to utilize its resources effectively. Such capabilities are embedded in the routines of the organization and are not easily documented as procedures and thus are difficult for competitors to replicate. Cost Advantage and Differentiation Advantage . Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. efficiency. the competitors simply could replicate what the firm was doing and any advantage quickly would disappear. An example of a capability is the ability to bring a product to market faster than competitors. The firm's resources and capabilities together form its distinctive competencies. and customer responsiveness.Resources and Capabilities According to the resource-based view. quality.

or rework. Value Creation The firm creates value by performing a series of activities that are identified as the value chain. Some of the key features that they offer in terms of quality are: >Heavy plastic material >Simple and bold Looks . Crabtree focuses a lot on producing quality switches. Another important decision is how broad or narrow a market segment to target. To achieve a competitive advantage. the firm operates in a value system of vertical activities including those of upstream suppliers and downstream channel members. A firm positions itself in its industry through its choice of low cost or differentiation.Competitive advantage is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. or as much scrap. In addition to the firm's own value-creating activities. People do not like to pay good money for work/product that has to soon be redone or have to purchase a new unit that fails prematurely. By that I mean faster than expected. This decision is a central component of the firm's competitive strategy. Superior value is created through lower costs or superior benefits to the consumer (differentiation). the firm must perform one or more value creating activities in a way that creates more overall value than do competitors. Over the long term producing higher quality is almost always less expensive as you don’t have to deal with as many returns. which can be felt by usage of its switches. Competitive Advantages in case of Crabtree Switches: Quality is important in almost every industry.

Last but not the least. they are bought in the market because of the brand equity they have created with their customer base.>Safe locking system >No Colour Fading Crabtree offers a premium segment product. the company has created a value chain with the series of activities. . It has resources and capabilities which can be ascertained on the basis of following: • • • • • Patents and trademarks Proprietary know-how Installed customer base Reputation of the firm Brand equity Even the advertisements of the company focus on their core competency that is producing quality product and creating value. which has helped in creating value amongst the customer base. Crabtree switches have a differentiation advantage.

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