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

1996

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2004

2005

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.

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

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

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

These come from within the company's unique value chain. as well as personnel. and so on." 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. The external factors may include macroeconomic matters. technological change. The factors may include all of the 4P's. J. For example. It also presents the resulting lists uncritically and without clear prioritization so that. SWOT analysis is just one method of categorization and has its own weaknesses. and socio-cultural changes. finance. The results are often presented in the form of a matrix. The importance of individual SWOTs will be revealed by the value of the strategies it generates. It is prudent not to eliminate too quickly any candidate SWOT entry. weak opportunities may appear to balance strong threats. SWOT analysis groups key pieces of information into two main categories: • Internal factors – The strengths and weaknesses internal to the organization. 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. A SWOT item that . . As an alternative to SWOT. manufacturing capabilities.If the threats or weaknesses cannot be converted a company should try to minimize or avoid them. 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. • External factors – The opportunities and threats presented by the external environment to the organization. Armstrong describes a 5-step approach alternative that leads to better corporate performance. 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." Findings from Menon et al. as well as changes in the marketplace or competitive position. What may represent strengths with respect to one objective may be weaknesses for another objective. (1999) and Hill and Westbrook (1997) have shown that SWOT may harm performance." This old version did not require that SWOTs be derived from an agreed upon objective. for example. Evidence on the Use of SWOT SWOT analysis may limit the strategies considered in the evaluation.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. legislation.

Examples include: non-profit organizations. 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. Projects (or other units of measurements) that could be potential risk or opportunity objects are highlighted. capital value fluctuations). 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 . 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 also be used in pre-crisis planning and preventive crisis management. Corporate planning As part of the development of strategies and plans to enable the organization to achieve its objectives.landscape analysis The SWOT-landscape systematically deploys the relationships between overall objective and underlying SWOT-factors and provides an interactive. query-able 3D landscape. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. SWOT . SWOT analysis may also be used in creating a recommendation during a viability study. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business and environmental factors. and individuals. A SWOT item that generates no strategies is not important. then that organization will use a systematic/rigorous process known as corporate planning. 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. Changes in relative performance are continually identified.produces valuable strategies is important. this should determine relevance from the results of an internal/external appraisal.

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

For example.strategy formulation and selection. 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. each of the following may be considered weaknesses: • • Lack of patent protection A weak brand name . 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.

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. Opportunities The external environmental analysis may reveal certain new opportunities for profit and growth. a weakness may be the flip side of strength. 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. 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. 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 .

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

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

and face any unpleasant truths as soon as possible. Threats: • • • • • • What obstacles do you face? What is your competition doing that you should be worried about? Are the required specifications for your job. 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. A useful approach for looking at opportunities is to look at your strengths and ask yourself whether these open up any opportunities. Alternatively. population profiles. Changes in social patterns.• • • What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales? Again. Changes in government policy related to your field. 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. 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? . Local events. look at your weaknesses and ask yourself whether you could create opportunities by eliminating them. lifestyle changes.

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

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

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

The Bargaining power of suppliers Pressure suppliers can impose on sources for inputs that are needed in order to provide goods or services. efficiencies. The switching costs from one supplier to another are high. >Distribution channels are controlled by existing players. >Existing players have close customer relations. prices. >Capital Requirements. >Economies of scale (minimum size requirements for profitable operations). >High switching costs for customers >Brand Loyalty >Legislation and government action The Threat of substitute products Pressure from alternative product substitutive .Due to switching costs.due to experience curve effects of operation >Brand loyalty of customers >Protected intellectual property like patents. >Scarcity of important resources. market shares. e.g. The Threat of new entrants Pressure of possible new competitors entering the market and changing environment (e. e.g. Threat of forward integration by suppliers The buying industry has low barriers to entry. Will depend on the extent to which there are barriers to entry. and benefits to the consumer.g. from long-term service contracts. qualified expert staff >Access to raw materials is controlled by existing players.High initial investments and fixed costs >Cost advantages . 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. licenses etc.there must order-of-magnitude improvements in costs. customer loyalty).

the competitive landscape is less competitive (closer to a monopoly). This category also relates to complementary products. > Low market growth rates (growth of a particular company is possible only at the expense of a competitor). The Bureau of Census periodically reports the CR for major Standard Industrial Classifications (SIC's). Concentration Ratio (CR) – Economic indicator of measure of rivalry by industry concentration. and hence. expensive and highly specialized equipment). Current trends. Close customer relationships. there is much price competition.Market volume and potential sales volume may be affected for existing players. The relative price for performance of substitutes. hence.only a few firms holding a large market share. A low concentration ratio indicates. Switching costs for 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. > Barriers for exit are high (e. Shows percent of market share held by the largest firms A high concentration ratio indicates. industry profits declines . The Intensity of competitive rivalry Competitive pressure on prices. 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. margins.g. Treat of substitutes is determined by factors like > > > > > Brand loyalty of customers.

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.Profitability highest in industries with: 12345low rivalry. limited entry.doc . low supplier power.com/Baruch/Porter%205%20forces%20analysis. few substitute products.

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

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

Less successful products that never gain market position will move straight from question mark to Dog. Market development IV. Market penetration III. A star is a potential business which has the competitive advantage to be a market leader in an industry that is growing fast. a).It is a market leader in a high growth market. 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. Liquidation III. Strategic options for Dogs include I. Retrenchment II. Divestment 4. MAIN STEPS OF BCG MATRIX A. Integration – forward. C. The company must spend substantial funds to keep up with the high market growth and to fight off competitor attacks. 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.strategic options are I. Strategic options for stars include. I. 2. DOGS: . backward and horizontal II. Growth rate OF SBU’S industry. . Concentric diversification b). Product development V. The company uses its cash cows to pay bills and support other business. It would be fruitless to spend and money on this matrix business.Businesses that have weak market shares in low-growth markets are in the dog category. SBU’S relative market share. Classifying the SBU’S on the basis of BCG matrix.2. STARS: . Assessing and comparing the prospects of each SBU according to two criteria 1. Product development II. Joint ventures 3. A star does not necessarily produce a positive cash flow for the company. B. Weak position :. Identifying and dividing a company into SBU. 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. Strong position:-strategic options are I.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. CASH COWS: . Retrenchment (if it is believed that it could be revitalized) II.

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

Currently 60% of the CFL and only 30% of the fixtures market is organized.The Company is recognized as quality manufacturers of cable & wires and offers a complete range of low and high voltage PVC and XLPE cables. and generates operating margins in excess of 20%. Co-Axial TV and telephone cables. is the key focus segment. Question Marks • Electrical consumer Deliverables & Others products like CRABTREE switches. With strong brand image among domestic consumers. Airconditioner have the ability to gain market share. Geyser. domestic/FRLS wires. 11% up from same period of previous year. -76 million on revenues of Rs. 2133 million for Q3.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.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. They believe the electric fan segment. the turnover of the division grew at 25% y-o-y to Rs 2900 million.190 million with 26. . Company had negative EBIT of Rs. besides. 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. Electrical Consumer Deliverables & Others Havells also offers products like electric fans. The Company has increased its share form 3% to 13% in the organized fan market of INR 17 bn. Lightning and Fixtures During FY08. which contributes 10% to consolidated revenues. Havells may launch new products like Geysers in this segment. meters and ‘Crabtree’ brand bath fittings which are largely consumer products and add diversity to Havells product profile. In this division. first quarter revenues stood at 650 million. 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. the Company expanded its CFL capacity to become the largest CFL manufacturer in the country. Their estimates put Lightings and Fixtures business growth at 25% CAGR FY10E –FY12E as industrial growth is likely to pick up. from FY05 to FY08.7% margins as against 12. The Company generated operating profit of Rs.3% margin last year.

valuenotes.com/ www. Dogs • Cables and wires Low growth as well as market shares in market.Strategic management by Hill and Jones . • During the FY08.csgstrategies. and divestment in Europe. basically outsource its products from India. they expect demand to go down in near future and will pick up slowly. • 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.L Cash Cow • Lighting and Fixtures Products like Sylvania due to cultural difference and cost rationalization undergo retrenchment. Havells’ strong brand value and aggressive marketing to help it grow its top line for its cables and wires segment. the Company had almost doubled its capacity.com/fairwealth/fairwealth_havells_30Jan09..pdf Books. H Relative Market Share L Key focusing strategies for future growth – • Since Construction and real Estate sector has slowed down. REFERENCE http://www.

Contribute to fulfillment of customer's needs At a price the consumer is willing to pay. Available alternatives (including substitute products) iii. II. Customer preferences ii. which is determined by i.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. 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 .

Impediments to imitation: a. etc. Dependence on historical circumstances . Impediments to imitation : Impede rivals from duplicating critical resources and capabilities. demand forces) c) Changes in consumer tastes. technology.. 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. Superior access to inputs or to customers c. ii. Early-mover advantages : Set in motion a dynamic that increases the magnitude of that advantage relative to other firms over time A. Causal ambiguity ii. ii. certification. trademarks ii.g. copyrights. Legal restrictions on imitation : i. 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. can result in changed value d) Resources of different firms can be valuable in different ways (e. Governmental control over entry into markets (licensing. industry structure. Patents. quotas on operating rights) b. Market size and scale economies d.b) Thus. value is partially a function of external environment (product market. Intangible barriers to imitation i.

Social complexity B. Other path dependencies iv. Can be imitated (but may not be) Capacity preemption. v. unique locations Difficult to imitate: Brand loyalty. employee satisfaction. iv. Degrees of resource and capability imitability i. iii. reputation for fairness. economies of scale.iii. 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. Easy to imitate: Cash. ii. iii. unique assets. 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 . ii. Cannot be imitated: Patents. iv.

Tables 1. marketing.163. service. Montgomery. material management. and human resources-have a role in lowering the cost structure and increasing the perceived value of the products through differentiation. . The term VALUE CHAIN refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value. p. 1997. Value chain analysis The Value Chain All of the functions of the company –such as production.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. information systems. R&D. "Resources: The essence of Corporate Advantage". Harvard Business School Case N1-792-064 Source: Barney. The process of transformation is composed of a number of primary activities and support activities that add value to the product.

promotions and advertisements. . Consumer pull evenly matched with a well entrenched distribution network High RoCE and RoE creating shareholder value.27x and PAT . consumer products Significant brand emphasis to create a strong differentiator with FMCG like packaging.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 .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.

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

The task of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. This centre has been set-up at the company's H. inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. premises in Noida.O. New ideas. The Group has also decided to dedicate 2% of it's turnover towards R&D. . 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. 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.Innovation is the hallmark of every vital development at QRG. Centre For Research and Innovation (CRI) QRG has recently invested 20 million dollars in a new center for research and innovation.

A diversified or multibusiness company is thus one that is involved in two or more distinct industries. . To increase profitability. 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. (2) Perform one or more of the value creation functions in a way that allows for differentiation and gives a company pricing options. 2) Leveraging competencies to create new businesses.Diversification Diversification is the process of adding new businesses to the company that are distinct from its established operations. or (3) Help the company to manage industry rivalry better.

Qimat Rai Gupta 1976: Rewirable switches and changeover switches. 1979: HBC fuses at Delhi 1980: Energy meters .  CRABTREE “Havells is not shy of investing in unrelated field. The two main types of diversification are related diversification and unrelated diversification.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. The acquisition marks the beginning of our entry into the healthcare segment. we are likely to go for more such facilities” -. 4) Using diversification as a means of managing rivalry in one or more industries. and 5) Exploiting general organizational competencies that enhance the performance of all business units within a diversified company. Related diversification is diversification into a new business activity in a different industry that is related to a company’s existing business activity. 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. In the next phase. by commonalities between one or more components of each activity’s value chain. or activities.

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

Mergers and acquisitions are the third. or help a growing company in a given industry grow rapidly without having to create another business entity. finance. vehicle that companies can use to enter new industries or countries.  CRABTREE • Towers and Transformers Ltd in 1983. control systems. and culture to manage a new acquisition is important because many acquisitions are unsuccessful. 2009: Set up of fully automatic switchgear manufacturing plant at Baddi. 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. QRG group entered healthcare business acquiring majority Stakes (70%) in Central Hospital and Research centre Faridabad. 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. corporate finance and management dealing with the buying. . selling and combining of different companies that can aid. 2008: Ventured into Motor business. How to implement structure. and most widely used.2006: CFL plant at Haridwar 2007: Acquired Lightning business of Sylvania group.

SIRIUM (Malaysia). • Entry into international markets. Strategic Alliances and Continuous enrichment of existing business 3. KEMA. Duke Arnics. The production of Fans in tax free zones of Uttaranchal 4. SEMKO. Latin America and Asia Pacific Factors for Success: 1.• 1996 Joint Venture with Crabtree Modular Plate Switches. Learned how to mobilize funding and to deal with complex issues of merger and acquisitions. CE. • LEARNING FROM MISTAKES: Lost bid for Electrium to Siemens by 8 million pounds. DZG Germany. • GRAND TAKEOVER March 2007:• SLI SYLVINIA: 235.5 million Euros led by Barclays Capital finances • Entry into Europe. . CB. AENOR (Spain). 2. etc For its various products. International approvals: such as CSA. ASTA. Integrating into stores How Strategic the Acquisition was? • Can keep existing manufacturing facilities in Europe. but will create additional capacities in low cost India • Havells substitute Chinese export to Sylvania • Havells will leverage Sylvania distribution in Europe.

A diamond cutter can be used as an example of the difference. The value chain categorizes the generic value-adding activities of an organization. the described value chain and the documentation of processes. and services (maintenance). is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller. but the activity adds much of the value to the end product. assessment and auditing of adherence to the process routines are at the core of the quality certification of the business. 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”. It is important not to mix the concept of the value chain with the costs occurring throughout the activities.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. Competitive Advantage: Creating and Sustaining Superior Performance. The "support activities" include: administrative .g. also known as value chain analysis. e. This acquisition will provide us a platform with strong brands and established distribution channels on which Havells can build on. operations (production). The business unit is the appropriate level for construction a value chain. marketing and sales (demand). ISO 9001. A value chain is a chain of activities for a firm operating in a specific industry. not the divisional level or corporate level. The cutting activity may have a low cost. Typically. Further. The value chain. Products pass through all activities of the chain in order and at each activity the product gains some value. outbound logistics. since a rough diamond is significantly less valuable than a cut diamond. The chain of activities gives the products more added value than the sum of added values of all activities. The "primary activities" include: inbound logistics.

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. The objective of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. Services. had some success in the early 1990s. 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. Quality Control . Havells has recently invested 50 crores in the havell’s Center for Research and Innovation. Six business functions of the Value Chain: • • • • • • Research and Development Design of Products. The costs and value drivers are identified for each value activity. U. a cross-functional process which was developed over the next decade. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design. The simpler concept of value streams. set-up at the company's Head Office premises in Noida. technology (R&D). inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. and procurement.P. 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.

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

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 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 .

process and wastages. Moving down the value chain into casting has enabled the company to increase the product range.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 . provide a budled service to its customers and control more effectively raw material prices. machining and sub-assembly capabilities.Aluminium Control Cables . which are typically complementary to each other. The company makes a number of casting modules for engines and transmission components.• • • • • • • • • • • • • • • • • • • • • • • • 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 .

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

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

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

O A Model Of Competitive Advantage: Resourc es Distinctive Competenci es Cost Advantage Or Differentiation Advantage Value Creation Capabiliti es . 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. Thus.T.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). 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). 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.

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. quality. Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily.Resources and Capabilities According to the resource-based view. An example of a capability is the ability to bring a product to market faster than competitors. in order to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. the competitors simply could replicate what the firm was doing and any advantage quickly would disappear. 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. Without this superiority. Cost Advantage and Differentiation Advantage . all of which can be leveraged to create a cost advantage or a differentiation dvantage. and customer responsiveness. efficiency. These competencies enable innovation. The firm's resources and capabilities together form its distinctive competencies.

Another important decision is how broad or narrow a market segment to target. A firm positions itself in its industry through its choice of low cost or differentiation. or rework. the firm must perform one or more value creating activities in a way that creates more overall value than do competitors. Crabtree focuses a lot on producing quality switches. Superior value is created through lower costs or superior benefits to the consumer (differentiation). Value Creation The firm creates value by performing a series of activities that are identified as the value chain. Competitive Advantages in case of Crabtree Switches: Quality is important in almost every industry.Competitive advantage is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. To achieve a competitive advantage. In addition to the firm's own value-creating activities. This decision is a central component of the firm's competitive strategy. 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. 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. Some of the key features that they offer in terms of quality are: >Heavy plastic material >Simple and bold Looks . By that I mean faster than expected. the firm operates in a value system of vertical activities including those of upstream suppliers and downstream channel members. or as much scrap.

. 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. they are bought in the market because of the brand equity they have created with their customer base. Crabtree switches have a differentiation advantage.>Safe locking system >No Colour Fading Crabtree offers a premium segment product. the company has created a value chain with the series of activities. Last but not the least.

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