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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.
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
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
To be a globally recognized corporation that provides best electrical & lighting solutions, delivered by best-in-class people .
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.
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.
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.
plan and work. If it doesn't exceed customer expectation. Realising and respecting the basic needs of customers to feel more secure.Quality Control The essence of quality is closely wrapped in the way we think. Our customers rely on us and it is our responsibility to give them the very best. and thus reduce the environmental impact of our operations. as well as its relationships in all key spheres of influence: the workplace. we've committed ourselves to make our products better. . and includes efforts to develop an alternative-energy strategy. To deliver products those are safer. social. QRG has a simple rule on quality. Building customer confidence through teamwork is a top priority to provide a wide variety of products and services. we have readily embraced right from the start. Our eco responsibility initiative also focuses on how we run our business. We as a company have been in lead in offering a portfolio of eco responsible products and services that deliver powerful. the supply chain. and environmental impacts. It finds its true expression when we extend beyond ourselves to exceed our customer’s expectations. and the public policy realm. We offer our customers holistic energy-efficient solutions. All our products are as per IEC standards. but also how we make them. It goes beyond philanthropy and compliance and addresses how our company manages its economic. enabling them to not only save money and protect their capital investment. We strive to bring corporate responsibility to every aspect of our business. Our ability to build communities and promote the exchange of ideas through assistive technologies. participation programs. and standardization is transforming the way people experience our products. it's not quality ECONOMIC FACTOR The Havells Group defines corporate governance strategically. every time. but also lower their energy usage and protect the environment. which encompasses not only what we do as a company with our profits. We're committed to managing a responsible and diverse supply chain that's consistent with our high standards for environmental and business practices. sustainable. That's a passion that began 30 years ago and that's how it continues to be even today. Breaking down the barriers that constrain innovation is a challenge. faster and simply better. the marketplace. energy-efficient solutions that don't compromise on capacity and security. thus fulfilling our CSR responsibility of sustenance of depleting environmental resources. safer and smarter than what he or she is looking for. the community. Each time.
We use several channels to communicate with employees. Corporate governance as practiced by our Group translates into being fair and civic-minded. considering the interests of our shareholders and welfare of our employees as foundation of our long term success. 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. including an internal web portal and company website along with communication sessions with the top management of the company. and. We have high-quality. safety and wellness standards to enhance our business performance while optimizing employee health. The group's adherence to ethical business conduct is rooted in the vision of its Founder Mr Qimat Rai Gupta. trust. making integrity an article of faith across all our operations. These sessions provide assessment of employee satisfaction and are inputs for business planning. management decision-making and company strategy development. integrity and ethics have served us in good stead. explicit rules and regulations supplement the traditional values on which our group companies have been shaped. fulfilling our duties to the entire spectrum of stakeholders. knowledge. We are committed to open communications and a workplace where everyone's voice is heard. This is what we have endeavored to do in the 50 years of our existence. 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. ideas and enthusiasm drive our business. We wish to be a company that is known for its leadership in corporate ethics and . On issues ranging from customer care and business excellence to financial propriety and more. Employee Relations Our people are the key to our success.CORPORATE GOVERNANCE AND ETHICS An implicit sense of ethical business conduct has been the cornerstone of the havells way on corporate governance. They also help employees implement company policies. Their skills. We also encourage them to align with our vision. meet high standards of conduct and ensure their behavior reflects company values and policies. diverse workforce and employees who fulfill their potential. We seek to meet leading health. Our values of understanding. We started on sound and straightforward business principles. most importantly.
including SWOT and SCAN analysis. The SWOT analysis is often used in academia to highlight and identify strengths. . An example of conversion strategy is to find new markets.responsibility. opportunities and threats . SWOT Analysis: SWOT Analysis is a strategic planning method used to evaluate the Strengths. A company where employees are proud to work. and customers. and Threats involved in a project or in a business venture. It is particularly helpful in identifying areas for development . 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. partners and suppliers want to do business with. • Strengths: attributes of the person or company that are helpful to achieving the objective. • • Opportunities: external conditions that are helpful to achieving the objective. First. If the objective is NOT attainable a different objective must be selected and the process repeated. Weaknesses. Opportunities. 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. Converting is to apply conversion strategies to convert weaknesses or threats into strengths or opportunities. A SWOT analysis must first start with defining a desired end state or objective. • Weaknesses: attributes of the person or company that are harmful to achieving the objective. given the SWOTs. Threats: external conditions which could do damage to the objective. Strategic Planning. Matching and converting Another way of utilizing SWOT is matching and converting. has been the subject of much research. A SWOT analysis may be incorporated into the strategic planning model. Matching is used to find competitive advantages by matching the strengths to opportunities. weaknesses. the decision makers have to determine whether the objective is attainable.
technological change. as well as personnel." Findings from Menon et al. What may represent strengths with respect to one objective may be weaknesses for another objective. SWOT analysis groups key pieces of information into two main categories: • Internal factors – The strengths and weaknesses internal to the organization. Evidence on the Use of SWOT SWOT analysis may limit the strategies considered in the evaluation.If the threats or weaknesses cannot be converted a company should try to minimize or avoid them. and socio-cultural changes. These come from within the company's unique value chain. SWOT analysis is just one method of categorization and has its own weaknesses." 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. (1999) and Hill and Westbrook (1997) have shown that SWOT may harm performance. It also presents the resulting lists uncritically and without clear prioritization so that. As an alternative to SWOT. J. 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. weak opportunities may appear to balance strong threats. Examples of SWOT analyses that do not state an objective are provided below under "Human Resources" and "Marketing.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. and so on. . For example. The importance of individual SWOTs will be revealed by the value of the strategies it generates. for example. The results are often presented in the form of a matrix. The external factors may include macroeconomic matters. • External factors – The opportunities and threats presented by the external environment to the organization. It is prudent not to eliminate too quickly any candidate SWOT entry. A SWOT item that . as well as changes in the marketplace or competitive position. it may tend to persuade companies to compile lists rather than think about what is actually important in achieving objectives. finance. Armstrong describes a 5-step approach alternative that leads to better corporate performance." This old version did not require that SWOTs be derived from an agreed upon objective. 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. The factors may include all of the 4P's. legislation. manufacturing capabilities.
SWOT . SWOT analysis may also be used in pre-crisis planning and preventive crisis management. Examples include: non-profit organizations. and individuals. SWOT analysis may be used in any decision-making situation when a desired end-state (objective) has been defined. governmental units. Corporate planning As part of the development of strategies and plans to enable the organization to achieve its objectives. • • Set objectives – defining what the organization is going to do Environmental scanning o Internal appraisals of the organization's SWOT. Projects (or other units of measurements) that could be potential risk or opportunity objects are highlighted. Changes in relative performance are continually identified. SWOT alongside PEST/PESTLE can be used as a basis for the analysis of business and environmental factors.produces valuable strategies is important. query-able 3D landscape. 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 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.landscape analysis The SWOT-landscape systematically deploys the relationships between overall objective and underlying SWOT-factors and provides an interactive. Use of SWOT Analysis The usefulness of SWOT analysis is not limited to profit-seeking organizations. capital value fluctuations). then that organization will use a systematic/rigorous process known as corporate planning. A SWOT item that generates no strategies is not important. SWOT analysis may also be used in creating a recommendation during a viability study. this should determine relevance from the results of an internal/external appraisal.
taking corrective action which may mean amending objectives/strategies. As such. Accordingly. resources and competencies. Such an analysis of the strategic environment is referred to as a 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. management often conducts market research (alternately marketing research) to obtain this information. competitive positioning and product differentiation. Marketing: In many competitor analyses. such as focus groups Quantitative marketing research. Environmental factors internal to the firm usually can be classified as strengths (S) or weaknesses (W).• 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. it is instrumental in . and those external to the firm can be classified as opportunities (O) or threats (T). sources of profits. focusing especially on their relative competitive strengths and weaknesses using SWOT analysis. projects plans for strategy implementation • Monitoring results – mapping against plans. SWOT Analysis A scan of the internal and external environment is an important part of the strategic planning process. resource. Marketers employ a variety of techniques to conduct market research. historical responses to industry developments. and other factors. 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. Marketing managers will examine each competitor's cost structure. Marketing management often finds it necessary to invest in research to collect the data required to perform accurate marketing analysis. marketers build detailed profiles of each competitor in the market.
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. each of the following may be considered weaknesses: • • Lack of patent protection A weak brand name . 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. For example.strategy formulation and selection.
Take the case in which a firm has a large amount of manufacturing capacity. 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. a weakness may be the flip side of strength. 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. 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 .• • • • 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.
• W-T strategies establish a defensive plan to prevent the firm's weaknesses from making it highly susceptible to external threats. and for looking at the Opportunities and Threats you face. W-O strategies overcome weaknesses to pursue opportunities. the firm can overcome a weakness in order to prepare itself to pursue a compelling opportunity. it helps you develop your career in a way that takes best advantage of your talents. Used in a personal context.A firm should not necessarily pursue the more lucrative opportunities. Rather. abilities and 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. Manage and Eliminate Threats. it may have a better chance at developing a competitive advantage by identifying a fit between the firm's strengths and upcoming opportunities. it helps you carve a sustainable niche in your market. SWOT Analysis is a powerful technique for understanding your Strengths and Weaknesses. . • S-T strategies identify ways that the firm can use its strengths to reduce its vulnerability to external threats. Used in a business context. SWOT Analysis Discover New Opportunities. and here for Personal SWOT Analysis. In some cases. Click here for Business SWOT Analysis. a matrix of these factors can be constructed. To develop strategies that take into account the SWOT profile.
How to Use the Tool ? To carry out a SWOT Analysis. and from the point of view of your customers and people in your market. so that you can compete successfully in your market. then a high quality production process is not sstrength in the market. And by understanding the weaknesses of your business. 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. with a little thought. start by downloading our free template. Some of these will hopefully be strengths!) In looking at your strengths. it is a necessity. Tip: For help finding your company's Unique Selling Proposition (USP) or crafting your competitive edge. you can start to craft a strategy that helps you distinguish yourself from your competitors. Be realistic: It's far too easy to fall prey to "not invented here syndrome". try writing down a list of your characteristics. if all your competitors provide high quality products. Weaknesses: • What could you improve? . (If you are having any difficulty with this. by looking at yourself and your competitors using the SWOT framework.Business SWOT Analysis What makes SWOT particularly powerful is that. think about them in relation to your competitors . you can manage and eliminate threats that would otherwise catch you unawares. More than this. it can help you uncover opportunities that you are well placed to exploit.for example. read our USP Analysis article.
Local events. look at your weaknesses and ask yourself whether you could create opportunities by eliminating them. population profiles. 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? . Changes in government policy related to your field. and face any unpleasant truths as soon as possible. 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. Alternatively. lifestyle changes. 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.• • • What should you avoid? What are people in your market likely to see as weaknesses? What factors lose you sales? Again. 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. Threats: • • • • • • What obstacles do you face? What is your competition doing that you should be worried about? Are the required specifications for your job.
rather than "Good value for money"). make sure you're rigorous in the way you apply it: • Only accept precise. or in a more sophisticated way as a serious strategy tool. • Apply it at the right level – for example. at product or product line level. • Make sure that options generated are carried through to later stages in the strategy formation process. and in putting problems into perspective. Tip 2: SWOT can be used in two ways – as a simple icebreaker helping people get together and "kick off" strategy formulation. no need for higher management approval. For this reason the SWOT Analysis is sometimes called InternalExternal Analysis and the SWOT Matrix is sometimes called an IE Matrix Analysis Tool. As you do this. Tip 1: Make sure you visit our next article 'PEST Analysis' .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.Carrying out this analysis will often be illuminating – both in terms of pointing out what needs to be done. Strengths and weaknesses are often internal to your organization. • Supplement it with other option-generation tools – none is likely to be completely comprehensive. 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. If you're using it as a serious tool. You can also apply SWOT Analysis to your competitors. and prioritize factors so that you spend your time thinking about the most significant factors. you'll start to see how and where you should compete against them. verifiable statements ("Cost advantage of US$10/ton in sourcing raw material x". rather than at the much vaguer whole company level. . • Ruthlessly prune long lists of factors. Opportunities and threats often relate to external factors.
• We can give really good customer care. good value services to local businesses. The consultancy may therefore decide to specialize in rapid response. as the current small amount of work means we have plenty of time to devote to customers. 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. Our competitors may be slow to adopt new technologies. Our cash flow will be unreliable in the early stages. minimize threats. Marketing would be in selected local publications. The consultancy should keep up-to-date with changes in technology where possible. Opportunities: • • • Our business sector is expanding. with many future opportunities for success. and take the greatest possible advantage of opportunities available to you. and the Opportunities and Threats you face. so can offer good value to customers. . • • • Our lead consultant has strong reputation within the market. We can change direction quickly if our approach isn't working. This helps you to focus on your strengths. We have a small staff with a shallow skills base in many areas. to get the greatest possible market presence for a set advertising budget. We have little overhead. 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. We are vulnerable to vital staff being sick. leaving. Weaknesses: • • • • Our company has no market presence or reputation.
and social risk. search costs. must be significantly better 2) Different people have different reference points. Switching to an alternative product is relatively simple and is not related to high costs. Customers bargaining power is likely to be high when · · · · · · They buy large volumes. The customer knows about the production costs of the product There is the possibility for the customer integrating backwards. equipment costs. financial risk. there is a concentration of buyers. learning costs. cognitive effort. For how they evaluate the advantages disadvantages 3) People exhibit loss aversion. Gourville several rules: 1) People are sensitive to the relative advantages and disadvantages of any change from the status quo. psychological risk. The pain of giving up a benefit is much more significant than the pleasure of gaining that benefit.Customers could produce the product themselves. . emotional costs. 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.any impediment to a customer's changing of suppliers. Bargaining Leverage. Switching Costs : .The product is not of strategically importance for the customer.Porter’s 5 force model The Bargaining power of customers How much customers can impose pressure on margins and volumes. . -product. installation and start-up costs. Bargaining Leverage.consumer must see a clear benefit to offset the perceived sacrifice Andy Grove’s 10x rule.
qualified expert staff >Access to raw materials is controlled by existing players.due to experience curve effects of operation >Brand loyalty of customers >Protected intellectual property like patents. The Threat of new entrants Pressure of possible new competitors entering the market and changing environment (e. The switching costs from one supplier to another are high.g. prices. and benefits to the consumer. from long-term service contracts. >High switching costs for customers >Brand Loyalty >Legislation and government action The Threat of substitute products Pressure from alternative product substitutive . >Economies of scale (minimum size requirements for profitable operations). >Scarcity of important resources.g. >Distribution channels are controlled by existing players.High initial investments and fixed costs >Cost advantages . e. Threat of forward integration by suppliers The buying industry has low barriers to entry.Due to switching costs. licenses etc. efficiencies. customer loyalty). e.g. 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. Will depend on the extent to which there are barriers to entry. >Capital Requirements.there must order-of-magnitude improvements in costs. >Existing players have close customer relations. market shares. The Bargaining power of suppliers Pressure suppliers can impose on sources for inputs that are needed in order to provide goods or services.
and hence. Concentration Ratio (CR) – Economic indicator of measure of rivalry by industry concentration. This category also relates to complementary products. A low concentration ratio indicates.Market volume and potential sales volume may be affected for existing players. there is much price competition. Treat of substitutes is determined by factors like > > > > > Brand loyalty of customers. expensive and highly specialized equipment). industry profits declines .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. The Bureau of Census periodically reports the CR for major Standard Industrial Classifications (SIC's). Shows percent of market share held by the largest firms A high concentration ratio indicates. The relative price for performance of substitutes. Switching costs for customers. margins. the competitive landscape is less competitive (closer to a monopoly). Current trends. 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. hence. > Barriers for exit are high (e. Close customer relationships.only a few firms holding a large market share. > Low market growth rates (growth of a particular company is possible only at the expense of a competitor).g. The Intensity of competitive rivalry Competitive pressure on prices.
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. limited entry.Profitability highest in industries with: 12345low rivalry. few substitute products. low supplier power.
measured either in revenue terms or unit volume terms. businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. Market share is the percentage of the total market that is being serviced by your company. RELATIVE MARKET SHARE RMS = Business unit sales this year Leading rival sales this year The higher your market share. Stars Question marks Cash cows Dogs . III. According to this technique. MARKET GROWTH RATE MGR = Individual sales this year . the higher proportion of the market you control. Market growth is used as a measure of a market’s attractiveness.BCG Matrix BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s. II. 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. IV. 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.
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. 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. QUESTION MARKS: .These are Businesses that operate in high. which is its largest competitor in the segment under consideration. The two axes are divided into high & low. Product development IV. It refers to the Strategic Business Unit’s market share as compared to the firm. Strategic options for question marks include.It is based on the combination of market growth and market share relative to the next best competitor. I.. The growth matrix is divided into four cells each indicating a different type of business profile. Which are all intensive strategies or divestment? . On the horizontal axis is the Relative Market Share. equipment and personnel to keep up with the fast growing market and because it wants to overtake the market leader. The relative market share serves a measure of the company’s strength in the market segment. Market penetration II.growth markets but have low relative market shares. 1. The matrix comprises of four quadrants each describing the size and position of the strategic business unit owned by an organization. Market development III. A question mark requires a lot of cash because the company has to spend money on plant.
Integration – forward. 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.2. Concentric diversification b). Classifying the SBU’S on the basis of BCG matrix. A star does not necessarily produce a positive cash flow for the company. .It is a market leader in a high growth market. B. a). I. Growth rate OF SBU’S industry. Retrenchment (if it is believed that it could be revitalized) II. Market development IV. Product development II. CASH COWS: . 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. The company uses its cash cows to pay bills and support other business. Product development V. 2. Strategic options for stars include.Businesses that have weak market shares in low-growth markets are in the dog category.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. Weak position :. Joint ventures 3. Market penetration III. STARS: . Identifying and dividing a company into SBU. backward and horizontal II. MAIN STEPS OF BCG MATRIX A. Divestment 4. The company must spend substantial funds to keep up with the high market growth and to fight off competitor attacks. SBU’S relative market share. Liquidation III. C.strategic options are I. Less successful products that never gain market position will move straight from question mark to Dog. Retrenchment II. A star is a potential business which has the competitive advantage to be a market leader in an industry that is growing fast. It would be fruitless to spend and money on this matrix business. Assessing and comparing the prospects of each SBU according to two criteria 1. Strategic options for Dogs include I. 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. Strong position:-strategic options are I. DOGS: .
D. The use of high and low to form four categories is too simplistic. 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. and distribution boards in India . RCCBs.5% 9M YTD FY08 to 5. Developing strategic objectives for each SBU. Growth rate is only one aspect of industry attractiveness and high growth markets are not always the most profitable. since. It ignores the impact of small competitors whose market share is rising fast. including the quality conscious European countries.Switch Gear division had EBIT margins of 32% for Q3FY09. G. Fall in revenues was . 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. BCG MATRIX is simple and easy to understand. It helps you to quickly and simply screen the opportunities open to you. and helps you think about how you can make the most of them. H. B. This segment is the most profitable one with operating margins to the tune of 33% in the FY08. It ignores interdependence and synergy. Market share is only one aspect of overall competitive position. 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. LIMITATIONS A. I. E.With the market share of around 25% in the market for MCBs. It assumes that market share and profitability are directly related. 5420 million to its overall revenue. Definition (qualitative and quantitative) of the market is sometimes difficult. C. switchgear contributed 25% at Rs. With continued investment in power sector they expect Company to grow at 15% CAGR over FY08-FY12.D. BENEFITS A. F. It is used to identify how corporate cash resources can best be used to maximize a company’s future growth and profitability. C. The Company currently exports MCBs to over countries.4% in FY09. B. It considers the product or business in relation to the largest player only. In FY08. BCG MATRIX IN HAVELLS:Indian Operations of the Company are divided into 4 key segments: Switchgear: Havells is the largest manufacturers of MCBs. Companies will frequently search for a balanced portfolio. They expect margins in this business will remain stable above 30% over long term.
domestic/FRLS wires. The Company generated operating profit of Rs. Havells may launch new products like Geysers in this segment. Their estimates put Lightings and Fixtures business growth at 25% CAGR FY10E –FY12E as industrial growth is likely to pick up. and generates operating margins in excess of 20%. Geyser. With strong brand image among domestic consumers. from FY05 to FY08.The Company is recognized as quality manufacturers of cable & wires and offers a complete range of low and high voltage PVC and XLPE cables.7% margins as against 12.190 million with 26. . Company had negative EBIT of Rs. 11% up from same period of previous year. besides. Currently 60% of the CFL and only 30% of the fixtures market is organized.3% margin last year. 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. Co-Axial TV and telephone cables. is the key focus segment. 2133 million for Q3. the turnover of the division grew at 25% y-o-y to Rs 2900 million.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. first quarter revenues stood at 650 million. which contributes 10% to consolidated revenues. Question Marks • Electrical consumer Deliverables & Others products like CRABTREE switches. In this division. They believe the electric fan segment. The Company has increased its share form 3% to 13% in the organized fan market of INR 17 bn.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. Electrical Consumer Deliverables & Others Havells also offers products like electric fans. -76 million on revenues of Rs. meters and ‘Crabtree’ brand bath fittings which are largely consumer products and add diversity to Havells product profile. 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. Lightning and Fixtures During FY08. the Company expanded its CFL capacity to become the largest CFL manufacturer in the country. Airconditioner have the ability to gain market share.
Havells’ strong brand value and aggressive marketing to help it grow its top line for its cables and wires segment. REFERENCE http://www. and divestment in Europe. they expect demand to go down in near future and will pick up slowly.com/ www. • 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.Strategic management by Hill and Jones . Dogs • Cables and wires Low growth as well as market shares in market. H Relative Market Share L Key focusing strategies for future growth – • Since Construction and real Estate sector has slowed down. basically outsource its products from India.csgstrategies.L Cash Cow • Lighting and Fixtures Products like Sylvania due to cultural difference and cost rationalization undergo retrenchment. • During the FY08.valuenotes.pdf Books. the Company had almost doubled its capacity.com/fairwealth/fairwealth_havells_30Jan09..
Contribute to fulfillment of customer's needs At a price the consumer is willing to pay.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 . Available alternatives (including substitute products) iii.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 . II. Customer preferences ii. which is determined by i.
b) Thus. trademarks ii. 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. Patents. ii. Superior access to inputs or to customers c. value is partially a function of external environment (product market. industry structure. Impediments to imitation: a. Legal restrictions on imitation : i. Governmental control over entry into markets (licensing. Early-mover advantages : Set in motion a dynamic that increases the magnitude of that advantage relative to other firms over time A. etc. copyrights.. quotas on operating rights) b. demand forces) c) Changes in consumer tastes. Impediments to imitation : Impede rivals from duplicating critical resources and capabilities. can result in changed value d) Resources of different firms can be valuable in different ways (e. 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. Dependence on historical circumstances . ii.g. technology. Causal ambiguity ii. Intangible barriers to imitation i. Market size and scale economies d. certification.
Social complexity B. reputation for fairness. ii. 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 . unique locations Difficult to imitate: Brand loyalty. iii. employee satisfaction. Can be imitated (but may not be) Capacity preemption. Cannot be imitated: Patents. ii. unique assets. iv. iv. iii. Degrees of resource and capability imitability i. v. Other path dependencies iv.iii. Easy to imitate: Cash. 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. economies of scale.
The process of transformation is composed of a number of primary activities and support activities that add value to the product.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. 1997.163. R&D. Montgomery. Value chain analysis The Value Chain All of the functions of the company –such as production. Tables 1. service. . "Resources: The essence of Corporate Advantage". p. Harvard Business School Case N1-792-064 Source: Barney. information systems. marketing. The term VALUE CHAIN refers to the idea that a company is a chain of activities for transforming inputs into outputs that customers value. and human resources-have a role in lowering the cost structure and increasing the perceived value of the products through differentiation. material management.
consumer products Significant brand emphasis to create a strong differentiator with FMCG like packaging. promotions and advertisements. . launch of new branded.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. Consumer pull evenly matched with a well entrenched distribution network High RoCE and RoE creating shareholder value.27x and PAT .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 .
branded and well distributed product companies like Havell’s. Distinctive shift from un-organized to organized Segment. Increasing affordability and willingness to pay for quality products. Large opportunities for quality. Significant investment planned with greater focus on infrastructure development. power and construction key user segments. Structural changes in the underlying buying patterns. Large investment in real estate and power sectors. . Growing protection awareness. Increased brand awareness for hitherto commoditized products –wires and cables.Buoyant end user segments: • • • • • • • • • Infrastructure.
Centre For Research and Innovation (CRI) QRG has recently invested 20 million dollars in a new center for research and innovation. inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. The task of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering.O. . The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design. New ideas.Innovation is the hallmark of every vital development at QRG. 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. premises in Noida. The Group has also decided to dedicate 2% of it's turnover towards R&D. This centre has been set-up at the company's H.
or (3) Help the company to manage industry rivalry better. 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. A diversified or multibusiness company is thus one that is involved in two or more distinct industries. To increase profitability. 2) Leveraging competencies to create new businesses. (2) Perform one or more of the value creation functions in a way that allows for differentiation and gives a company pricing options.Diversification Diversification is the process of adding new businesses to the company that are distinct from its established operations. The managers of a diversified company can boost profitability in five main ways: 1) Transferring competencies among existing business. .
1979: HBC fuses at Delhi 1980: Energy meters . Related diversification is diversification into a new business activity in a different industry that is related to a company’s existing business activity. or activities. The two main types of diversification are related diversification and unrelated diversification.3) Sharing resources to realize economies of scope. and 5) Exploiting general organizational competencies that enhance the performance of all business units within a diversified company. we are likely to go for more such facilities” -. The acquisition marks the beginning of our entry into the healthcare segment. We have spent over Rs 20 cr for the acquisition and are investing an equal amount in expanding the existing facilities in the hospital. In the next phase. 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.Qimat Rai Gupta 1976: Rewirable switches and changeover switches. by commonalities between one or more components of each activity’s value chain. 4) Using diversification as a means of managing rivalry in one or more industries. CRABTREE “Havells is not shy of investing in unrelated field.
2002: Attained IEC & CSA certification. 2001: Acquired MCCBs business of Crabtree and merged ECS ltd in the company.1983: Acquired towers and transformer ltd 1987: MCB’s JV with GEYER Germany 1990: Manufacturing plant for changeover switches. Germany. for ELCBs. 2000: Acquired controlling stakes in Duke Arnics Electronics meters. Standard electrical became 100% 2004: Manufacturing plant for CFL’s and Ceiling Fans Noida Ceiling fans Noida. Germany. 1998: Introduced high-end Ferraris electronic meter in JV with DZG. 1992: Technical JV with Schiele Industrieworke. 2005: Manufacturing plant for fans in Uttaranchal. and in industry major Standard Electricals. JV with Electrium for MCCBs and with Crabtree for MPS. . 1997: Acquired Electric control and switchboards Noida. for customized package solutions. 1996: Acquired a Manufacturing plant for power cables and wires.
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. 2009: Set up of fully automatic switchgear manufacturing plant at Baddi. or help a growing company in a given industry grow rapidly without having to create another business entity. QRG group entered healthcare business acquiring majority Stakes (70%) in Central Hospital and Research centre Faridabad. selling and combining of different companies that can aid. and culture to manage a new acquisition is important because many acquisitions are unsuccessful. vehicle that companies can use to enter new industries or countries. and most widely used. 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. How to implement structure. control systems. CRABTREE • Towers and Transformers Ltd in 1983. . finance. 2008: Ventured into Motor business. Mergers and acquisitions are the third.2006: CFL plant at Haridwar 2007: Acquired Lightning business of Sylvania group.
KEMA. DZG Germany. Duke Arnics. • LEARNING FROM MISTAKES: Lost bid for Electrium to Siemens by 8 million pounds. AENOR (Spain). International approvals: such as CSA. Latin America and Asia Pacific Factors for Success: 1. • Entry into international markets. SIRIUM (Malaysia). CB.• 1996 Joint Venture with Crabtree Modular Plate Switches. etc For its various products. • GRAND TAKEOVER March 2007:• SLI SYLVINIA: 235. Strategic Alliances and Continuous enrichment of existing business 3. ASTA. The production of Fans in tax free zones of Uttaranchal 4. . but will create additional capacities in low cost India • Havells substitute Chinese export to Sylvania • Havells will leverage Sylvania distribution in Europe. Integrating into stores How Strategic the Acquisition was? • Can keep existing manufacturing facilities in Europe. SEMKO. Learned how to mobilize funding and to deal with complex issues of merger and acquisitions. 2. CE.5 million Euros led by Barclays Capital finances • Entry into Europe.
The value chain categorizes the generic value-adding activities of an organization.g. marketing and sales (demand). not the divisional level or corporate level. but the activity adds much of the value to the end product. This acquisition will provide us a platform with strong brands and established distribution channels on which Havells can build on. and services (maintenance). The business unit is the appropriate level for construction a value chain. e. A diamond cutter can be used as an example of the difference. The "support activities" include: administrative . The chain of activities gives the products more added value than the sum of added values of all activities. Further. The value chain. 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”. outbound logistics. The "primary activities" include: inbound logistics. is a concept from business management that was first described and popularized by Michael Porter in his 1985 best-seller. since a rough diamond is significantly less valuable than a cut diamond.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 cutting activity may have a low cost. the described value chain and the documentation of processes. ISO 9001. Competitive Advantage: Creating and Sustaining Superior Performance. 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. Products pass through all activities of the chain in order and at each activity the product gains some value. operations (production). Typically. A value chain is a chain of activities for a firm operating in a specific industry. assessment and auditing of adherence to the process routines are at the core of the quality certification of the business.
The simpler concept of value streams. Quality Control . The objective of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. The value chain framework quickly made its way to the forefront of management thought as a powerful analysis tool for strategic planning. technology (R&D). Six business functions of the Value Chain: • • • • • • Research and Development Design of Products. U. 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. inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. Havells has recently invested 50 crores in the havell’s Center for Research and Innovation. and procurement. had some success in the early 1990s. Havell’s technological strengths and its endeavor towards continuous research & development have allowed it to fulfill its responsibilities towards its customers. The costs and value drivers are identified for each value activity.infrastructure management. a cross-functional process which was developed over the next decade. set-up at the company's Head Office premises in Noida. human resource management. Services. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design. 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.P.
and bathfittings covering the entire range of household. motors. luminaires for domestic. That's a passion that began 30 years ago and that's how it continues to be even today. CFL lamps. faster and simply better. cables and wires. they’ve committed themselves to make their products better. • • • • • • • • • • • • • • • • • • • • 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 . commercial and industrial electrical needs.The essence of quality is closely wrapped in the way they think. Company products Havells manufactures products such as industrial and domestic circuit protection switchgears. safer and smarter than what he or she is looking for. Havells has a simple rule on quality. modular switches. fans. Each time. To deliver products those are safer. Realising and respecting the basic needs of customers to feel more secure. customers rely on havells and it is responsible to give them the very best. it's not quality performance. every time. All their products are as per IEC standards. Building customer confidence through teamwork is a top priority to provide a wide variety of products and services.commercial and industrial applications. plan and work. It finds its true expression when they extend beyond themselves to exceed our customer’s expectations. power capacitors. If it doesn't exceed customer expectation.
• • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • • 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 .
MAJOR PRODUCTS OF CRABTREE: • • • • • • • MODULAR SWITCHES RANGE THAMES PICCADILLY ATHENA UNDEFLOOR BOX CASA DIGITAL DIMMING AND ENERGY MANAGEMENT SYSTEM .Copper Copper Flexible Cables Integrated service: AIL have the ability to provide customers with an integrated range of casting. machining and sub-assembly capabilities.Aluminium Control Cables .• • • • • • • • • • • • • • • • • • • • • • • • 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 . Moving down the value chain into casting has enabled the company to increase the product range. which are typically complementary to each other. process and wastages. provide a budled service to its customers and control more effectively raw material prices. The company makes a number of casting modules for engines and transmission components.
• • • • 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. Havells produces a complete range of low and high voltage PVC and XLPE cables besides domestic FR/FRIS wires. contractors etc. Co-Axial TV and Telephone cables. fuse switches. resulting in fast growth in volume. cable & wire and electrical consumer durables. 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 . This company also manufactures a comprehensive range of industrial switchgear products including MCCBs. the Government has approved the strategy formulated by the ministry of power for distribution reforms. This company is largest manufacturers of MCBs. fuses. The company is recognised as quality manufacturers of cable with a major presence in the country.000 MW of power from FY07 to FY12. The eleventh five year plan has earmarked capacity addition of 62. Increasing focus on transmission and distribution scheme. changeover switches. rural electrification and rural electrical supply augment revenue visibility.
Havell’s recorded a export turnover of Rs. Kaizen at all units of the company. 130 Crores and Rs. Dubai.60 crores in FY06 and is making capital expenditure amounting Rs.120 Crore in FY07 and upto Rs 150 Crores in FY08. the energy demand is expected to grow at 5%. 5-S. Despite the intense competition in the global electrical industry. a company registered under the company law of UK. Havell’s is a company which is poised to benefit from this. TQM. Additional Capital expenditure. It is a wholly owned subsidiary company of Havell’s India Limited set up primarily . Going forward it is expected to clock a turnover of Rs. Capital expenditute will bring in additional capacity resulting in increase in topline.Havell has incorporated Havell’s (UK) Limited in London. 75 Crores in FY06. rise in income levels.power and infrastructure sector is expected to drive growth initiatives of the company. In March.Havell's India has made capital expenditure to the tune of Rs. High GDP Growth: With an expected GDP growth of 8% by the end of the Tenth Five-year Plan. Growing focus on exports: Havell’s caters its international clientele spread over 51 countries with offices in London. Nigeria.70 Crores in FY07 & FY08 respectively. Sri Lanka and distribution networks in all major countries. and increased availability of goods and services. China. Dhaka. India’s incremental energy demand for the next decade is projected to be among the highest in the world spurred by sustained economic growth. Foreign subsidiary. Cost Competitiveness – Cost competitiveness has been enhanced through improvements in process using tools like six sigma. the company bagged an export contract for 2 years from Eaton Electrical group for supply of switchgear amounting US $10 million.
The goal of much of business strategy is to achieve a sustainable competitive advantage. location. Strong trade network in electrical industry. Competitive advantage can come in one or combination of the following factors: Price. Havell's has got the approval from its board of directors to acquire a greek company for Euros 10 million. or imbedded customer base. Overseas acquisition . . New Product launch: The company is also diversifying into new products of capacitors and motors.Havell's has one of the largest and strongest network in India. It is expected to incur a capex of Rs. Crabtree India Ltd. Crabtree India started out as a jointventure between Crabtree UK and Havell's India Ltd. These products will be a growth driver in future. The better your business performs against one of these factors.50 Crores for this products nt lamp. has been merged with Havell's India Ltd along with brandrights assignment for Indian subcontinent. the more likely you are to succeed.to promote the business in European market and will result in increasing export turnover to a great extent. service. 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. Havell's recognises the strength of trade channel. quality.Managements of Havell's is actively looking for inorganic growth which will have synergies with their existing product portfolio. and the company interacts with dealer on a regular basis to get a fair pulse of the market.It has a sustained competitive advantage when it is able to maintain above average profitability over a number of years.
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). 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. The following diagram combines the resource-based and positioning views to illustrate the concept of competitive advantage: P.O A Model Of Competitive Advantage: Resourc es Distinctive Competenci es Cost Advantage Or Differentiation Advantage Value Creation Capabiliti es . or deliver benefits that exceed those of competing products (differentiation 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. Thus. a competitive advantage enables the firm to create superior value for its customers and superior profits for itself.T.
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. An example of a capability is the ability to bring a product to market faster than competitors. 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. and customer responsiveness. efficiency. quality.Resources and Capabilities According to the resource-based view. in order to develop a competitive advantage the firm must have resources and capabilities that are superior to those of its competitors. Resources are the firm-specific assets useful for creating a cost or differentiation advantage and that few competitors can acquire easily. all of which can be leveraged to create a cost advantage or a differentiation dvantage. the competitors simply could replicate what the firm was doing and any advantage quickly would disappear. These competencies enable innovation. Without this superiority. The firm's resources and capabilities together form its distinctive competencies. Cost Advantage and Differentiation Advantage .
Crabtree focuses a lot on producing quality switches. In addition to the firm's own value-creating activities. Competitive Advantages in case of Crabtree Switches: Quality is important in almost every industry. or rework. the firm operates in a value system of vertical activities including those of upstream suppliers and downstream channel members. or as much scrap. By that I mean faster than expected.Competitive advantage is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. Value Creation The firm creates value by performing a series of activities that are identified as the value chain. A firm positions itself in its industry through its choice of low cost or differentiation. which can be felt by usage of its switches. 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). Another important decision is how broad or narrow a market segment to target. To achieve a competitive advantage. Some of the key features that they offer in terms of quality are: >Heavy plastic material >Simple and bold Looks . Over the long term producing higher quality is almost always less expensive as you don’t have to deal with as many returns. 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. the firm must perform one or more value creating activities in a way that creates more overall value than do competitors.
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. . Crabtree switches have a differentiation advantage. which has helped in creating value amongst the customer base. 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. Last but not the least. the company has created a value chain with the series of activities.