Beginning of VOLTAS

Since its inception in 1954 with the launch of Air Conditioner, Voltas dominated this segment till
early 90’s. They were market leader with expertise in Air Conditioning & Cooling Technology. In
1991, due to various reforms introduced in India along with the liberalization deep-pocket
international players such as Carrier, Samsung, and LG entered the market. This led to Voltas slipping
from 40% market share since almost 5 decades to 7% market share post 2000. This was the point
when strategist from Tata stepped in and suggested many strategies to sustain the competition in
market. Voltas revamped its product offerings by launching 75+ new products. It currently holds a
market share of ~24% in India's residential Air Conditioner segment. It’s interesting to decode the
mystery behind the rise, fall & again rise of Voltas along with various product & market strategies
that were adopted.

Problem Identification
With help of Tata Strategic Management Group, Voltas transformed from an engineering company to
a marketing company. It also devised “Big Bang” strategy to revive company’s situation. In 1996-97,
Voltas faced problems related to excessive diversification and lack of focus. It invested in many
businesses but couldn’t manage them effectively. As part of its turnaround strategy, it soon divested
several businesses, such as white goods, chemicals, etc and to regain its leadership position in the
market, it started focusing mainly on marketing & cost cutting. It also entered a price war with other
companies and entered a joint venture with a Turkey-based company, Arcelik in 2017 to form Voltas
Beko, which customized its products as per Indian needs. It diversified the portfolio by re-entering the
white goods segment, producing products such as washing machines, refrigerators, microwave ovens
and dishwashers. As per the marketing head, Voltas plans to capture around 10% market share in each
white goods segment by 2025. However, the primary issue that persists today is that the AC industry
is highly competitive and is projected to grow at a CAGR of 17% in the next few years. Pandemic has
positively impacted Voltas, but it must strategize to increase penetration amidst intense competition.

Problem Statement
Analyse strategies employed by Voltas AC to replicate its success & learnings to foray into
white goods market through its partnership with Arcelik.

Scope of the Project & Learning Objectives

The major objective & scope of this term paper is to work on the aspects below:

1. Industry Analysis that will include different products and their market share.
2. Voltas’ ride through 50 years and learnings from successful Voltas turnaround strategies
3. Competitive landscape to conduct competitive analysis in home appliance. We will also track
consumer needs & their importance with changing market.
4. Analysis of Voltbek Home appliance that uses brand extension post joint venture with Arcelik.
5. Way Forward for Voltas that will focus on the Product strategy to be implemented to increase
the market share for each of its product segment.
References:
1. https://www.myvoltas.com/about-us/
2. https://www.forbesindia.com/article/take-one-big-story-of-the-day/can-voltas-keep-its-cool/64271/1
3. https://www.rediff.com/money/2006/apr/05spec2.htm
4. https://www.moneycontrol.com/news/business/companies/voltas-beko-launches-first-manufacturing-unit-in-india-
4882211.html
5. https://www.businessinsider.in/advertising/brands/article/air-conditioner-and-cooling-brand-voltas-india-eyes-
double-digit-growth-this-summer/articleshow/82035344.cms