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VOLTAS CASE STUDY


GENERAL MANAGEMENT

By:-
Vasista B V
Prashanth
Nagendra
Supriya T swamy
AGENDA OF THE PRESENTATION
 Background of the Voltas case
 Strategy process at Voltas
 Mission statement (aim & goal)
 Objective
 Environmental analysis
 Strategy (generic, alternative)
 Swot analysis
 Conclusion
Background of the case study
 Voltas was set up in the year 1954.
 In the year 1963 started manufacturing.
 In the year 1964 set up the supporting
industry.
 The range of products gradually widened.
 Voltas international limited was set up in the
year 1978.
 Over a year voltas tied up with several global
players.
 Until the 1990s voltas was a major player.
Continued………..
 The company invested heavily in the business b/w
1994&1997.
 At the same time voltas had diversified into
several unrelated business.
 Voltas acquired the loss-making Hyderabad
ALLWYN LTD.
 The demand fell down by 9% in 1996-97.
 The debt doubled from 1.65 billion in 1994-95 to
3.3 billion 1996-97.
 The MD of voltas Viswanath H munshi replaced by
Nawshir.
Continued…..
 The restructuring.

 Develop the core competency.


 Stabilize the cash flow position.
 Voluntary retire service.
 Identifying avenues for growth.
 The electro-mechanical business
 The unitary cooling business.
Continued………
 The Big Bang strategy
 New products.
 Brand building.
 Channel & service.
STRATEGY PROCESS AT
VOLTAS
VOLTAS PRODUCT LINE
 Electro- Mechanical Projects and Services -
 Air-conditioning and Refrigeration.
 Electrical, Mechanical and HVAC Solution (International).
 Water Management and Treatment.

 Engineering Products & Services -


 Textile Machinery.
 Mining & Construction Equipments.
 Machine Tools.
 Material Handling Solutions.

 Unitary Cooling Products -


 Cooling Appliances.
 Commercial Refrigeration's.

 Others -
 Chemicals Trading.
 Voltas – is leader in air conditioning business.
 Voltas – is largest projects exporter in Mechanical, Electrical and Public Health works.
 Voltas - is No. 2 brand in air conditioners.
 Voltas – is most trusted name in mining and construction equipments.
 Voltas – enjoys market leadership in textile machinery.
 Voltas – is a innovator and leading player in machine tools.
 Voltas – is leading force in forklift trucks.
MISSION STATEMENT
AIM :
 Historic Voltas mission to 'foster indigenous manufacture' had
one particularly momentous outcome.
 To foster indigenous manufacture of engineering products
and capital equipment, based on technologies acquired from
overseas, often from Volkart's existing principals.
 To supply the full gamut of services, from marketing to
commissioning, for such products.

GOAL :
 To have a market share of 20% in 2006.
ENVIRONMENTAL
ANALYSIS
(Where are we now??)
 From a loss of Rs. 119mn in 1998-99, Voltas recorded an
From a loss of Rs. 119mn in 1998-99, Voltas recorded an
operating profit of Rs. 69mn in 2000.
 The company offered a dividend of 12% in 2000.
 In electro-mechanical business, Voltas decided to strengthen its
financial capabilities in order to further expand it business.
 Voltas intended to grow through brand building and new product
launches.
 Making a mark in the High end category Segment – electro
mechanical projects, air conditioning and refrigeration.
RAPIDLY
INCREASING
ITS MARKET SHARE
Market Shares in the Indian
Ac Market

LG VOLTAS SAMSUN VIDEOC HITACHI CARRIER OTHERS


COMPAN G ON
Y
FY02 15.2 10.6 6.8 5.3 8.2 9.8 44.1

FY03 23.5 12.1 6.5 6 10.7 11.8 29.4

FY04 28.5 10.9 9.2 7.5 8.2 9.2 2.5

FY05 32.7 13.5 9.7 9 7.2 6.6 21.3


Voltas Revenue Break-up
in FY06
3%

25%

59%

13%
OBJECTIVE
(Where do they want to
be ???)
To have a market share of 20% in 2006.
Expansion of its Sales Infrastructure
Become a Mass product and still retain its
leading edge technology
STRATEGY AT VOLTAS

(A) GENERIC STRATEGY:


Generic strategy includes Product diversification
and focus of the company

PRODUCT DIVERSIFICATION
 Product Range is from contemporary to hi-tech
 Diversifying products so that each and every segment
is covered
FOCUS OF THE COMPANY
 Provide contemporary and best-in-class products meeting customer needs and value
expectations
 Build customer loyalty by strengthening after-market operations through service.
 Ensure cost reduction in all aspects of operations to achieve total cost leadership in
the market.
 Achieve market leadership through people by attracting, developing and retaining
excellence in personnel.
 Energise the organization through teamwork to ensure that various functional areas
work together to deliver results in a quick and effective manner.
 Explore new avenues for revenue generation leveraging established manufacturing
and distribution strengths.

 Spending a good amount of its revenue on R&D.


(B) ALTERNATIVE
STRATEGY

BIG BANG STRATEGY

 INTRODUCTION OF NEW PRODUCT.


 BRAND BUILDING.
 ESTABLISHMENT OF A WIDESPREAD
SERVICE NETWORK.
MARKET PENETRATION

 Working towards reaching out all the cities.


 Expanding its sales network.
 Revamping sales infrastructure.
SWOT ANALYSIS
STRENGHTS

 Design and manufacture of


industrial equipment.
 Management and execution of
air conditioning .
 Public works projects.
 Sourcing, installation and
servicing of technology-based
systems.
 Voltas represents a number of
global technology leaders,
serving diverse industrial sectors
and applications.
WEAKNESS

 Not targeting the mass market


OPPORTUNITIES

 The Indian Mass Market.


 The high end value driven
proposition helps increase the
Market Share.
 VOLTAS is well known for it
product differentiation
THREATS

 Indian Mass Market may


be captured by a rival
company, LG, Videocon,
Samsung etc.
 Due to increased price of
inputs and continuing
price erosion there is
downtrend in the
consumer durables
market.
Conclusion
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