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In the Name of

Almighty Allah
who is the most
Beneficial & Merciful
 “HMT – Machine Tools Division”
For the course of
‘Strategic Marketing Management’
Group Members:
Noman Jehangir (8151)
Muhammad Kashif Parvez (8072)
Muhammad Shafique Ahmad (8073)
Sohaib Ali Khan (6307)

Submitted To:
Sir Samir S. Amir

Date Submitted: July 16, 2010

HMT – Machine Tool Division
Related Environment & Marketing Strategy

• Related Environment:
– HMT want to all manufacturing goods to be manufactured and delivered
through one roof.
– Like when all textures are join together to create one single design, similarly
HMT wanted to manufacture and deliver all goods through one roof
– Diversification and expertise in all machine related manufacturing
– Competitive advantages are low cost and skilled engineering base

• Corporate Strategy:

– HMT has adopted a strategy of Diversification.

– Expertise and skill acquired by building machine tools.
– Diversify into other product line such as tractors, lamps, dairy machinery,
watches, bearings etc.
– Separate Business Groups for product line.
– Introduction of better and new products.
 Liberalization Policies
• Liberalization Policies:
– By 1992, all remaining physical barriers to import machine tools were
eliminated.
– The duty on the machine tools has been consistently reduced from
110% to 20% and is further expected to be reduced.

• Likely problems and challenges faced by HMT:

– De-licensed Environment: The machine tool industry is completely

free from any controls. Anyone (even a foreign company) can set up a
plant anywhere (outside urban limits) with 100% equity and
managerial control without having to obtain permission for it.
– Export-Import related Problems: Special facilities such as duty free
import-export of capital goods, raw material and components etc.
 Indian Machine Tool Industrial Problems:
1. Innovation is not happening as fast as
it should.
2. Domestic market is too small.
3. Information about market is poor.
4. Lack of training including the
concept of 5s.
5. Lack of professionalism.
6. Manufacturers sell different designs
of machine – variety is too large.
7. Manufacturers sell machines not
solutions.
8. Information sharing is poor.
9. Absence of a Center of Excellence
for R&D.
10. Low volume operations and not able
to reap benefits of scale.
11. Country is not industrializing at fast
pace.
12. Exports are low.
13. After sales service is poor.
14. Poor product design and image.
15. Prices of machines are high
compared to China /Province of
Taiwan.
16. Small units cannot spend on R&D.
17. Absence of large number of
service providers.
18. High cost of consultants.
19. High cost of production.
20. Input costs are high.
21. Small units have uneconomical
procurement costs.
22. No formal channels of
communication exit.
 Environmental changes
Environmental changes critical to machine tool industries are;

• Technology Obsolescence:
– Technology obsolescence in the machine tool business is extremely
rapid

• Higher Resource Requirement:

– The restricted availability and the inability to raise resources are
common to all types of small businesses.

• Vendor Linkages:
– No other business requires such complex level of vendor linkages as
the machine tools. For materials, electrical, electronics, hydraulics

• Diversified:
– HMT is very largely diversified.
 HMT – Machine Tool Division

• HMT to Respond to these changes

– Should try to adopt advanced technology.

– Should fulfill the higher resource requirement.

– Should try to maintain vendor linkages.

– Should maintain the diversity of the industry.

‘Base Technology’ or take-up ‘Key
Technology’
It should be Base + Key technology but main emphasis should
be on Key technology reasons why ……
 Technological Choices
1. Production of CNC machines.
2. Sourcing of components including electronic and electrical.
3. Improvements in production lines.
4. Verification of designs.
5. Import of machine tool technology.
Growth Rate of Machine Tool Industry
• 50% increase in 2005
• Demand from three sectors: automotive, auto ancillaries, and consumer
durables.
• Much of the gain from lathes, machining centers, grinders, and sheet metal
centers.
• the Indian machine tool industry caters to other sectors such as electronics,
consumer durables, IT products, telecom and packaging, accounting for 50
percent of the total consumption
• Global machine tool industry - $15-billion
• Indian Machine tool industry - $2.5 billion
 To Achieve Global Competitiveness HMT
Should …………..
• Understanding the implications of the SWOT analysis.
• Identification of the potential weaknesses in product, features, quality, etc.
• Exposure of the industry for updating the knowledge and information to
correct the weaknesses through adoption of improved designs, improved
manufacturing practices, high machining techniques, standardization etc.
• In house capacity building of SMEs for design development, verification
and evaluation.
• Training in key areas to facilitate industry in reducing production cost.
• Identification of product range and the related target market.
• Concurrent focus on domestic and export markets.
• Proactive marketing of machine tools.
• Foreign Collaboration / License Agreements.