FALL OF BPL-MICROECONOMIC

REASONS
MIE PROJECT, GROUP 9 | 2021-2023|
 Founded in 1963, BPL was promoted by the BPL Group’s TPG Nambiar.

It has production plants in Palakad, Bangalore, Noida, and Doddaballapur.

In 1980 onwards, when industry licensing was relaxed BPL began

manufacturing Television and Telecom equipment

BPL marked its emergence as one of the India's most high profile companies,
during its prime BPL would feature among the most top 10 brands in
the country.
1994-1998 was the golden period. BPL purchased 2 crore equity shares of BPL
PTI Limited, which was involved in dry cell battery manufacturing and
marketing
Introduction Technological tie-up with Sanyo, Japan, has helped the company to extend its
product range.
 From 2000 to 2005:Mumbai
on Mobile and BPL Mobile
Roam-free in Kerala and
enjoyed Monopoly.
From 1990 to 2000:Kitchen
appliances and Alkaline
Batteries.

1980 to 1989:EPABX and

telephone instruments and VCR'S 

PRODUCT  1963 to 1979:Hermetically

sealed panel meters and
expanded to 
DIFFRENTIATION Electrocardiographs

 
 •BPL in its prime, acted as the Market leader through new product introductions and its
strong market share.

•In 1995, the company made a group profit of ₹ 120 crores from Bangalore-headquarters
for its consumer electronics and durables products.

•BPL was even appointed as the local distributor of Nokia phones in India by Nokia.

•Through the company’s rapid diversification into related and unrelated categories, BPL
eventually became a Monopoly in Indian market.

•By the late 1990s, the company had transformed into India's biggest consumer electronics
& telecommunication company and annual turnover raised to ₹4,300 crores.

GROWTH •BPL had diverse group of competitors and before its fall the company maintained its
stronghold against big companies like Samsung, Onida, LG etc.
STORY 
• During the prime time of its growth, BPL was regularly featured among the top 10
brands of India.
 A joint venture between BPL and Sanyo of Japan was first incorporated in 1963, for the
manufacture of video Deck mechanism and other critical components for video cassette
recorders.

In 2004, SECL started their 50:50 joint venture with BPL with manufacture of  LCD Plasma

.In early 2001, SECL picked up a 14% stake in BPL's subsidiary in the home appliances
business. The subsidiary manufactured and marketed appliances like washing machines,
microwave ovens, vacuum cleaners, dishwashers, gas tables, and cooking ranges.

The BPL’s and SECL joint venture rate of attribution was 70% in 2007. Later BPL focused on
Health care business.

Joint Venture
With Sanyo In 2006-07 the joint venture collapsed after the Japanese Company ceased to exit globally.
 Globalization
and
Liberalization

Shift from
Market
monopoly to
volatility
monopolistic

Competition
Financial Crisis with low price
products

Fail of BPL- Failure to adapt

FALL OF BPL
Sanyo Joint to changing
Venture dynamics

Disruption of Lack of
non-specialized economies of
areas scale
 The several microeconomics reasons for the fall of BPL in Indian market were failure of BPL’s
partnership with Sanyo, lack of financial discipline, family and internal organizational disputes,
untimely industry diversification, shift of market from monopoly to monopolistic competition,
consumers open for globalization and liberalization, failure to adapt to the changing demand &
lack of innovation.

BPL could have avoided failure in market had it taken the right measures after its initial
setbacks:

•Post-merger synergies: BPL and Sanyo should have merged with a shared vision and a
common plan Also, the merged market should have set targets for itself and tracked their
performance

•Setting right priorities: With new entrants Samsung and LG posing competition, BPL should
Conclusion have focused on retaining its market share and overcoming their setbacks rather than involving
in court cases and family issues.
 •Developing a good financial discipline: Using accounting tools to
record every expenditure (financial books) and regular monitoring of
BPL’s financial performance; using feedback to incorporate new
strategies.

Overcoming challenges like Globalization: Due to Globalization,

Indian consumers accepted other competitor companies like Samsung
and LG. This was inevitable but BPL could have used this opportunity
to leverage its core competencies and adopt innovation to grow as a
company. The company should have focused on customizing their
products for local market with a marginal price and introducing new
Contd. technology and features which could retain Indian consumers.