Neeraj Patki Ketan Nimsudkar Viraj Bhat Shambhavi Jha

Analysis  We would be analyzing company on following parameters :  Company’s Competitive advantage  Company’s Financial Strength  Industry Strength  Environmental Stability .

•Not much.17 %. •Brand differences are not visible enough . as it is not technology dependent product.Company’s Competitive Advantage Factor Market Share Score Remarks (-7 to 0) -1 0 -2 • 14 % . • Market Share is rising for last 3 years •High Quality •One of the Lowest Cost Cement Producer •Past half of the Growth Stage Product Quality Product Life Cycle Product Replacement Cycle Customer Loyalty 0 -5 •Is not much significant.3rd in Industry • Market Leader ACC.

Company’s Competitive Advantage .

Company’s Competitive Advantage Factor Competitor’s Capacity Utilization Technological Know-How Score Remarks •Almost All the Big competitors are near 100 % Utilization •Ambuja is aggressively expanding capacity •Technology not a trade secret -2 -7 Vertical Integration 0 •Captive power plants at multiple places. •Power cost is 40 % of total cost. Sea Transport . •Captive port at Muldwarka.

470 92 96 100 84 .000 14.640 14.531 6.707 14.300 5.636 4.902 15.649 18.094 13.550 8.316 6.680 6.860 17.174 6.434 6.Company’s Competitive Advantage Company Production Installed Capacity Capacity Utilization (%) ACC Gujarat Ambuja Ultratech Grasim 17.810 6.115 96 100 80 100 95 India Cements JK Group Jaypee Group Century Madras Cements 8.

net worth – 19 % •Debt Reduced over the years •D/E ratio= 0.03 •More Owners’ fund •Fairly liquid position •Liabilities covered •Operating profit growing •Working capital requirements easily fulfilled 4 4 7 7 Liquidity Capital Reqd.Company’s Financial Strength Factor ROI Leverage Score (0 to 7) Remarks •ROE 23% •RO./Capital Available .

Company’s Financial Strength Factor Cash Flow Score (0 to 7) Remarks •Net cash flow positive •No borrowings required for fulfilling WC needs •High exit barriers •Low risk in northern market 6 2 5 Ease of exit from the market Risk Involved in the business .

•However Industry dominated by large players may give control over pricing. due to expected oversupply.Industry Strength Factor Growth Potential Score (0 to 7) Remarks •10. •Gov-backed construction projects have created strong demand for cement in the country.5 % CAGR. •Industry players will continue to increase their output •Profits will remain strong for some years but may gradually erode. 6 Profit Potential 5 .

Industry Strength Factor Financial stability Score Remarks •Demand – Supply controlled by fewer players •Growth in Economy will translate into growth of sector •Downturns may affect temporarily •Technology not a trade secret •Industy is highly up to date •High •Highly Capital Intensive 5 Technological Know-How Resource Utilization Capital Intensity 4 6 5 .

Industry Strength Factor Ease of entry into market Score Remarks •Highly Capital Intensive •Ease only for bigger players as technology readily available •Average Gestation Period : 2-3 Yrs •Holcim.HeidelBerg •Highly Productive •Nearing 100 % Capacity utilization 6 Productivity. La Farge. Capacity Utilization 7 .

and then starts declining once all the developmental projects are in place and the country has achieved a very high level of economic growth -1 -3 Rate of Inflation -5 •High Inflation. reaches a peak level. •Cement demand rises with the progress in economic development. •Increase in Fuel and Energy Costs . the demand for cement grows at about 3%-4% above the growth rate of GDP.Environmental Stability Factor Technological Changes Demand Variation Score (-7 to 0) Remarks •Technology up to date. •Rapid changes less likely •Usually.

Environmental Stability Factor Price Range of competing products Score Remarks (-7 to 0) -1 •Not much Difference •Brand differences are not very visible Barriers to entry into market Competitive pressure Price elasticity of Demand -3 -4 •Capital Intensive •No technological or IPR barrier •High •New entrants also coming in •Prices nearly fix •High infrastructure growth •Demand less likely to deviate -2 .

13 5 5.Average Scores Factor Company’s Competitive Advantage Company’s Financial Strength Industry Strength Environmental Stability Score -2.72 .5 -2.

13 0 -2.71 7 Industry Strength Environmental Stability -7 .SPACE Chart Financial Strength 7 5 Competitive Advantage 5.5 -7 -2.

13 0 -2.5 -7 -2.71 7 Industry Strength Environmental Stability -7 .SPACE Chart Financial Strength 7 5 Competitive Advantage 5.

Strategies  Aggressive Posture :  It must exploit existing opportunities.    Continue sea transportation Keep control over cheaper resources Keep investing in captive plants  Should Focus on overall cost leadership .  It should continue it’s development and investment strategies to weaken the competition  Should look for related acquisitions  Must control it’s resources to have competitive advantage.

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