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Transcript of Bpl
STRATEGIC ANALYSIS OF
BPL & ADANI WILMAR
Submitted To: Submitted By:
Pro.Amita Sharma POOJA ARORA(P1102)
PUNYASHREE BHATT(P1108)
HARSHAVARDHAN DATE(P1110)
RIDDHI KANSARA(P1121)
PRAYAG MISTRY(P1127)
SUMIT PRAJAPATI(P1132)
Diminishing Company BPL
Introduction
BPL is a name that has almost become synonymous with electronics in India. BPL is the abbreviation for British Physical Laboratories India Private Limited. Counted amongst the most popular brands in the country the BPL Group was established in 1963 by TPG Nambiar
The BPL Group is an Indian electronics manufacturing company that has successfully ventured into various sectors such as consumer appliances like washing machines and refrigerators, health care devices, and entertainment home products. The company manufactures products under two broad labels; Consumer Products and Professional Products.
After the introduction of the television in India BPL joined hands with SANYO of Japan and launched the BPL brand of televisions in India. Today BPL under consumer appliances manufactures televisions such as flat TV, slim TV, and conventional TV.
BPL Label under health care devices manufactures multi- parameter monitors, wireless treadmill system, and dental x- ray machines. All the manufacturing facilities of the group are highly technologically advanced. In order to further improve the quality of its products, the Group BPL has entered into collaborations with foreign companies who provide technology to the group. This has helped BPL Group to set high quality of standard for its products which in turn has boosted the sale of the group's products. As a result the group has become the country's largest electronics consumer company.
The Group BPL has its head office in Mumbai and it employs more than 14,000 people. The group is worth around 4,000 crore. The Label BPL in order to further expand its business is planning to expand in the health care sector. The group plans to enter the areas such as dentistry, critical care, and home health care. BPL Group expects the revenue from the health care sector to amount more than 500 crore by 2010. The group in recent years has been facing equity revamp and major debt.
BPL Ltd has reported a net loss of Rs 34.76 crore in the second quarter of fiscal 2005-06, on gross sales of Rs 34.71 crore. Operating losses were at Rs 13.91 crore.
Gross sales were Rs 64.45 crore in the corresponding period during 2004-05 while net loss was at Rs 41.59 crore.
Joint Venture with Sanyo
The BPL Group and Japanese electronics major Sanyo Electric Company Ltd, formally started their 50:50 Joint Venture.
The partners, who had shared a long-standing relationship since 1982, had been off the market for about two years, going through some tough
times. This year, they decided to get back in action together to regain lost market share.
While unveiling the Joint Venture's plans, Sanyo-BPL Pvt Ltd Chairman and Chief Executive Officer, Ajit G Nambiar, said the company expected to post revenues of around Rs 2,000 crore by 2009 and lead the market in consumer electronics and white goods in five years.
They, however, decided to market their brands separately with BPL focusing on the volume segment while Sanyo brand positioned itself as the value driver.
Besides, Sanyo also planned to use India as its sourcing base and has already started sourcing slim TVs from India. It also expected India to contribute five per cent of its global revenues from its operations in India.
In May 2007 after the failure of Sanyo BPL venture. The attrition in rate in Sanyo BPL was 70%. BPL concentrated 100% on Healthcare Business group which has its own manufacturing of electromedical equipment such as Electrocardiography apparatus, Patient Monitors, etc. with a well established distribution and service network across the country. The company focusses on delivering to the customers a high degree of support reliability and has re branded its the Service offering under "SURE CARE" brand. Sure Care provides support for the complete range of BPL Healthcare products.
Strategic Advantage & Disadvantages
Pre Launch:
Research and Development.
Revolutionizing Technology.
System Upgrade.
Post Launch:
Sponsorship.
Penetrative Strategy
Gorilla Marketing.
Mobile advertisement.
MARKETING STRATEGIES
Disadvantages
Apart from falling production-levels, a strike is threatening BPL's advantage as a low-cost manufacturer.
Technology was a commodity and we could have sourced it. Where BPL failed was the lack in control on finances
PEST Analysis
Political
Lowering of customs/excise duties post 90’sGlobalization driving investment through FDI, FIIs & JV’s
Economic
Increased urbanizationIncrease in disposable personal incomeEasy & cheap availability of consumer finance
Social
Burgeoning middle classDouble income families
Technological
India becoming a manufacturing hub
Incorporation of top end technology across product range
SWOT Analysis
Strength
BPL Company has a brand name
Strong backward integration
Improved Technology
Innovative Products
Weakness
No exclusive showrooms
Fewer margins to distributors and dealers
Opportunities
BPL Going Global
Growing Semi Urban Market
Purchasing power of people increasing day by day. Movinginto new attractive market segments.
Mergers joint ventures of strategic alliances
Threats
Competitors having innovative products
Acceptance of re-launch
Porter’s Five force Model
Five forces analsysis looks at five key areas namely the threat of entry, the power of buyers, the power of suppliers, the threat of substitutes, and competitive rivalry.
The threat of entry.
Economies of scale e.g. the benefits associated with bulk purchasing.
The high or low cost of entry e.g. how much wills it cost for the latest technology?
Ease of access to distribution channels e.g. Do our competitors have the distribution channels sewn up?
Cost advantages not related to the size of the company e.g. personal contacts or knowledge that larger companies do not own or learning curve effects.
Will competitors retaliate?
Government action e.g. will new laws be introduced that will weaken our competitive position?
How important is differentiation? e.g. The Champagne brand cannot be copied. This desensitises the influence of the environment.
This is high where there a few, large players in a market e.g. the large grocery chains.
If there are a large number of undifferentiated, small suppliers e.g. small farming businesses supplying the large grocery chains.
The cost of switching between suppliers is low e.g. from one fleet supplier of trucks to another.
The power of suppliers.
The power of suppliers tends to be a reversal of the power of buyers.
Where the switching costs are high e.g. Switching from one software supplier to another.
Power is high where the brand is powerful e.g. Cadillac, Pizza Hut, Microsoft.
There is a possibility of the supplier integrating forward e.g. Brewers buying bars.
Customers are fragmented (not in clusters) so that they have little bargaining power e.g. Gas/Petrol stations in remote places.
The threat of substitutes Where there is product-for-product substitution e.g. email for fax Where
there is substitution of need e.g. better toothpaste reduces the need for dentists.
Where there is generic substitution (competing for the currency in your pocket) e.g. Video suppliers compete with travel companies.
We could always do without e.g. cigarettes.
Competitive Rivalry This is most likely to be high where entry is likely; there is the threat of
substitute products, and suppliers and buyers in the market attempt to control. This is why it is always seen in the center of the diagram.
Competitive Strategies
Sanyo-BPL repositions strategy to beat competition
In what is seen as a clever repositioning of strategy, Sanyo-BPL Pvt. Ltd., which makes colour television sets, has decided to push the Japanese brand Sanyo in a big way. Currently, the company makes two brands –Sanyo and BPL.The move comes in the wake of intense competition for Sanyo from foreign brands such LG, Samsung, Panasonic and Sony.
The move should also be read in the backdrop of the joint venture seeing a greater growth and brand loyalty for its BPL brand of CTVs in India, especially in the South. “Promoting BPL is an easy task. Marketing Sanyo is, however, challenging,” says Toshiaki Iue, President, Sanyo TV International Corporation.
Sanyo-BPL Pvt. Ltd. was formed as an equal joint venture between Sanyo Electric Company Ltd. of Japan and BPL India. Under the agreement, BPL transferred its colour television business into the joint venture. This also saw BPL brand for CTV come under the joint venture fold.
Mr. Iue said the Indian plant, located in Bangalore, was manufacturing one million colour televisions per annum under single-shift. This comprised both BPL and Sanyo brands. If the demand increased, the plant could double its production. The company produced 6.2 lakh CTVs last year.
Mr. Iue said the dual brand strategy was beneficial to the company. It was working out various business strategies to promote both the brands
simultaneously across various geographical locations. It would be introducing various models under both the brands. He said Sanyo would use the BPL platform for promoting the CTVs in India. However, it would be importing other Sanyo consumer durables from China and Thailand. At present, both Sanyo and BPL put together have 29 CTV models in India, including LCDs. To a question, he said it did not make sense for Sanyo to have a production base of its own in India because of the scale limitation. Should the demand increase over a period, Sanyo would look at a similar strategic alliance with BPL for other products, he added.
Growing Company Adani Wilmar
ADANI GROUP
FORMAL ORGANIZATION STRUCTURE – BUSINESS UNITS & CORPORATE UNITS
Businesses Corporate
Group HR
Corporate Finance
(Legal & Secretarial,
Corp. IT, Internal Audit)
Corporate Communications
Corporate Affairs
Coal Mining and Trading
Power
(Projects/Generation/
Transmission/Trading)
City Gas Distribution
Oil & Gas Exploration
Agro
Ports & SEZ
Logistics
Real Estate Development
ADANI GROUP: BUSINESS PROFILES
(1) Coal Mining:
Adani group has coal mining business divided into two horizons :
Domestic
Parsa East & Kente Basan Coal Blocks – 450 MT Chendipada Coal Block – 1600 MT Machhakata Coal Block – 1400 MT Lohara (W & Extn) Coal Block – 170 MT Agarzari Coal Block – 137 MT
Overseas
Australia Indonesia Bunyu Inland Coal Mine South Sumatra Coal Mine
(2) Coal Trading The largest importer of coal in India Entered in to long-term exclusive coal supply
arrangement with largest mining company of Indonesia.
Having long standing relationships with over 12 large miners of Indonesia and 4 miners of China.
(3) Power To be a leader in power sector with interest in
thermal, hydro, gas, solar, wind, transmission & distribution.
To be 20,000 MW power organization.(4) Power Trading
No.1 Private Power Trading Company. Commenced operation in 2003 following reforms to
the Electricity Act, Highest “F” Category License. One of the leading private sector power traders in
India with a significant market share.
Future initiatives to include the trading of surplus
power from the operating power plants to the power
deficit states.
(5) Oil & Gas
Distributing CNG & PNG in Ahmedabad, Vadodara & Faridabad.
Steel ring network of c.328 km and PE network of c.1,800 km.
To commence operations in next couple of years – Noida, Khurja, Lucknow, Udaipur and Jaipur.
Adani Welspun Exploration Ltd – Oil Exploration.
Domestic Onshore – 2 blocks in Nelp VI (one at Marghreita,
Assam & another at Palej, Gujarat ) Offshore – a new block located at northwestern part of
the Surat depression of Mumbai Basin 2 blocks in Kutch , Gujarat through consortium – one
through AWEL, ONGC, IOC & GSPC and 2nd through AWEL, ONGC & IOC.
Overseas – Onshore – awarded 2 blocks in Thailand. Offshore – a block awarded at Gulf of Suez,
Egypt, in partnership with GSPC. Dubai’s Black Pearl Co. engaged for drilling operations.
(6) Mundra Port & Special Economic Zone Limited (MPSEZ)
Domestic
Mundra Port:o Largest all weather, deep draft, private port in
the country.o Handled the largest container vessel in India.o Connected to the national railway network by
57km railway line between Port and nearest
railhead Adipur – started doubling this railway line to meet the growing demand of the port.
o Building world’s largest dedicated coal import terminal having 60MMTPA coal handing capacity.
o Developing terminals for handling cargo at Hazira, Gujarat, & Marmugoan, Goa.
SEZ:o India’s largest and first port based SEZ
spread over 13000 Ha.
Overseas:
Australia: Dudgeon Point Indonesia (South Sumatra) : Coal Terminal
Adani Logistics Limited (ALL) – Container Train Operations
First company to operate double decker container rakes.
In land container terminal. Network of rail-linked inland container depots
spread across India.
Adani Agri Logistics Limited (AALL) – Transportation and Storage of Food Grains.
Food Grain Handling, Storage & Transportation facility – BOO arrangement.
2 Base Depot in Kaithal (Haryana) & Moga (Punjab).
5 Field Depot in Chennai, Coimbatore, Bangalore, Navi Mumbai & Hooghly.
Adani Shipping Pte. Ltd and Libra Shipping Pte. Ltd.
Wholly- owned subsidiaries in Singapore to manage shipping and freight operations.
Shipping operation aims to capitalize on the Group’s trading business to charter freight for the cargo of the various group companies.
(7) Real Estate
Adani Infrastructure & Developers Pvt. Ltd (AIDPL)
Business Activity: Realty Development in Mumbai, Cochin and Surat.
Developing Bandra – Kurla complex and mill land development.
Samundra Township – Mundra
Adani Township & Real Estate Co. (ATRECO) Business Activity: Realty Development in
Ahmedabad. “Shantigram” – Integrated Township, Ahmedabad. Commercial, Retail, Residential, Integrated
Townships.
(8) Agro Adani Wilmar Limited (AWL) – Edible Oil
50:50 joint venture with Wilmar Group, Singapore Refining capacity of 4040 TPD, crushing capacity
of 5750 TPD and hydrogenation capacity at 575 TPD across India at 16 locations.
Fortune, India’s largest selling Edible oil brand Adani Agri Fresh Limited (AAFL) – Fresh Fruits
Controlled Atmosphere Technology for increasing shelf life of fruits.
3 sites located in Dist Shimla (HP) – Rewali, Saing & Rohru.
Handled 18000 tons of apples and 1000 MT of fruit exports.
“FARM-PIK” – the retail brand of AAFL.
Visionary Chairman of Adani Group: SHRI GAUTAM ADANI
Visionary – able to spot scalable businesses Uncanny ability to convert adversity into opportunity Risk-taker Focused on long-term sustainability Trusts own intuition Down to earth
Group Vision – 2020
To be one amongst top 5 diverse corporate conglomerates of the country with capacity of 20,000 MW Power, 200 MT Coal Mining and 200 MT Port Facilities
To be an important player in energy and infrastructure business in South East Asia.
To be country’s no. 1 private player in all our core businesses. To be major infrastructure player of our nation.
Mission
To assimilate knowledge, develop capabilities and manage collective enterprise to profitably tap global business opportunities for the maximal benefit of everyone associated with Adani.
Vision Statement A globally competitive, India focused MNC, with leadership in
edible oil businesses providing branded products and services to the delight of customers and stakeholders.
KEY MILESTONES ACHIEVED BY ADANI GROUP
1988 Adani Exports starts trading as Partnership Firm
1993 Adani Enterprise Ltd. becomes a Public Ltd. Company and a
famous trading house
1998 Mundra Port fully operationalized and AEL commences Coal
trading
2001 Sets up Edible Oil Refinery in Joint Venture with Wilmar Group
of Singapore
2006 Coal Mining starts in Indonesia
2010 Adani Ports Ltd: 2nd and 3rd unit of 330MW power generation
operational; Acquired Linc Energy Coal Mind in Australia which is
largest Coal mine acquisition by any Indian Company.
2012 Infrastructure: 100 Mega tonnes Cargo Handling Capacity;
Energy: 10,000MW power generation, 70MT coal mining
Strategic Advantages to AWL
1) Adani Wilmar Limited is a 50:50 joint venture between two
recognized Multinational Corporations – the US$7 Billion Adani
Group, the leader in International trading, Power Sector and
Private infrastructure, and Wilmar International Limited,
Singapore, Asia’s leading Agri business group with revenues
exceeding US$ 44.7 Billion.
2) Adani Wilmar Ltd.'s flagship brand Fortune has been repositioned
with a new mantra of 'Joy of Eating'. The objective of this exercise
is to craft a unique value proposition for the brand. Fortune, which
has maintained its market leadership for last 7 years, hope to
further strengthen its market share with this re-positioning.
3) Catering to the burgeoning middleclass, core of Indian consumer
market, AWL introduces King's range of refined oils. It will have
under its portfolio, Soya. Coming from the house of Adani Wilmar,
coupled with the planned 360 degree Marketing Support, King's is
set to be the king of its own turf.
4) AWL also has as part of its edible oil portfolio, Bullet brand mustard
oils and a Refined Palmolein Oil under the brand name of Raag
Gold, a premium vanaspati brand called Raag, special frying oil
called Fryola and Speciality Fats range under brands like Jubilee
Master chef, Aadhaar Bakewell, Alpha Cookwell & A-Kote.
5) Adani Wilmar Limited has a strong distribution network, consisting
of Company Distributors and Super Stockists, in place that reaches
out across India. This enables the end-users of our products -
households and institutional buyers - to receive our offerings
speedily. Small retailers and traders also benefit greatly from this
arrangement.
6) Our distribution footprint spans the length and breadth of the
country, AWL has 85 stock points catering to more than 5000
distributors, 600 Super Stockists and numerous brokers and other
trade associates. Our retail reach is more than 1,000,000 outlets
and we continue to cater to an ever-growing customer base of over
80 million Indians.
7) "Fortune" also became the 1st edible oil brand to be associated
with major sporting events of Common Wealth Games 2010 and
ICC Cricket World Cup 2011. It roped in the Ace Badminton
champion of India – Saina Nehwal as brand ambassador of its
Fortune brand cooking oil.
8) The company also provides contract manufacturing/private
labelling services for various companies.
S.W.O.T. Analysis of AWL
Strengths
Joint venture with Asia’s largest edible oil company. Wilmar International Ltd. having expertise in crude &
refined edible oil. Oil refineries at key locations of the country catering
edible oil markets across the country. With 80 branches, 5000 distributors to 1 million outlets,
AWL’s products reach to 20 million households across India.
AWL introduced based Soya bean oil to Middle – East and is now exporting its products to more than 19 countries in the Middle-East, South-East Asia & East Africa.
Combined refining capacity of 3200 TDP including major share of 2200 TDP from State-of-the-art refinery at Mundra, Kutchh.
Weaknesses
AWL is in Growth stage whereas Saffola, Sunflower, etc brands have been in the market from a long time.
Existence of small local players in the market. Insufficient rains in 2012.
Opportunities
High volume business with low margin. Competition with local players amounts to 90% of
domestic market. Effective Management of Logistics. Adherence to quality standards. Highly competitive Branded Edible Oil Market. Highly volatile Pricing Structure. Highly dynamic business conditions based on
agricultural market. Growing consumer demand for branded edible oil. Huge untapped local edible oil market. Demand for vegetable oil exceeds the National
Production. Highly growing bakery / confectionary & food industry
requires specialized fats. Import benefits on crude palm oil. Export incentives under various export promotion
schemes by government. Agriculture market has become more stable & growing
at a higher rate.
Threats
Shifts in consumer tastes.Tough competition to the
competitive brands like Saffola, Sunflower, Ruchi
Soya, etc.
Global or National economic downturn may force
consumers to buy the local brands.
New Government regulations.
Threats from local edible oil brands which are
normally lesser price than Fortune products.
PEST Analysis
1) Political Factors
The edible oil sector has been fully liberalized to create competition
in production, processing and marketing.
The taxation system is being harmonized so that millers operate on
a level playing field.
Institutions that promote raw material production have been set up
and adequately financed. [National Agricultural Research
Organization (NARO), Cotton Development Organization (CDO)]
The Government, with a view to avoiding scarcity of this items and
consequential price rise, has been allowing import of edible oils.
Import duty on edible oils has been reduced to 15%.
Permission has been accorded on experimental basis for
manufacture and marketing of a new product category distinct
from vanaspati so as to help product diversification and meet
changing consumer needs.
2) Economic Factors
India is 4th largest oilseeds and edible oils producing country in the
world next to USA, China and Brazil contributing to 9.3% of world’s
total oilseed production.
Adani has 50:50 Joint venture with Asia’s largest edible oil
producing company – Wilmar International (Singapore).
India’s GDP was 7.5% in 2004-05 which fluctuated and finally came
down to 6.5% in 2011-12.
India’s inflation rate was recorded at 7.45% in October, 2012 by
Ministry of Statistics and Programme Implementation. The inflation
rate has been fluctuating mostly on increasing pattern. This has
impacted Edible oil industry and ultimately agricultural sector.
Addition to this, there was comparably insufficient rainfall in 2012
which has triggered the rise in inflation rate.
The depreciation of the rupee has considerably affected the price of
the edible oil complex in a big way, as we import 60-70% of our
requirement. For instance, in November-December 2011, the price
of refined soya oil shot up by Rs 75 per 10 kg from Rs 651 to Rs
724," says Hanish Kumar Sinha, head, trade and commodity
intelligence group, NCMSL
AWL’s refined oils meet the CODEX, WHO and FAO standards. We
also meets the standards set by AOCS, and have also applied for
HACCP and ISO9001 certification.
Adani Wilmar Limited's Export division was started in 2004, and
our exports markets are the Middle East Countries, South-East
Asian Countries, Africa, Ukraine, etc. AWL has been awarded the
status of Trading House, by the Government of India.
“Fortune” was awarded as India’s no.1 Edible Oil brand by Nielsen
Retail Audit Index (March-2012)
3) Social Factors
Fortune brand reflects healthy, young and urban middle-class
families.
Fortune promoted guilt-free eating, supported by finest oils, giving
consumers a healthier way to indulge.
First this positioning was strengthened by the campaign “Thoda
Aur Chalega”. But due to constant changes in consumer habits, the
campaign has been revamped as “Joy of Eating” and “Ab Bas, Toot
Pado”.
At AWL, the goal is to help consumers rediscover the happiness of
eating a good, home-cooked meal and enjoy the food.
4) Technological Factors
Refining capacity of 4040 TPD, crushing capacity of 5750 TPD and
hydrogenation capacity at 575 TPD across India at 16 locations.
AWL’s distribution footprint spans the length and breadth of the
country, AWL has 85 stock points catering to more than 5000
distributors, 600 Super Stockists and numerous brokers and other
trade associates. Our retail reach is more than 1,000,000 outlets
and we continue to cater to an ever-growing customer base of over
80 million Indians.
Combined refining capacity of 3200 TPD including major share of
2200 TPD from State-Of-The-Art refinery at Mundra, Kutch
Porter’s Five Forces Model
Threat of Substitutes
The products in FMCG industry are highly substitutable.
For every single product there are many players giving almost the
same product or with some differentiation.
Threat of New Entrants
The well-established brand like Fortune has very huge base of loyal
customers, which will create entry barriers for new entrants.
Also products from Marico can be a threat to the Fortune brand.
Determinant’s of Supplier’s Power
This industry is dependant mostly on the local players for the
supply of raw materials, so here the quality and supply constraints
come in to the picture which affects the company’s growth.
Determinant’s of Buyer’s Power
Since these products are highly substitutable, the number of sellers
in the industry is comparatively very less with respect to the
number of buyers.
The market is also very price sensitive. If a company increases
price of their products, customers have many options to choose
from and they may shift to another brand or company.
Rivalry among existing players
There is intense rivalry present in Edible oil industry because they
produce products with little or no differentiation.
Competitive Strategies for Adani Wilmar
Growing consumer demand for Branded edible oil unlike older
times and Adani Group is a well-known brand by now.
AWL has identified the fact that demand for vegetable oil excess
the National production of vegetable oil and they have largest
edible oil refinery complex with the help of which they can meet
this demand.
They have their own Logistics subsidiary company which eases
their imports, exports and national distribution of their products.
They have a super-strong distribution network than any other
competitor like Ruchi Soya, Marico, etc.