SUMMER INTERNSHIP PROJECT REPORT

Program & Batch:PGDM 2014-2016, Section BRoll No.140103187Name of the StudentVysakh MadhavanName of the academic guide/ faculty:Dr. Ratna VadraProject Title :Premise Cabling: Sales penetration through distributors and channel partnersOrganization Name:3M India Ltd.Original or Revised Write-up:OriginalContact No.9880247212Email idft14vysakhmadhavan@imt.ac.in

Appendix 2

Premise Cabling: Sales Penetration through Distributors and Channel Partners

By

Vysakh Madhavan

140103187

June, 2015Appendix 3

Premise Cabling: Sales Penetration through Distributors and Channel Partners

By

Vysakh Madhavan

140103187

Under the guidance of

Mr. Joe KuriakoseDr. Ratna VadraNational Sales Manager, Assistant. Professor,Communications Market Division,Economics & International Business3M Electro & Communications India Pvt LtdIMT Ghaziabad

June, 2015

Appendix 4

Certificate of Approval

The following Summer Project Report titled "Premise Cabling: Sales Penetration through Distributors and Channel Partners" is hereby approved as a certified study in management carried out and presented in a manner satisfactory to warrant its acceptance as a prerequisite for the award of Post-Graduate Diploma in Management for which it has been submitted. It is understood that by this approval the undersigned do not necessarily endorse or approve any statement made, opinion expressed or conclusion drawn therein but approve the Summer Project Report only for the purpose it is submitted.

Summer Project Report Examination Committee for evaluation of Summer Project Report

NameSignature

1. Faculty Examiner_______________________ ___________________

2. PG Summer Project Co-coordinator_______________________ ___________________

Appendix 5

Certificate from Summer Project Guides

This is to certify that Mr. Vysakh Madhavan a student of the Post-Graduate Diploma in Management, has worked under our guidance and supervision. This Summer Project Report has the requisite standard and to the best of our knowledge no part of it has been reproduced from any other summer project, monograph, report or book.

Faculty GuideOrganizational GuideDesignationDesignationIMT, GhaziabadOrganizationAddressDateDate

Appendix 6Abstract

Premise Cabling: Sales Penetration through distributors and Channel Partners

By

Vysakh Madhavan

3M was formerly known as Minnesota Mining and Manufacturing Company is a US multinational corporation headquartered in St. Paul, Minnesota. 3M is amongst the Fortune 100 companies with annual sales of about $30 billion and an employee strength of 90,000 people worldwide. They have their presence in a wide range of industries and has a wide portfolio of products ranging from adhesives, laminates, abrasives, safety and protection, dental, electronics, car care and many others. It has its operations in 65 countries. The business groups of the company as industrial, consumer, health care, safety and graphics and electronics and energy. The3M electro and communications is a subsidiary of 3M Global. Its a private limited company and is a part of the electronics and energy division. My project was a part of the Communications market division in the 3M Electro and Communication family. It involved finding avenues to increase the sales penetration for the company in the premise cabling or the structured cabling market. This mainly revolves around the voice and data part of the establishments in the corporate world. 3M is a relatively new player in the premise cabling business and was facing a huge competition from players lie TE Connectivity, Commscope, Molex etc. As a part of my project I had to visit the key decision makers of the industry such as top architectural firms, turnkey vendors and major system integrators in Bangalore who were responsible for majority of the projects. These included clients like Cushman & Wakefield, Jones Land LaSalle, Frontier, BNA Systems etc. This business was mainly relationship driven and based on the results of my discussions with these players, I had to devise a mechanism for 3M to effectively penetrate this market and thereby increase the sales for the premise cabling products. I suggested a two thronged approach based on my findings and this involved targeting the SMEs and startups in Bangalore and also the established players in the IT/ITeS segment like Cognizant, Infosys, HCL and IBM.

Appendix 7Acknowledgement

I wish to express my appreciation and thanks to all those with whom I have had the opportunity to work and who have helped me furthering my knowledge and understanding of the subject. I am extremely grateful for the moral support and guidance given to me by my respected Project guides, Professors, Friends and Family Members throughout the duration of my project.

My sincere gratitude goes to my project guide Mr. Joe Kuriakose, National Sales Manager, Communications Market Division, 3M Electro and Communications India Pvt. Ltd without whose valued guidance, encouragement and inspiration, the presentation of this project would have been impossible.

I would also like to thank Mr. Gopalan Ramakrishnan, Vice President, Communications Market Division, 3M Electro and Communications India Pvt. Ltd for assisting me during the tenure of the project and providing his expert advice on key issues in the premise cabling industry,

I am also indebted to my Faculty Guide Dr. Ratna Vadra for monitoring and guiding me through the course of the project. It is her guidance that helped me solve multiple queries and doubts regarding the project.

Vysakh Madhavan140103187IMT Ghaziabad

Appendix 8Table of Contents

Abstract5Acknowledgement 6Table of Contents7List of Figures8List of Tables9List of Appendices10I. Introduction to 3M businesses11II. Objectives12III. Research Design123.1. Research Methodology 123.2. Sample123.3. Sample Collection Technique133.4. Expected Outcome14The Premise Cabling Market in India15Research findings System Integrator16Research findings Turn Key Vendors & Architects18Recommendations20Approach21IV. Reference23

Appendix 9List of Figures

Figure No.Description Page

1. Research Design102. SWOT Analysis of industry133. Market segmentation by category (By volume)154. Concentration of projects in Bangalore165. Market Share of Tier I Competitors17

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Appendix 10List of Tables

Table No.Description Page

1. Branded solutions and suppliers152. Major distributors/wholesalers of premise cabling18

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Appendix 11

List of Appendices

Table No. Description Page

1Cover Page 1 2Second Title 2 3Certificate of Approval3 4Approval of DAC 4 5Certificate from Summer Project Guides56Abstract6 7Acknowledgement78Table of Contents89List of Figures910List of Tables1011List of Appendices 1112Abbreviations12 13References 38

I. Introduction

3M was formerly known as Minnesota Mining and Manufacturing Company and is a US multinational corporation headquartered in St. Paul, Minnesota. 3M is amongst the Fortune 100 companies with annual sales of about $30 billion and an employee strength of 90,000 people worldwide. They have their presence in a wide range of industries and has a wide portfolio of products ranging from adhesives, laminates, abrasives, safety and protection, dental, electronics, car care and many others. It has its operations in 65 countries and boasts of around 75,000 products with thousands of patents in multiple geographies.

The five industry business groups of 3M are: Industrial Consumer Health Care Safety and Graphics Electronics and Energy

The 3M electronics and energy group comprises of eight business units serving the related markets with the relevant technologies. It builds 3M relevance with the multiple global clients in the related areas and focusses on the ability to enhance key technology, manufacturing and marketing activities aimed to grow these at a faster rate.3M Electronics and Energy further comprises of:1. Electronics:a. Optical Systems Divisionb. Electronics Markets Divisionc. Electronic Solutions Divisiond. Touch Systems Division

2. Energy:a. Electrical Markets Divisionb. Renewable Energy Divisionc. Infrastructure Protection Divisiond. Communications Market Division3M Electro and Communications Pvt. Ltd is a wholly owned subsidiary of the 3M Global. This houses the above mentioned divisions including the electronics and communications division. The communications consists of wire line, wireless and premise. The premise includes the various voice and data aspects of organizations and the total end to end connectivity of the passive communication. The passive part comprises of the RJ-45 jacks, 3M volition (copper) and fiber cables, patch cords, splicers, racks, mounts etc. The major competitors in this space include TE Connectivity, Schneider, Commscope, Molex and R&M.

II. Objective

The objectives of this study are:1. To study the market share of competitors in the premise cabling business in India: This is done by surveying multiple decision makers in the industry and getting feedback on the brands used for various projects2. To understand the decision making process while selecting vendors for various premise cabling projects and suggest avenues for 3M to increase its sales in this market

III. Research Design

The project was divided into four phases over a span of two months. The stages included knowledge transfer from technical experts to market research involving the system integrators, turnkey vendors and architects across Bangalore. Finally, the last phase involved the accumulation of findings and recommend suggestions to increase sales penetration

3.1 Research MethodologyPrimary research was conducted on the basis of survey. In depth interviews and client visits were conducted in order to understand the market share of the competitors in the premise cabling industry. These surveys involved multiple architects, turnkey vendors and system integrators.1. In depth interviews with 20 System Integratorsa. System Integrators are responsible for consolidating the devices and items responsible for passive connectivity among the market players in order to successfully provide voice and data to the clientsb. System integrators interact with the OEM as well as the distributors to not only procure the devices but also to gain certifications in order to execute the installation of the systemsThe interview guidelines were designed to understand point (1) of the objectives and then deeply delve into the details which are required for a deal. It also gives an indication of the loyalty of the customers to the brand and the brand recall that these players have

2. In depth interviews with a total of 15 turnkey vendors and commercial architectsa. Architects and Turnkey vendors (like JLL, C&W) play an important role in the IT/ITeS segment where they are deeply involved in the decision making processThe interviews will further help in understanding point (2) of the objectives and a deep insight into the decision making process involved between the turnkey vendors and end clients

3.2 Sample

20 System Integrators who contribute to a majority of 85% of the deals happening in Bangalore and Southern India and who had an annual turnover of at least Rs. 5 Crore 15 Architects and Turnkey vendors who were major national players in the Indian premise cabling business and had major MNC clients in IT/ITeS segment

3.3 Sample Collection Technique

Primary interviews were conducted with the aforementioned players in the market based on the guidelines as below

Interview Guidelines for the System Integrators

1. What are the brands that sell in premise cabling2. Which brand contributes the max to company turnover3. Approximate turn over in SCS Business in your Organization4. What is the Value addition expected from an OEM5. What are the kind of incentive schemes available from other OEMs6. What is the Volume of Stock you maintain in SCS7. Which distributor you do business with on SCS8. What is the preferred delivery time lines for supply9. What is the credit terms expected from Distributor10. What is the approx. value of Billing you do per quarter on SCS11. What is the support they get from OEM12. What is the expected Support / Value add from OEM

Discussion guidelines for Architects and turnkey vendors1. How long have you been into SCS Distribution2. Which Brands are they partnered with for Distribution3. What is the total turnover of their SCS Business4. What is the Business Share of each Brand of SCS in there organization 5. What is the stock level maintained for each OEM 6. Available Incentive schemes for SI from Distributor for each OEM7. What is the rebate % expectations8. Which SI / End Customer do they cater to on a regular basis9. What is the support from OEM10. What kind of Marketing activity they do they engage in

3.4 Expected OutputThese detailed in-depth interviews would give an indication of the decision making process in the premise cabling business and also the market share of the brands and the incentive schemes that are currently being employed by the other players in structured cabling market in the country. This would give 3M insights as to how to increase the sales penetration in this market and grow their revenues.

The Premise Cabling Market in India

SWOT Analysis

Strength (Internal): The 3M brand equity is high and the assurance of quality from 3M products is well known across country as a trusted brand. The global support, financial backing and expertise also adds to 3Ms repertoire.

Weakness (Internal): Despite 3M being a known brand in the market, 3Ms structured cabling products are relatively unknown. It has lost the advantage to competitors who already have captured large chunk of market share. The number of feet on street is also relatively low

Opportunity (External): The emergence of Internet of Things (IoT) presents a huge opportunity to provide infrastructure support. Smart cities initiative by the Government and also the recent inflow of tech companies setting up server farms in India

Threat (External): A lot market consolidation is happening with major players like TE and Commscope becoming one entity. This combined market share and resources of these two top players also poses a huge threat to 3Ms emergence

Research Findings System Integrators

Tier I players have about 75-80% of their business based on Structured Cabling. Tier II players have a contribution of about 20-30% from SCS End Customers decision is the key when it comes to majority of System integrators. PMC play a bigger role for the larger players Incentives: Backend on an average 2-3% depending on the volumes. Plus extra on achieving a particular target (E.g.: 15Cr - Extra 3%) For larger deals especially in SEZs, SI prefer to deal directly with OEM where the delivery time is longer. Smaller deals with (