INDIA
MINI PROJECT REPORT Subject: STRATEGIC STRATEGIC MANAGEMENT
Submitted by MUHAMMED SHEFEEQUE P Regite! Numbe! "#$%&'(()*+ "#$%&'(() *+
MASTER OF ,USSINESS ADMINISTRATION OF ,HARATHI-AR ,HARATHI-AR UNI.ERSIT-
DEPARTMENT OF M,A SAN/ARA CO00EGE OF SCIENCE AND COMMERCE
INTRODUCTION H12e334 India Limited was established in 1958 and is a part of the QRG group, a leading solution provider in the power distribution-euipment industr! in India" #he $ompan! is one of the foremost manufa$turers and suppliers of low-voltage ele$tri$al euipment in the $ountr!" %ave %avell llss Indi Indiaa was was in$o in$orp rpor orat ated ed in 198& 198& is a bill billio ionn-dol dolla larr $omp $ompan an! !" It is enga engaged ged in manufa$turing of ele$tri$al and power distribution euipments" %avells has $reated brands li'e (rabtree, )!lvania, (on$ord, Luminan$e, Linolite, and an d )LI Lighting that are 'nown globall!" globall!" #he %avells group originated as a small trading business in (entral *elhi+s hagirath la$e, whi$h is a wholesale mar'et for ele$tri$al goods" It was promoted b! .r" Qimat Rai Gupta and .r" .r" )ur/it 0umar Gupta, who $ommen$ed their trading operations in the !ear 1958" 1958 " former tea$her in un/ab, the entrepreneur Qimat Rai Gupta bought the %avells brand from one %aveli Ram Gandhi, thereb! moving up from trader to manufa$turer" #he (ompan! was in$orporated as %avells India rivate Limited on 8th ugust, 198& under the (ompanies $t, 1952 and subseuentl! the name was $hanged to %avells India Limited vide $ertifi$ate dated &1st .ar$h, 1993" #his $ompan! manufa$tures ele$tri$al and power distribution euipments ranging from building $ir$uit prote$tion, Industrial 4 *omesti$ swit$hgear, $ables 4 wires, energ! meters, fans, (L lamps, luminaries for domesti$, $ommer$ial 4 Industrial appli$ation and modular swit$hes"
H12e33 I5di1 0imited Ty6e: T!1ded 1: :)67 I5dut!y : F7u5ded : F7u5de! : He1d8u1!te! : /ey 6e763e : P!7duct : Re2e5ue: O6e!1ti5g i5c7me : Net i5c7me :
ubli$ $ompan! )67 51&5 %;6LL) % ;6LL) 6le$tri$al euipment 1958 Qimat Rai Gupta :oida, India nil Rai Gupta <(hairman4 .*= ast .oving 6le$tri$al Goods ₹2,3>"3 $rore 1= ₹28"8& $rore million= <3>1= ₹5&9"> $rore >> professionals in over 5> $ountries"s of 3>12, it has 11 <3>1=
INTRODUCTION H12e334 India Limited was established in 1958 and is a part of the QRG group, a leading solution provider in the power distribution-euipment industr! in India" #he $ompan! is one of the foremost manufa$turers and suppliers of low-voltage ele$tri$al euipment in the $ountr!" %ave %avell llss Indi Indiaa was was in$o in$orp rpor orat ated ed in 198& 198& is a bill billio ionn-dol dolla larr $omp $ompan an! !" It is enga engaged ged in manufa$turing of ele$tri$al and power distribution euipments" %avells has $reated brands li'e (rabtree, )!lvania, (on$ord, Luminan$e, Linolite, and an d )LI Lighting that are 'nown globall!" globall!" #he %avells group originated as a small trading business in (entral *elhi+s hagirath la$e, whi$h is a wholesale mar'et for ele$tri$al goods" It was promoted b! .r" Qimat Rai Gupta and .r" .r" )ur/it 0umar Gupta, who $ommen$ed their trading operations in the !ear 1958" 1958 " former tea$her in un/ab, the entrepreneur Qimat Rai Gupta bought the %avells brand from one %aveli Ram Gandhi, thereb! moving up from trader to manufa$turer" #he (ompan! was in$orporated as %avells India rivate Limited on 8th ugust, 198& under the (ompanies $t, 1952 and subseuentl! the name was $hanged to %avells India Limited vide $ertifi$ate dated &1st .ar$h, 1993" #his $ompan! manufa$tures ele$tri$al and power distribution euipments ranging from building $ir$uit prote$tion, Industrial 4 *omesti$ swit$hgear, $ables 4 wires, energ! meters, fans, (L lamps, luminaries for domesti$, $ommer$ial 4 Industrial appli$ation and modular swit$hes"
H12e33 I5di1 0imited Ty6e: T!1ded 1: :)67 I5dut!y : F7u5ded : F7u5de! : He1d8u1!te! : /ey 6e763e : P!7duct : Re2e5ue: O6e!1ti5g i5c7me : Net i5c7me :
ubli$ $ompan! )67 51&5 %;6LL) % ;6LL) 6le$tri$al euipment 1958 Qimat Rai Gupta :oida, India nil Rai Gupta <(hairman4 .*= ast .oving 6le$tri$al Goods ₹2,3>"3 $rore 1= ₹28"8& $rore million= <3>1= ₹5&9"> $rore >> professionals in over 5> $ountries"s of 3>12, it has 11 <3>1=
T7t13 1et : Numbe! 7' em637yee : Di2ii75 :
9ebite :
₹,959"99
$rore million= <3>1=B3C
2>>> L; .otors, %ome and 0it$hen pplian$es, Lighting, (onsumer and Industrial )wit$hgear,(ables and Dires, 6le$tri$al 6uipment www"havells"$om
.ISION T7 be 1 g37b133y !ec7g5ied c7!67!1ti75 t;1t 6!72ide bet e3ect!ic13 < 3ig;ti5g 73uti75= De3i2e!ed by bet>i5>c31 6e763e "
MISSION T7 1c;ie2e 7u! 2ii75 t;!7ug; '1i!5e= bui5e et;ic= g37b13 !e1c;= tec;5737gic13 E?6e!tie= bui3di5g 375g te!m !e31ti75;i6 @it; 133 7u! 17ci1te= cut7me!= 61!t5e!= 15d em637yee
.A0UES
Customer Delight: A c7mmitme5t t7 u!61i5g 7u! cut7me! e?6ect1ti75
0e1de!;i6 by e?1m63e: A c7mmitme5t t7 et t15d1!d i5 7u! bui5e 15d t!151cti75 b1ed 75 mutu13 t!ut
I5teg!ity 15d T!1561!e5cy: A c7mmitme5t t7 be et;ic13= i5ce!e 15d 76e5 i5 7u! de13i5g
Pu!uit 7' E?ce33e5ce: A c7mmitme5t t7 t!i2e !e3e5t3e3y= t7 c75t15t3y im6!72e 7u!e32e= 7u! te1m= 7u! e!2ice 15d 6!7duct 7 1 t7 bec7me t;e bet i5 c31
O,JECTI.ES
Reduce COB emii75 *evelop and manufa$ture energ! effi$ient produ$ts
Im6!72e e52i!75me5t13 6!7tecti75 Redu$e haEardous substan$es and improve waste management
Im6!72e 8u13ity 7' 3i'e (reate sense of well-being with a superior ualit! of light
O''e! 6!7'it1b3e 173uti75 t7 m1!et etter effi$ien$!, sustainablil! and longer produ$t life
C7m615y 6!7duct %avells manufa$tures produ$ts su$h as industrial and domesti$ $ir$uit prote$tion swit$hgears, $ables and wires, motors, fans, power $apa$itors, (L lamps, luminaires for domesti$, $ommer$ial and industrial appli$ations, modular swit$hes, and bath fittings $overing the entire range of household, $ommer$ial and industrial ele$tri$al needs"
uilding (ir$uit rote$tion (apa$itors ans ath fittings and $$essories Industrial (ir$uit rote$tion Lighting .odular late )wit$hes .otors (L (ables and Dire uilding (ir$uit rote$tion .iniature (ir$uit rea'er Isolator (hangeover )wit$h Residual (urrent (ir$uit rea'er R(F *istribution oard Indi$ator Light (apa$itors :ormal *ut! %eav! *ut! )uper %eav! *ut! gri$ulture *ut! .otor Run (apa$itors
ans (eiling ans #able ans Dall .ounting ans edestal ans ir (ir$ulator ans ;entilating ans Industrial (ir$uit rote$tion ir (ir$uit rea'er
.(( anel oard )!stem (hangeover )wit$h !-ass (hangeover )wit$h utomati$ #ransfer )wit$h )wit$h *is$onne$tor Load (hangeover )wit$h (ontrol Gear )wit$h *is$onne$tor use use )wit$h and )wit$h use (hamber )!stem use %older :!lon use ase use Lin' and use ase Lighting L6* Lighting (onsumer Lighting (Fmmer$ial Lighting *own Lighter Lands$ape-un'er Lighting Industrial Lighting rea Lighting Road Lighting )pe$ialit! lamps $$essories
ura Lighting .odular late )wit$hes %avells .odular )wit$hes (rabtree .odular )wit$hes .otors oot .ounting lange .otor lange .otor oot (um lange Inverter *ut! .otors with or$ed (ooling (rane *ut! .otors ra'e .otors (L Retrofit :on Retrofit %igher Range Liliput L (ables and Dires
ower (ables - luminium (ontrol (ables - (opper (opper leible (ables I5teg!1ted e!2ice: IL have the abilit! to provide $ustomers with an integrated range of $asting, ma$hining and sub-assembl! $apabilities" #he $ompan! ma'es a number of $asting modules for engines and transmission $omponents, whi$h are t!pi$all! $omplementar! to ea$h other" .oving down the value $hain into $asting has enabled the $ompan! to in$rease the produ$t range, provide a budled servi$e to its $ustomers and $ontrol more effe$tivel! raw material pri$es, pro$ess and wastages"
MAJOR PRODUCTS OF CRA,TREE:
MODU0AR S9ITCHES RANGE THAMES PICCADI00ATHENA
UNDEF0OOR ,O CASA
DIGITA0 DIMMING AND ENERG- MANAGEMENT S-STEM AURA PRO AURA I9D AURA I9S MOTION SENSOR
MERGERS < ACQUISITION #he phrase mergers and a$uisitions
CRA,TREE
H #owers and #ransformers Ltd in 198&" H 1992 oint ;enture with (rabtree .odular late )wit$hes, *u'e rni$s,
*JG German!"
H L6R:I:G RF. .I)#06)7 Lost bid for 6le$trium to )iemens b! 8 million pounds" Learned how to mobiliEe funding and to deal with $omple issues of merger and a$uisitions" H GR:* #06F;6R .ar$h 3>>7H )LI )KL;I:I7 3&5"5 million 6uros led b! ar$la!s (apital finan$es H 6ntr! into 6urope, Latin meri$a and sia a$ifi$
F1ct7! '7! Succe: 1" I5te!51ti7513 166!7213 7 su$h as (), 06., (, (6, )#, )6.0F, )IRI?. <.ala!sia=, 6:FR <)pain=, et$ or its various produ$ts"
6ntr! into international mar'ets"
3" )trategi$ llian$es and (ontinuous enri$hment of eisting business
&" #he produ$tion of ans in ta free Eones of ?ttaran$hal
" Integrating into stores
H7@ St!1tegic t;e Ac8uiiti75 @1
H (an 'eep eisting manufa$turing fa$ilities in 6urope, but will $reate additional $apa$ities in low $ost India H %avells substitute (hinese eport to )!lvania H %avells will leverage )!lvania distribution in 6urope, ?) and Latin H meri$a for margin ri$h swit$h gear produ$ts H )!lvania R 4 * pra$ti$es $an transform %avells H %avells $an use )!lvania multi brand strateg! for different mar'ets
)!lvaniaMs a$uisition is a first step towards attaining leading position in the global lighting industr! with a strong presen$e in the developed mar'ets of 6urope and high growth Latin meri$an mar'ets" #his a$uisition will provide us a platform with strong brands and established distribution $hannels on whi$h %avells $an build on" urther, the management team responsible for )LI )!lvaniaMs turnaround will $ontinue to remain with the business and grow the $ombined organiEation #he management team is etremel! e$ited about the #ransa$tion and believes that )LI )!lvania is well-poised to effe$tivel! eploit the opportunities ahead with signifi$ant s!nergies to be realiEed b! the $ombined organiEationN"
T;e 213ue c;1i5= 137 57@5 1 213ue c;1i5 1513yi , is a $on$ept from business management that was first des$ribed and populariEed b! .i$hael orter in his 1985 best-seller, (ompetitive dvantage7 (reating and )ustaining )uperior erforman$e"
value $hain is a $hain of a$tivities for a firm operating in a spe$ifi$ industr!" #he business unit is the appropriate level for $onstru$tion a value $hain, not the divisional level or $orporate level" rodu$ts pass through all a$tivities of the $hain in order and at ea$h a$tivit! the produ$t gains some value" #he $hain of a$tivities gives the produ$ts more added value than the sum of added values of all a$tivities" It is important not to mi the $on$ept of the value $hain with the $osts o$$urring throughout the a$tivities" diamond $utter $an be used as an eample of the differen$e" #he $utting a$tivit! ma! have a low $ost, but the a$tivit! adds mu$h of the value to the end produ$t, sin$e a rough diamond is signifi$antl! less valuable than a $ut diamond" #!pi$all!, the des$ribed value $hain and the do$umentation of pro$esses, assessment and auditing of adheren$e to the pro$ess routines are at the $ore of the ualit! $ertifi$ation of the business, e"g" I)F 9>>1" #he value $hain $ategoriEes the generi$ value-adding a$tivities of an organiEation" #he primar! a$tivities in$lude7 inbound logisti$s, operations s"
Si? bui5e 'u5cti75 7' t;e .13ue C;1i5:
H
Resear$h and *evelopment
H
*esign of rodu$ts, )ervi$es, or ro$esses
H
rodu$tion
H
.ar'eting 4 )ales
H
*istribution
H
(ustomer )ervi$e
.13ue c;1i5 1513yi T;e .13ue C;1i5
ll of the fun$tions of the $ompan! Osu$h as produ$tion, mar'eting, R4*, servi$e, information s!stems, material management, and human resour$es-have a role in lowering the $ost stru$ture and in$reasing the per$eived value of the produ$ts through differentiation" #he term .A0UE CHAIN refers to the idea that a $ompan! is a $hain of a$tivities for transforming inputs into outputs that $ustomers value" #he pro$ess of transformation is $omposed of a nu mber of primar! a$tivities and support a$tivities that add value to the produ$t"
P!im1!y Acti2itie
Research & Developmen
Marketng Producton
& Sales
Cusomer service
Company
Informaton
Maerials
Human
Infrasrucure
Sysems
Managemen
Resources
Su667!t Acti2itie
C75ite5t 213ue c!e1ti75:
(onsistent profitable growth over the last 1> !ears >P (GR )ales - 3 and # - 58 &> uarters of $onse$utive growth 1>-!ear 6*I# and # (GR in e$ess of >P Frgani$ growth led b! gaining mar'et share in eisting rodu$ts, laun$h of new branded, $onsumer produ$ts )ignifi$ant brand emphasis to $reate a strong differentiator with .(G li'e pa$'aging, promotions and advertisements" (onsumer pull evenl! mat$hed with a well entren$hed distribution networ' %igh Ro(6 and Ro6 $reating shareholder value"
,u7y15t e5d ue! egme5t:
Infrastru$ture, power and $onstru$tion 'e! user segments" )ignifi$ant investment planned with greater fo$us on infrastru$ture development" Large investment in real estate and power se$tors" )tru$tural $hanges in the underl!ing bu!ing patterns" *istin$tive shift from un-organiEed to organiEed )egment" In$reased brand awareness for hitherto $ommoditiEed produ$ts Owires and $ables" Growing prote$tion awareness" In$reasing affordabilit! and willingness to pa! for ualit! produ$ts" Large opportunities for ualit!, branded and well distributed produ$t $ompanies li'e %avell+s"
S9OT A513yi: S9OT A513yi is a t!1tegic 63155i5g met;7d used to evaluate the St!e5gt;= 9e15ee= O667!tu5itie= 15d T;!e1t involved in a pro/e$t or in a business venture" It involves spe$if!ing the ob/e$tive of the business venture or pro/e$t and identif!ing the internal and eternal fa$tors that are favorable and unfavorable to a$hieving that ob/e$tive"
)DF# anal!sis must first start with defining a desired en d state or ob/e$tive" )DF# anal!sis ma! be in$orporated into the strategi$ planning model" )trategi$ lanning, in$luding )DF# and )(: anal!sis, has been the sub/e$t of mu$h resear$h" H
St!e5gt; 7 attributes of the person or $ompan! that are helpful to a$hieving the ob/e$tive"
H 9e15ee7 attributes of the person or $ompan! that are harmful to a$hieving the ob/e$tive" H
O667!tu5itie 7 eternal $onditions that are helpful to a$hieving the ob/e$tive"
H
T;!e1t7 eternal $onditions whi$h $ould do damage to the ob/e$tive"
Identifi$ation of )DF#s is essential be$ause subseuent steps in the pro$ess of planning for a$hievement of the sele$ted ob/e$tive ma! be derived from the )DF#s" irst, the de$ision ma'ers have to determine whether the ob/e$tive is attainable, given the )DF#s" If the ob/e$tive is :F# attainable a different ob/e$tive must be sele$ted and the pro$ess repeated" #he )DF# anal!sis is often used in a$ademia to highlight and identif! strengths, wea'nesses, opportunities and threats B$itation neededC" It is parti$ularl! helpful in identif!ing areas for development B$itation neededC"
M1tc;i5g 15d c752e!ti5g
nother wa! of utiliEing )DF# is mat$hing and $onverting" .at$hing is used to find $ompetitive advantages b! mat$hing the strengths to opportunities" (onverting is to appl! $onversion strategies to $onvert wea'nesses or threats into strengths or opportunities" n eample of $onversion strateg! is to find new mar'ets"
If the threats or wea'nesses $annot be $onverted a $ompan! should tr! to minimiEe or avoid them" E2ide5ce 75 t;e Ue 7' S9OT
)DF# anal!sis ma! limit the strategies $onsidered in the evaluation" " )$ott rmstrong notes that people who use )DF# might $on$lude that the! have done an adeuate /ob of planning and ignore su$h sensible things as defining the firmMs ob/e$tives or $al$ulating RFI for alternate strategies" indings from .enon et al" <1999= and %ill and Destbroo' <199= have shown that )DF# ma! harm performan$e" s an alternative to )DF#, rmstrong des$ribes a 5-step approa$h alternative that leads to better $orporate performan$e" #hese $riti$isms are addressed to an old version of )DF# anal!sis that pre$edes the )DF# anal!sis des$ribed above under the heading )trategi$ and (reative ?se of )DF# nal!sis" #his old version did not reuire that )DF#s be derived from an agreed upon ob/e$tive" 6amples of )DF# anal!ses that do not state an ob/e$tive are provided below under %uman Resour$es and .ar'eting"
I5te!513 15d e?te!513 '1ct7! #he aim of an! )DF# anal!sis is to identif! the 'e! internal and eternal fa$tors that are important to a$hieving the ob/e$tive" #hese $ome from within the $ompan!Ms uniue value $hain" )DF# anal!sis groups 'e! pie$es of information into two main $ategories7 H
Internal fa$tors O #he strengths and wea'nesses internal to the organiEation"
H 6ternal fa$tors O #he opportunities and threats presented b! the eternal environment to the organiEation" - ?se a 6)# or 6)#L6 anal!sis to help identif! fa$tors #he internal fa$tors ma! be viewed as strengths or wea'nesses depending upon their impa$t on the organiEationMs ob/e$tives" Dhat ma! represent strengths with respe$t to one ob/e$tive ma! be wea'nesses for another ob/e$tive" #he fa$tors ma! in$lude all of the Ms as well as personnel, finan$e, manufa$turing $apabilities, and so on" #he eternal fa$tors ma! in$lude ma$roe$onomi$ matters, te$hnologi$al $hange, legislation, and so$io-$ultural $hanges, as well as $hanges in the mar'etpla$e or $ompetitive position" #he results are often presented in the form of a matri" )DF# anal!sis is /ust one method of $ategoriEation and has its own wea'nesses" or eample, it ma! tend to persuade $ompanies to $ompile lists rather than thin' about what is a$tuall! important in a$hieving ob/e$tives" It also presents the resulting lists un$riti$all! and without $lear prioritiEation so that, for eample, wea' opportunities ma! appear to balan$e strong threats" It is prudent not to eliminate too ui$'l! an! $andidate )DF# entr!" #he importan$e of individual )DF#s will be revealed b! the value of the strategies it generates" )DF# item that
produ$es valuable strategies is important" )DF# item that generates no strategies is not important"
Ue 7' S9OT A513yi #he usefulness of )DF# anal!sis is not limited to profit-see'ing organiEations" )DF# anal!sis ma! be used in an! de$ision-ma'ing situation when a desired end-state
)et ob/e$tives O defining what the organiEation is going to do
H
6nvironmental s$anning
o Internal appraisals of the organiEationMs )DF#, this needs to in$lude an assessment of the present situation as well as a portfolio of produ$tsAservi$es and an anal!sis of the produ$tAservi$e life $!$le H nal!sis of eisting strategies, this should determine relevan$e from the results of an internalAeternal appraisal" #his ma! in$lude gap anal!sis whi$h will loo' at environmental fa$tors H )trategi$ Issues defined O 'e! fa$tors in the development of a $orporate plan whi$h needs to be addressed b! the organiEation
H *evelop newArevised strategies O revised anal!sis of strategi$ issues ma! mean the ob/e$tives need to $hange H 6stablish $riti$al su$$ess fa$tors O the a$hievement of ob/e$tives and strateg! implementation H
reparation of operational, resour$e, pro/e$ts plans for strateg! implementation
H .onitoring results O mapping against plans, ta'ing $orre$tive a$tion whi$h ma! mean amending ob/e$tivesAstrategies" M1!eti5g:
In man! $ompetitor anal!ses, mar'eters build detailed profiles of ea$h $ompetitor in the mar'et, fo$using espe$iall! on their relative $ompetitive strengths and wea'nesses using )DF# anal!sis" .ar'eting managers will eamine ea$h $ompetitorMs $ost stru$ture, sour$es of profits, resour$es and $ompeten$ies, $ompetitive positioning and produ$t differentiation, degree of verti$al integration, histori$al responses to industr! developments, and other fa$tors" .ar'eting management often finds it ne$essar! to invest in resear$h to $olle$t the data reuired to perform a$$urate mar'eting anal!sis" $$ordingl!, management often $ondu$ts mar'et resear$h
Qualitative mar'eting resear$h, su$h as fo$us groups
H
Quantitative mar'eting resear$h, su$h as statisti$al surve!s
H
6perimental te$hniues su$h as test mar'ets
H
Fbservational te$hniues su$h as ethnographi$
H .ar'eting managers ma! also design and oversee various environmental s$anning and $ompetitive intelligen$e pro$esses to help identif! trends and inform the $ompan!Ms mar'eting anal!sis"
S9OT A513yi
s$an of the internal and eternal environment is an important part of the strategi$ planning pro$ess" 6nvironmental fa$tors internal to the firm usuall! $an be $lassified as strengths <)= or wea'nesses
strateg! formulation and sele$tion" #he following diagram shows how a )DF# anal!sis fits into an environmental s$an7 S9OT A513yi F!1me@7!
6nvironmental )$an AS Internal nal!sis AS
6ternal nal!sis
AS
)trengths Dea'nesses
Fpportunities #hreats
T S9OT M1t!i? St!e5gt;
firmMs strengths are its resour$es and $apabilities that $an be used as a basis for developing a $ompetitive advantage" 6amples of su$h strengths in$lude7 H
atents
H
)trong brand names
H
Good reputation among $ustomers
H
$ost advantages from proprietar! 'now-how
H
6$lusive a$$ess to high grade natural resour$es
H
avorable a$$ess to distribution networ's
9e15ee
#he absen$e of $ertain strengths ma! be viewed as a wea'ness" or eample, ea$h of the following ma! be $onsidered wea'nesses7 H
La$' of patent prote$tion
H
wea' brand name
H
oor reputation among $ustomers
H
%igh $ost stru$ture
H
La$' of a$$ess to the best natural resour$es
H
La$' of a$$ess to 'e! distribution $hannels
In some $ases, a wea'ness ma! be the flip side of strength" #a'e the $ase in whi$h a firm has a large amount of manufa$turing $apa$it!" Dhile this $apa$it! ma! be $onsidered a strength that $ompetitors do not share, it also ma! be a $onsidered a wea'ness if the large investment in manufa$turing $apa$it! prevents the firm from rea$ting ui$'l! to $hanges in the strategi$ environment" O667!tu5itie
#he eternal environmental anal!sis ma! reveal $ertain new opportunities for profit and growth" )ome eamples of su$h opportunities in$lude7 H
n unfulfilled $ustomer need
H
rrival of new te$hnologies
H
loosening of regulations
H
Removal of international trade barriers
T;!e1t
(hanges in the eternal environmental also ma! present threats to the firm" )ome eamples of su$h threats in$lude7 H
)hifts in $onsumer tastes awa! from the firmMs produ$ts
H
6mergen$e of substitute produ$ts
H
:ew regulations
H
in$reased trade barriers
#he )DF# .atri
firm should not ne$essaril! pursue the more lu$rative opportunities" Rather, it ma! have a better $han$e at developing a $ompetitive advantage b! identif!ing a fit between the firmMs strengths and up$oming opportunities" In some $ases, the firm $an over$ome a wea'ness in order to prepare itself to pursue a $ompelling opportunit!" #o develop strategies that ta'e into a$$ount the )DF# profile, a matri of these fa$tors $an be $onstru$ted" #he )DF# matri
)DF# A #FD) .atri )trengths
Dea'nesses
Fpportunities )-F strategies D-F strategies
#hreats
)-# strategies D-# strategies
H
)-F strategies pursue opportunities that are a good fit to the $ompan!Ms strengths"
H
D-F strategies over$ome wea'nesses to pursue opportunities"
H )-# strategies identif! wa!s that the firm $an use its strengths to redu$e its vulnerabilit! to eternal threats" H D-# strategies establish a defensive plan to prevent the firmMs wea'nesses from ma'ing it highl! sus$eptible to eternal threats" )DF# nal!sis *is$over :ew Fpportunities" .anage and 6liminate #hreats" )DF# nal!sis is a powerful te$hniue for understanding !our )trengths and Dea'nesses, and for loo'ing at the Fpportunities and #hreats !ou fa$e" ?sed in a business $ontet, it helps !ou $arve a sustainable ni$he in !our mar'et" ?sed in a personal $ontet, it helps !ou develop !our $areer in a wa! that ta'es best advantage of !our talents, abilities and opportunities" (li$' here for usiness )DF# nal!sis, and here for ersonal )DF# nal!sis"
,ui5e S9OT A513yi
Dhat ma'es )DF# parti$ularl! powerful is that, with a little thought, it $an help !ou un$over opportunities that !ou are well pla$ed to eploit" nd b! understanding the wea'nesses of !our business, !ou $an manage and eliminate threats that would otherwise $at$h !ou unawares" .ore than this, b! loo'ing at !ourself and !our $ompetitors using the )DF# framewor', !ou $an start to $raft a strateg! that helps !ou distinguish !ourself from !our $ompetitors, so that !ou $an $ompete su$$essfull! in !our mar'et" H7@ t7 Ue t;e T773
#o $arr! out a )DF# nal!sis, start b! downloading our free template" #hen answer the following uestions7 )trengths7 H
Dhat advantages does !our $ompan! haveU
H
Dhat do !ou do better than an!one elseU
H
Dhat uniue or lowest-$ost resour$es do !ou have a$$ess toU
H
Dhat do people in !our mar'et see as !our strengthsU
H
Dhat fa$tors mean that !ou get the saleU
(onsider this from an internal perspe$tive, and from the point of view of !our $ustomers and people in !our mar'et" e realisti$7 ItMs far too eas! to fall pre! to not invented here s!ndrome"
Dea'nesses7 H
Dhat $ould !ou improveU
H
Dhat should !ou avoidU
H
Dhat are people in !our mar'et li'el! to see as wea'nessesU
H
Dhat fa$tors lose !ou salesU
gain, $onsider this from an internal and eternal basis7 *o other people seem to per$eive wea'nesses that !ou do not seeU re !our $ompetitors doing an! better than !ouU It is best to be realisti$ now, and fa$e an! unpleasant truths as soon as possible" Fpportunities7 H
Dhere are the good opportunities fa$ing !ouU
H
Dhat are the interesting trends !ou are aware ofU
?seful opportunities $an $ome from su$h things as7 H
(hanges in te$hnolog! and mar'ets on both a broad and narrow s$ale"
H
(hanges in government poli$! related to !our field"
H
(hanges in so$ial patterns, population profiles, lifest!le $hanges"
H
Lo$al events"
useful approa$h for loo'ing at opportunities is to loo' at !our strengths and as' !ourself whether these open up an! opportunities" lternativel!, loo' at !our wea'nesses and as' !ourself whether !ou $ould $reate opportunities b! eliminating them" #hreats7 H
Dhat obsta$les do !ou fa$eU
H
Dhat is !our $ompetition doing that !ou should be worried aboutU
H
re the reuired spe$ifi$ations for !our /ob, produ$ts or servi$es $hangingU
H
Is $hanging te$hnolog! threatening !our positionU
H
*o !ou have bad debt or $ash-flow problemsU
H
(ould an! of !our wea'nesses seriousl! threaten !our businessU
(arr!ing out this anal!sis will often be illuminating O both in terms of pointing out what needs to be done, and in putting problems into perspe$tive" )trengths and wea'nesses are often internal to !our organiEation" Fpportunities and threats often relate to eternal fa$tors" or this reason the )DF# nal!sis is sometimes $alled Internal6ternal nal!sis and the )DF# .atri is sometimes $alled an I6 .atri nal!sis #ool" Kou $an also appl! )DF# nal!sis to !our $ompetitors" s !ou do this, !ouMll start to see how and where !ou should $ompete against them" #ip 17 .a'e sure !ou visit our net arti$le M6)# nal!sisM - this tool is useful for understanding the Mbig pi$tureM of the environment !ou are operating in and will help !ou identif! the opportunities and threats within it" #ip 37 )DF# $an be used in two wa!s O as a simple i$ebrea'er helping people get together and 'i$' off strateg! formulation, or in a more sophisti$ated wa! as a serious strateg! tool" If !ouMre using it as a serious tool, ma'e sure !ouMre rigorous in the wa! !ou appl! it7 H Fnl! a$$ept pre$ise, verifiable statements <(ost advantage of ?)@1>Aton in sour$ing raw material , rather than Good value for mone!=" H Ruthlessl! prune long lists of fa$tors, and prioritiEe fa$tors so that !ou spend !our time thin'ing about the most signifi$ant fa$tors" H .a'e sure that options generated are $arried through to later stages in the strateg! formation pro$ess" H ppl! it at the right level O for eample, at produ$t or produ$t line level, rather than at the mu$h vaguer whole $ompan! level" H )upplement it with other option-generation tools O none is li'el! to be $ompletel! $omprehensive" 6ample
start-up small $onsultan$! business might draw up the following )DF# matri7 )trengths7 H De $an respond ver! ui$'l! as we have no red tape, no need for higher management approval" H De $an give reall! good $ustomer $are, as the $urrent small amount of wor' means we have plent! of time to devote to $ustomers" H
Fur lead $onsultant has strong reputation within the mar'et"
H
De $an $hange dire$tion ui$'l! if our approa$h isnMt wor'ing"
H
De have little overhead, so $an offer good value to $ustomers"
Dea'nesses7 H
Fur $ompan! has no mar'et presen$e or reputation"
H
De have a small staff with a shallow s'ills base in man! areas"
H
De are vulnerable to vital staff being si$', leaving"
H
Fur $ash flow will be unreliable in the earl! stages"
Fpportunities7 H
Fur business se$tor is epanding, with man! future opportunities for su$$ess"
H
Fur lo$al $oun$il wants to en$ourage lo$al businesses with wor' where possible"
H
Fur $ompetitors ma! be slow to adopt new te$hnologies"
#hreats7 H
Dill developments in te$hnolog! $hange this mar'et be!ond our abilit! to adaptU
H small $hange in fo$us of a large $ompetitor might wipe out an! mar'et position we a$hieve" #he $onsultan$! ma! therefore de$ide to spe$ialiEe in rapid response, good value servi$es to lo$al businesses" .ar'eting would be in sele$ted lo$al publi$ations, to get the greatest possible mar'et presen$e for a set advertising budget" #he $onsultan$! should 'eep up-to-date with $hanges in te$hnolog! where possible"
/ey P7i5t
)DF# nal!sis is a simple but powerful framewor' for anal!Eing !our $ompan!Ms )trengths and Dea'nesses, and the Fpportunities and #hreats !ou fa$e" #his helps !ou to fo$us on !our strengths, minimiEe threats, and ta'e the greatest possible advantage of opportunities available to !ou"
C7m6etiti2e Ad215t1ge $ompan! has a $ompetitive advantage over its rivals when its profitabilit! is greater than the average profitabilit! for all $ompanies in its industr!" #he goal of mu$h of business strateg! is to a$hieve a sustainable $ompetitive advantage" It has a sustained $ompetitive advantage when it is able to maintain above average profitabilit! over a number of !ears" (ompetitive advantage $an $ome in one or $ombination of the following fa$tors7 ri$e, servi$e, ualit!, lo$ation, or imbedded $ustomer base" #he better !our business performs against one of these fa$tors, the more li'el! !ou are to su$$eed"
#wo basi$ t!pes of $ompetitive advantage7 H
(ost advantage
H
*ifferentiation advantage
$ompetitive advantage eists when the firm is able to deliver the same benefits as $ompetitors but at a lower $ost <$ost advantage=, or deliver benefits that e$eed those of $ompeting produ$ts
A M7de3 O' C7m6etiti2e Ad215t1ge:
Resources
Cos !dvanage
Distnctve
"r
Compeencies
$alue Creaton
Di#erentaton !dvanage
Capailites
C7m6etiti2e Ad215t1ge i5 c1e 7' C!1bt!ee S@itc;e: Qu13ity is important in almost ever! industr!" eople do not li'e to pa! good mone! for wor'Aprodu$t that has to soon be redone or have to pur$hase a new unit that fails prematurel!" ! that I mean faster than epe$ted" Fver the long term produ$ing higher ualit! is almost alwa!s less epensive as !ou don+t have to deal with as man! returns, or as mu$h s$rap, or rewor'"
(rabtree fo$uses a lot on produ$ing ualit! swit$hes, whi$h $an be felt b! usage of its swit$hes" )ome of the 'e! features that the! offer in terms of ualit! are7 W%eav! plasti$ material W)imple and bold Loo's W)afe lo$'ing s!stem
W:o (olour ading
(rabtree offers a premium segment produ$t, the! are bought in the mar'et be$ause of the brand euit! the! have $reated with their $ustomer base" (rabtree swit$hes have a differentiation advantage" It has resour$es and $apabilities whi$h $an be as$ertained on the basis of following7 H
atents and trademar's
H
roprietar! 'now-how
H
Installed $ustomer base
H
Reputation of the firm
H
rand euit!
6ven the advertisements of the $ompan! fo$us on their $ore $ompeten$! that is produ$ing ualit! produ$t and $reating value" Last but not the least, the $ompan! has $reated a value $hain with the series of a$tivities, whi$h has helped in $reating value amongst the $ustomer base"
HA.E004S RESEARCH AND DE.E0OPMENT Ree1!c; 15d De2e376me5t
Innovation is the hallmar' of ever! vital development at havell+s Group" :ew ideas, inventions deepen s$ientifi$ 'nowledge and give its wor' for$e a new impetus towards te$hni$al progress" %avell+s te$hnologi$al strengths and its endeavor towards $ontinuous resear$h 4 development have allowed it to fulfill its responsibilities towards its $ustomers" #he responsibilit! of providing its $ustomers the best produ$ts and Eero defe$t servi$es to enable them to be $omfortable and se$ure in usage of ele$tri$it!" %avells has re$entl! invested 5> $rores in the havell+s (enter for Resear$h and Innovation, set-up at the $ompan!Ms %ead Fffi$e premises in :oida, ?"" #he ob/e$tive of this $entre is to provide the theoreti$al 4 eperimental foundations for all segments of ele$tri$al engineering" #he $entre $losel! $ooperates with the various departments so as to provide the best and the latest in terms of te$hnolog! and design"
Qu13ity C75t!73
#he essen$e of ualit! is $losel! wrapped in the wa! the! thin', plan and wor'" It finds its true epression when the! etend be!ond themselves to e$eed our $ustomer+s epe$tations" #o deliver produ$ts those are safer, faster and simpl! better" 6a$h time, ever! time" uilding $ustomer $onfiden$e through teamwor' is a top priorit! to provide a wide variet! of produ$ts and servi$es" Realising and respe$ting the basi$ needs of $ustomers to feel more se$ure, the!+ve $ommitted themselves to ma'e their produ$ts better, safer and smarter than what he or she is loo'ing for" #hatMs a passion that began &> !ears ago and thatMs how it $ontinues to be even toda!" $ustomers rel! on havells and it is responsible to give them the ver! best" ll their produ$ts are as per I6( standards" %avells has a simple rule on ualit!" If it doesnMt e$eed $ustomer epe$tation, itMs not ualit! performan$e"
HA.E004S ,USINESS SEGMENT
%avellMs India operates in the business of swit$h gear, $able 4 wire and ele$tri$al $onsumer durables" #his $ompan! is largest manufa$turers of .(s, R((s and distribution boards in India" #his $ompan! also manufa$tures a $omprehensive range of industrial swit$hgear produ$ts in$luding .((s, fuse swit$hes, fuses, $hangeover swit$hes, $ontra$tors et$"
%avells produ$es a $omplete range of low and high voltage ;( and XL6 $ables besides domesti$ RARI) wires, (o-ial #; and #elephone $ables" #he $ompan! is re$ognised as ualit! manufa$turers of $able with a ma/or presen$e in the $ountr!, resulting in fast growth in volume" %avellMs has a strong brand name in ele$tri$al $onsumer goods and a brand leader in $ompa$t fluores$e
Re7u!ce 15d C161bi3itie
$$ording to the resour$e-based view, in order to develop a $ompetitive advantage the firm must have resour$es and $apabilities that are superior to those of its $ompetitors" Dithout this superiorit!, the $ompetitors simpl! $ould repli$ate what the firm was doing and an! advantage ui$'l! would disappear" Resour$es are the firm-spe$ifi$ assets useful for $reating a $ost or differentiation advantage and that few $ompetitors $an a$uire easil!" #he following are some eamples of su$h resour$es7 H
atents and trademar's
H
roprietar! 'now-how
H
Installed $ustomer base
H
Reputation of the firm
H
rand euit!
C161bi3itie refer to the firmMs abilit! to utiliEe its resour$es effe$tivel!" n eample of a $apabilit! is the abilit! to bring a produ$t to mar'et faster than $ompetitors" )u$h $apabilities are embedded in the routines of the organiEation and are not easil! do$umented as pro$edures and thus are diffi$ult for $ompetitors to repli$ate"
#he firmMs resour$es and $apabilities together form its distin$tive $ompeten$ies" #hese $ompeten$ies enable innovation, effi$ien$!, ualit!, and $ustomer responsiveness, all of whi$h $an be leveraged to $reate a $ost advantage or a differentiation dvantage"
C7t Ad215t1ge 15d Di''e!e5ti1ti75 Ad215t1ge
(ompetitive advantage is $reated b! using resour$es and $apabilities to a$hieve either a lower $ost stru$ture or a differentiated produ$t" firm positions itself in its industr! through its $hoi$e of low $ost or differentiation" #his de$ision is a $entral $omponent of the firmMs $ompetitive strateg!" nother important de$ision is how broad or narrow a mar'et segment to target"
.13ue C!e1ti75
#he firm $reates value b! performing a series of a$tivities that are identified as the value $hain" In addition to the firmMs own value-$reating a$tivities, the firm operates in a value s!stem of verti$al a$tivities in$luding those of upstream suppliers and downstream $hannel members" #o a$hieve a $ompetitive advantage, the firm must perform one or more value $reating a$tivities in a wa! that $reates more overall value than do $ompetitors" )uperior value is $reated through lower $osts or superior benefits to the $onsumer
:
)hri )urender 0umar #ute/a
(hairman
7
)hri ;i/a! 0umar (hopra
.ember
7
)mt ratima Ram
.ember
7
)hri )ur/it 0umar Gupta
.ember (ommittee
7 7
)ta'eholders RelationshipAGrievan$e Redressal *r" darsh 0ishore
(hairman
7
)hri )urender 0umar #ute/a
.ember
7 )hri )ur/it 0umar Gupta
.ember
7 )hri nil Rai Gupta
Nomination And Remuneration Committee
(hairman
7 )hri ;i/a! 0umar (hopra
.ember
7 )hri )urender 0umar #ute/a
.ember
7 )hri )ur/it 0umar Gupta
Corporate Social Responsibility Committee
(hairman
7 )hri ;ella!an )ubbiah
.ember
7
)hri )urender 0umar #ute/a
.ember
7
*r" darsh 0ishore
.ember
7 )hri Ra/esh 0umar Gupta
Enterprises Risk Management Committee
(hairman
7 )mt ratima Ram
.ember
7 )hri nil Rai Gupta
.ember
7 )hri Ra/esh 0umar Gupta
