Professional Documents
Culture Documents
Submitted in partial fulfillment of the requirements of Master of Business Administration (MBA) Kurukshetra University, Kurukshetra
Department of Management Studies NC College of Engineering Israna, Panipat SESSION 2011 2013
INDEX
S NO TOPICS 1. CERTIFICATE 2. 3. ACKNOWLEDGMENT Introduction literature Business of company 4. 9. 10. 11. 12. 13. 14. 15. Achievements Founder & board of directors Distribustion Channels Promotions done by company Secondary Data Industry Analysis Products of the Company Recommendation & Suggestions Bibliography PAGE NO 1 2 3 6 7 8 9 10 12
This is to certify that Mr./Ms. (Student Name) Roll No. MBA 4th sem. has completed his research project entitled (Title of the Research Project) under my supervision. It is his/her original work and fit for evaluation.
DECLARATION
I, , roll no., class..2nd
sem., N.C. College of Engg. Israna, Kurukshetra University, Kurukshetra hereby declare that the project entitled, .. is an original work and the same has been not submitted to any other institute for the award of any other degree.
Chapter 1
COMPANY PROFILE
The company currently manufactures Colour TVs, Black & White TVs and Audio product Videocon produces a sophisticated range of Home Audio Systems, Stereo Radio, Recorders and Personal Stereos, as well as the conteporary international range of Kenwood Digital Hi Fi Systems Continuous upgradation and indigenous manufacturing has been and continues to be an integral part of the company's philosophy. Perceived as an innovator in its fieVideoconhas notched up many exciting firsts, by exploring the world's most advanced technologies. In Colour TVs, Videocon was the first Indian Company to introduce Picture-In-Picture, Turbo Sound, Surround Sound, Larger Screen Sizes, the Full Flat Square Tube, Bazooka technology and the Freedom series : affordable high quality range of Colour TVs for the price-conscious consumer.
Global Ambition
Looking beyond India, Videocon is now a global player, acknowledged by the world. It is the first Indian company to win the prestigious CE approval for exporting its Colour TV to Europe. Videocon is now entering world market with its operations in the Middle East, Europe, Indonesia and South Africa. Videocon Narmada Glass (VNG): a division of Videocon International Ltd., has the distinction of having set up India's first plant for the manufacture of Glass Shells for Color Television Picture Tubes, in technical collaboration with Techneglas Inc., USA (formerly known as OI-NEG TV Products Inc., USA), world leader in Glass Shell Technology. The projects in 1990, when the then Prime Minister of India, the late Shri Rajiv Gandhi, laid the foundation stone for the project. The Videocon Group, with the objective of backward integration, joined hands with Gujarat Narmada Valley Fertilizers Co. Ltd., (GNFC) for the implementation of this 100% import substitution project, the largest investment (Rs. 450 crores) in electronic component industry in the country. The plant, with an installed annual capacity of 1.7 million Glass
Shells for Color Picture Tubes and 0.25 million glass Bulbs for Black & white Picture Tubes and Monochrome Monitor Tubes, is located at Village Chavai, District Bharuch, Gujarat.
Profiles of Leadership
Futuristic Neuro Fuzzy Logic Washing Machines, User-friendly - No-Frost Refrigerators, the very latest music systems. The most sophisticated Colour Television and VCRs. HighTech Air-conditioners. Videocon today, is a multi-faceted group, with 9 state -of-the-art manufacturing facilities all over India. Highly qualified engineers, trained in Japan, backed
by 6500 technical and support staff, work together in close unison to produce India's leading branch of consumer electronic products and home appliances.
HISTORY
Videocon is an Indian multinational with interests in Consumer Electronics, Home Appliances, Colour Picture Tube Glass, and Oil & Gas. Videocon was founded in 1987 by Nandlal Madhavlal Dhoot. At that time it used to manufacture TV and Washing Machine. In 1989-90, Videocon started manufacturing Home Entertainment Systems, Electric Motors & AC. Videocon entered Refrigerators and coolers segment in 1991. In 1995, Videocon started manufacturing Glass shells for CRT and in 1996 it ventured into Kitchen appliances and crude oil segment. By 1998, Videocon started manufacturing Compressors & Compressor Motors. In the year 2000, Videocon tookover Philips Color TV Plant. In 2005, Videocon tookover 3 plants of Electrolux India and acquired Thomson CPT. In March 2010, Videocon Industries Ltd.'s unit, Videocon Telecommunications Ltd., launched mobile services based on the global system for mobile platform. Today, it has evolved into a giant conglomerate with annual revenues of over U$4.1 billion, making it one of the largest consumer electronic and home appliance companies in India. Since 1998, it has expanded its operations globally, especially in the Middle East.
Business of Videocon
Consumer Electronics & Home consumer products like Colour Refrigerators, Microwave ovens refrigerator manufacturing enjoys technology in Bangalore.
Appliances: Videocon enjoys leadership position in Televisions, Washing Machines, Air Conditioners, and numerous other home appliances. Videocons synergy with its inhouse compressor manufacturing
Display industry and its components: After the acquisition of Thomson in 2005, Videocon has emerged as one of the largest Colour Picture tube manufacturers in the world. It has plants in Mexico, Italy, Poland and China and manufactures a range of hightech products such as slim CPT, extra slim CPT and High Definition 16:9 format CPT. Colour Picture Tube Glass: Videocon is one of the largest CPT Glass manufacturers in the world. It has plants in Poland and India. Videocons CPT Glass manufacturing complements its Colour Picture tube manufacturing business. Oil and Gas: Videocon Group has interests in oil & gas exploration, prospecting and intends to get into gas distribution. It produces 7% of all oil in the private sector in India. Videocons Ravva oil field has one of the lowest operating costs in the world and it produces 50,000 barrels of oil per day. Videocon is also actively looking for exploration and production opportunities in countries like Oman, Australia and the Timor Sea near Indonesia. The company reported revenues of (Rupee) INR 119,808.58 million during the fiscal year ended September 2008, a decrease of 5.37% from 2007. The operating profit of the company was INR 14,403.34 million during the fiscal year 2008, an increase of 55.69% over 2007. The net profit of the company was INR 10,989.31 million during the fiscal year 2008, an increase of 57.20% over 2007.
The largest panel production facility in the world under one roof providing very high economies of scale One of the worlds largest and most respected CRT glass manufacturers Firing the largest furnace of its kind in the world with a tank size of 3300 sq ft One of the few companies in the world to convert sand to TV One of the largest and most acknowledged CPT manufacturer in the world Manufactured Indias first rust-free Washing Machine
BOARD OF DIRECTORS
Mr. Venugopal N Dhoot Mr. Pradeepkumar N Dhoot Mr. K C Srivastava Mr. Satyapal Talwar Mr. S Padmanabhan Maj. Gen. S C N Jatar Mr. Arun L Bongirwar Mr. Radhey Shyam Agarwal Ms. Gunilla Nordstrom (Nominee - AB Electrolux (Publ) ) Dr. B N Singh (Nominee - IDBI Limited) Mr. Ajay Saraf (Nominee - ICICI Bank Limited)
1. In this type of channel the company uses its sales representatives to deal with the dealers directly. The dealers place the order through the sales representatives who visit them periodically, and the products are delivered directly from the company. Some companies appoint Direct Dealers who act as their Franchisee Outlets or their Exclusive showrooms. BPL uses this channel
2. In this channel of distribution the company appoints distributors on the basis of District/ Population /No of Dealers to be handled by one distributor. The area of operation and its potential is also taken into consideration. Some of the companies make the distributor totally responsible from appointing the dealers to providing after sales service.
3. In this channel of distribution the company appoints Distributors as well as Direct Dealers. The company appoints distributors to deal with small dealers who order small quantities. With the dealers who have good potential and sales the company deals directly. Videocon and Samsung use this channel: The Korean Multinational follow this channel where they appoint Distributors for upcountry towns and direct dealers for big cities and major towns eg. Ahmedabad.
4. In this channel the company appoints a C&F agent who acts on behalf of the company. The C&F agent is totally responsible for appointment of Distributors and Direct Dealers. He sells to both the Distributors and the Direct Dealers at t
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.
Videocon gives displays Promotional schemes are taken out in festivals Bio fresh Videocon 0% finance by Videocon Exchange offer by Videocon Kismat offer by Videocon High incentives by Videocon 0% interest by Videocon and finance facility by Videocon Carry back scheme Videocon Exchange offer by kelvinator Pentacool new advertisement by electrolux
Segment Price % Market Share Direct Cooling Low 85% Frost Free 35-40% more than DC 15% Based on the Capacity and price the market was divided as follows in 2007-08
% Share 3% 7% 85% 5%
In 2007-08 the penetration levels were approx. 9% In 2007-08 the demand distribution as per the Income class was as follows: Penetration % 0.7%
In 2007-08 the demand distribution as per markets was as follows: Urban Rural 2.04 24.3 Total 8.61 100
25.23 75.7
Past trends
Demand for refrigerators grew from 11,000 units in 1968-69 to about 2.25 million units in 2007-08
Demand for refrigerators has grown at a CAGR of around 22% from 1.04 mn units in 1992-93 to 2.18 mn units in 2007-08. The total stock went up from 3.3 million units in 1968-69 to 17.2 million units in 1996-97, but still covering only about half of the total households in middle and high-income groups.
Current Scenario
The current demand for refrigerators is approx. 2.9 mn units per annum. The 165-200 Ltrs of refrigerators comprise of 80% of the total demand. Frost Free refrigerators contribute 15% of the total demand with 5% coming from the premium range.
The replacement demand is about 20% of the total demand and shows preference for larger and technically advanced models. Demand for the frost-free refrigerator is increasing rapidly.
Feature based differentiation and various price points for same capacity emerge in the top and high categories. Some of the features, individually or together are used for differentiation. No and type of doors. Crushed ice and water dispenser Quick chilling zones Multiple temperature zones Adjustable racks and shelves Multiple use compartments Refrigerant CFC free Vs CFC Energy efficient compressor Freezer space vis a vis Refrigeration space
Future Trends
Replacement market is expected to increase to 25-30% on account of faster replacement (further induced by exchange scheme). Refrigerator market is expected to grow at a CAGR of 14% in the medium term aided by the rising per capita income and growing consumerism. The demand for refrigerators is expected to be about 3.6 million units in 2000-01 with a penetration rate of about 13% As specified by the Montreal Protocol the use of refrigerants such as CFC-11 and
Kelvinator has acquired Voltas and Allywn and thus their total market share comes to 29.6% of the total refrigerator market.
INDUSTRY ANALYSIS (REFRIGERATOR INDUSTRY IN INDIA) PORTERS FIVE FORCES MODEL 1.THREAT OF ENTRY Barriers of entry Economies of scale
The players like Godrej, BPL , Whirlpool, Videocon and Voltas have achieved economies of scale. Godrej has a capacity utilization of 75% and the highest capacity in the industry. This declines their unit cost of every function of business and enables them to keep their prices low. This will force the entrant to come in at a large scale and risk strong reactions from them or come at a small scale and accept a cost and price disadvantage. Godrej also possesses economies of vertical integration as it manufactures its own compressors, which constitutes a substantial part of the manufacturing cost. The other players like BPL and Videocon who are currently outsourcing their compressors also plan to set up their own manufacturing units for compressors in the long run.
Product differentiation
The companies like Godrej, BPL and Videocon, being very old players in the Indian market enjoy high brand awareness and consumer loyalties. These brand names are associated with trust and reliability in the Indian market. The Korean players like LG and Samsung who engaged in heavy advertising and brand promotion during the last year have also created a niche for them in the premium segment. Their brand awareness has grown tremendously after the recent Cricket World Cup Tournament, during which they advertised heavily. These create a barrier to entry by forcing the entrant to spend heavily to overcome existing consumer loyalties and to build a brand image.
Capital Requirements
Huge Capital requirements are posed in front of the new entrant in terms of advertising, product development, Production facilities, Distribution channel credit, inventories and for covering up the start-up losses.
Government policy
The Government policies of levying duties on the imported Refrigerators and refrigerator parts gives an advantage to the Indian Players and in a way protect them from price competition in the market with the MNCs.
Expected retaliation
The industry as a whole faces excess capacity and the supply exceeds demand and so the existing competitors are expected to respond forcefully to a new entrant. The new entrant will face competition based on the segment to which it tries to cater. If the company enters in the Direct cool segment Godrej, Kelvinator, and Whirlpool will pose the major threat. If the company enters in the Frost free, high capacity segment (above 300 Ltrs) it will have to face main competition from LG, Samsung, Kelvinator, BPL and Whirlpool.
2. INTENSITY COMPETITORS
OF
RIVALRY
AMONG
THE
EXISTING
The companies in the Refrigerator industry of India can be divided into four strategic groups based on the price and the perceived quality of the products. These groups also differ in their target segments and the strategies adopted to cater to it.
High Perceived
(1)LG, Samsung, (2) Whirlpool, BPL Quality Moderate Perceived STRATEGY (3) Godrej , Kelvinator Quality Low Perceived (5)Voltas, Allwyn Quality 7. RIP OFF STRATEGY 8. FALSE ECONOMY STRATEGY (4) Videocon 9. ECONOMY STRATEGY Kelvinator 4. OVER CHARGE 5. MEDIUM VALUE 6. GOOD VALUE
STRATEGY
STRATEGY
BPL, Whirlpool
BPL, the market leader in the Frost-free segment and Whirlpool of India, the subsidiary company of the US giant Whirlpool form this group. They have frost-free models in the below 300 Ltrs capacity segments as well as the above 300 Ltrs segment. The models in above 300 Ltrs segment cater to the replacement market and to the higher middle class. These aim at providing high quality at a moderate price. The models in the below 300 Ltrs are targeted at the first time buyers of middle class and are not high in price.
Godrej, Kelvinator
These are the old brands of India, which have high brand awareness and presence in urban as well as the rural Markets. These are mainly serving to the Direct cool segment and have few models in the frost-free segment. These brands are catering to the middle class and are not very high in prices.
Videocon
This is the company, which introduced Frost-free refrigerators in India. The products are value for money products. With the lowest prices in the market it is catering to the middle class of the society.
Voltas Allwyn
These companies cater to the middle and lower middle class of buyers with their low priced ranges. The companies in the market witness a tough competition from the other members of its strategic group as they fight for the same chunk of the market. As their products do not differ much in the features, they try to differentiate their brands through copy differentiation in advertising.
The bargaining power of the consumers is high due to the presence of many competitive products in the market. The refrigerator models available are not much differentiated in terms of the features, and so the buyers can switch between the different brands based on other criteria like Price, service, warranty, promotion and financing schemes.
PRODUCTS OF VIDEOCON
Refrigerator Home Direct Cool Frost free Water matic Washing Machine Home Air Conditioner Home Microwave Home
RNV271 DIGITAL SENSI FLOW DURAFRESH PLATINUM DEODORISER GREEN HOUSE CRISPER SIX YEARS WARRANTY
RNV275
DIGITAL SENSI FLOW DURAFRESH PLATINUM DEODORIZER GREEN HOUSE STYLISH EURO HANDLE 6 YEARS WARRANTY
RNR312 SENSI FLOW SYSTEM DURAFRESH PLATINUM DEODORIZER GREEN HOUSE CRISPER RECESSED HANDLE 6 YEARS WARRANTY
RNV312 SENSI FLOW SYSTEM DURAFRESH PLATINUM DEODORIZER GREEN HOUSE CRISPER VERTICAL HANDLE 6 YEARS WARRANTY
D380MF
No Frost Multi Flow System Antibiotic Deodorizer New Edge Door design New Style Vertical Handle 6 Years Warranty
D452MF INBUILT DEODORIZER FULLY AUTOMATIC DEFROSTING SYSTEM MULTIFLOW COOLING SYSTEM 6 YEARS WARRANTY
a) b) c) d) e) f) g)
Brand = 64% say that the customers prefer brand name Price = 84% of the customers look for price Feature = 90% see the features while buying. Service= 20 % see for services Promotion schemes= 12% see the promotional scheme. Word of mouth = 18 % go for word of mouth. Dealers advise= 32% go for the dealers advise.
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Promotion Scheme Word of mouth Service Feature Dealers advise Brand Price
towards: Best sales service Displays In festivals we do promotions 0% finance Exchange offer High incentives 0% interest Carry back scheme
BIBLIOGRAPHY Books
Philip Kotler for Marketing Management
Web site:
www.videoconinternational.com