REPORT

ON

STUDY OF SCOPE OF NEW PRODUCT DEVELOPMENT (EXTRA HIGH VOLTAGE

POWER CABLE) IN POWER SECTOR (TRANSMISSION & DISTRIBUTION)

By

Monisha Malhotra

A0102109017

Amity Business School, Noida

A Report Submitted in Partial Fulfillment of the Requirements of MBA Program

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 AUTHORIZATION

I hereby authorize that Monisha Malhotra, a student of Amity Business School, Noida has
successfully done the Summer Internship Project, assigned to her as a part of the requirement in
the MBA curriculum of Amity Business School under my guidance and supervision.

She has worked on the project titled “STUDY OF SCOPE OF NEW PRODUCT
DEVELOPMENT (EXTRA HIGH VOLTAGE POWER CABLE) IN POWER SECTOR
(TRANSMISSION & DISTRIBUTION)” during the period May 10th, 2010 to June 26th, 2010.

The project is based on the original study conducted and has not formed a basis for the award of
any Degree/Diploma by any other University or Institution.

The project is done for partial fulfillment of the M.B.A program from the aforesaid institute.

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 ACKNOWLEDGEMENT

Though words are seldom sufficient to express gratitude and feelings, I would like to fulfill a
fraction of my moral obligation by expressing a word of gratitude to all those who have
profoundly contributed to this project.

First of all I would like to thank Dr. Sanjay Shrivastava, Head & Additional Director General,
Amity Business School, Noida for giving me an opportunity to do Summer Internship Training
at UNIVERSAL CABLES LIMITED, Satna.

I would like to thank Mr. Vinod Bansal, (Asst. Vice President, Commercial), Universal Cables
Limited and J. G. Merwana, (General Manager, P. P. C.), Universal Cables Limited for
accepting me as a trainee and giving me opportunity to work in the company. It was their
knowledge, skills and professionalism which helped me. Their suggestions, encouragement has
been instrumental in the study.

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 ABSTRACT

Report is the practical part of the theoretical subject marketing of our MBA Program. The sole
objective is to familiarize the students with the practical manipulation of business organization.

This report has been written to know about the demand for the high power electrical
transmission and distribution cables in India that lead to the launching new Product. In the
first phase of the report there is the general introduction about the New Product Development.

The project is related to understand the power sector scenario in India and the demand for these
power distribution cables. The project report takes into account the objectives that are behind
this. The report illustrates the objective one by one according to their priority. To understand and
specify the objectives is necessary to understand the variable, which affect this issue.

This report defines only the key variables. After this the data has been collected from different
sources and analyzed, interpreted, and shown by the diagrammatical representation for easy
understanding. More over some conclusion and offer our suggestions for improvements with
some limitations that we face. In the next phase report comprises of the feasibility report of
Power Transmission Sector and Universal Cables Limited with its SWOT analysis, Porter’s Five
Forces Analysis and the target market demand analysis.

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5|Page
Table of Contents
Table of Contents....................................................................................................... 6
Chapter 2................................................................................................................. 29
Power Sector- Key Growth Driver for Power Cables...........................................49

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Chapter 1

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Introduction

Product Development strategy

Given the rapid changes in consumer tastes technology arid competition companies must
develop a steady stream of new products and services .A firm can obtain-new products in two
ways. One is through acquisition by buying a whole company a patent or a license to produce
someone else s product. The other as through new-product development in the company’s own
research and development department .By new products we mean original products product
improvements product modifications and new brands that the firm develops through its own
research-and-development efforts.

When an organization introduces a product into a market they must ask themselves a number of
questions.

1. Who is the product aimed at?

2. What benefit will they expect?
3. How do they plan to position the product within the market?
4. What differential advantage will the product offer over their competitors?

New products continue to fail at a disturbing rate. One source estimates that more than 90
percent of all new products fail in within 2 years. Another-study suggested that of the staggering
25,000 new consumer foods, beverages, beauty and healthcare products to hit the market each
year, only 40 percent will be around 5 years later. Moreover failure rates for new industrial
products may be as high as 30 percent.

Why do so many new products fail? There are several reasons. Although an idea may be good
but the market size may have been overestimated. Perhaps the actual product was not designed
as well as it should have been. Or maybe it was incorrectly positioned in the market priced too
high or advertised poorly. A high-level executive might push a favorite idea despite poor
marketing research findings. Sometimes the costs of product development are higher than
expected, and sometimes competitors fight back harder than Expected.

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Indian Electrical Equipment Industry

Indian Electrical Equipment Industry, though growing still, is showing signs of slowdown during
the second successive quarter of the current financial year. The industry, which indicated
reversal of trend even before the global financial crisis with a posting of an overall growth of
11.8% in the 1st quarter down from 14.5% in the 1st quarter of last fiscal. The growth has now
further decelerated to 6.6% in the 2nd quarter. Consequently, the half yearly growth registered is
8.57% down from 19.6% of the previous financial year. The growth figures reported are in terms
of volume.

Additionally, the major metals like copper, aluminium, which were at their peak during the 2nd
quarter impacted business margins and lowered domestic demand.

IEEMA, the apex body representing the Indian Electrical Equipment industry, which monitors
the growth based on the compiled and monitored production and sales data from its members on
regular basis, had raised the red flag as early as the last quarter of the year 2007-08.

Although most of the product groups showed a decline in growth, some products like conductors
and power transformers could buck the trend and have shown remarkable growth of 33.6% and
30.6% respectively.

The growth in conductors is attributed to the flow of orders from the single largest customer i.e.
PowerGrid, the suppliers are optimistic about the order flow in near term coupled with a good
export demand.

Power transformers have also clocked in an exceptional growth of 30.6% including 50% growth
in exports. Demand from upcoming evacuation systems has helped the 400 KV and above
segment to grow by about 10%

Delays in funding and order finalizations for the Government sponsored program - RGGVY and
by many other utilities has resulted in decline in demand for distribution Transformers to the
extent of 10% in 1st Quarter, further reducing to 22% till 1st half of the fiscal.

Deceleration in growth is also visible in the switchgear segment, where the half yearly growth
has reduced to a mere 5% from 11% in the 1st quarter. Slump in the construction projects has
resulted in slowdown in growth for LV switchgear like MCBs, ELCBs, MCCBs, fuses,
contactors etc. However, launching of the revised National Electricity Code for buildings and
promotion of awareness for safety may create some demand in near future.

High voltage breakers have grown by just 4%. But, breakers of rating above 220 KV, which are
an integral part of power transmission system, have declined by 20%

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The cable industry registered an overall growth of 9.7% propelled by 15.6% growth in power
Cables segment. It is also experienced that the domestic demand is rising especially for cables
above 33 kV. However, demand for railway signaling cables has reduced sharply.

Capacitors, being the last items in the power T&D segment are witnessing a surge in demand to
35.3% mainly for above 132 KV class, which is a normal fallout of last year’s growth in the
sector.

Rotating machines, which cater to various core sectors, has reported a growth of 12.6%. Demand
is mainly for motors above 355 frame sizes indicating a positive momentum in the core sector
industries. Captive power generation by SMEs and telecom tower segment continues to add
demand for alternators, which has shown a growth of 15.6%.

The Indian electrical industry is hoping for an urgent stimulus from the Government to spur the
domestic demand and a need for faster implementation of the on-going projects for augmenting
power generation, transmission and distribution systems like RAPDRP (APDRP II) and
RGGVY. Whereas the funded projects may not be affected, the non-funded and BOT projects
are likely to be impacted with the squeeze in money supply and cautious approach of project
builders and investors.

Experts like IEEMA says a close watch is needed on the scenario emerging due to the global
meltdown since a further slowdown in domestic and exports demand, resulting in over capacities
could create problems for the industry. On the flip side, however, the recent reduction in prices
of the major raw materials like copper, aluminium, steel, fuel and polymers could stimulate the
demand with reduction in project costs. A strong dollar would also help exporters and especially
those whose value additions are high and who do not depend on imports to a large extent.

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Table for growth of Indian electrical equipment industry

Product Weightages 1st HY

Quarter 2008-
2008-09 09

LT Motors 7.6 20.75 13.42

HT Motors 1.3 17.94 25.00

Alternators 2.5 17.65 15.55

FHP Motors 1.7 8.99 4.04

Rotating Machines 13.1 18.4 12.6

Power Contactors 1.4 1.45 -7.70

LT Circuit Breakers 3.7 25.28 12.86

MCB 2.4 22.35 8.76

S/F & F/S Units 0.8 -0.06 -5.19

HT Circuit Breakers 6 1.52 4.43

Switchgears 14.3 11.07 5.03

Power Cables: PVC 20.9 12.06 15.71

Control Cables & other 6.7 24.04 -8.29

Special Purpose Cables

Cables 27.6 14.96 9.69

Power Transformers 8.7 36.77 30.41

Distribution Transformers 14.9 -13.50 -21.93

Transformers 23.6 5.03 -0.29

HT Capacitors 0.2 14.53 52.63

LT Capacitors 0.5 13.74 21.39

Capacitor Industry 0.7 13.96 35.27

Energy Meters 2.6 -16.24 -2.28

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Energy Meters 2.6 -16.24 -2.28

T.L.T. 9.5 11.22 10.05

Conductors 8.6 20.31 33.58

Transmission Lines 18.1 15.54 19.46

Total 100 11.79 8.57

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Indian Cable Industry Status

A whole range and variety of cables manufactured today in India includes PVC / FRLS cables,
XLPE cables, submarine cables, aerial bunched conductor cable, telecommunication cable such
as jelly filled cables, optical fibre cables etc. The cable industry may be mainly divided into four
segments viz; house wiring (upto 440V), LT (1.1 to 3.3kV), HT (11 to 66kV), EHV (66kV).

There is a definite upward technological movement along with the growth rate in cables and wire
industry in India. But consumption has fallen by more than the rate of growth. Slow down in
power generation sector has direct effect on cable industry and its power segment, in particular,
resulting into reduced demand as State Electricity Boards (SEBs) are the principal customers of
this segment. The LT cable segment and house wiring segment show moderate increase because
of infrastructure and construction boom.

The demand for optical fiber cable is expected to grow at compounded annual growth rate of
17% to 1.8-2.4 million fiber kilometers over the next 3 years as producers are reporting healthy
order book position on the back of increased demand for broadband deployment. But at the same
time, price realization for OFC will decrease owing to competition from global players as
custom duties have been abolished under the IT agreement with effect from April 1, 2005.

Large-scale deployment using wireless services is expected to limit the demand for wireless
services, thus adversely affecting Jelly filled telecom cables (JFTC) demand. The demand for
JFTC is expected to decline at compounded annual rate of 11% between 2003-04 and 2006-
07and will eventually be restricted to replacement and maintenance demand. Intense competition
will continue to strain the margins of JFTC producers over the medium term.

The abolition of the custom duty on JFTC and OFC in the budget is expected to have a negative
impact on domestic producers. The reduction in the custom duty on raw materials like copper,
polyethylene and polypropylene will partially offset the decrease in the duties on finished goods.

A major worry of the cable manufacturers is exorbitant cost of raw material namely aluminium,
copper, XLPE and PVC compounds accounting for close to 60% of the production cost. Due to
this, Indian cable makers are left behind in global competitiveness.

However, the industry hopes that with increase in government spending on the infrastructure and
restructuring of SEBs, the fortunes of the industry will improve.

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Research And Development Scenario In India

What customer demands today is high quality of electrical and electronics product. Further, with
rapid change in market environment, high degree of product innovation is demanded. This is
where Research and Development activities play an important role. Focus on R & D activity is
essential for improvement in the quality of products, upgrading the existing technologies and
developing new products for diversification.

Well-established R & D facilities are key factor for development of industry. In India, renowned
laboratories like Central Power Research Institute (CPRI), Electrical Research and Development
Association (ERDA), CEL are well equipped with the most advanced product testing facilities to
meet international standards. Most of the major electrical and electronics manufacturing
companies in India has strong R & D base.

Product testing / certification in any foreign country is very expensive process adding financial
burden to manufacturers. National Accreditation Board for Testing and Calibration Laboratories
(NABL) has been granted a 4-year term as an accreditor of testing and calibration laboratories by
APLAC & ILAC through Mutual Recognition Agreement (MRA). This allows entry for goods
tested by any NABL accredited laboratories in India, into MRA partner countries.

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Growth Of Indian Electrical Industry

Indian electrical industry has registered about 19.3% growth the year 2004-05 as compared to
the same period for the year 2003-04

The well conceived APDRP programme and passing of Electricity Act 2003 have provided a ray
of hope to the industry. Almost all sectors of electrical industry are indicating growth. Product
like meter shows technology shift, as there is more demand for static meter than conventional
electromagnetic meter.

The general buoyancy in the Indian Economy would then create a demand for electrical products
through growth of general industrial and economic development. From the experiences of the
past few years, it can be confidently said that the Indian industry has faced the critical challenges
well and survived in the most difficult times. In current favourable market scenario today, the
electrical industry can certainly look forward for growth.

Future

India’s vibrant economy needs matching improvements in the infrastructure. Power sector will
play important role in the economic development and hence need focused attention. Ministry of
Power has taken number of legislative and policy initiatives to expedite power sector
development. All these initiatives provide loads of investment opportunities to FIIs and other
investors. The power sector reforms if implemented as scheduled will create large business for
power sector equipment manufacturers and service providers. We can expect a continuous
handsome growth for this sector for at least next five years.

India’s vibrant economy needs matching improvements in the infrastructure. Power sector will
play important role in the economic development and hence need focused attention. Ministry of
Power has taken number of legislative and policy initiatives to expedite power sector
development. All these initiatives provide loads of investment opportunities to FIIs and other
investors. The power sector reforms if implemented as scheduled will create large business for
power sector equipment manufacturers and service providers. We can expect a continuous
handsome growth for this sector for at least next five years.

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About The Company

Universal Cables Limited (UCL) was established in 1962 by late Shri M.P. Birla, the then
Chairman, with modern plant for manufacture of Paper Insulated Cables. Since then, the
Company has made rapid progress achieving a world class reputation.

n the year 1977, collaborating with M/s. Asea Kabels AB, Sweden (now called ABB Cables),
UCL brought XLPE technology to India. The Company’s other collaborations are with
internationally acclaimed leaders in their respective fields.

UCL is a leader in the Indian Cable Industry with the widest product range. The cable division
has a very wide range of product. It includes Low Voltage, Medium Voltage and Extra High
Voltage XLPE Power Cables upto 500 kV grade, PVC and Rubber Insulated Power Cables upto
11 kV grade, Control and Instrumentation Cables upto 1.1 kV for any number of Cores/Pairs and
speciality Rubber Cables for Trailing/Flexible standards to suit to customer requirements. Its
Cables and Capacitors are known by the Brand Name “UNISTAR”.

To meet the growing demand of Extra High Voltage Cables (220 kV and above), UCL has
already ventured into this market segment. For this UCL has adopted VCV process at its Satna
Plant in technical collaboration with the World Leader in Cable technology, Furukawa Electric
Co. Ltd., Japan. The technical collaboration covers Cable designing, Manufacturing, Laying,
Jointing, Testing and Installation.

UCL has also tied-up with Viscas Corporation, Japan (Power Cable Alliance of Furukawa &
Fujikura) for sourcing new generation cable jointing accessories for 220 kV and above.

Apart from manufacturing Electrical Cables for multifarious applications, UCL is having full
fledged EPC Division to execute Turnkey Contracts for various Utilities/Projects.

With this, UCL has now positioned itself as a complete solution provider for EHV Underground
Power Cables Transmission System upto 500 kV, involving designing, manufacturing, laying,
jointing and installation.

The 220 kV Cables prototype sample manufactured by UCL has been successfully Type Tested
as a complete cable system at CPRI, Bangalore creating a land mark in itself as this is the first
successful 220 kV cables system Type Test in India. UCL has successfully executed orders for
220 kV Cables.

The Capacitor Division of the Company, which commenced operation in the year 1967,
manufactures world class All Poly Propylene (APP) Capacitors for AC applications. This
Division was set up in collaboration with Toshiba, Japan for manufacture of Paper and Power
Capacitors. In 1977, this Division entered into another technical collaboration with General

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Electric Company of USA for manufacture of Mixed Dielectric Capacitors and in 1985 for
manufacture of All PP Dielectric Capacitors.

The product range includes Low & High Voltage Capacitors (415 VAC to 220 KVAC), APFC
Panels, Medium Frequency Water Cooled Capacitors for Induction Furnace Application, Surge
Protective Capacitors, Tuned and Detuned Filter Capacitors, DC Capacitors. This Division also
provides services like Automatic PF Correction Systems, Harmonic Analysis and PF Studies.

Today, The Capacitor Division is rated to be the foremost manufacturer of All PP Power
Capacitors in LT & HT Range in the country.( http://www.unistar.co.in/index.php)

Introduction

Extra High Voltage Cables

UNIVERSAL CABLES LTD, the pioneer of XLPE cables in India, manufactures Extra High
Voltage (EHV) XLPE cables in the range of 66-220 kV using ‘Vertical Continuous
Vulcanising’ (VCV) technology in technical collaboration with World Leader in Cable
manufacturing, FURUKAWA ELECTRIC CO. LTD. (In association with VISCAS
Corporation, Japan). This technology for EHV XLPE Cable manufacturing process is the only
of its kind in the Country.

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EHV Underground Power Transmission is the solution for meeting today’s growing power
demand of the power starved Metro Cities. Underground Power Transmission System requires
highest reliability to ensure uninterrupted power supply.

Unistar EHV cable, manufactured using VCV technology with proven know-how from
FURUKAWA ELECTRIC CO. LTD and also having in-house engineering expertise for system
designing, cable jointing and installation, can guarantee this requirement.

The main cutting edge features of this technology as True simultaneous triple extrusion with
single (common) cross-head, Dry cure dry cooled process, Dimensional accuracy for perfect
geometry with Zero eccentricity/ ovality of the insulation, Class 1000 cleanliness level with
completely closed material handling system, Online X-Ray monitoring system, Direct
gravitational feeding of XLPE compound, Control and Monitoring in production process using
SCADA, all add up to unmatched quality standard to ensure reliable and efficient performance
of the cable throughout its service life.

Product Range

VOLTAGE CROSS SECTIONAL TYPE OF DESIGN SPECIFICATION

GRADE AREA (sqmm)

66 kV 240 to 2000 Lead sheath Corrugated / IS 7098 Part-III

aluminium sheathed IEC 60840
Polylaminate with or IEC 62067
without Copper screen as
applicable

110/132 kV 240 to 2000 Lead sheath Corrugated / IS 7098 Part-III

aluminium sheathed IEC 60840
Polylaminate with or IEC 62067
without Copper screen as
applicable

220 kV 500 to 2000 Lead sheath Corrugated / IS 7098 Part-III

aluminium sheathed IEC 60840
Polylaminate with or IEC 62067
without Copper screen as
applicable

Conductor shall be compacted circular up to 1000 sqmm and Milliken type from 1200 sqmm and
above sizes. 1000 sqmm size conductor shall be available both in compacted circular as well as
Milliken design.

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Manufacturing Facilities

Manufacturing Range

Product Voltage Class Size

XLPE Power Cables 1.1 - 500 kV 16 - 2000 Sq.mm

PVC Power Cables 1.1 - 11 kV 16 - 2000 Sq.mm

Elastomeric Cables . 250 V - 33 kV 0.5 - 630 Sq.mm

Control & Instrumentaion Cables ( XLPE / 110 V - 1.1 kV 0.5 - 6.00 Sq.mm
PVC / Elastomeric ) Up to 61 Cores

Speciality Cables As per Customer As per Customer

Requirement Requirement

LV & HV Capacitors 415 V - 220 kV 1 - 50000 KVAR

(Unit / Bank)

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UCL undertake the complete solution package for Underground Power Transmission involving
system design, supply of cables, cable jointing and termination, laying, installation and
commissioning. UCL have specialized cable jointers with expertise and long experience upto
220 kV class cables.

UCL offers its know-how on specialized underground cable projects with most efficient and cost
effective solution.

Cable Monitoring System (CMS)

On demand, UCL can provide Cable Monitoring System using Distributed Temperature Sensor
(DTS) system and offers complete package including installation and commissioning, training
and maintenance.

DTS System, using Optic Fibre Cables is recognised world over as the most reliable technology
for monitoring optimal power transmission and distribution in Power Cable System and its
protection. This system enables the user to monitor and record the Real Time Temperature
profile of the entire power route and avoid development of “hot spots” and situation leading to
‘thermal run away” of cable and its joints.

• DTS system measures temperature either by using optic fibre cable embedded with the
power cable or an external optical fibre cable running along the length of power cable.

• Continuous temperature profile using a single optical fibre as the sensing element

• Sensor length up to many kilometres

• Monitor thousands of points in seconds

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 220 kV Cable installation with Outdoor Termination

132 kV Termination installed on Overhead Transmission Tower

132 kV Cable installation for Power Evacuation

About the Product

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Electric power transmission or "high voltage electric transmission" is the bulk transfer of electrical
energy, from generating power plants to substations located near to population centers. This is distinct
from the local wiring between high voltage substations and customers, which is typically referred to
as electricity distribution.

Transmission lines, when interconnected with each other, become high voltage transmission networks. In
the India, these are typically referred to as "power grids" or sometimes simply as "the grid".

Historically, transmission and distribution lines were owned by the same company, but over the last
decade or so many countries have introduced market reforms that have led to the separation of the
electricity transmission business from the distribution business.

Transmission lines mostly use three phase alternating current (AC), although single phase AC is
sometimes used in railway electrification systems. High-voltage direct current (HVDC) technology is
used only for very long distances (typically greater than 400 miles, or 600 km); undersea cables (typically
longer than 30 miles, or 50 km); or for connecting two AC networks that are not synchronized.

Electricity is transmitted at high voltages (110 kV or above) to reduce the energy lost in long distance
transmission. Power is usually transmitted through overhead power lines. Underground power
transmission has a significantly higher cost and greater operational limitations but is sometimes used in
urban areas or sensitive locations.

A key limitation in the distribution of electricity is that, with minor exceptions, electrical energy cannot
be stored, and therefore it must be generated as it is needed. A sophisticated system of control is therefore
required to ensure electric generation very closely matches the demand. If supply and demand are not in
balance, generation plants and transmission equipment can shut down which, in the worst cases, can lead
to a major regional blackout.

Power Cables

Electric power can also be transmitted by underground power cables instead of overhead power lines.
They can assist the transmission of power across:

 Densely populated urban areas

 Areas where land is unavailable or planning consent is difficult

 Rivers and other natural obstacles

 Land with outstanding natural or environmental heritage

 Areas of significant or prestigious infrastructural development

 Land whose value must be maintained for future urban expansion and rural development

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Some other advantages of underground power cables:

Less subject to damage from severe weather conditions (mainly lightning, wind and freezing)

Greatly reduced emission, into the surrounding area, of electromagnetic fields (EMF). All
electric currents generate EMF, but the shielding provided by the earth surrounding underground
cables restricts their range and power.

Underground cables need a narrower surrounding strip of about 1–10 meters to install, whereas
an overhead line requires a surrounding strip of about 20–200 meters wide to be kept
permanently clear for safety, maintenance and repair.

Underground cables pose no hazard to low flying aircraft or to wildlife, and are significantly
safer as they pose no shock hazard (except to the unwary digger).

Much less subject to conductor theft, illegal connections, sabotage, and damage from armed
conflict.

Some disadvantages of underground power cables:

Undergrounding is more expensive, since the cost of burying cables at transmission voltages is
several times greater than overhead power lines, and the life-cycle cost of an underground power
cable is two to four times the cost of an overhead power line. Above ground lines cost around
$10 per foot and underground lines cost in the range of $20 to $40 per foot.

Whereas finding and repairing overhead wire breaks can be accomplished in hours, underground
repairs can take days or weeks and for this reason redundant lines are run.

Underground power cables, due to their proximity to earth, cannot be maintained live, whereas
overhead power cables can be.

Operations are more difficult since the high reactive power of underground cables produces large
charging currents and so makes voltage control more difficult.

The advantages can in some cases outweigh the disadvantages of the higher investment cost, and
more expensive maintenance and management.

Most high voltage cables for power transmission that are currently sold on the market are
insulated by a sheath of cross-linked polyethylene (XLPE). Some cables may have a lead or
aluminium jacket in conjunction with XLPE insulation to allow for fiber optics to be seamlessly
integrated within the cable.] Before 1960, underground power cables were insulated with oil and
paper and ran in a rigid steel pipe, or a semi-rigid aluminium or lead jacket or sheath. The oil
was kept under pressure to prevent formation of voids that would allow partial within the cable
insulation. There are still many of these oil-and-paper insulated cables in use worldwide.
Between 1960 and 1990, polymers became more widely used at distribution voltages,

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mostly EPDM (ethylene propylene diene M-class); however, their relative unreliability,
particularly early XLPE, resulted in a slow uptake at transmission voltages. While cables of
330 kV are commonly constructed using XLPE, this has occurred only in recent decades.

Introduction – XLPE Power Cables

For several years, the use of Overhead lines has been traditionally the most economical and
reliable means of power supply to Urban as well as Rural areas.

The ever increasing demand of energy for Industrial and Domestic applications led to a steady
rise in transmission voltages over the years e.g. 6.6/11 KV to 33 KV to 400 KV and even 800
KV today. The transfer of power at such high voltage levels necessitates installation of high rise
bulky towers and also leads to generation of powerful magnetic field which is hazardous for
inhabitants and environment of densely populated areas.

In view of public safety, aesthetic and environmental concerns, the use of overhead lines are
now-a-days limited to primary transmission of bulk power over the long distances to outskirts of
a city or town.

As a safe and reliable alternative to Overhead lines, underground XLPE cables are being used
today worldwide for transfer of power inside semi-urban / urban areas for Industrial & Domestic
needs. All new installations in urban areas are now invariably of XLPE Cables and overhead
lines located in densely populated areas are being progressively replaced by underground XLPE
cables worldwide.

The introduction of technologically superior Cross linked Polyethylene (XLPE) Cables in late
60’s as replacements of Paper Insulated Lead Cover (PILC) Cables proved to be a milestone and
since then XLPE Cables are an integral part of infrastructure in Energy Transmission &
Distribution Network worldwide on account of following critical applications.

MV XLPE Power Cables : Primary Distribution of Energy for Industrial &

Domestic (11kV-33kV) Applications.
HV/EHV XLPE Power : For secondary transmission of power in Power Plants,
Cables (66-400 kV) Switch Yards and receiving stations. For
Primary Transmission of Bulk Power in densely
Populated metropolitan and other cities.

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In Indian context the use of 220 kV imported XLPE Power Cables for carrying bulk power
inside the densely populated cities is of vital importance as apart from our four metropolitan
cities there are many other cities experiencing severe power shortage. Since the expertise in the
country is limited to 132 kV, there is an urgent need to upgrade the XLPE technology to 400 kV
level keeping in mind the future needs of the country.

Background – XLPE Power Cables

The use of Cross linked Polyethylene (XLPE) for insulation of Medium Voltage Power Cables
(10 KV) commenced in late sixties. In the past 45 years, continuous improvements in material
and manufacturing technologies based on service experience led to use of XLPE Power Cables
up to 400 KV commercially and 500 KV XLPE Power Cables are currently under field
evaluation in many countries.

In India, XLPE Cables having a limited range up to 132 KV are being manufactured
indigenously and 220 KV and 400 KV XLPE Power Cables are being imported presently.

The development profile of XLPE Power Cable over the period 1960-2005 is enclosed herein.

FINDINGS

An Overview of Technology Development & Upgradation Programme

Development & Upgradation of Indigenous Technology for improving the manufacturing

process of XLPE Power Cables.

Objectives Of The Company Behind Upgaradation

• To enhance the expertise and capability in the field of manufacturing technology of XLPE
Power Cables in line with the technological development taking place worldwide.

• To establish world class manufacturing facility for bridging the existing technology gap
and meeting the emerging demand of 220 KV Extra High Voltage XLPE Power Cables in
the country which are being imported presently.

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 • To further upgrade the technology for the future needs of 400 KV Extra High Voltage
XLPE Power Cables in the country.

• To attain requisite competitiveness & cost effectiveness for Domestic and Export Business
through :

 Quality Upgradation

 Enlargement of the Manufacturing Range

 Improved Productivity

 Optimised consumption of raw materials

 Efficient Energy Management

 Overall operational flexibility.

Preamble

Universal Cables Limited pioneered the introduction of “XLPE Technology” in the country by
commencing the manufacture of Medium Voltage (11 kV) XLPE Cables in the year 1978.

Since then, there is no looking back and keeping in pace with the domestic requirements UCL
developed necessary skill and expertise for the XLPE Cables up to 132 kV employing the
Catenary Continuous Vulcanisation (CCV) Process.

The existing CCV lines have now become very old and have limited manufacturing range.
Keeping in mind, the tremendous technology development having taken place over the years in
the field of processing technology of XLPE Cables, this initiative by the Company will go a long
way to fulfil the future needs of the country as well as creation of exports opportunities.

The Upgradation Proposal of Universal Cables Limited has been conceived with an objective to
fulfil the future needs of the country with the National objective of Power Sector Reforms.

27 | P a g e
A Brief On Product And Technology

• Product : Cross linked Polyethylene (XLPE) insulated Power Cables in

11- 400 KV range.

• Product Applications :

o MV XLPE Power : Primary Distribution of Powers. (11kV-33kV)

Cables
o HV XLPE Power : Primary Distribution & Secondary Transmission of Power.
Cables (66kV to 132kV)
o EHV XLPE : Primary Distribution & Secondary Transmission of Power.
Power Cables (66kV to 132kV)
o Existing : Catenary Continuous Vulcanisation Technology
Manufacturing (CCV) Process.
o Upgraded : Vertical Continuous Vulcanisation Technology (Proposed)
Manufacturing (VCV) Process.

28 | P a g e
Chapter 2

29 | P a g e
Review of Literature
Product strategies

When an organization introduces a product into a market they must ask themselves a number of
questions.

• Who is the product aimed at?

• What benefit will they expect?
• How do they plan to position the product within the market?
• What differential advantage will the product offer over their competitors?

We must remember that Marketing is fundamentally about providing the correct bundle of
benefits to the end user, hence the saying ‘Marketing is not about providing products or services
it is essentially about providing changing benefits to the changing needs and demands of the
customer’ (P.Tailor 7/00)

Philip Kotler in Principles of Marketing devised a very interesting concept of benefit building
with a product.

Kotler suggested that a product should be viewed in three levels.

• Level 1: Core Product : What is the core benefit your product offers? Customers who
purchase a camera are buying more than just a camera they are purchasing memories.
• Level 2: Actual Product : All cameras capture memories. The aim is to ensure that your
potential customers purchase your one. The strategy at this level involves organizations
branding, adding features and benefits to ensure that their product offers a differential
advantage from their competitors.

30 | P a g e
 • Level 3: Augmented product : What additional non-tangible benefits can you offer?
Competition at this level is based around after sales service, warranties, delivery and so
on. John Lewis a retail departmental store offers free five year guarantee on purchases of
their Television sets, this gives their `customers the additional benefit of peace of mind
over the five years should their purchase develop a fault.

Idea Generation

New product development starts with idea generation the systematic search for new product
ideas. A company typically has to generate many in order to find a few good once. According to
one well-known management consultant, For every 1000 ideas, only 100 will have enough
commercial to promise to merits a small scale experiment, only 10 of those will warrant
substantial financial commitment and of those a couple will turn out to be unqualified successes.
“His conclusion”: If you want to find a few ideas with the power to enthrall customer, foil
competition, and thrill investors’ you must’ first generate hundreds and potentially thousands of
unconventional strategic ideas.

Internal Idea Sources

Using internal sources the company can find new ideas through formal research and
development. It can pick the brains of its executives Scientists engineers manufacturing staff
Sand sales people Some companies have developed successful entrepreneurial programs that
encourage employees to think up and develop new product ideas. For example, 3Ms well known
15-percent rule allow employees to spend 15 percent of their time bootlegging — working on
projects of personal interest whether or not those project directly benefit the company.

Companies sometimes look for creative innovation approaches that overcome barriers to the free
flow-of new product ideas For example firms like Eureka’ Ranch—a well known new product
hatchery — employ both method and madness in helping companies to jumpstart their new
product idea generation process.

External Idea Sources

Good new product idea also come from watching and listening to customers The company can
analyze customer questions and complaints to find new products that better solve consumes
problems Company engineers or salespeople can meet with and work. Alongside customers to
get suggestions and ideas The Company can conduct surveys or focus groups to learn about
Consumer needs and wants. Heinz did just that when its researchers approached children who
consume more than half of the ketchup sold find out what would make ketchup more appealing
to them The answer change the color So, Heinz developed and launched EZ Squirt green
ketchup that comes with a squeezable bottle targeted at kids Blastin Green ketchup was a smash
hit, so Heinz followed up with an entire rainbow of EZ Squirt colors, including Funky Purple
Passion Pink, Awesome Orange, Totally Teal, and Stellar Blue. The EZ Squirt bottle s special
nozzle also emits a thin ketchup stream, “so tykes can autograph their burgers (or squirt someone
across the table though Heinz neglects to mention that).” In all the new line earned the Company
a 5 percent increase in sales ii the first year after hitting the grocery shelf. Consumers often
create new products and uses on their own and companies can benefit by putting them on the

31 | P a g e
market. For example for years customers were spreading the word that Skin-so-soft bath oil and
moisturizer was also a terrific bug repellent. Whereas some Consumers Were content simply to
bathe an water scented with the fragrant oil others carried it in their backpacks to mosquito-
infested campsites or kept a bottle on the deck of their beach houses Avon tuned the idea into a
complete line of Skin-So-Soft Bug Guard PLUS lR335® products including the Insect Repellent
Gentle Breeze Moistures Sun block Lotion SPF 30 a combination moisturizer insect repellent
and sunscreen.

The search for new-product ideas should be systematic rather than haphazard. Otherwise few
new ideas will surface and many good ideas will sputter and die Top management can avoid
these problems by installing an idea management system that directs the flow of new ideas to a
central point where they can be collected reviewed and evaluated hi setting up such a system the
company can do any or all of the following.

• Appoint a respected senior person to be the company’s idea manager.

• Create a cross-functional idea management committee consisting of people from R&D,

engineering purchasing operations finance and sales and marketing to meet regri1rly and
evaluate proposed new product and service ideas.

• Set up a toll-free number or Web site for anyone who wants to send a new idea to the
idea manager.

• Encourage all company stakeholders-employees suppliers, distributors, dealers—to send

their ideas to the idea manager.

• Set up formal recognition programs to reward those who contribute the best new ideas.

Idea Screening

The purpose of idea generation is to create a large number of ideas. The purpose of the
succeeding stages is to reduce that number. The first idea-reducing stage is idea screening, which
helps spot good ideas and drop poor ones as soon as possible. Product development costs rise
greatly in later Stages, so the company wants to go ahead only with the product ideas that will
turn into profitable products.

The object is to eliminate unsound concepts prior to devoting resources to them. The screeners
must ask at least three questions:

1. Will the customer in the target market benefit from the product?
2. What is the size and growth forecasts of the market segment/target market?
3. What is the current or expected competitive pressure for the product idea?
4. What are the industry sales and market trends the product idea is based on?
5. Is it technically feasible to manufacture the product?
6. Will the product be profitable when manufactured and delivered to the customer at the
target price?

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 Many companies require their executives to write up new-product ideas on a standard form that
can be reviewed by a new-product committee. The write-up describes the product, the target
market, and the competition. It makes some rough estimates of market size, product price,
development time and costs, manufacturing costs, and rate of return. The committee then
evaluates the idea against a set of general criteria. For example, at Kao Company, the - large
Japanese consumer-products company, the committee asks questions such as these:

• Is the product truly useful to consumer and society? Is it good for our particular
company?

• Does it mesh well with the company’s objectives and strategies?

• Do we have the people, skills, and resources to make it succeed?

• Does it deliver more value to customers than do competing products?

• Is it easy to advertise and distribute?

• Many companies have well-designed systems for rating and screening new-product ideas.

Concept Development And Testing

An attractive idea must be developed into a product concept. It is important to distinguish

between a product idea, a product concept, and a product image. A product idea is an idea for a
possible product that the company can see itself offering to the market. A product concept is a
detailed version of the idea stated in meaningful consumer terms. A product image is the way
consumers perceive an actual or potential product.

• Develop the marketing and engineering details

• Who is the target market and who is the decision maker in the purchasing process?
• What product features must the product incorporate?
• What benefits will the product provide?
• How will consumers react to the product?
• How will the product be produced most cost effectively?
• Prove feasibility through virtual computer aided rendering, and rapid prototyping
• What will it cost to produce it?

Concept Development

After 10 years of development, Daimler Chrysler is getting ready to commercialize its

experimental fuel-cell-powered electric car. This car’s nonpolluting fuel-cell system runs
directly on methanol, which delivers hydrogen to the fuel cell with only water as a by-product. It
is highly fuel efficient (75 percent more efficient than gasoline engines) and gives the new car an
environmental advantage over standard internal combustion engine cars or even today’s
stupefacient gasoline-electric hybrid cars.

33 | P a g e
Last year, Daimler Chrysler put 60 “F-cell” cars on the road in Japan, Germany, and the United
states to test their worth in everyday operation. Based on the tiny Mercedes A-Class, the car
accelerates quickly, reaches speeds of 90 miles per hour, and has a 280-mile driving range,
giving it a huge edge over battery-powered electric cars that travel only about 80 miles before
needing 3 to 12 hours off recharging. Fuel cell systems are also being tested in busses, trucks,
and other vehicles.

Now Daimler Chrysler’s task is to develop this new product into alternative product concepts,
find out how, attractive each concept is to customers, and choose the best one. It might create the
following product concepts for the fuel-cell electric car:

• Concept 1: A moderately priced subcompact designed as a second family car to be used

around town. The car is ideal for running errands and visiting friends.

• Concept 2: A medium-cost sporty compact appealing to young people.

• Concept 3: An inexpensive subcompact “green” car appealing to environmentally

conscious people who want practical transportation and low pollution.

• Concept 4: A high-end SUV appealing to those who love the space SUVs provide but
lament the poor gas mileage.

Concept Testing

Concept testing calls for testing new-product concepts with groups of target consumers. The
concepts may be presented to consumers symbolically or physically. Here; in words, is concept
3: An efficient fun-to drive fuel cell-powered electric subcompact car that seats four. This
methanol powered high-tech wonder provides practical and reliable trans potation with virtually
o pollution It goes up to 90 miles per hour and unlike battery-powered electric cars, it never
needs recharging It s priced, fully equipped at $20000. For some concept tests a word or picture
description might be sufficient. However a more concrete and physical presentation of the
concept will increase the reliability of the concept test Today some marketers are finding
innovative ways to make product concepts more real to consumer subjects For example some are
using virtual reality to test product concepts. Virtual reality programs use computers and sensory
devices (such as gloves or goggles) to simulate reality A designer of kitchen cabinets might use a
virtual reality program to help a customer ‘ see how his or her kitschier would look and work if
remodeled with the company’s products. After being exposed to the concept consumers they
may be asked to react to it by answering questions such as those. The answers will help the
company decide which concept has the strongest appeal For example the last question asks about
the consumers intention to buy suppose 10 percent of the consumers said they definitely would
buy and another 5 percent said “probab1y”. The company could project these figures to the full
population in this target group to estimate sales volume Even then the estimate is uncertain
because people do not always carry out their stated intentions.

34 | P a g e
Marketing Strategy Development

Suppose DaimlerChrysler finds that concept 3 for the fuel cell powered electric car tests is best
The next step is marketing strategy development designing an initial marketing strategy for
introducing this car to the market.

The marketing strategy statement consists of three parts. The first part describes the target
market the planned product positioning; and the sates, market share, and profit goals for the first
few years. Thus, the target market is younger well educated moderate to high income individuals
couples or small families seeking practical environmentally responsible transportation The car
will be positioned as more economical to operate, more fun to drive, and less polluting than
today s internal combustion engine or hybrid cars. It is also less restricting than battery powered
electric cars which must be recharged regularly. The company will aim to sell 100 000 cars in
the first year at a loss of not more than $15 million In the second year the company wall aim for
sales of 120,000 cars and a profit of $25 million.

The second part of the marking strategy statement outlines the products planned price
distribution and marketing budget for the first year. The fuel cell powered electric car will be
offered an three colors—red white and blue—and will have optional air-conditioning and power
drive features It will sell at a retail price of $20,000—with 15 percent off the list price to dealers.
Dealers who sell more than 10 cars per month will get an additional discount of5 percent on each
car sold that month an advertising budget of $5Q million will be split 50-50 between a national
media campaign and local advertising. Advertising will emphasize the car’s fun spirit and low
emissions. During the first year, $100,000 will be spent on marketing research to find out who is
buying the car and their satisfaction levels.

Business Analysis

Once management has decided on its product concept and marketing strategy it can evaluate the
business- attractiveness of the proposal. Business analysis involves a review of the sales costs,
and profit projections for a new product to find out whether they satisfy the company’s
objectives. If they do the-product can move to-the product development stage. To estimate sales,
the company might look at the sales history of similar products and conduct surveys of market
opinion. It can then estimate minimum and maximum sales to assess the range of risk. After
preparing the sales forecast, management can estimate the expected costs and profits for the
product including marketing R&D operations accounting and finance costs. The company then
uses the sales and costs figures to analyze the new product’s financial attractiveness.

• Estimate likely selling price based upon competition and customer feedback
• Estimate sales volume based upon size of market and such tools as the Fourt-Woodlock
equation
• Estimate profitability and breakeven point

35 | P a g e
Product Development

So far for many new product concepts the product may have existed only as a word a thawing or
perhaps a crude mock-up If the product concept passes the business test it moves into product
development Here R&D or engineering develops the product concept into a physical product.
The product development step however now calls for a large jump in investment It will show
whether the product idea can be turned into a workable product. The R&D department will
develop and test one or more physical versions of the product concept R&D hopes to design a
prototype that will satisfy and excite consumers and that can be produced quickly aid at
budgeted costs. Developing a successful prototype can take days, weeks, months, or even years.
Often products undergo rigorous tests to make sure that they perform safely and effectively,
or that consumers will find value in them. Here are some examples of such product tests:

Procter & Gamb1e (P&G) spends $150 million on 4,000 to 5 0O studies a year test in everything
from the ergonomics of picking up a shampoo bottle to how long women can keep their hands in
sudsy water. On any given day subjects meet an focus groups e11 their dirty laundry to
researchers put prototype diapers on their babies bottoms and rub mysterious creams on their
faces Last year one elementary school raised $17000 by having students and parents take part in
P&G product tests Students tested toothpaste and shampoo and ate brownies while their mothers
watched advertising for Tempo tissue P&G s paper wipes packaged to fit in a car.

At Gillette almost everyone gets involved in new product testing. Every working day at Gillette,
200 volunteers from various departments come to work unshaven troop to the second floor of the
company’s gritty South Boston plant and enter small booths with a sink and mirror. There they
take instructions from technicians on the other side of a small window as to which razor, shaving
cream or after shave to use The volunteers evaluate razors for sharpness of blade, smoothness of
glide and ease of handling In a nearby shower room women perform the same ritual on their
legs, underarms and what the company delicately refers to as the bikini area. We bleed so you.
11 get a good shave at home says one Gillette employee.

Test Marketing

If the product passes functional and consumer tests, the next step is test marketing the stage at
which the product and marketing program are introduced into more realistic market settings.
Test marketing, gives the marketer experience with marketing the product before going to the
great expense of full ‘introduction. It lets the company test the product and its entire marketing
program-positioning strategy advertising distribution pricing branding and packaging and budget
levels. The amount of test marketing needed varies with each new product Test marketing costs
can be high, and it takes time that may allow competitors to gain advantages.

• Produce a physical prototype or mock-up

• Test the product (and its packaging) in typical usage situations
• Conduct focus group customer interviews or introduce at trade show
• Make adjustments where necessary

36 | P a g e
 • Produce an initial run of the product and sell it in a test market area to determine
customer acceptance

When the costs of developing and introducing the product are low or when management as
already confident about the new product the company may do little or no test marketing In fact
test marketing by consumer package-goods firms has been declining in recent years Companies
often do not test market simple line extensions or copies of successful competitor products For
example. P&G introduced its Folgers’s decaffeinated coffee crystals without test marketing and
Pillsbury rolled out Chewy granola bars and chocolate covered Granola Dips with no standard
test market. However when introducing a new product requires a big investment or when
management is not sure of the product or marketing program a company may do a lot of test
marketing. For instance Lever USA spent 2 years testing its highly successful Lever 2000 bar
soap in Atlanta before introducing it internationally. Frito-Lay did 18 months of testing in three
markets on at least five formulations before introducing its Baked Lays line of low fat snacks.
And Nokia test-marketed its N-Gage cell phone/mobile game player extensively in London
before introducing it worldwide.

Standard Test Marketing

Using standard test markets, the company finds a small number of representative test cities
conducts a full marketing campaign in these cities and uses store audits consumer and distributor
surveys, and other measures to gauge product performance. The results are used to forecast
national sales and profits discover potential product problems and fine tune the marketing
program.

Standard test markets have some drawbacks. They can be very costly and they may take a long
time—some last as long as 3 to 5 years Moreover competitors can monitor test market results or
even interfere with them by cutting their prices in test cities increasing their pro motion or even
buying up the product being tested. Finally test market give competitors a look at the company’s
new product well before it is introduced nationally Thus competitors may have tune to develop
defensive strategies and may even beat the company s product to the market For example while
CLOROX® was still test marketing its new detergent with bleach in selected markets P&G
launched Tide with Bleach nationally Tide with Bleach quickly became the segment leader
GLOROX® later withdrew its detergent Despite these disadvantages standard test markets are
still the most widely used approach for major in-market testing However many companies today
are shifting toward quicker and cheaper controlled and simulated test marketing methods.

Control Test Marketing

Several research firms keep controlled panels of stores that have agreed to carry new products
for a fee Controlled test marketing systems like AC Nielsen’s Scan track and Information
Resources Inc s (IRI) Behavior Scan track individual consumer behavior for new products from
the television set to the checkout counter.

In each Behavior Scan market WI maintains a panel of shoppers who report all of their
purchases by showing an identification card at check-out in participating stores and by using a

37 | P a g e
handheld scanner at home to record purchases at nonparticipating stores. Within test stores, IRI
controls such factors as shelf placement price and in-store promotions for the product being
tested IRI also measures TV viewing in each panel household and sends special commercials to
panel member television sets Direct mail promotions can also be tested.

Commercialization

Commercialization is the process or cycle of introducing a new product into the market. The
actual launch of a new product is the final stage of new product development, and the one where
the most money will have to be spent for advertising, sales promotion, and other marketing
efforts. In the case of a new consumer packaged goods, costs will be at least $ 10 million, but
can reach up to $ 200 million. In general one can say that it will cost about a dollar for each
dollar of sales turnover achieved.

Commercialization is often confused with sales, marketing or business development. The

Commercialization process has three key aspects:

1. The funnel. It is essential to look at many ideas to get one or two products or business
that can be sustained long-term
2. It is a stage-wise process and each stage has its own key goals and milestones
3. It is vital to involve key stakeholders early, including customers

Commercialization of a product will only take place, if the following four questions can be
answered:

When?

The company has to decide on the introduction timing. When facing the danger of cannibalizing
the sales of the company’s other products, if the product can be improved further, or if the
economy is down, the launch should be delayed.

Every single bank in Nigeria today has been commercialized. But it’s sad enough to know that
most of these banks are not straight forward in their various dealings with their clines/customers.

Where?

The company has to decide where to launch its products. It can be in a single location, one or
several regions, a national or the international market. This decision will be strongly influenced
by the company’s resources, in terms of capital, managerial confidence and operational
capacities. Smaller companies usually launch in attractive cities or regions, while larger
companies enter a national market at once.

Global roll outs are generally only undertaken by multinational conglomerates, since they have
the necessary size and make use of international distribution systems (e.g., Unilever, Procter &
Gamble). Other multinationals use the “lead-country” strategy: introducing the new product in
one country/region at a time (e.g. Colgate-Palmolive).

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To Whom?

The primary target consumer group will have been identified earlier by research and test
marketing. These primary consumer groups should consist of innovators, early adopters, heavy
users and/or opinion leaders. This will ensure adoption by other buyers in the market place
during the product growth period.

How?

The company has to decide on an action plan for introducing the product by implementing the
above decisions. It has to develop a viable marketing mix and create a respective marketing
budget.

Test marketing gives management the information needed to make a final decision about
whether to launch the new product. If the company goes ahead with commercialization—
introducing the new product into the market—it will face high costs The Company may have to
build or rent a manufacturing facility. And it may have to spend in the case of a new consumer
packaged goods between $10 million and $200 million for advertising sales promotion, and
other marketing efforts in the first year.

The company launching a new product must first decide on introduction timing. If
DaimlerChrysler s new fuel cell electric car will eat into the sales of the company s other cars its
introduction may be delayed If the car can be improved further, or if the economy is down, the
company may wait until the following year to launch it. Next, the company must decide where to
launch the new product—in a single location, a region the national market or the international
market. Few companies have the confidence capital and capacity to launch new products into
full national or international distribution. They will develop a planned market rollout over time.
In particular small companies may enter attractive cities or regions one at a time larger
companies, however may quickly introduce new models into several regions or into the full
national market.

The following are the steps of commercialization.

• Launch the product

• Produce and place advertisements and other promotions
• Fill the distribution pipeline with product
• Critical path analysis is most useful at this stage

Organizing for new product Development

Many companies organize their new product development process into the orderly sequence of
starting-with idea generation and ending with commercialization. Under this sequential product
development approach one company department works individually to complete its stage of the
process before passing the new product along to the development next department and stage.
This orderly step-by step process can help bring control to complex and risky projects. But it
also can be dangerously slow. In fast changing highly competitive works markets such slow but

39 | P a g e
sure product development can result in product failures lost sales arid profits and crumbling
market positions Speed to market and reducing new product development cycle time have
become pressing concerns to companies in all industries.

In order to get their new products to market more quickly many companies are adopting a faster
team-oriented approach called simultaneous product development (or team bad or collaborative
product-development) Under this approach company departments work closely together through
cross functional teams overlapping the steps in the product development process to save time
and increase effectiveness Instead of passing the new product from department to department the
company assembles a team -of people from various departments that Stays with the new product
from start to finish. Such teams usually include people from the marketing finance design,
manufacturing & legal departments and even supplier and customer companies.

The top management gives the product development team general strategic direction but no clear
cut product idea or work plan It challenges the team with stiff and seemingly contradictory goals
— turn out carefully planned and superior new products but do it quickly — and then givers the
team whatever freedom and resources it needs to meet the challenge In the sequential process a
bottleneck at one phase can seriously slow the entire protect In the simultaneous approach, if one
functional area hits snags it works to resolve them while the team moves on.

40 | P a g e
Chapter 3

41 | P a g e
Research Methodology
• Data collection from the following sources:
 Primary (surveys using questionnaire and interviews)
 Secondary
o News papers
o Subject books, articles and notices from public and college library
o Magazines
o Journal
o Internet
• Use of the various trade websites, BSNL telephone directory services to access various
organizations, dealers, and suppliers detailed database.

• Cold calling and sending online questionnaire to organizations and dealers via internet.

• Contact the persons working or involved in the cable installation process.

• Collecting detailed information and data of power transmission requirements by personal

interview.

• Compilation and sorting of observations and collected data.

• Formulating the data thus obtained in a suitable format and quantity.

• Analysis of obtained data.

42 | P a g e
Objective of Research

The main objective of the research report is

• The project involves the study of demand of these high power transmission products in
the Indian markets”

• To study the measures to increase the company’s share by investing in these future
arenas of new product development

Research Design

The research involves working with the market research department of the company where the
main responsibility allotted were to:

• Creating database of all the company’s suppliers and customers.

• Prepare a questionnaire about the needs of the customers for the power transmission
cables.

• Taking personal interviews with the industry experts and the customers.

• Finding out the technical specifications of these demands.

• Finding out the scope of these new demands to build a new product.

• Company’s current position analysis and future growth prospects of market coverage.

43 | P a g e
Chapter 4

44 | P a g e
Data Analysis

Company Analysis: Universal Cables Limited

Universal Cables Limited engages in the manufacture and sale of power cables, capacitors, and
optical fiber cables in India and internationally. It offers XLPE power cables, PVC and rubber
insulated power cables, control and instrumentation cables, and rubber cables; low and high
voltage capacitors, APFC panels, medium frequency water cooled capacitors, surge protective
capacitors, tuned and detuned filter capacitors, and DC capacitors, as well as provides PF
correction systems, harmonic analysis, and PF studies. The company offers its cables and
capacitors products under the UNISTAR brand name. Universal Cables Limited, through its
joint venture with Birla Ericsson Optical Limited, manufactures optical fibre cables and jelly
filled telephone cables. It also involves in the system design, supply of cables, cable jointing and
termination, laying, installation, and commissioning of underground power transmission
networks. The company exports its products primarily to the Middle East, the Far East, Africa,
Europe, Sri Lanka, Bangladesh, Nepal, Bhutan, Mauritius, and Pakistan. It sells products through
dealers and distributors. The company has a strategic alliance with VISCAS Corporation for the
supply of 220kV cable jointing accessories. Universal Cables Limited was founded in 1962 and
is based in Satna, India.

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 EHV (Upto
220KV) 7% EHV (Upto 220KV)
LV PVC 48% HV (Upto HV (Upto 33KV)
33KV) 36% LV XLPE
LV PVC
LV XLPE 9%

The questionnaire has been prepared which is attached as “annexure” which was given to
company’s key customers and the findings of the 15 respondents in pan India locations is shown
in the graph above. The above data shows that there exists a growing demand for the company’s
new extra high power cables as the power transmission requirements of the electrical energy has
increased due to vast increase in the number of customers and the power load of the transmission
lines. This increasing demand has created a great opportunity for to company to tap a niche
market of high power capacity transmission cable, where only a few players are present on a
global level.

But still there is a large scope as the Indian market is still on a growth stage of infrastructure
development where the customers for such cables are increasing day by day and the cost
efficiency has become top most priority for these firms.

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BALANCE SHEET OF THE COMPANY

Currency in As of: Mar 31 Mar 31 Mar 31 Mar 31

Millions of Indian Rupees 2007 2008 2009 2010
Restated Reclassified Reclassified

Revenues 3,772.1 4,914.6 5,774.3 4,957.3

Other Revenues 41.8 22.5 3.2 1.2

TOTAL REVENUES 3,813.9 4,937.1 5,777.6 4,958.5

Cost of Goods Sold 2,826.8 3,742.1 4,501.7 3,741.3

GROSS PROFIT 987.1 1,195.1 1,275.9 1,217.1

Selling General & Admin Expenses, 505.9 549.4 681.3 602.2

Total

Depreciation & Amortization, Total 82.3 134.2 164.8 168.7

Other Operating Expenses -23.0 91.6 109.3 90.9

OTHER OPERATING EXPENSES, 565.2 775.3 955.5 861.8

TOTAL

OPERATING INCOME 421.8 419.8 320.4 355.3

Interest Expense -66.5 -148.0 -202.3 -78.6

Interest and Investment Income 1.4 2.7 5.5 9.7

NET INTEREST EXPENSE -65.1 -145.3 -196.8 -68.9

Currency Exchange Gains (Loss) 0.7 3.9 -22.4 25.7

Other Non-Operating Income -17.1 -17.3 8.4 16.7

(Expenses)

EBT, EXCLUDING UNUSUAL 340.4 261.2 109.6 328.8

ITEMS

Gain (Loss) on Sale of Assets -1.9 1.9 2.9 84.5

Other Unusual Items, Total 1.3 3.6 -- --

Other Unusual Items 1.3 3.6 -- --

EBT, INCLUDING UNUSUAL 339.8 266.6 112.5 413.2

ITEMS

Income Tax Expense 120.0 93.9 42.5 141.8

47 | P a g e
 Earnings from Continuing Operations 219.7 172.6 70.0 271.4

NET INCOME 219.7 172.6 70.0 271.4

NET INCOME TO COMMON 219.7 172.6 70.0 271.4

INCLUDING EXTRA ITEMS

NET INCOME TO COMMON 219.7 172.6 70.0 271.4

EXCLUDING EXTRA ITEMS

Although debt as a percent of total capital decreased at Universal Cables, Ltd. over the last fiscal
year to 40.88%, it is still in-line with the Electrical Equipment industry's norm. Additionally,
even though there are not enough liquid assets to satisfy current obligations, Operating Profits
are more than adequate to service the debt. Accounts Receivable are typical for the industry,
with 85.39 days worth of sales outstanding. Last, inventories seem to be well managed as the
Inventory Processing Period is typical for the industry, at 95.83 days.

The company, which has completed its Rs 63 crore investment plan.Stratergy analysis of product
development at UNIVERSAL CABLES LIMITED in the recent financial years the company has
spent considerable capital on its research and development company has also spend and focused
on acquiring new and advanced technology and quality implementation of new product
development process intended to increase the product line and market share of the company.
This invested amount has decreased the profit after tax amount of the current year and has also
reduced a current profitability margin for the company but company expects the future sales to
go in the coming years and accrue the benfits of invested amount on technology upgradation and
research and development technology in the coming year which would be the results of
increased market share and penetration in the niche market of extra high power cables in
India.The company clocked in a net profit of Rs 6.95 crore for the quarter ended September 30
2009, from a net loss of Rs 1.37 crores in the corresponding quarter of the previous year. Net
sales were at Rs 130.11 crore against Rs 157.96 crore in the previous corresponding quarter.Tthe
company clocked in nearly a six-fold increase in net profit for the quarter ended December 31,
2009, at Rs 6.79 crore from Rs 0.09 crore. Net Sales for the quarter was also higher at Rs 130.53
crore, an increase of 4.94 per cent.

The cable industry has to take the responsibility to be a prt of decision making process for
encouraging undergrounding of power links for benefits of utility and industries –this in turn
would generate higher demand for power cables.

48 | P a g e
Power Sector- Key Growth Driver for Power Cables

• The Indian Cable Industry has been playing a crucial role and dedicatedly serving the
Nation by supporting the growth of the Power Sector for over 60 years.

• The Industry has kept pace by continuously upgrading the technology to meet the
technical demand from the Power Sector.

• In consonance with the Power Development Programme the Industry has been
augmenting its capacity to meet the projected demand-supply gap.

• The industry had to pass through many traumatic phases due to cyclical recessions
arising from the slippages in the projected Power sector targets.

ESTIMATED Growth FOR 11th Plan And 12th Plan

Projected Growth as per Price waterhouse Cooper

11th Plan 11th & 12th Plan
HV & EHV Power Cables 30-35% 13-17%

LV Cables 13-19% 9-13%

Conductors 8-12% 6-9%

Projected Growth as per PwC report

INDUSTRY RESPONSE

Major manufacturers have undertaken expansion for additional capacity through brown field as
well as green field

Sub-vendor base, complimenting the industry effort through additional capacity

New technology ties ups with foreign players to develop capability in 220 kv cables and above.

• Faster and more reliable jointing technologies being practiced for the medium and high
voltage cables, resulting in lesser failures.

49 | P a g e
 Huge investments made by the industry for adding capacity to meet growth plan of the
country. However due to slowdown in the World markets, the envisaged demand has not
picked up. Cable industry has clocked negative growth in the current year.

Power Sector : Projected Capital Outlay

11th Plan 12th Plan

(2007-12) (2012-17)
Generation Rs. 343000 Cr Rs. 495083 Cr +44%

Transmission Rs. 129300 Cr Rs. 240000 Cr +86%

Distribution Rs. 144300 Cr Rs. 400000 Cr +277%

Total Outlay Rs. 616500 Cr Rs. 1135083 Cr +184%

Source: CEA Report

50 | P a g e
SWOT Analysis of Universal Cables Limited

STRENGETH WEAKNESS

• Availability of large capital and • Scarcity of raw material

Funds • Bad infrastructure for transportation
• Well established Brand Name across various places in Country
• Available Highly Technical Expertise
• Use of Latest Technology & Strong
Research & Development Cell
• Highly experienced Management
• One of the largest production facility
OPPORTUNITIES THREAT

• Continuous growing demand of high • Continuous increment in new entrants

power electrical cables across the from domestic as well as international
globe markets
• Government backed support to • Increasing raw material prices and
establish projects of special transportation costs
preference
• Continuous growth in demand for
power due to rapid development in
Country’s infrastructure

51 | P a g e
Porter’s Five Forces Analysis of Power Industry in India

The model of pure competition implies that risk-adjusted rates of return should be constant
across firms and industries. However, numerous economic studies have affirmed that different
industries can sustain different levels of profitability; part of this difference is explained by
industry structure. Porter’s model is based on the insight that a corporate strategy should meet
the opportunities and threats in the organizations external environment. Especially, competitive
strategy should base on and understanding of industry structures and the way they change.

• Supply

Many projects have been planned but due to slow regulatory environment, the supply is
far lesser than demand. Currently, India needs to double its generation. Many projects
have been planned but due to slow regulatory environment, the supply is far lesser than
demand. Currently, India needs to double its generation capacity to meet the potential
demand.

• Demand

The long-term average demand growth rate is 6%.

• Barriers to Entry

Barriers to entry are high, as entering this business requires heavy investment initially.
The other barriers are fuel linkages, payment guarantees from State Governments, Retail
distribution licensed, etc.

• Bargaining Power to Suppliers

Not very high as Government controls tariff structure. However, this may change the
future.

• Bargaining Power of Customers

Bargaining power of retail customers is low, as power is in short supply. However,

Government is a big buyer and payment by Government can be more erratic. Not high
currently. The Electricity Act, 2003 will encourage investments, thereby increasing
competition.

52 | P a g e
SWOT Analysis

Strenghts And Opportunities Of Power Sector

• Well established and vast transmission and distribution network.

• Highly qualified engineering and technical personnel.

• Regulatory framework is further facilitated with enactment of Electricity Bill, 2003.

• The Electricity Bill, 2003 holds promises for the power sector and certainly for the
consumer by way of competition reliability and rationalized tariff structure.

• Emergence of strong and globally comparable central utilities (NTPC, POWERGRID).

• India has substantial non-conventional energy resource base and technologies to meet
growing power requirements by tapping this energy.

Weaknesses And Threats To Power Sector:

• Poor infrastructure has led to heavy T&D losses. Old and poor transmission and
distribution network has led to frequent power outages and poor quality of power.

• Lack of proper metering and theft has led to large scale losses. Only 51% of the power
generated is billed and only 41% is realized.

• Moreover, Government provides power to agricultural sector at subsidized rates and also
free of cost in some states. All these factors have resulted in financial disorder of the
State Electricity Boards (SEBs).

• Restoration of SEBs financial health and improvement in their operating performance

continues to be a critical issue. The Government of India has signed a Memorandum of
Understanding (MOU) with various states reflecting the joint commitment of centre and
states to undertake reforms in a time bound manner.

• Poor return to utilities, which affect their profitability and capacity to make further
investments

• Increasing gap between unit cost of supply & revenue, approximately Rs 1.10/Unit

• Managerial and financial inefficiencies in state sector utilities have adversely affected
capacity addition and systems improvement.

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• Non-availability of quality coal may hamper thermal plants’ efficiency in power
generation.

• Inability of SEBs to raise funds, as most of the SEBs is on the verge of bankruptcy due to
poor operational performance. Adding to the problems, SEBs need huge money to
measure up competition from efficient private players

• The major risk of privatizing a critical sector like power is the precedence of commercial
over public interest. Some of these interests that will take a back seat include
development of environment friendly generation and provision of electricity for rural
areas. The new Electricity Act does not provide any specific financial incentives for
private players to address public issues.

• The SBEs which are right now holding 60% of total installed capacity, will be hit
adversely by some provisions of the new electricity act such as delicensing of generation
and open access for IPPs and CPPs, there by such units will take away the most lucrative
customers (like industrial and commercial users) from the SEBs. This will not only affect
SEB’s but also the entire power sector for near term.

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New Product Development Process at Universal Cables
Limited

New Initiative: Necessity

• Indigenous Technology is stagnant at 132 KV level since 1990 as the existing CCV Line
is 27 years old and not suitable for producing 220 KV & 400 KV XLPE Cables being
imported presently.

• VCV Line with its “State-of-the-Art Features” like X-Ray & Laser Units is the most
suitable technology for producing world class XLPE Power Cables up to 400 KV.

• First of its kind in India.

• Will Gear up the country for the future needs of XLPE Cables up to 400 KV.

• Will help the Nation in import substitution (220 KV Cables).

• Will help the Nation in promoting Export Business.

55 | P a g e
Objective of developing new product

• To enhance the expertise and capability in the field of manufacturing technology of

XLPE Power Cables in line with the technological development taking place worldwide.

• To establish world class manufacturing facility for bridging the existing technology gap
and meeting the emerging demand of 220 KV Extra High Voltage XLPE Power Cables
in the country which are being imported presently.

• To further upgrade the Technology for the future needs of 400 KV Extra High Voltage
XLPE Power Cables in the country.

• To attain requisite competitiveness & cost effectiveness for Domestic and Export
Business through Quality Upgradation, Enlargement of the Manufacturing Range,
Improved Productivity, Optimised consumption of raw materials, Efficient Energy
Management and Overall operational flexibility.

Benefit of New Initiative: Project of Special Importance

• The Government of Madhya Pradesh has accredited the proposed project as a project of
special importance.

• Special economic concessions have therefore been granted to the project.

56 | P a g e
 Discussion

Indian Cable Production US$ 2.2 bn

CRU estimates that Indian cable production in 2005 was US$ 2.2 billion. This means that the
Indian production is comparable to that of France or Mexico, for example. China’s cable
production in 2005 is estimated to be US$ 17 billion, nearly 8 times higher than India. This ratio
is much higher than the ratio of China’s GDP to India’s, as (a) China has many manufacturing
industries that are very intensive in their consumption of cable, and (b) China is going through a
sustained boom in infrastructure development.

Very Large Number of Cable Producers

The Indian cable industry is highly fragmented with a very large number of cable producers –
many hundreds of companies – a larger total than can be found in any other country in the world
except China. Many of these Indian companies are small-scale cable producers, the smallest of
which are family-run operations with only the most basic of production equipment.

Larger Indian Cable Producers

At the other end of the scale in the Indian industry are some relatively large cable producers, but
even amongst these larger players there are only a small number whose annual sales of insulated
wire & cable approach or exceed US$ 100 million. The larger Indian cable producers include
Finolex Cables, the Birla Group (including Universal Cables, Vindhya Telelinks and Birla
Ericsson Optical), Sterlite Optical Technologies, Havell’s India, Nicco Corp. and KEI Industries.
These are all listed companies. Polycab is a large privately-owned cable producer, while
Hindustan Cables is a state-owned manufacturer of telecom cables.

Very Limited Consolidation

CRU estimates that even the largest Indian cable producer, the Finolex group, accounts for only
5% of total Indian cable production. In mature markets it would be more usual to find that the
largest cable producer had 15% to 20% (and sometimes a much higher percentage) share. There
has been only very limited consolidation amongst the major players in the Indian cable industry.
The tendency of Indian cable companies to grow organically, rather than by acquisition of
competitors, means that no clearly dominant groups have emerged in the Indian cable industry.

Many Major Listed Cable Companies

Most of the major cable companies in India are listed companies or are part of large industrial
groups that are themselves listed companies. This bias in India towards listed companies
contrasts with many other developing regions of the world where listed cable companies are not

57 | P a g e
so widespread as they are in India. In China, for example, only a few of the large cable
companies are listed, as most of the others have developed from state-owned enterprises or have
been newly established by private entrepreneurs. The situation in India also contrasts with South
America, where, with a few notable exceptions like Madeco, most of the major cable groups are
subsidiaries of foreign groups or are privately owned.

Improved Industry Profitability

According to the survey by CRU of financial results of the major listed Indian cable companies,
industry profitability has been improving in recent quarters. Average profitability weakened
from Q2 2002 onwards (i.e. Q1 of the Indian 2002/03 financial year), and the low point for the
industry was reached in Q1 2004 (i.e. Q4 of FY 2003/04), as in that quarter some of the major
players in telecom cables reported big operating losses. Since Q2 2005 average margins for the
Indian cable industry have been above 10%, so compared to many other markets, where
operating margins in the cable industry even in good years are in the range 5% to 10%, the
financial performance of the Indian industry is quite strong.

Large Informal Sector

In the Indian cable industry there is a large informal or unorganised sector. Some small cable
companies compete by selling products of dubious quality at low prices. While such a “black
market” sector also exists in other countries, it is a particularly big problem in India. Smaller
local cable producers may be encouraged in some market sectors (e.g. PVC power cables for
utility distribution networks) by legitimate tactics, such as price preferences, but in the
unorganised sector almost anything goes. In some instances small cable producers bypass the
regulations that large and medium-sized cable producers have to follow. Companies in the
unorganised sector may avoid paying taxes or take advantage of unmetered power supplies
intended for agricultural users.

Counterfeit Cables an Issue

In mature markets, such as Western Europe, products such as building wire are generally
regarded as commodities, with lowest price and availability being the key criteria for purchasers.
Quality is a secondary consideration in mature markets, as purchasers usually assume that all
cables that have the appropriate product approvals meet the required performance specifications.
In India, however, the market situation is different: domestic consumers (e.g. for building wire
used in residential construction) are likely to be quality conscious, aware of brands of cable that
have a reputation for quality and wary of buying poor quality products. In a market where
perceptions of quality are important, unscrupulous small producers may try to sell counterfeit
cables, usurping the brand-names of the more reputable Indian cable makers.

58 | P a g e
Cable Companies Show Resilience
Even more than cable companies in other countries, Indian cable producers experiencing
financial difficulties have shown a remarkable ability to survive, usually in a weakened form,
rather than being bought by other groups or undergoing outright closure. This behaviour
contrasts with the US or Europe, for example, where on a relatively short time scale pressure
from shareholders and banks forces the management of poorly performing cable businesses to
close unprofitable operations or to seek rationalisation opportunities. In India, by contrast,
companies in difficulties may carry on trading for several years, operating under India’s
bankruptcy protection regulations. In most parts of India, but especially in areas such as
Calcutta, it is difficult to close businesses because of laws that protect workers’ employment
rights. Thus the exit barriers in the Indian cable industry are high, which has also tended to make
outside investors very cautious about entering joint ventures or setting up green-field operations
in India.

Foreign Investment in JVs

There are a number of cable-making joint ventures in India involving foreign groups, but there
has not been a big movement by foreign investors into Indian cable manufacturing. The track
record for foreign investors in the Indian cable industry is generally poor. There are several
examples of foreign companies that in the past have established joint ventures in India but which
have eventually withdrawn, either due to market conditions remaining poor over a number of
years or to consistently weak performance by the joint venture. Cable businesses in India that are
wholly owned (or nearly so) by foreign groups are rare. It is interesting that some of the leading
global cable groups have no presence in India, except via trading companies.

Contrast with China

The reluctance of foreign investors to “go it alone” in the Indian cable market contrasts with
what has happened over recent years in China. Depending on the market sector, a foreign cable
group in China may choose either to set up a joint venture with a local company or to establish a
wholly-owned business. More experienced investors in China have the confidence not to need
the support of a local partner, unless there are good reasons for seeking such support.

Power

With the government recognising the power sector to be the backbone of sustained industrial
growth, robust investments have been proposed towards building up capacities. For India to
sustain its GDP growth at over 8%, it is estimated that the power sector should grow atleast 1.8
to 2 times of the GDP, translating to an addition of generation capacity by nearly 18,000 to
20,000 MW (megawatts) each year.

59 | P a g e
Power cables play a crucial part in all the three aspects of the power sector – generation,
transmission and distribution. The power sector in India is characterised by shortages on account
of various factors such as pilferage, theft, equipment defaults (due to poor quality), amongst
others. Increasing amounts of power deficits has increased the demand for quality equipment and
higher voltage power generation. As such, the major cable manufacturers have ventured into
manufacturing extra high voltage (EHV) cables along with expanding capacities to meet the
demand rising demand.

It is estimated that nearly 3% to 3.5% of investment per MW goes towards power cables.
Therefore, with an approximate investment of Rs 40 m per MW, the demand for cables will be in
the range of Rs 1.2 m to 1.4 m.

Approximate opportunities for power cable industry

Segment Estimated cost Range Opportunity

Generation 3,430 3%-3.5% 103-120
Transmission 1,293 1.5%-2% 19-26
Distribution 1,443 10% 144
Total 6,166 - 266-290
Source: PCI; All figures in Rs bn

Strong capacity addition plans have been proposed for power generation during the eleventh and
twelfth five-year plans. The Planning Commission of India (PCI) has proposed capacity addition
of almost 78,000 MW (although the actual addition is likely to be lower) during the eleventh
plan (2007-2012), translating as opportunities in the range of 103 bn to Rs 120 bn. Further, on a
conservative basis, it is estimated that nearly 1.5% to 2% total project cost in the transmission
segment goes towards power cables. Power distribution on the other hand generates the highest
demand for cables, approximating to nearly 10% of the total project cost.

60 | P a g e
Industrial

Investments in the industrial sector, comprising of buildings, factories, and industrial units across
various sectors such as steel, power, fertilisers, oil & refinery, aluminum, cement, mining,
among others, also generate demand for power cables (both low and high tension cables). It is
estimated that nearly 2% to 2.5% of the total capex plans goes towards power cables. With
Indian corporates estimated to spend around US$ 150 to US$ 200 bn as capex over the next few
years, the demand for cables from the sector is expected to be high.

Communication

Cables are the backbone of the communication sector. Favourable demographics and increased
discretionary spending drive the growth of this sector. As we all know, India is the fastest
growing telecom market in the world adding nearly 8 m to 9 m subscribers every month. In
addition, the telecom companies are aggressively making inroads into rural markets. In addition,
with the government estimated to contribute nearly Rs 18 bn towards the Universal Service
Obligations (USO) fund on an annual basis, the demand for telecom infrastructure, including
cables is expected to remain strong.

Realty
According to the eleventh five–year plan document, there is a shortage of 24 m homes in the
country. While there has been a significant slowdown in real estate demand in the recent past,
the above-mentioned fact still stands intact. As such, this sector is scheduled to create strong
demand for commodities (including cables) going forward. Growth across segments such as
residential, commercial and retail will be the major factor for this segment going forward.

61 | P a g e
 Recommendations
Key concerns of cable companies

While the market opportunities remain vast, being a manufacturing industry, cable players will
continue to face input cost pressures. With copper, steel and nickel being the major materials
consumed, volatility in prices will have an adverse impact on the companies going forward.
Passing on the costs to the customers may not be an easy task considering that most of the orders
are small sized. Strong competitive environment, currency fluctuations and shortage of
manpower are other factors that this sector needs to address in the long run. Also the fact that
operations are working-capital intensive makes companies’ balance sheet sometimes stretched.

Cables play a small but significant part in infrastructure activities. With strong investments
proposed across sectors such as power, realty, industrial and telecom, the cable industry in India
is slated for a strong growth going forward.

In order to outperform the emerging competition, the companies need to focus more on its
research and development process and invest more in these activities. Since the Indian
companies lack the strategic approach to invest more into innovation and research activities, the
percentage of contribution in overall sector wise growth on global level by Indian companies is
significantly low.

The new product development process helps the company to understand the constantly changing
needs and demands of the current as well as future customers. Hence the company can
strengthen its brand equity by indulging more in such innovative strategy thereby delighting the
end customers as well as all its stakeholders with the desired returns and growth.

62 | P a g e
The new product development process of the company has lead to increase in the market share
of the company. It has been successful in meeting the demand for extra high power transmission
cables with low cost of production. As this new technology would result in maximizing
efficiency and improving transmission losses, the company has gained competitive advantage as
being an early entrant in this segment. It has also improved the product line of the company and
has added to its branding initiatives.

The new product developed has also benefited the company as:

• Subsidised product pricing to gain price advantage due to special subsidy given by state
government.

• Improved technology to reduce production costs

• Improved product quality and reduced power losses

• Gain first mover advantage and build brand equity

• Improve profit margin and growth on investment.

63 | P a g e
 Bibliography
Books

• Principal of Marketing (Eleventh Edition)

o Part III

 Chapter# 9: Page # 274,276,280,282

Web site

• www.learnmarketing.net

• www.wikipedia.org

• www.infotrends.com

• http://learnmarketing.net/product.htm

• http://en.wikipedia.org/wiki/New_product_development

• http://www.npd-solutions.com/strategy.html

• http://www.infotrends.com/public/Content/MRD/Projectdescriptions/productconcepttesti
ng.html

• http://www.businessplans.org/Market.html

• http://www.proddev.com/pdf/Succeeding_at_New_Products_the_PG_Way.pdf

• http://www.unistar.co.in/index.php

Organization

• Universal Cables Limited, Satna

64 | P a g e
“Annexure”

65 | P a g e
Questionnaire

1. Name of Respondent:……….…………………………………………….

2. Designation:……………………………………………………………….

3. Name of the Company:…………………………………………………….

4. Address of the Company:…………………………………………………

……………………………………………………………………………...

5. Contact No.:…………………………………………………………………

6. Email Address:………………………………………………………………

7. Nature of Business:………………………………………………………….

8. Territory of Operations:………………………………………………………

9. Your Key Customers:

• …………………………………….

• …………………………………….

• …………………………………….

10. Power Capacity Requirements (Tick Appropriate):

a. More Than 66 KV

66 | P a g e
 b. 66 KV

c. 33 KV

d. 11 KV

e. Low Tension (LT)

11. Current Power Losses (In %):……………………………………………

12. Desired Tolerance level for Power Losses:………………………………

13. Average Annual Cable Requirement (Quantity in Meters):………………

14. Requirement of Cable Type (Tick Appropriate):

a. Extra High Voltahe (EHV) Upto 200KV

b. High Voltage (HV) Upto 33 KV

c. Low Voltage XLPE

d. Low Voltage PVC

Date:

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