Group #6 Cleber Hamada, Raghav Malhotra, Alejandro Chinchilla

Mayank Mittal & Kristoffer Sletten

Company Profile

• Bharat Wire Ropes Ltd. is located in Mumbai, India.

• Founded 37 years ago

• Products: • 30 varieties of Wire Ropes• Wire Rope Assemblies • Defense products.

• Operates in one plant with 450 employees.

Steel Wire Rope Industry in India

• Established in India in the 1920s

• Remarkable progress • Various types of high carbon• Alloy steel • Special steel wires

• The Industry has grown about 6%

• 5% of the total steel consumed in India

Chinese Market

• China's economy changed from a centrally planned system to a more market-oriented economy.

• Rapidly growing private sector and is a major player in the global economy.

• China in 2009 stood as the second-largest economy in the world after the US.

Product Description

• Wires that form the strand

• Multi-wire strand: laid helically around a core

• The Core

Overall Strategy of Entry

•Exporting•Small scale of entry – less risk•Use it’s expertise with the heavy competition and know-how•At least keep on the break-even point•Face one of the biggest markets in the world•Achieve the experience curve•Find a local company’s partnership in day-to-day operation

Consumer Channel / Distribution

•Concentrated systems •Short distribution channel•Transportation by sea to the top ten Chinese sea ports•Then transport it by land – Local partner•Analyse all the possibilities of transportation

Pricing/Strategic choices • Product sourcing- Raw materials procured domestically machines imported

• Barriers to Entry-Chinese laws for setting up operations, piracy issues

• Problems anticipated after entry: Bureaucracy and Red tape to secure orders from state run companies

• Low Cost Approach: Product differentiation is hard low cost can give BWRL an edge

• Value Creation Activities

Logistic Management : Availability adds value Operation Management: Streamline to lower the cost Customer Service: Get Feedback and improve overall

Financial situation

• Acquired company, hence is a financial analysis essential • Family’s holding company - funding

• The company has done restructuring adjustments last year• Huge potential to gain from increasing their exports

DuPontApproach to analyze a firm by evaluating inters relationships among many of the performance measures

• Operating efficiency – profit margin• Asset use efficiency – asset turnover• Financial leverage – equity multiplier

• ROE (return on equity)

Shift in Customer Base

Future Target

25%

35%

40%

Government customer Private customer Export customer

Conclusion

• Attractive market • Government issues

• Competitiveness of the market• Company's capabilities

• Conservative approach – kick back commission's to wholesalers

• More aggressive approach – localization strategy

Guys, in the future, if you are in need of wire ropes, you know who to call!

Thank you

Special thanks to Dr. S. K. Shardha