Kingfisher Pp t

7/27/2019 Kingfisher Pp t

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The Power of Leadership

Company presentation on UB

GROUP

Presented By:

Arun singh


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The UB Group was founded by Scottish gentleman

Thomas Leishman in 1915.

The group started manufacturing beer from south

Indian based British breweries and elected its first

Indian director, Mr. Vittal Mallya in 1947.

Kingfisher the most visible and modest brand made

its entry in 1960.


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KINGFISHER-BRAND

kingfisher stands for excitement, youth

and camaraderie.

kingfisher, the bird is known for its keen

instinct,and perfect aim.

It zeros on its target with unfaltering

focus


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Contd

During the 60s they added Mc dowell as a

subsidiary which helped them to extend its portfolioin to wine & spirits business.

Latter on Mr. Vittal Mallya acquired UB Group and

after his untimely deth in 1983, Mr. Vijay Mallyabecame the chairman of UB Group.


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Mission & Vision

We are focused on assuming leadership in all our targetmarkets.

We seek to be the most preferred employer wherever weoperate.

We recognize that our organization is built around people

who are our most valuable asset.

We will always be the partner of choice for customers,suppliers and other creators of innovative concepts.

We will operate as a decentralized organization and alloweach business to develop within our stated values.

We will be a major contributor to our National Economyand take full advantage of our strong resource base.


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Corporate Strategy

The ultimate goal is GROWTH of the

company

Focus on primary line of business

Effort to sell the same products to a new

market

GROWTH BY CONCENTRATION,

MARKET DEVELOPMENT,MERGERAND ACQUISITION


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MERGERS - UB

Following entities being merged:

McDowell & Company Limited (Listed)

Herbertsons Limited (Listed)

Triumph Distillers & Vintners Private Limited

United Distillers India Limited

Baramati Grape Industries Limited

Phipson Distillery Limited

United Spirits Limited

Asian Opportunities & Investments Limited

McDowell International Brands Limited

Zelinka Limited Shaw Wallace Distilleries Limited together with its subsidiaries

WHYTE & MACKAY

26% stake in Air Deccan


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Group Business

Breweries

Airlines

Fertilizers

Engineering


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UB GROUPA Group in the process of Transformation

Spirits

29%

Beer

8%

Pharma

25%

Engineering

18%

Others

7%Petrochemic

als

6%

Paints

7%

FY 1990

FY 2006

Beer , 17%

Spirits, 59%

Airlines ,

6%

Engineerin

g , 3%

Fertilizers,

15%


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UB Group- One of Indias leading wealth creators

Market Cap : August 2006

Five Core listed companies have a market cap ofUSD 1.7 billion

Market cap has grown 10 times in last 5 years

Some of the large funds who have invested inMcDowell

and United Breweries include-

McDowell & Company Ltd

Sloane Robinson LLPGoldman Sachs (Mauritius)Merril Lynch Capital MktsDB Funds (Mauritius)FID Funds (Mauritius)Platinum Asset Mgnt

United Breweries Ltd

Oppenheimer Fund IncCitigroup Global MktsGoldman Sachs (Mauritius)FID Funds (Mauritius)Arisaig Partner (Asia) PteHSBC Financial Services (ME


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Group Holding Structure

(UB City Project)

Investments Real Estate

Spirits

Business

United Spirits

Shaw Wallace Ltd

Beer

Business

United Breweries

Millenium Alcobev

Aviation Others

Kingfisher

Airlines Ltd.

Aventis

Pharma

MangaloreChemicals &

Fertilizers

UB Engineering

UB (Holdings) Ltd.

(36.54%)(37.50%)

(50%)

(100%)

(10.28%)

(30.44%)

(34.74%)

(55%)

( Erstwhile McDowell &

Co Ltd)

(75%)


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UB GroupUnique Leadership in both Beer and Spirits

Spirits : Controls about half the domestic market -

60% in first line brands

3rd largest player in the world

Has 5 brands which are in the Top 50Spirits Brands World wide list of ImpactInternational.

Beer :

50% market share nationally Sold in over 52 countries

Indias 1st global consumer brand

Kingfisher

Both B eer

and Spir i ts

share a

common

distr ibut ionchannel


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Grand Strategies

Expansion Strategies

Diversification

Cooperation (M&A, JV/Foreign Collaboration)


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Acquisition of Shaw Wallace

Shaw Wallace was the 2nd largest player in spirits inIndia (MS - 15%).

UB Group acquired 75% stake for a consideration ofUSD 300 mio in July 2005

Consolidation Plan Action initiated to merge all the spirits entities into

McDowell to create United Spirits Limited.

USL 4


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Largest producer of sparkling wine in Saumurregion.

Acquisition ofBouvet Ladubay


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Acquisition of Air Deccan

The choice is simple.


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UB

SAB

MM

Shiv'k

Fosters

Other

Market ShareMar 06

Kingfisher

(Mild+Strong)

H 5000

Knock-out

Royal Challenge

Zingaro

Others

Brand MarketShare Mar 06

Indian Beer Market

UBL 2


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PORTERS FIVE FORCES MODEL

IndustryCompetitors

Strong image,

Brand Loyalty, and

Innovative R&D.

Potential Entrants

Barrier to entry - customer

loyalty, high set-up costs.

Buyers

Retailers power

increasing.

Substitutes

Railways for airlines.

Suppliers

Globaleconomies of

scale keep

suppliers prices

low.

Source: Porter, 1978


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PRODUCT MARKET PORTFOLIO

RMS

MARKETGROW

TH(%)

1.0

Breweries

Airlines

15%

10%

18%

1.5 0.6


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External Analysis

PEST Analysis

Opportunities &Threats

Competitive advantage


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PEST Political

Regulatory hurdles constitute an entry barrier to the industry.

The alcohol distribution structure is 65% State government controlled.

Deregulation is now starting to happen which will benefit the industry in

general & USL in particular-

Policy Change Benefits

- De-cartelization in 2001 - Industry has doubled

- State Govt has taken over - Net Realization has doubled

the wholesale trade

- Changes in the Annual - Price increasetender policy


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PEST

Economical: With 8% + GDP growth expected over the next few years the

Industry have a bright future.

High Disposable Income.

Domestic Air Trafficgrew by 23% to 21.82 million passengers

in 2005, over 17.70 million passengers in 2004.

The buoyancy in the corporate sector with the economic boom,

business and leisure travel is expected to far exceed first time

travel.


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PEST

Social:

Demographics, Higher disposable income & change in spendingpatterns favour growth of more profitable products

Changing Lifestyles

Attitudes of work & Leisure

Rapid urbanization - middle class already exceed 300 million


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PEST

Technological:

New packaging initiatives to reduce costs and curtail counterfeiting.

New product developmentsDiet Whisky

Innovative CRM Techniques


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Opportunities & Threat

Opportunity

Market conditions very attractive for growth especially booming real

estate and aviation. Create credible alternatives in the premium and high end segment.

Facilitate entry into new segments, such as wines, Aviation etc.

Provide access to non traditional global markets, particularly Russia

and China.

Incorporate B2C e-commerce portal.


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THREAT

Government regulations

Stiff competition to products

Alternative drinks and health conscious customer.


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Strongest brands

Significant

upgradation

Least vulnerable

to policy

volatility due tolarge spreadBranding

Local

Sourcing

Value

Chainownership

Segment-

Market

Presence

ManufacturingTechnology

Beverage

Business

Optimal, asalmost

completely

locally sourced

Largest manufacturing base

Maximum capacity utilisation

Initiatives plannedfor integration into

retailing

The UB Groups competitive advantage

Management

Team

Professionally managed

Seasoned professionals with

significant industry experience


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Core Competencies

Focus on Brand Imagery

Since Beer is a category with little product differentiation, consumersbrand choice is largely on imagery

With multiple brands in each segment of beer, UB has successfullypositioned different brands on different platforms relevant to differentconsumers, different need states

Kingfisher has appropriated some of the category values including`refreshment

Brand Association

With Fashion, through Kingfisher Fashion Awards and the KingfisherSwimsuit Calendar

With high visibility events like the Mumbai Marathon, the Delhi HalfMarathon, the International Film Festival of India

With events important to the ethos and culture of people in key regionslike the Goa Carnival, the Bangalore Habba


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Core Competencies

Focus on Value to Consumer.

Develop Synergies Through Mergers and Acquisitions.

Dominance at point of purchase / consumption through

Visibility

Innovation

In product

In packaging


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New Product Initiatives

USL 15

To achieve the national roll out of McDowells Diet Mate whisky (using a

proprietary and US patented technology from the Group ResearchFoundation VMSRF)

Launching of unique

Diet Vodka (using

another US patented

technology from VMSRF)


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New Marketing Initiatives

USL 17

- To pursue the launch of existing products in innovative

packaging variants (tetra packs, pre-formed sachets, etc)and there by reduce the packaging cost as well as the

price point to consumers in addition to the convenience

of the pack itself .

Pre-formed

Sachets

180ml Tetra Pack

Saving

of Rs.30/-

per Cs.Saving of Rs.12/-

per Cs.


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UB Group in transition

From

o Primarily volume focus

o Growth driven by market shareacross segments

o Spirits player

o Focus on India

To

o Primarily top-line and profitability

focus

o Growth driven by increasedpremium-ness of the portfolio

o Spirits, wine, Aviation , Pharma,

Infrastructure & Fertilizers player

o Global ambitionspragmatically

calibrated through M&As


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CONCLUSION

Based on the the PEST analysis we

feel:

The group should keep on investing in the

Breweries division as the portfolio offerspromising future.

Aviation is in growth phase so needs

focused growth strategies.

It can divest from the Pharma business andconcentrate on the Infra division specially.


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Thank you..!

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Kingfisher Pp t