Presentation of Strategic Audit

8/8/2019 Presentation of Strategic Audit

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PRESENTED BY:NISHANT ANAND (87)

VICKY GUPTA (114)MONA BHAGAT (84)



In a hot and humid country such as India, one of the most cost-effective gadgets to increasepersonal and collective comfort is fan.Its adaptability and universal applicability hascreated a worldwide market that cuts acrossincome lines and uses.The traditional fan, an essential commodity, hasexperienced a whirlwind of change.

From being a mundane object designed toartificially agitate air, it has now whirred its wayinto the modern, demanding world of style andstatement.



Fans are one of the largest domesticappliances industry in India.

Over the years a number of players haveentered the fan industry and stayedHowever 50% of the market is still

unorganized.Such characteristic has made the industryquite unique and an interesting area of study.



4

EXISTING PLAYERS

CromptonCromptonOrientOrient

PolarPolarKhaitanKhaitanUshaUshaBajajBajajOrtemOrtemPadminiPadmini

20%

20%

18%

7%

15%

5%

5% 10%CROMPTON

USHA

ORTEM

ORIENT

KHAITAN

PADMINI

POLAR

BAJAJ



Crompton Greaves (CG) is part of the US$ 4bn Avantha Group, a conglomerate with

global footprint, operating in over 10countriesIndia operations were established in 1937

The company has a large customer base,which includes State Electricity Boards,Government bodies and large companies inprivate and public sectors.



The Crompton Greaves fans division, hasprogressively moved from being awarded Silver in2005 to Gold Runner-up in 2006 to Platinum thehighest award in 2007 in the India ManufacturingExcellence Award in Large Engineering EnterprisesIt developed the first four-blade fan with an underlightand it became the first company in India to

manufacture one million units under a single roof.On the technology front Crompton Greavesdeveloped the high speed low voltage (HSLV) fanmotor to beat current fluctuations



To ensure that the customer is effectively updated onnew product developments, the company hasidentified the sales counter as its first point of contact.Crompton provides product information leaflets andcatalogues at all locations, besides also dynamicallydisplaying its range banners.The brand advertises regularly in the print and

electronic media at the national as well as regionallevels.Thus, the sports section of national dailies carriedsustained advertising during the first round of the IPLcricket series.



Profitability objective : To achieve a 30%return on capital employed within a year of

launching the product.M arket share objectives : To gain 35% of themarket share.Promotional objective : To promote product

to fullest through all types of masscommunication.O bjective for survival : To survive the currentrecession.



PRODUCTS

CEILING T/P/WINDUSTRIAL

FAN



The Most Expensive Fan was IntroducedThe Most Expensive Fan was Introducedunder light fan category NEBULA .under light fan category NEBULA .

Launched differentiated models aimed at theLaunched differentiated models aimed at thelower and middle price segmentlower and middle price segmentSubSub--Economy Fans Were Introduced At TheEconomy Fans Were Introduced At ThePrice Range Of Rs.950.Price Range Of Rs.950.Gave more emphasis on middle and higherGave more emphasis on middle and higherincome group.income group.



COMPANY - DEALER - RETAILER - CONSUMER

COMPANY - DEALER - CONSUMER



PEST ANALYSIS



Tax-policy, and trade and tariff controlsMinimum wage and overtimeIndustrial safety regulationProduct labelling requirementsEnvironmental and consumer-protection legislation After China, India was second in the world in terms of fan manufacturing but once China adopts WTO rules,

competition will be come downIn the first four months of this fiscal, exports had shot up following large orders from Iraq.Orders from Wal-Mart and other USA-based buyers alsohelped growth.



Seasonality/weather issuesHome economic situationLabor costsJob growth/unemploymentImpact of globalizationThe existence of a strong unorganised sector is the greatest threat to the Indian fan industry as suchunits accounted for 55-60 per cent of the market High input costs to high incidence of value-added tax (VAT) and excise duty Volatility of key raw material prices like copper,aluminium and steel





Competitive technology developmentResearch funding

Replacement technology/solutionsManufacturing capacity



R ivalry amongCompeting Firms

BargainingPower of

Consumers

BargainingPower of

Suppliers:

PotentialDevelopment of

SubstituteProducts

Potential Entryof New

Competitors



Rivalry among Competing Firms :There are major five players in industry.

Only three players dominate the industry with 60% shareP otential Entry of New Competitors :New competition is discouraged due to highinitial dealership amount.Unorganised sector holds more than 50% of total industry



P otential Development of SubstituteP roductsNew technological enhanced AC sPortable affordable coolersB argaining P ower of SuppliersGreat bargaining power as there are largenumber of playersB argaining P ower of Consumershigh bargaining power as lot of choice availabledue to players of both organized as well asunorganized sector.



STRENGTH:super brand status

market leader with twenty percent

sharescores over others on quality aspect.

great brand loyalty

WEAKNESS:

Crompton fans are the costliest onesLess number of dealer

Initial amount for dealership is very highTax related problem in some state

THREATS:growing unorganized sector

Technological changeshigh input costs

volatility of key raw material prices

OPPORTUNITIES:excellent brand recall

good potential for tapping a largepercentage of unorganized sectors

boom in the real estate sector

CROM PTO N



STRENGTH:market segmentation

reduced its riskloyalty to their high-end customers

WEAKNESS:

Inferior quality

small staff

THREATS:gro ing unorganized sector

Technological changeshigh in ut costs

large no of com etitors

OPPORTUNITIES:good otential for ta ing a largeercentage of unorganized sectorsboom in the real estate sector

U SHA



CROMPTON S SHOULD DECREASE THEINITIAL COST OF DEALERSHIP

COMPANY SHOULD FOCUS ON RURALAREAINVEST MORE IN ADVERTISINGINCREASE THE DEALER NETWORKFOCUS ON THE AFTER SALES SERVICE

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Presentation of Strategic Audit