Group Holding Structure

(UB City Project)Investments Real Estate

Spirits Business

United Spirits

Shaw Wallace Ltd

BeerBusiness

United Breweries

Millenium Alcobev

Aviation Others

Kingfisher

Airlines Ltd.

Aventis Pharma

Mangalore Chemicals &

Fertilizers

UB Engineering

UB (Holdings) Ltd.

(36.54%)(37.50%)

(50%)

(100%)

(10.28%)

(30.44%)

(34.74%)

(55%)

( Erstwhile McDowell & Co Ltd)

(75%)

Air Deccan (26%)

Whyte & Mackey

UB Group composition

59%17%

14%

3% 6% 1%

Spirits Beer Fertilizer

Engineering Airlines Pharma

Year : 2006

Intensity of Competition:• Number of major competitors are less• Industry growth rate is more• Relative size of competitor is large• Buyers switching cost is low• Exit barriers are high• Competitor less diversified

Threat of Substitutes:• Relative price of Substitute is same and low• Switching cost of Buyer is low• Relative Quality of substitute is different

Bargaining power of the buyer• Number of buyers are high• Enough options in form of product• Buyers uses multiple sources• Buyers threats to backward integration is low• Importance of product to the buyers varies based on customer profile

Threat of New Entrants:• High Economies of Scale• Less differentiated product so cannot be copied• High capital Requirement• Switching cost to buyer is low• Less access to distribution channel• Stringent Government Policies and taxes• High Industry Growth

Bargaining power of the Suppliers:• Number of organized suppliers are less• Availability of substitute input is less• Suppliers threat to forward integration is low• Buyers threat to backward integration is high

USL is merged entity of:◦ erstwhile McDowell & Co. Limited,◦ Phipson Distillery Limited,◦ United Spirits Limited,◦ Herbertsons Limited,◦ Triumph Distillers and Vintners Private Limited,◦ Baramati Grape Industries Limited,◦ United Distillers India Limited,◦ Shaw Wallace Distilleries Limited.

United Breweries LTD.:◦ 37.5% Heineken, 37.5% Mr. Mallya, 25% Public,

◦ Millennium Alcobev,

USL acquired: Balaji Distilleries Limited in 2008,

USL acquired: acquired AP–based, Tern Distilleries, in 2009,

USL acquired: Glasgow-based Whyte and Mackay,◦ Brands: The Dalmore, Isle of Jura, Glayva, Fettercairn, Vladivar

vodka and the eponymous Whyte & Mackay blended Scotch.

USL: acquisition of Bouvet Ladubay in 2006,

Kingfisher airlines took over Deccan airlines,◦ The primary reason here was to expand business and reduce

competition,

Final Horizontal Merger Deal…

From the Kingfisher’s Point of view - To start overseas business(May 2005) - For the expansion purpose - Survive from the losses (577 Crore

loss) From the Air Deccan’s Point - To make the profit &

overcome losses(418 Crore loss)

•Signature•Bagpiper

•Mc Dowell no 1•Antiquity Blue

•Director Special

•Royal Challenge

BCG MATRIX- WHISKEY

% MARKETGROWTH

5X RELATIVE MARKET SHARE 0.1X

15%

40%

-5% 1X

UNRELATED DIVERSIFICATION

Mangalore Chemicals and Fertilizers Limited(1976)

UB Engineering (1977) Aventis Pharma VMSRF(research and

developmant) (1987) Kingfisher Airlines

(2005) UB City Project(Real

estate)

UNRELATED DIVERSIFICATION

Mangalore Chemicals and Fertilizers Limited(1976)

UB Engineering (1977) Aventis Pharma VMSRF(research and

developmant) (1987) Kingfisher Airlines

(2005) UB City Project(Real

estate)

RELATED DIVERSIFICATION•United Spirits Ltd(1951)•United Breweries Ltd (1915)•UB Global International Trading

RELATED DIVERSIFICATION•United Spirits Ltd(1951)•United Breweries Ltd (1915)•UB Global International Trading

•Force INDIA F1•Royal Challengers (2007)

•Force INDIA F1•Royal Challengers (2007)

Inbound LogisticUB - Beer is brewed in either the company’s

owned or non-owned Breweries .- Company also has its franchise for the

production of the beer- network of 23 breweries- Contract farming initiatives in the state of

Punjab- 51% stake in maltex malster

SABMiller - "Progress through Partnership“- 15 centers & 8000 farmers - Distribution of certified seeds- Operates 17 breweries and 16 bottling

plants

OUTBOUND LOGISTICSUB- Use third party to distribute product.

SABMiller - Adopted transportation and logistics

management solutions from JDA Group Inc

OPERATIONS:-UB- The Central Scientific Laboratory (CSL)- Quality Management Systems on the lines

of ISO 9000SABMiller - Waste minimization drive - Follows HACCP Certification Source – “Interview with Gary Whitlie “ 3rd April 2009 ,

Budapest Business Journal

Distribution channel - Strong distribution channel - 3,00,000 point of sales MARKETING/SALES- Quality marketing as well trained sales force to

sell the product in India .- Free gifts to the customers - Referred to as India's Richard Branson- Sports Sponsorship - Every second 4 bottles of Kingfisher bottles are

sold.

Distribution channel- network of 53 distribution centers - contracted distributors and franchised

distribution centers.

UB- contract farming- 51% stake in maltex malster SABMiller - 15 centers & 8000 farmers

UB- Complete automated plant by the Allen Bradley system.- Reduction in cost , cycle time .

SABMiller - Zero-waste operations - Complete automated plant

TECHNOLOGICAL

MCF

UBL

USL

ENGG & PHARMA

HIGH

MEDIUM

LOW

MARKET ATTRACTION STRON

GMEDIU

MWEEK

HARVEST / DIVEST

INVEST / GROWTH

EARNING & SELECTIVITY

BUSINESS STRENGTH

GE MATRIX

FKF