India as a Global Hubfor

White Goods

Presented by: Group 4

Atul PandeyBhushan SoniJoy MukherjeeSameeksha RastogiSriya ChatterjeeTushar ShahVishal Sharma

Flow of PresentationIntroductionContribution in Indian EconomySWOT AnalysisPorter’s Five Forces AnalysisImprovements RequiredRecommendationsIdentification of major playerReferences

What are White goodsHeavy consumer durables such as air conditioners, refrigerators, stoves, microwave oven etc. which used to be painted only in white enamel finish.Despite their availability in varied colors now, they are still called white goods.White goods sector is characterized by emergence of MNCs, exchange offers, discounts and intense competition.

White goods do not include the entertainment appliances such as Televisions, Home cinema, Camcorders, CD and DVD players. These products are included in the Brown goods category. The major players in the White goods sector are LG Electronics India Ltd., Samsung India, Whirlpool and Videocon.

Contribution in Indian EconomyThe market share of MNCs in White goods segment is 65%. MNCs mainly target the growing middle class of India. MNCs offer superior technology to the consumers.The Indian companies compete on the basis of firm grasp in the local market, their well-acknowledged brands and their hold over wide distribution network.The penetration level of the consumer durables is still low in the market.Poor government spending on infrastructure is a major factor.

SWOTStrengths: Presence of established distribution networks in

both urban and rural areas. Organized sector has increased its share in the

market viz. a viz. the unorganized sector. Presence of well known brands.Weaknesses: Seasonal Demand. Poor Govt. spending on infrastructure. Low purchasing power of consumers.

SWOT Contd.Opportunities: The penetration level of white goods is lower as

compared to other developing countries. Unexploited rural market. Rapid urbanization. Increase in income levels & purchasing power of

consumers. Availability of finance.Threats: Cheap imports from Singapore, China and other

Asian countries.

Porter’s Five Forces Analysis

Destination IndiaIndia is among 3 most attractive FDI destinations

in the world

A T Kearney FDI Confidence Index2005

India has the highest returns

on foreign investments

US Department of Commerce

By 2032, India will be among the 3

largest economies in the world

BRIC Report by Goldman SachsOct 2005 India is a

Developed nation as far as

intellectual capital is

concerned

Jack Welch, GE

We came to India for the

costs, stayed for the quality & are

now investing for innovation

Dan Scheinman, CISCO Systems Inc. Aug 2005

India, with middle class of 50 to 60 million people, is ripe for

growth

Lee Scott, CEO Wal-Mart

Economy of India

Facts Production of Rs. 270 billion worth of white goods for year end of Mar 2009 over Rs. 235 billion in the previous year.7.1% increment in Annual industrial output for first quarter in 2009 for the same period over the previous year.India stood 3rd all over Asia after China & Thailand in terms of production in 2008.

Improvements RequiredR & D given lowest priority.Scale of operations not upto global level.No coordination across the Supply Chain.High lead time.Lack of price competitiveness w.r.t. global customers.Imbalance in terms of capabilities between east & west.Infrastructure improvements.Lack of skilled labor.SMEs incompetent in comparison to MNCs.Bureaucratic hassles, socio political hassles, transportation infrastructure resulting into high operation costs.

RecommendationGovt. funding to improve R & D.Engineers & scientists to setup flexible processing firms where SMEs can conduct R & D to improve its processes.Increase scale of operations to global level by reopening facilities closed during financial crises.Govt. to improve infrastructure facilities.Streamlining the Supply Chain to reduce lead time.

References