Sustainable Competetive Strategy

Presented by-: Manas Kumar Saurav Kumar Saurabh Singh

SUSTAINABLE COMPETITIVE ADVANTAGE Sustainability is a framework for

responding to the emerging competitive threats and maintaining competitive advantage. Sustaining competitive advantage requires erecting barriers against the competition. A competitive strategy consists of moves to 1) 2) 3)

Attract customers Withstand competitive pressures Strengthen an organization’s market position

CREATE COMPETITIVE ADVANTAGE Cheaper (lower cost) producer: ? Better (superior perceived quality): ? Newer (more innovative/up to

date/fashionable): ? Faster (speed to market): ? More desirable/ distinctive (successful branding):? Better reputation: ? First mover advantages: ? Provide your own examples of firms that compete successfully on this basis.

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RECOGNISING PATTERNS  Advantage comes from understanding and exploiting the

emerging competitive market patterns. There is scope for advantage based on:  Search/ scanning capabilities  Analysis/ interpretation capabilities  Risk taking capabilities  Implementation capabilities  Change management capabilities  Ownership of/ access to required complementary assets/ capabilities  The ability to do this depends in turn on the effectiveness and integration of the appropriate key business activities and processes (distinctive capabilities/ competencies) which underlie cost competitiveness, quality, innovation, speed to market, network building, and customer intimacy.  Production, marketing, logistics, supply chain management, collaboration, branding, quality, market development, product development, and innovation.  Which in turn depends on organisational processes and practices such as HRM, information and decision management, and relationship management. 4

Porter’s approach to CA Low cost/ differentiation may indeed be the

proximate cause of CA but they cannot be the ultimate source. Low cost positions, superior quality, speed to market, or whatever, must come from something or other the organisation has or does. For example in Ricardo’s time the superior returns (CA) of some farmers indeed came from lower costs which derived ultimately from superior quality (ie more productive) land, a resource that was very hard to make more of! Nowadays Nokia’s or Dell’s superior returns come ultimately from something similar, something (scarce and hard to make more of) which allows them to do things which enable them to offer a better ‘value for money’ proposition to consumers. manecon/options/create

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Conditions for sustaining a competitive advantage A difference that matters A gap in capabilities 1. 2. 3. 4.

Gap in business system Gap in position Regulatory and legal gaps Gap in R&D and implementation

Sustainable differentiation

SWOT ANALYSIS OF SUZLON(THREATS) Intense competition Over dependence on US Foreign Exchange Risk Technology Risk Decreasing price of crude oil

SWOT ANALYSIS OF SUZLON STRENGTH(Company Values)  People strength  Aggressive Vertical Integration Strategy  Strong R&D team  Expanding Manufacturing Capabilities  Strong Order Book  Aggressive Growth

SWOT ANALYSIS OF SUZLON(STRENGTH)  Cost Reduction  Reverse Outsourcing  End to End Solution  Vertical Integration and Amalgamation  Market Leadership in India and Global

Presence  Growth  Integrated Business model

SWOT ANALYSIS OF SUZLON(WEAKNESS)  Management Structure  Capital Intensive  Overseas Business  Cash Conversion  Growth in asset overweighting growth in

revenue

SWOT ANALYSIS OF SUZLON(OPPURTUNITIES) Environmental and Governmental Initiatives Favorable tax exemptions Untapped offshore market Steady source of demand

SWOT ANALYSIS OF SUZLON(THREATS) Intense competition Over dependence on US Foreign Exchange Risk Technology Risk Decreasing price of crude oil

Company overview

Company overview

Timeline & Select Milestones

Suzlon group – global presence

Acquisition of Hansen Transmission

Drivers for growth Three key drivers to go beyond India:

1. Access to technology Technical collaboration with Südwind (1995) internalizing R&D by 1997/8  Formation of AE Rotors in the Netherland• Netherlands  Product and process engineering in India  Alliances: e.g. joint venture with Elin Generators Maiden venture into the US market (2002/3)  European technology platform Experienced European wind energy professionals (engineers, researchers,  technicians) as the core to drive Suzlon’s R&D  Compete in India

2. Access to people  Experienced professionals in e.g. international sales, project management, service  management etc. with existing and tested relationships comprising the core team  Follow the demand – North America, Europe, Australia, China etc.  Creation of Business Units (local organisations, local manufacturing etc.)  Follow shift in customer trends (consolidating and becoming bigger more complex  higher demands for technology, services, Industrial plans etc. 3. Access to new markets/customers  Acquisitions: Repower / Hansen Transmissions  enter new markets and access new customers  build up experienced and international (but localized) managerial/specialist base  local manufacturing to lower transportation costs  expand product portfolio  access state-of-the-art technology

Edge over competitors

Proactively addressing challenges at their root

Blade cracks  Retrofit exercise under way after satisfactory conclusion of RCA and solution Order book slowdown  S88 V3, with demonstrable performance, positioned as mainstay for internationalmarket  Strong pipeline of potential customers  Cost competitiveness, vertical integration and expanded scope of services toprovide edge in tough market conditions Global credit crisis

Well-diversified market reach hedges geographical risk  Focusing on key markets and customer relationships  Current customer profile dominated by utilities and financially sound developers 

Working capital management Working capital buildup  Working capital reduction plan designed in association with AT Kearney Receivables  Program management for order fulfillment  Improvement in production planning process  Improvement in documentation and certification process Inventories  Procurement reduction  Non- and slow-moving inventory reduction  Redistribution of excess between units  Mismatch and excess inventory reduction

Sustaining competetive advantage