Voltas Case Study

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VOLTAS CASE STUDY GENERAL MANAGEMENT By:Vasista B V Prashanth Nagendra Supriya T swamy

AGENDA OF THE PRESENTATION        

Background of the Voltas case Strategy process at Voltas Mission statement (aim & goal) Objective Environmental analysis Strategy (generic, alternative) Swot analysis Conclusion

Background of the case study  Voltas

was set up in the year 1954.  In the year 1963 started manufacturing.  In the year 1964 set up the supporting industry.  The range of products gradually widened.  Voltas international limited was set up in the year 1978.  Over a year voltas tied up with several global players.  Until the 1990s voltas was a major player.

Continued……….. The company invested heavily in the business b/w 1994&1997.  At the same time voltas had diversified into several unrelated business.  Voltas acquired the loss-making Hyderabad ALLWYN LTD.  The demand fell down by 9% in 1996-97.  The debt doubled from 1.65 billion in 1994-95 to 3.3 billion 1996-97.  The MD of voltas Viswanath H munshi replaced by Nawshir. 

Continued…..  The

restructuring.

Develop the core competency.  Stabilize the cash flow position.  Voluntary retire service.  Identifying avenues for growth.  The electro-mechanical business  The unitary cooling business. 

Continued………  The

Big Bang strategy  New products.  Brand building.  Channel & service.

STRATEGY PROCESS AT VOLTAS

VOLTAS PRODUCT LINE 

Electro- Mechanical Projects and Services   



Engineering Products & Services    



Textile Machinery. Mining & Construction Equipments. Machine Tools. Material Handling Solutions.

Unitary Cooling Products  



Air-conditioning and Refrigeration. Electrical, Mechanical and HVAC Solution (International). Water Management and Treatment.

Cooling Appliances. Commercial Refrigeration's.

Others        

Chemicals Trading. Voltas – is leader in air conditioning business. Voltas – is largest projects exporter in Mechanical, Electrical and Public Health works. Voltas - is No. 2 brand in air conditioners. Voltas – is most trusted name in mining and construction equipments. Voltas – enjoys market leadership in textile machinery. Voltas – is a innovator and leading player in machine tools. Voltas – is leading force in forklift trucks.

MISSION STATEMENT AIM : 





Historic Voltas mission to 'foster indigenous manufacture' had one particularly momentous outcome. To foster indigenous manufacture of engineering products and capital equipment, based on technologies acquired from overseas, often from Volkart's existing principals. To supply the full gamut of services, from marketing to commissioning, for such products.

GOAL 

:

To have a market share of 20% in 2006.

ENVIRONMENTAL ANALYSIS (Where are we now??)  From a loss of Rs. 119mn in 1998-99, Voltas recorded an  





From a loss of Rs. 119mn in 1998-99, Voltas recorded an operating profit of Rs. 69mn in 2000. The company offered a dividend of 12% in 2000. In electro-mechanical business, Voltas decided to strengthen its financial capabilities in order to further expand it business. Voltas intended to grow through brand building and new product launches. Making a mark in the High end category Segment – electro mechanical projects, air conditioning and refrigeration.

RAPIDLY INCREASING ITS MARKET SHARE

Market Shares in the Indian Ac Market

LG

VOLTAS SAMSUN VIDEOC HITACHI CARRIER OTHERS G ON

COMPAN Y FY02

15.2

10.6

6.8

5.3

8.2

9.8

44.1

FY03

23.5

12.1

6.5

6

10.7

11.8

29.4

FY04

28.5

10.9

9.2

7.5

8.2

9.2

2.5

FY05

32.7

13.5

9.7

9

7.2

6.6

21.3

Voltas Revenue Break-up in FY06 3%

25%

59%

13%

OBJECTIVE (Where do they want to be ???) To have a market share of 20% in 2006. Expansion of its Sales Infrastructure Become a Mass product and still retain its leading edge technology

STRATEGY AT VOLTAS (A)

GENERIC STRATEGY:

Generic strategy includes Product diversification and focus of the company

 

PRODUCT DIVERSIFICATION Product Range is from contemporary to hi-tech Diversifying products so that each and every segment is covered

FOCUS OF THE COMPANY 

Provide contemporary and best-in-class products meeting customer needs and value expectations



Build customer loyalty by strengthening after-market operations through service.



Ensure cost reduction in all aspects of operations to achieve total cost leadership in the market.



Achieve market leadership through people by attracting, developing and retaining excellence in personnel.



Energise the organization through teamwork to ensure that various functional areas work together to deliver results in a quick and effective manner.



Explore new avenues for revenue generation leveraging established manufacturing and distribution strengths.



Spending a good amount of its revenue on R&D.

(B) ALTERNATIVE STRATEGY BIG BANG STRATEGY

  

INTRODUCTION OF NEW PRODUCT. BRAND BUILDING. ESTABLISHMENT OF A WIDESPREAD SERVICE NETWORK.

MARKET PENETRATION

  

Working towards reaching out all the cities. Expanding its sales network. Revamping sales infrastructure.

SWOT ANALYSIS STRENGHTS    



Design and manufacture of industrial equipment. Management and execution of air conditioning . Public works projects. Sourcing, installation and servicing of technology-based systems. Voltas represents a number of global technology leaders, serving diverse industrial sectors and applications.

WEAKNESS



Not targeting the mass market

OPPORTUNITIES  



The Indian Mass Market. The high end value driven proposition helps increase the Market Share. VOLTAS is well known for it product differentiation

THREATS 



Indian Mass Market may be captured by a rival company, LG, Videocon, Samsung etc. Due to increased price of inputs and continuing price erosion there is downtrend in the consumer durables market.

Conclusion e u l a V s s r r e e e e n i n i g g n n E E s s e a t u l l a o V V s a t l o V

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