STRATEGIC MANAGEMENT

Group Members
Name Amit Singh Mayuri Ghag Talha Zahoor Neelam Shinde Roll No. 63 83 93 103

Introduction to Industry

Consumer Durables
Consumer

durables are the products whose life expectancy is at least 3 years. These products are hard goods that cannot be used up at once.

Overview of Indias Consumer Durables Market

Indian Market Size is over US$ 9.5 Billion India has been ranked fourth in consumer electronics Strong

domestic economy and growing high-income population

Urban consumer durables market growing at almost 10

%p.a., and the rural durables market growing at 25% p.a.

Huge domestic market and growing

Overview of Indias -Consumer Durables Market

Economic outlook : 7.5% growth in 2008-09 (Year of

Recession) Burgeoning middle class

Government

working

towards

improvements

in

infrastructure,
Rural electrification and implementation of goods and

service tax
Skilled low cost manpower

The Indian consumer durables can be segmented into three key groups
White Goods Refrigerator Washing Machine Air Conditioner Kitchen Appliances Grinders Microwaves Ovens Consumer Electronics Mobile Phones Televisions MP3 Players

Speakers
Audio Equipments

Irons
Electric Fans Chimneys Cooking Range

DVD Players
VCD Players

Performance In Last 10 Years

The global market has witnessed a surge in demand as economies

such as Brazil, Mexico, India and China have opened up and begun Rapid development, welcoming globalization
Industry suffered during the 2008-2009 period Projections for current year are very optimistic, as consumers

resume spending, new enticing variants to grab new customers

Consumer Financing (Credits & Loans) Change in Policy by WTO (Taxes Benefits) Entry of heavyweight retail players is increasing the competition

Key growth drivers

Rise in disposable income Increased affordability of products Increasing share of organised retail Availability of easy financing schemes Entry of heavyweight retail players is increasing

the competition

Demand of Consumer Durables

14000 12000 10000 8000 6000 4000 2000 0

1995-96 2001-02 2005-06 2009-10

Growth Rate 2010-2011

Consumer Durables Air Conditioners Microwaves Growth (%) 20-25 25

Refrigerators
Washing Machine

5-10
5-10

Colour Televisions
Clock Watch VCDs Black & White Televisions Consumer Electronics (Overall)

15-20
10 10 30 -20 9

Key Players

Top players in consumer durable industry:

Nokia India LG Electronics India Limited Philips India Titan Industries Samsung India Electronics

Whirlpool Appliances
Siemens Sony India Videocon Industries Blue Star Godrej

Indian Durable Industry-SWOT

STRENGTHS
1.

WEAKNESSES
1.Demand is seasonal and is high during festive seasons 2.Demand is demand is dependent on good monsoons 3. Poor government spending on infrastructure 4. Low purchasing power of consumers

Presence of established distribution networks in both urban and rural areas 2.Presence in well-known brands 3. In recent years organised sectors has increased its share in the market compared to unorganised sector

SWOT
THREATS

OPPORTUNITIES
1. The rising rate of GDP 2. Unexploited rural market 3.Rapid urbanisation and easy availabilty of consumer loans 4. In India, the penetration level of white goods is lower than in other developing countries

1. Cheap imports from Singapore, China and other Asian Countries 2. Heavy taxation in the country 3.Poor infrastructure, regular power supply is imperative for any consumer electronics product, but that remains a major hiccup in India

Porters 5 Force in Consumer Durables

Threat of New Entrants
Most current players are global players New entrants will need to invest in Brand,

Technology and Distribution

Competitive Rivalry
Number of well established players, with new

players entering Good technological capability Many untapped potential markets

 Bargaining Power of Customer

Multitude of brands across price points - wide

variety of choice for customers

Bargaining Power of Supplier
Indigenous supply base limited - most raw materials

are imported
Threat of Substitutes
Unbranded products and cheaper imports could

enter the market

Competitors Analysis
WHIRLPOOL
Today, Whirlpool is the most recognized brand in

home appliances in India holds a market share of over 25% manufacturing facilities at Faridabad, Pondicherry and Pune

Videocon
The group has 17 manufacturing sites in India

plants in China, Poland, Italy and Mexico

It is also the third largest picture tube

manufacturer in the world Multi Brand strategy with the largest sales and service network

SAMSUNG
The management philosophy represents the strong

determination to contribute directly tothe prosperity of people all over the world. The talent, creativity and dedication of thepeople are key factors to efforts, and the strides made in technology offer endlesspossibilities to achieve higher standards of living everywhere.SAMSUNG believes that the success of contributions to society and to the mutualprosperity of people across national boundaries truly depends on how we manage our company. The companys goal is to create the future with our customers Samsungprovides products like dishwaher, washing machine, microwave, refrigerator and air conditioners.

LG - Introduction
LG Electronics, Inc.(LG) is a global leader and

technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in 114 operations including 82 subsidiaries around the world. With annual worldwide revenues exceeding $40 billion, LG Electronics comprises five business units: Home Entertainment, Home Appliance, Air Conditioning, Business Solutions and Mobile Communications.

LG - Introduction
LG is one of the world's leading producers of

mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems In 1993, LG entered the Indian market through a joint venture with the Delhi-based consumer electronics company Best a vision for selling colour televisions under the brand name Goldstar.

Reasons for growth

The rise in disposable income of the rural families The economic boom Rural population involved themselves in business Increase white-collar jobs in nearby towns Commercialization of agriculture Saturation of the urban markets * Media penetration in rural areas (particularly satellite channels) Globalization Economic liberalization Revolution in the Information Technology Women empowerment Improving infrastructure

LG- Global Presence

LG Electronics India Ltd

The parent company was originally established in1958 as

Goldstar producing Radio, TV, Refrigerator & AC LG group was the merger of two companies Lucky and Goldstar A wholly owned subsidiary of LG Electronics, South Korea Established in India in January, 1997 State-of-the art manufacturing facility at New Delhi / Pune Vision was to become a 'Health Partner' for its consumers
The CTV range offered by LG has 'Golden Eye' technology Entire range of LG air-conditioners have 'Health Air System' Microwave ovens have the 'Health Wave System Refrigerators have the 'PN System Washing machines have 'Fabricare System'

Major Landmarks of LG in India

Feb 1997 May 1997

: Established LGEIL : Launched CTV,WM & : Launched AC : Inaugurated Noida plant : Started monitor production : Started PC production : Inaugurated Pune plant : Started GSM production : Started TFT monitor production : 5 star energy rating for product

Refrigerator Jan 1998 Apr 1998 May 2001 Jan 2004 Oct 2004 Apr 2005 Jan 2007 Apr 2007

Vision- Global Top 3 by 2012

"Life's Good
Represents LG's determination to provide delightfully smart products that will make your life good

Mission
To create value for customers . To respect human dignity .

To become the best in its class by winning

customers' acclaim as a true leader in the global market .

STRENGTH

SWOT OF LG
WEAKNESSES
1. Transportation cost 2.Demand fluctuation handling capacity 3. Service quality

1. Manufacturing Unit at tax incentive area 2. Wide range of products to serve all category 3.Widest distribution network in the industry (47 branches, 10000 trade partners) 4. Highest share in home appliance market

SWOT
OPPORTUNITIES
1.Fast growth of home appliances market 2. Growing rural market in India 3. New technology 4. Increase in income level

THREATS
1. Cut throat competition 2. Korean rivals in Indian market 3. Raw material import duties 4. Price sensitiveness of the Indian consumer