DIVERSIFICATION STRATEGY OF ADITYA BIRLA GROUP

PRIYAMBADA PRADHAN ENROLL ID-4111029029

Aditya Birla group of companies was formed in the year 1870. Seth Shiv Narayan Birla launched a trading business of cotton & Jute in Pilani, in the state of Rajasthan. Entered into speculation business of opium and gradually moved from speculation of opium to actual trading of opium that had remained exclusively by the English traders. A US $40 billion corporation, the Aditya Birla Group is in the League of Fortune 500. The group operates in 36 countries. It is one of the successful diversified Indian companies.

ABOUT ADITYA BIRLA GROUP

 Non-ferrous metals

BUSINESS SECTORS

Cement-grey & white Textiles Chemicals Agri business Carbon black Mining Ferro chem Wind power Insulators Tele communications Financial services IT-ITes Retail Trading solutions

COMPANIES IN INDIA

Aditya Birla Nuvo Grasim Industries Limited Grasim Bhiwani Textiles Limited Hindalco Industries Limited UltraTech Cement Limited Aditya Birla Minacs Worldwide Limited Aditya Birla Chemicals (India) Limited Utkal Alumina International Limited Dahej Harbour & Infrastructure Limited Aditya Birla Science and Technology Company Limited Aditya Birla Finance Limited Aditya Birla Money Aditya Birla Insurance Brokers Aditya Birla Capital Advisors Private Limited Idea Cellular Limited Madura Fashion and Lifestyle Essel Mining and Industries Aditya Birla Retail Limited Aditya Birla Group Power Projects

FACT FILES
The world's largest aluminium rolling company No.1 in viscose staple fibre Biggest producer of primary aluminium in Asia Among the top 10 cement producers globally The No.1 producer of carbon black in the world Fourth-largest producer of insulators in the world Fifth-largest producer of acrylic fibre in the world Among the best energy efficient fertiliser plants

JOINT VENTURES
Birla Sun Life Insurance Company-(Sun Life Financial Inc (Canada) Birla Sun Life Asset Management-Sun Life Financial Inc (Canada) Tanfac Industries Limited-Tamil Nadu Industrial Development Corporation (TIDCO) Aditya Birla Grasun Chemicals (Fangchenggang) LimitedFanchenggang Grasun Company Limited, Guangxi Province (China) Thai Peroxide Company Limited-FMC Corporation (USA) Hindalco-Almex Aerospace Limited-Almex USA Inc. Mahan Coal Limited-Essar Power

CORPORATE STRATEGY AND BUSINESS

DEVELOPMENT

continuously tracks the business environment for the Aditya Birla Group's existing businesses. It recommends new directions through evaluation of deal creation opportunities, analysis of project proposals, etc. The function also plans and develops strategic initiatives for the Group and facilitates its execution.

It assists businesses in crafting their strategic direction and evaluates options for long-term growth, both organic and inorganic. It works towards identifying sources of competitive advantage for the businesses, viz., exploration of new markets and geographies, analysis of integration across the industry's value chain, etc

For new businesses, the function primarily focuses on opportunities, which take cues from the concept of megatrends, adjacencies and synergies to the Group's existing businesses.

BEGINNING OF DIVERSIFYING THE BUSINESS

Through the two managing agencies, Birla Brothers (founded in 1919), and BirlaTrust (worth 300 million pounds) had spearheaded the growth of Birla business empire that consisted of over 200 companies by 1970

Like the British entrepreneurs, the Tatas, and the Birlas had adopted this control mechanism by which a businessman through a holding company could have controlling stakes on various unrelated businesses.

Aware of the challenges that they were to face with the new government under Indira Gandhi, G.D. has probably planned to move his business expansion in other countries outside India.

Indo Thai textiles:

To skirt the regulations on limits of foreign exchange withdrawal, the Birlas for example, imported the spinning machine from Texmaco in India, a K.K. Birla group company..

BUSINESS DIVERSIFICATION STRATEGY

Wide political and industry network from the early days of Seth Baldeodas. New technological collaborations were undertaken to modernize the existing units. For instance, Hindustan Motors tied up with Lord Nuffield to manufacture the legendary Morris Minor. Diversification also served the purpose of saving tax and retaining profits within the company. In-house Training and Internship for Diversification. the Birlas got eight years of tax holidays, an eight year holiday for business tax (sales tax), eight year holiday for all remittances of royalties and technical know-how fees which normally attract a 20% tax.

LEVERAGING THE INDUSTRIAL POLICY CHANGES SINCE 1991

Birlas swung to action and they diversified into newer sunrise industries like petrochemicals, telecom, retail, insurance and financial services.