Market Research

Introduction

A toothpick refers to a small metal, plastic, wood, or bamboo stick that is used to remove detritus from an individual’s teeth. This is usually done after meals. Apart from being used to remove food remains from the teeth, toothpicks are also used to pick up small appetizers such as olives or cheese cubes. Toothpicks can be used as cocktail sticks. In this case, a toothpick is usually cylindrical and short, and it is made up of wood with two sharp pointed ends. The cocktail stick is can then is used as a skewer where decorations such as cherries can be held in cocktails. During parties, foods such as pineapples, sausages, and diced cheese can be served using toothpicks. The modern eating habits have increased the consumer demand for toothpicks, a situation that has increased the production and marketing of toothpicks in many parts of the world (Petroski, p 13). In the United States, one of the leading producers of toothpicks is the Maine region.

Charles Forster who is considered to be the father of the American toothpick history worked from the Maine area. Globally one of the leading toothpick exporters is Brazil. The use of toothpicks by people began in the ancient civilization, with the toothpick being recognized as one of the oldest instrument of cleaning teeth. Having being used for cleaning before the invention of the toothbrush, toothpicks are known to have been used in almost all cultures.

In the 17th century, toothpicks were designed and used as luxury objects since they were developed form expensive stones and precious metals. In 1872, Silas Noble and J. Cooley patented the first toothpick manufacturing machine. Due to the modern day development, numerous toothpick brands have been designed, manufactured, and marketed for consumer use. This has increased the market competition between the toothpicks and other products such as the toothbrush or dental floss.

However, the toothpick has remained competitive in the market. When it   comes to the marketing of the toothpicks, it will be vital for it comesurer to put into place effective product promotion measures. For instance, through branding and advertising. It is very important for any potential investor in the toothpick industry to know that marketing the product will require a high   level of creativity.

Factors that have increased the demand for toothpicks in the global market

One factor that has increased the market demand of toothpicks is the peoples’ changing eating habits. In the modern world, healthy eating has become a priority. By eating variety of food types, people are considered to practice healthy eating. This means that people are choosing to reduce the intake of sugars and fats, while increasing the intake of foods such as desserts, small appetizers, and cocktail food dishes. The   handling and serving of these food dishes requires one to use toothpicks. In addition, high dental hygiene as a result of eating different variety of food types makes it     necessary for people to use toothpicks. The development and manufacture of new brands of toothpicks has increased the effectiveness of toothpicks in various uses.

The consumers who use toothpicks are able to appreciate and acknowledge the efficiency of toothpicks due to new inventions. For instance, toothpicks have been wooden for   many years (Christy, p 664). However, the modern day toothpicks are also made from plastics. A Swiss Army Knife which is recognized for its quality, versatility, and dependability has a toothpick attached to it. A plastic toothpick that is attached on the knife’s second blade enables an individual to carry out certain tasks. The availability of numerous   brands of toothpicks in the global market has increased consumer consumption hence increased demand.

The Current Market Trends in the Toothpick Industry

The global market  trends have  indicated  that many  nations have continued  to be  more  dependent on the foreign trade when it come  to the marketing and  purchasing of gods or commodities. In the last one decade, many nations share of trade in the global economy has continued to increase. This is an indication that there has been increased economic growth in the nations (Julian, p 26). Globalization plays a vital role in the improvement of the economic performance of many nations. This in turn creates great   business opportunities for   new brands of products such as the toothpicks which can be introduced in the market.

The increased economic productivity of many nations in the world has increased the consumer purchasing power, which has increased competition between different brands of products in the market. Therefore, the introduction of a new brand of toothpick by an investor is likely to receive positive consumer response. The stiff competition and the increasing number of products brands in the market have led to fair and low prices of toothpicks in the market. The global economy has provided different producers with the ability to create more jobs while at the same time lowering the unemployment rate.

The global economy has provided different producers with the ability to create more jobs while at the same time lowering the unemployment rate. The global economic growth has made many nations to be interdependent with other nations who are players in the world economy. This has lead to great growth of particular nation’s local economies. This supports increased consumption of products in the domestic market. When new products are introduced into a growing domestic market, it is likely for these products to be purchased at high rates. Therefore, producers are able to generate maximum returns from their products. This makes any investment in the toothpick industry feasible. In addition, this motives the investors to put their financial resources to where they can generate maximum returns.

The quality of a given product that has been offered in the market determines whether the product receives positive or negative consumer response in the current market. While the high quality product receives positive consumer response, poor quality products receive negative response. The high quality products encourage consumer loyalty and trust. Consumers who have bad experiences with certain products tend to avoid buying the products again, and this undermines the customer loyalty towards that product. By producing products that satisfy the consumer needs, a producer will therefore   be able to earn customer loyalty. An investor in the toothpick industry will be required to produce toothpick brands that will satisfy the customers’ needs so that the investment becomes beneficial to him or her.  By promoting customer loyalty, an investor will be able to establish a steady customer base.

Stiff competition between different product brands is very common in the current market. Due to the competition, only producers or manufacturers who offer high quality products at fair or low prices are able to compete favorably with the rival products. An investor who intends to market toothpicks will be required to win customer loyalty. Furthermore, the investor should undertake certain measures that will increase her or his chances of out competing the other product brands being offered in the market. The market trends have shown that, the cost that a producer incurs to win new customers is greater than that of maintaining the existing customers. An investor in the toothpick industry should aim at attracting and maintaining customers, while at the same time attracting new customers.

Advertising and branding of toothpicks will be very important in promoting the quality of the product, as well as a high consumer purchasing rate. Toothpicks are currently being purchased in high numbers due to their crucial role in improving the oral health of the consumers with minimal expenses. Many people all over the world have embraced different toothpick brands because they are convinced that toothpicks improve their oral health with them incurring minimal expenses. For instance, consumers who use toothpicks to manage their oral health have admitted that the use of toothpicks lowers the dentist bills. Many studies that have been conducted on the efficiency of toothpicks as compared to other products such as floss have indicated that the toothpicks work much better in improving dental health. All products in the market are offered to the customers for consumption due to the value the products add to the customers lives. The toothpicks have been acknowledged for their high value to the customers. Different toothpick brands have been acknowledged by the customers for promoting good oral health through the stimulation of gums, helping in the removal of plaque, and tartar build up. Since the toothpicks assist the customers to reduce dental suffering and pain, the product due to its high value to the people is likely to receive positive customer response and high demand.

Many brands of toothpicks are currently being offered to the   consumers. For instance, custom imprinted and customized toothpicks are currently offered in the US market by the Colorado- based Wagner Match Company and the Indiana- based Extra Mile Promotional Products (Douglass, np). Many toothpick manufactures win customer loyalty and strive to maximize their financial returns by providing their customers with toothpick use information together with oral care tips. This has been very instrumental in showing and convincing their customers that the manufactures cares for their oral hygiene. The investor in the toothpick industry can be able to market their toothpick brands by ensuring that the product instructions are accompanied by the producers’ imprinted business name. By so doing, many toothpick investors are able to make ideal advertising of their products. These types of custom printed toothpicks have become very common in the market due to their great use during special functions, anniversaries, and weddings. Flavored and decorative toothpicks have been purchased at a high rate for use in celebrations or other public occasions.

Challenges facing a new Investor in the Toothpick Industry

As a new investor in the toothpick industry, there are various challenges that one is likely to face when marketing a given brand of toothpick. One major challenge that an investor will be    facing is how to effectively compete with other brands of toothpicks already in the market. In the   current competitive market, the supply and demand for goods or commodities is very essential. In the toothpick industry, there is stiff competition between the different toothpick brands in the market. Various toothpick brands are available for different uses. For instance, while some brands have been designed for oral hygiene, others have been designed as skewers. Many manufactures offer different brands of toothpicks to attract and retain customers and it will therefore be a great challenge for new investors to offer high quality brands of toothpicks in order to compete favorably with other brands in the market. The stiff competition will also bring another challenge to the new investor; how to take risks and make changes in the product so that he or she will generate maximum financial returns by increasing the market share. For example, there will be need to produce and sell new brands of toothpicks from those that are currently in the market. These include, custom imprinted toothpicks, nostalgic flavored toothpick and engraved sterling silver toothpicks. Coming up with new and high quality brands of toothpicks will also be a challenge to the new investor.

The investor should aim at offering high quality brands of toothpicks. However, there is need for a producer in the toothpick industry to offer high quality toothpicks at affordable prices to the consumer. One factor that determines the price of a product in the market is the cost of production. This in turn depends on the cost of raw materials and that of the production process. It will be a challenge for the investor to produce high quality toothpicks at a low cost of production so that the toothpicks are offered in the market at an affordable price for the consumers. Whether wooden or plastic, an investor will be required to offer toothpicks at a fair price for the consumers. Building customer loyalty is very crucial for any producer or manufacturer to succeed in business. For many toothpick producers, they have tried to win customer loyalty by producing high quality and different brands of toothpicks. In addition, the toothpicks can be offered in the market at a fair price. The quality of the toothpick product that the investor will be offering in the market will be required to satisfy the customers’ needs, which leads to customer loyalty. For example, flavored toothpicks are now being offered in the market for use during celebrations or parties.

To win the customer trust and loyalty, the investor will have a great responsibility to offer toothpick brands that will satisfy the need of the customers, while at the same time ensuring that the corporate objectives are met. Developing an effective advertising strategy will be a challenge to the investor. An effective advertising strategy creates awareness to the potential consumers. This is very critical in persuading the customers to purchase the product. On the other hand, an ineffective advertising strategy will undermine the success of the toothpick product in the market.

The Best Marketing Strategy for the Investor in the Toothpick Industry

The investor in the toothpick industry will require a good marketing strategy. But before developing a marketing strategy, it will be very crucial for the investor to conduct a thorough reconnaissance study in order to identify customer needs, which toothpick brands are being offered in the market, and at what price the brands are offered. This will shed some light for the investor on how he or she can compete favorably in the market with the other brands. For instance, the bamboo toothpicks that are currently being offered in various markets are preferred by the customers for use during the dinner parties. In addition, cinnamon toothpicks that are produced and marketed by Juju Stx are sold at $4.99.These tooth picks are preferred for being harder than the normal toothpicks, as well as their ability to freshen the breath longer. Other brands of toothpicks that are currently in the market are those from the Thunder Group. These toothpicks are double pointed and are sold at a fair price. In order for the investor to compete with these toothpick brands, it will be essential to produce high quality toothpicks at a selling price that will attract the customers and retain them (Steib, p 32).

The investor who plans to venture into the toothpick industry will require a steady customer base.  Since the investor will be entering a new market, there will be need for the investor to persuade the customers to purchase the new toothpick product. Apart from getting positive customer response, the investor will need to maintain a good customer relationship with the new and the existing customers. The cost of attracting new customers is often higher than that of maintaining customers; hence the investor will be required to build customer loyalty. This can be done in various ways. The investor will be able to win customer loyalty by reaching out for steady customers through good communication, offer good customer service to meet the customer needs, give customer incentives (discounts) and create product awareness. If these measures are integrated into the marketing strategy, then the investor will have his or her chances of succeeding in the business increased (Petroski, p 33).

Creating toothpick brands that symbolize value and high quality need to be integrated in the development and implementation of an effective marketing strategy. Creating brand recognition in customers will depend on the accumulated experiences that the customer has had with the products. The investor must be able to brand the toothpick product he /she will be offering in the market so that it creates a customer relationship that is based on trust. The toothpick brands should be a representation of high quality, good values, and creative ideas. For instance, if the investor decided to produce and market plastic toothpicks, this brand should be a symbol of quality. The toothpick product will then be able to compete favorably with other plastic toothpicks in the market industry.

An effective advertising strategy will be required by the new investor. Advertising creates awareness in customers about the product, where to find it, at what price, and the benefits of the products to the customers. Advertising in the contemporary world has been made easy by modernization and globalization. The online advertising has become a very common and effective means of marketing a product. In addition, radio and television adverts can create awareness about a product while at the same time building customer care and loyalty. By combining all these marketing strategy into one will be very vital for the investor to venture and remain in the toothpick industry.

Conclusion

The global market has become very competitive. Many companies are producing different brands of product with the aim of getting a high market share and maximizing their financial returns. The economic growth that is being witnessed in the domestic and global markets has attracted new investors. The toothpick industry is one example of an industry where producers are reaping huge financial benefits. Based on the current market trends, a new investor can succeed if he/she overcomes several challenges. In addition, developing an effective marketing strategy for the toothpick product will be vital for the investor to succeed.

Works Cited

Christy, Turner. “Interproximal Grooving of Teeth: Additional Evidence and Interpretation,”

Current Anthropology 29, no. 4 (1988), 664-65.

Douglass, Kent. Guide to Toothpicks.Business.com Guide

www.business.com/directory/retail_and_consumer_services/beauty_and_personal_care/oral_care/toothpicks/

Accessed on November 14, 2008

Julian, Petley. Advertising: Technology, People, Process. Black Rabbit Books, 2003

Petroski, Henry.The Toothpick: Technology and Culture. Vintage Publishers, 2008

Stieb, James. “Clearing up the Egoist Difficulty with Loyalty”, Journal of Business Ethics, vol

63, no 1, 2006

A Report on Organization Study at HAVELLS INDIA LTD Submitted in Partial Fulfillment of the Requirements of Bangalore University for the Award of the Degree of MASTER OF BUSINESS ADMINISTRATION By SACHIN MANJALEKAR REG NO: 10SKCMA053 Under the Guidance of Prof Acharya Institute of Management & Sciences 1st Cross, 1st Stage, Peenya Industrial Area

Bangalore – 560 058 2010 – 2012 DECLARATION I, Sachin Manjalekar, hereby declare that this the organization Study Report titled, MAREKT ANALYSIS ON PURCHASING PATTERN OF DEALERS ON HAVELLS PRODUCTS is based on the organization study by me under the guidance of Prof This report has not been submitted earlier for the award of any other degree / diploma by Bangalore University or any other University. Place: Bangalore Date: Sachin Manjalekar CERTIFICATE FROM THE GUIDE

Certified that this Organization Study Report titled MARKET ANALYSIS ONPURCHASING PATTERN OF DEALERS ON HAVELLS PRODUCTS is Based on an original organization study conducted by SACHIN MANJALEKAR Of III Semester MBA under my guidance. This report has not formed the basis for the award of any other degree / Diploma by Bangalore University or any other University. Place: Bangalore Prof Shweta . M Date: Professor – MBA

Acharya Institute of Management and Sciences 1st Cross, Peenya I stage, Bangalore – 560058 CERTIFICATE Certified that this Organization Study Report titled MARKET ANALYSIS ON PURCHASING PATTERN OF DEALERS ON HAVELLS PRODUCT’S is based On the study conducted by SACHIN MANJALEKAR of III Semester MBA under the guidance of Prof. This report is based on the original study undergone and has not formed the basis for the award of any other degree/diploma by Bangalore University or any other University. Prof Shweta.

M Dr. Kerron. G. Reddy Professor – MBA CEO and Principal Place: Bangalore Place: Bangalore Date: Date: Acknowledgement The toughest of endeavors in the world is not possible without the support of a helping hand which guides and motivates a person to take on any challenge head on. Inputs from such helping hands are always like very essential because more often or not certain mistakes which go unnoticed from our eyes. I am thankful to Dr.

Kerron G Reddy, Principal and CEO of Acharya Institute of Management and Sciences, who had provided all the required facilities to carry out the dissertation project work and nurturing my skills to execute the requirements. I am heartily thankful to my guide Prof , Acharya Institute of Management and Sciences, whose encouragement, guidance and support from the initial to the final level enabled me to develop an understanding of the subject. I offer my regards and blessings to all my Professors of AIMS who supported me in any respect during the completion of the dissertation project.

Last but not the least I thank my dear parents, teachers and friends who have been source of support, strength, inspiration and encouragement for whatever I am today. CHAPTER CONTENTS Page No. CHAPTER 1 Profiles Opening lines 1. 1Introduction 1. 2Industry Profile 1. 3Company profile 1. 4Products Profile 1. 5Competitors Profile CHAPTER 2Organization Structure CHAPTER 3Functional Departments Opening lines 3. 1 3. 2 3. 3……. CHATPER 4SWOT Analysis CHAPTER 5Ethical / Best Practices / Policies in the organisation CHAPTER 6 Findings, Suggestions & Conclusion

Bibliography & Annexure Special Task •Introduction •Statement of problem •objectives •Research Methodology •Analysis & Interpretation of data INTRODUCTION Industry which I have taken to do my summer internship is an Electrical industry, were their products are sold to both customers and Industrial customer segment. Products like Switchgears, Motors, Fans and wires etc…In this internship I have choose to do Market Analysis of on purchasing patterns of Havells products . I conducted my market research on Electrical dealers at Chikpet ,Balepet , I V K Iyengar Road of Bangalore.

This Report gives the detail of purchasing pattern of 30 dealers, where they sell various different company products other than Havells like Anchor, Philips, Crompton Greaves, Polycab etc. I have mainly focused my market research on Havells products and dealers who purchase Havells products. 1 . 2 INDUSTRY PROFILE The Indian Electrical/Electronics Industry is slowly emerging like every other industry sector in India. Over the past fifty years there was no exposure to global players and competition, with the result that the

Industry grew up in a sheltered environment, dependent on the Government for everything, from licenses to protection to tariffs. Each one of these interventions was aimed at securing protection for oneself and ensuring growth of one’s own organization at the cost of industry and the nation at large. Lack of global competition encouraged a “cost plus” approach, where every conceivable cost increase was passed on to the customer. There was thus no motivation to reduce costs. With deli censing, decontrol and deregulation, Indian Industry has suddenly been exposed to global competition.

Since last decade, India has witnessed what global players have achieved and what they are capable of achieving. We are becoming aware of competition on our turf. In this scenario, every company complains of increased competition, lower order books and shrinking margins. The Indian Electrical/Electronics Industry is of course further besieged by the fact that there is a dearth of business on account of lack of investment in the power infrastructure. Many organizations in this industry are looking overseas to develop the export markets owing to reduced demand at home.

At the outset, it must be stated that the reduced domestic demand is at best a temporary phenomenon. The power sector in India is bound to grow and this will undoubtedly boost demand from the Utilities, quite apart from the industrial demand which will continue to grow with increased industrial output. The poor financial health of the SEBs is however a damper that cannot be wished away in the short term. This will continue to plague corporates in the Electrical Industry, until the SEB restructuring and unbundling brings a turnaround in the medium term.

Factors Governing the Growth of Indian Electrical Industry Every industry thrives on some supporting factors. In this connection, there are few factors governing the growth of electrical and electronics industry: •Research & development played an important role to the increased productivity and higher-value added electrical and electronics products. •Foreign investments accelerated growth in production and export as well. To expand their business, foreign companies have done huge investment which lead developing countries in establishing production units. Global industries like Medical, Telecommunications, Industrial & Automotive industries have been cordially supported by electrical & electronics industry. •Increase in income changed living standards of the common mass. As a result, it increased the demand of electronics especially consumer electronics products globally. •Electric & Electrical industry is highly fragmented which comprises of many small and medium size enterprises resulting into a huge industry. •Asia Pacific region is emerging as the most spinning place for the consumer electronics industry, as the markets remain still unbroached. Innovation has played importantly in this industry. It led to a consistent demand for newer and faster products and applications. Future Prospects of Indian Electrical Industry The domestic market in India is itself large, and one must firstly satisfy this market with products that meet international quality standards. With increasing globalisation, every international player is now operating in India, providing goods and services complying with international quality.

Once we deliver high quality products and services within the domestic market, accessing the international market for exports should not pose a serious challenge. The Electrical/Electronics Industry in India is growing to its full potential in the coming years and no doubt that India will soon come to be recognized for quality products and services which in turn, will bring this industry to a position of true leadership. Indian electrical industry has grown because of government’s thrust on it and also due to overall economic growth.

It has also reached a stage where the industry has demonstrated its capabilities. The industry has seen a growth of 20% and should continue at the same level for the next few years. 1. 3 COMPANY PROFILE Havell’s India Limited was established in 1958 and is a part of the QRG group. It is one of the India’s largest electrical and power distribution equipment manufacturer company. Havells India is in four segments namely: Switchgears, Cable , Lighting and Fixtures and Electrical Consumer Durables.

It is amongst the top three players in most of its products and is fast increasing its market share through aggressive brand building Today Havells India is a billion-dollar-plus Indian electrical equipment company with products ranging from industrial & domestic circuit protection switchgear, cables & wires, motors, fans, power capacitors, compact fluorescent lamps (CFL), and luminaries for domestic, commercial & industrial applications, modular switches covering household, commercial and industrial electrical needs.

Havells owns global brands like Crabtree, Sylvania, Concord, Luminance, Linolite & SLI Lighting. Havells has 94 branches / representative offices and over 5000 professionals in over 50 countries. Its 12 state-of-the-art manufacturing plants in India are located at Haridwar, Baddi, Noida, Faridabad, Alwar, Neemrana, and 8 state-of-the-art manufacturing plants are located across Europe, Latin America & Africa Churn out globally acclaimed products. Havells is a name Synonymous with excellence and expertise in the electrical industry. It’s 20000 strong global distribution network is prompt to service customers.

The company has acquired a number of International certifications, like CSA, KEMA, CB, CE,ASTA, CPA, SEMKO, SIRIUM (Malaysia), SPRING (Singapore), TSE (Turkey), SNI (Indonesia) and EDD (Bahrain) for various products. Today, Havells and its brands have emerged as the preferred choice of electrical products for discerning individuals and industrial consumers both in India and abroad. In an attempt to transform itself from an industrial product company to a consumer products company, Havells launched the consumer electrical products such as CFLs, Fans, Modular Switches & Luminiaires.

The company has been consistent in its brand promotion with sponsorship of Cricket events like T20 World Cup, India-Australia Series and IPL. The company has also taken the initiative to reach directly to the consumers through “Havells Galaxy” – a one stop shop for all electrical and lighting needs. Social and environmental responsibility has been at the forefront of Havells operating philosophy and as a result the company consistently contributes to socially responsible activities. For instance, the company is providing mid-day meal in government schools in Alwar district, covering 15000 students per day.

Besides this company has acquired land for constructing a larger kitchen with all the modern facilities to serve freshly cooked food to 50000 students in the area. Havells runs a mobile Medical Van, equipped with a trained doctor and necessary medicines in the rural areas of Delhi & NCR for the very poor and needy villagers. We also setup free medical check-up camps. In the past also, the company has generously contributed to the society during various national calamities like the Bihar Flood, Tsunami and Kargil National Relief Fund etc.

The essence of Havells success lies in the expertise of its fine team of professionals, strong relationships with associates and the ability to adapt quickly and efficiently, with the vision to always think ahead. Havells is acknowledged as a manufacturer & suppliers of the widest range of quality low voltage electrical equipment. With a number of strategic alliance in place, Havells is the only company that has shown phenomenal growth rate with the help of various joint ventures,acquisition,mergers and takeovers. Havells recently acquired Frankfurt headquartered,SLI sylvania for $ 300 mn.

The company is a leading global designer and provider of lighting systems for lamps and fixtures. Sylvania is one of the most globally recognized brand for over a century in the electrical industry with brand like Sylvania,Concord:marlin,Lumiance,Marlin,Claude and Linolite-Sylvania. History (Milestones-Years Achievements) 1958: Commenced trading operations in Delhi 1971: Bought HAVELLS Brand 1976: Set up the first manufacturing plant for Rewireable Switches and Changeover Switches at Kirti Nagar, Delhi. Havells in the year 1976. 1979: Set up a manufacturing plant for HBC Fuses at Badli, Delhi. 980: Started manufacturing high quality Energy Meters at Tilak Nagar, Delhi. 1983: Acquired Towers and Transformers Ltd. and turned it into a profitably manufacturing Energy Meters Company in one year. 1987: Started manufacturing MCBs at Badli, Delhi in a Joint Venture with Geyer, Germany. 1990: Set up a manufacturing plant at Sahibabad, UP for Changeover Switches. 1993: Set up another manufacturing plant at Faridabad, Haryana for Control Gear Products. 1996: Acquired a manufacturing plant at Alwar, Rajasthan for Power Cables & Wires.

Entered into a Joint Venture with Electrium, UK for manufacturing Dorman Smith MCCBs and Crabtree Modular Plate Switches. 1997: Acquired Electric Control & Switchboards at NOIDA for manufacturing customized packaged solutions. 1998: Introduced high-end Ferraris Meters in Joint Venture with DZG, Germany. 2000: Acquired controlling stake in Duke Arnics Electronics (P) Limited engaged in manufacturing of Electronic Meters-Single Phase, Three Phase, Multi Function, Tri-Vectors. Acquired controlling interest in an industry major-Standard Electricals Ltd. 001: Acquired business of Havells Industries Ltd, MCCB of Crabtree India Limited and merged ECS Limited in the company to consolidate its area of core competence. 2002: Standard Electrical Company becomes a 100% Subsidiary of the company Attained the IEC certification for Industrial switchgear and CSA certification for all manufacturing plants. 2003: Set up manufacturing plant at Baddi (H. P. ) for manufacturing of Domestic Switchgear. Set up a manufacturing plant for manufacturing of CFL at existing manufacturing plant in Faridabad, Haryana. 2004: Set up a manufacturing plant for manufacturing of Ceiling Fans at Noida, UP.

Set-up their own marketing office in London through their wholly owned subsidiary company Havells U. K. Ltd. In December 2004, placed 235 fully convertible debentures of Rs. 10 lakhs on M/s. Shine Ltd. , Mauritius and the debenture got converted in June, 2006 Attained the CE certificate for CFLs. 2005: Set up manufacturing plant in Haridwar, Uttaranchal for manufacturing Fans. Awarded the KEMA certification by The Dutch Council for Accreditation, making QRG the only group to attain this certification. Set up of R Center in Noida H. O. 2006: Crabtree India merged with Havells India. Added CFL production unit in Haridwar manufacturing plant.

Expansion at Alwar manufacturing plant for increase of production capacity. Expansion at Baddi manufacturing plant and set-up of an Export Oriented Unit. 2006: First Company to get the ISI Certification for complete range of CFLs. Started mid-day meal program at Alwar, Rajasthan caters to 10,000 students from 77 schools. 2007: Set-up of Capacitor manufacturing plant in Noida, UP with the capacity of 6, 00,000 KVAr per month. Acquired the Lighting business of a Frankfurt based company “Sylvania”, a global leader in lighting business and now the company’s turnover crosses US$ 1 Billion.

Havells at that time was best known for its electrical switches, energy meters and miniature circuit breakers (MCBs), while SLI Sylvania was a renowned yet under-leveraged European lamps and fixtures brand. In March 2007, Havells acquired SLI Sylvania of Netherlands for $300 Million, making it the fourth largest lighting business in the world, worth over a billion USD! This was, at that time, the biggest overseas takeover by an Indian Electrical equipment manufacturer. This takeover helped take the Havells brand to over 20,000 dealers across Latin America, Europe, Asia and Africa.

The combined Havells-Sylvania generated over a $1 billion in revenue with more than 60% coming from international sales. Havells’ portfolio of prestigious global brands now includes Crabtree, Sylvania, Concord, Luminance, Linolite & SLI Lighting. 2008:First Indian CFL manufacturers to have adopted RoHS, European norms on Restriction of Hazardous Substances in CFLs. Set up of Global Corporate office, QRG Towers at Expressway Noida. Havells Corporate Office. Investment of Rs. 50 Crores in Global Center for Research and Innovation (CRI). Set up of fully automatic plant for Havells Lafert Motors at Neemrana.

Change in Corporate BRAND identity. [3] 2009: Set up of fully automatic 2nd unit for switchgear manufacturing at Baddi. Global consolidation of CFL manufacturing plant at Neemrana for domestic and export purposes. Launch of India’s 1st HPF CFL. Launch of India’s 1st BEE 5* Rated Fan. 2010: Inauguration of fan manufacturing unit 2 at Haridwar. Global Launch of LED products. Acquired 100% interest in Standard Electricals. Sets up World’s First New Generation CMH Lamp Plant at Neemrana. Vision “To be a globally recognized corporation that provides best electrical & lighting solutions,delivered by best in class people. ” Mission

To achieve our vision through fairness,business ethics, global reach,technological expertise,building long term relationships with all our associates,customers,partners,and employees. Values •Customer Delight:A commitment to surpassing our customer expectations. •Leadership by : A commitment to set standards in set standards in our business and transactions based on mutual trust. •Integrity and Transparency:A Commitment to be ethical,sincere and open in our dealings. Pursuit of Excellence: A commitment to strive relentlessly,to constantly improve ourselves, our teams,our services and products so as to become the best in class

Promoters QRG Group is one of the fastest growing Electrical and Power Distribution Equipment Company in the country, manufacturing products ranging from building circuit protection, industrial & domestic switchgear, cables & wires, energy meters, fans, CFLs, luminaries, bath fittings and modular switches. The group comprises of 5 companies – 1) Havells India Ltd. (the flagship company) 2) Standard Electricals 3) Crabtree India Ltd 4) TTL 5) Sylvanias Board of Directors 1. Qimat Rai Gupta (Chairman and Managing Director) 2. Anil Gupta (Joint Managing Director) 3. Surjit Gupta (Director Operations) 4.

Ameet Gupta (Director International Marketing) 5. Rajesh Gupta (Director Finance) Shareholders •Indian Promoters hold 61. 6%, single business focus. •In 2007 Warburg Pincus, a global private equity firm and one of the largest investors in India, invested US $110 million in Havells India Ltd. •Warburg Pincus share in havells represents 14 % of the fully diluted share capital of the company. •Overtime company attracted high quality long term investors Sequoia capital CLSA Blackrock SAIF partners Sloane Robinson HSBC (largest FII in India) SBI (largest bank in India) Havells Total Revenue Growth

Starting off as a manufacturer of switchgears in 1971, Havells till the late 1990s was largely involved in manufacturing industrial products. Foreseeing strong growth prospects in the consumer goods category, the company later diversified into products such as fans, compact fluorescent lamps (CFLs), modular switches, and power cables and wires. As these products are used mostly during building construction or renovation, the company benefited from the rapid growth in the real estate sector, reporting a robust compounded annual growth rate (CAGR) of around 40% in its revenues in the last ten years.

To further capitalize on the growth potential in the consumer goods category, Havells is now expanding its portfolio, including products such as water heaters and electrical appliances. With its main focus being on electrical consumer goods, demand for most of Havells products is driven by consumer spending and power availability. Over the last four years, the top players in domestic electrical consumer goods industry have demonstrated strong revenue growth of 15-18%, driven by rising income levels, increasing urbanization, and greater rural electrification.

Further, with standards of living improving and consumer focus increasing on saving energy, the demand for quality products has been reporting strong growth. The trend is expected to sustain, with the main beneficiaries being companies with established brands and product attributes that stand out in an increasingly cluttered market, high quality standards that neutralize competition from unorganized-sector players, and extensive distribution networks that enable them to reach the high growth centre’s in Tier-II and Tier-III cities.

Given its established track record, Havells is in a favorable position to capitalize on the sector‘s growth potential. We expect Havells to post a net profit CAGR of around 11% between 2009-10 and 2012-13(E) on a standalone basis. Major clients of Havells 1. 4 PRODUCT PROFILE There are twelve verticals of Havells they are as follows: 1. DP- Domestic product- (Miniature Circuit Breaker ) 2. IP- Industrial products- (Moulded Case Circuit Breaker ) 3. Switches (Modular )- Crabtree 4. Switches (Modular )- Havells 5. Motorts- Industrial 6. CFL’s-( Compact Flurosent Light )

There are various types of CFL’s they are as follows Normal, Spiral, Higher Range, T-2 Spiral, G24 Base 7. Professional Luminous 8. Consumers Luminous 9. Fans- There are various types of CFL’s they are as follows Table Fans, Wall mounted, Ceiling Fans, Exhaust Fans, Pedestal Fans 10. Geysers 11. Wires 12. Cables- There are various types of Cables they are as follows Flat Cables, Co-axial TV Cables, Telephone Switch Board Cables, Multi Core Round Products Building Circuit Protection Miniature Circuit Breaker o Miniature Circuit Breaker (MCB) o Isolator o Changeover Switch Residual Current Circuit Breaker (RCCB) o RCBO o Distribution Board (DB) o Indicator Light Industrial Circuit Protection o Air Circuit Breaker o MCCB o Panel Board system o Changeover Switch o By-pass Changeover Switch o Load Changeover Switch o Automatic Transfer Switch o Switch Disconnector o Control Gear o Switch Disconnector Fuse o Fuse Switch and Switch Fuse o Chamber System o Fuse Holder o Nylon Fuse Base o Fuse Link and Fuse Base Motors Foot Cum Flange Motor. o Foot Mounting o Flange Motor o Foot Cum Flange o Inverter Duty Motors with Forced Cooling o Crane Duty Motors o Brake Motors Normal Duty o Heavy Duty o Super Heavy Duty o Agriculture Duty o Motor Run Capacitors Lighting oLED Lighting o Consumer Lighting o Commercial Lighting o Down Lighter o Landscape – Bunker Lighting o Industrial Lighting o Area Lighting o Road Lighting o Specialty Lamps o Accessories o Aura Lighting CFL India’s First HPF Green CFL. o Retrofit o Non Retrofit o Higher Range o Liliput o FPL Water Heater o Instantaneous Water Heater o Electric Storage Water Heater Cables and Wires o Power Cables – Aluminum Control Cables – Copper o Copper Flexible Cables Fans Havells Ceiling Fans. o Ceiling Fans o Table Fans o Wall Mounting Fans o Pedestal Fans o Air Circulator Fans o Ventilating Fans 3. 9 Modular Plate Switches o Havells Modular Switches o Crabtree Modular Switches Capacitors Havells started manufacturing of its new range of products Capacitors in February 2007 Havells Capacitors are designed and manufactured using S3 technology. It encompenses product with triple shield with differential disconnector in the event of any fault within due to environmental compatibility.

Automatic controlled vacuum potting of “Element Modules” ensures fault remains localized. and protects the installation in spite of hazards Advance technologies adopted in our “Capacitors” offer you unmatched safety and outstanding performance under Indian conditions benefiting you month after month and every year from now on… Figure Capacitors 1. 5 COMPETITORS PROFILE CIRCUIT PROTECTION DEVICES BUILDING CIRCUIT PROTECTION COMPETITOR’S POSITION I. Havells II. Legrand III. Indo Asian IV. Schneider INDUSTRIAL CIRCUIT PROTECTION COMPETITOR’S POSITION I. L II. Osram III. Schneider IV.

Havells POWER CABLE COMPETITOR’S POSITION I. Polycab II. Havells III. Gloster WIRES COMPETITOR’S POSITION I. Finolex II. Havells III. Anchor IV. FANS COMPETITOR’S POSITION I. Crompton Greaves II. Orient III. Usha IV. Bajaj V. Havells ENGERY SAVINGS LAMP COMPETITOR’S POSITION I. Phillips II. Havells III. Osram LIGHTING FIXTURES COMPETITOR’S POSITION I. Phillips II. Bajaj III. Crompton Greaves IV. Havells Fig : ORGANIZATION CHART EXPLANATION OF ORGANIZATION STRUCTURE ?Havells India Ltd has straight line-functional structure. ? Qimat Rai Gupta is chairman and Managing Director of Havells India Ltd. Directors, Branch Heads, National product heads have to report Managing director. ?There are 12 different products of Havells and there are 12 different Branch Heads as show in organisation chart. ?Product Heads, Ass. Managers, Senior Sales Executive, Sales Executive, they have to report their respective Branch Heads as shown in organization chart. ? Accounts Executive have to report commercial Head and commercial head have to report Branch Head. ?Similarly Service Executive has to report Service Head and service head have to report their respective Branch Heads as shown in rganization chart. Work culture at Havells QRG is continuously applying modern management techniques such as Kaizen to enable employees to improve their day to day functioning in small steps, one at a time. QRG has also implemented Japanese version of 5S which stands for “a place for everything and everything in its place”. The company has Introduced these techniques as it firmly believes that small changes add up to large results and the only way for a corporation to grow, is to make its people grow.

The Group is driven by qualified and experienced professionals backed by a work force of over 4000 employees. All branches and manufacturing facilities are computerized and networked with each other. An open door policy at all levels encourages employees to be participated, innovative and creative. Empowering employees helps the organization in harnessing individual talents to the fullest. Emphasis is laid on building team spirit which helps employees to realize collective potential. Manufacturing Plants: Powerful trends are shaping up industry for the 21st century.

Because of rapid spread of advanced technologies complexity of work is increasing – almost daily. With the state of the art equipments and manufacturing facilities, QRG group is helping to boost safety in workplaces from the factory to the offices, domestic buildings to commercial plazas. All the manufacturing units are probably supervised and controlled by technocrats and industry specialists. The group has well managed, well equipped tool rooms with machines like CCV Line, CNC Machines, EDM Wire Cut, Spark Erosion Machines, Lathes and Surface Grinders.

Our strategic alliances with some of the leading technologycorporations in the world of electrical engineering, ensure constant access to the latest developments in the international markets, which are then adapted to the tough tropical conditions. Our manufacturing units are fully equipped with the latest and most sophisticated facilities in India. And in the hands of our highly qualified technical experts, this results in some of the most advanced product development in the country Location: Branch offices / zonal offices / manufacturing plants Haridwar, Uttaranchal Products manufactured: Fans and CFLs • Baddi, Himanchal Pradesh Products manufactured: MCBs, CFLs and Switches • Samepur Badli, Delhi Products manufactured: MCBs, ELCBs and DBs • Tilak Nagar, Delhi Products manufactured: Energy Meters • NOIDA, UP Product manufactured: Fans • Alwar, Rajasthan Products manufactured: Cables & Wires • Faridabad, Haryana Products manufactured: CFLs and Industrial Products. • Gurgaon, Haryana Luminaries and Lighting fixtures • Jalandhar Products manufactured: MCBs, ELCBs, DBs, Wires and Industrial Switchgear • Gurgaon, Haryana Products manufactured: Modular Plate Switches & Accessories . SWOT ANALYSIS Opportunities, and Threats involved in a project or in a business venture. It involves Specifying the objective of the business venture or project and identifying the internal and External factors those are favorable and unfavorable to achieving that objective. A SWOT analysis must first start with defining a desired end state or objective. A SWOT Analysis may be incorporated into the strategic planning model. Strategic Planning, including SWOT and SCAN analysis, has been the subject of much research. • Strengths: attributes of the person or company those are helpful to achieving the objective. Weaknesses: attributes of the person or company those are harmful to achieving the objective. • Opportunities: external conditions those are helpful to achieving the objective. • Threats: external conditions which could do damage to the objective. Identification of SWOTs is essential because subsequent steps in the process of planning for achievement of the selected objective may be derived from the SWOTs. The aim of any SWOT analysis is to identify the key internal and external factors that are important to achieving the objective. These come from within the company’s unique value chain.

SWOT analysis groups key pieces of information into two main categories: • Internal factors – The strengths and weaknesses internal to the organization. • External factors – The opportunities and threats presented by the external environment to the organization STRENGTHS •Foreign Joint Venture & International approvals •World class infrastructure •Low cost of Production due to the easy availability of raw materials and cheap labour •Leveraging upon Sylvinia network (10000 distributors). •Global presence (Latin America, UK, Europe) •Largest manufacturing capacity in the country for motors •R & D facilities

WEAKNESS •High power consumption and requirement of continous power supply •Season demand of the production due to weather condition •Increased cost of production due to increase in coal prices •Globally small Market share •Slowdown of real estates •Delays in execution of power projects OPPORTUNITIES •Global opportunities. •Growing middle class : There has been increase in the purchasing power of emerging middle-class with rise in salaries and wages, which results in rising demand for better quality of life that further necessitates infrastructure development and hence increase the demand for CFL. Technological changes: The CFL industry has made tremendous strides in technological up gradation and assimilation of latest technology. At present ninety three per cent of the total capacity in the industry is based on the capacity is based on old wet and semi-dry process technology. The induction of advanced technology has helped the industry immensely to conserve energy and fuel and to save material substantially and hence reduced the cost of production. •Changing dynamics due to increased FDI inflows •Shift of public perception on the product from being a luxury item to necessity. Acquisition of Chinese firms for low cost manufacturing. •Vertical integration into Havells retail outlets. •Leveraging upon motor business in India THREATS •Unorganized market. •International policies on environment of highly energy efficient, low or zero noise environment efficient product •Unrelated diversification •Global slowdown effected business adversely as is largely dependent on Sylvinia BCG MATRIX BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON Of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.

According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share. Market share is the percentage of the total market that is being serviced by your company, measured either in revenue terms or unit volume terms. RELATIVE MARKET SHARE RMS = Business unit sales this year Leading rival sales this year The higher your market share, the higher proportion of the market you control. Market growth is used as a measure of a market’s attractiveness. MARKET GROWTH RATE

MGR = Individual sales this year – individual sales last year Individual sales last year Markets experiencing high growth are ones where the total market share available is expanding, and there’s plenty of opportunity for everyone to make money. It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories: I. Stars Question marks II. Cash cows III. Dogs It is based on the combination of market growth and market share relative to the next best competitor.

The matrix comprises of four quadrants each describing the size and position of the strategic business unit owned by an organization. On the vertical axis is the Market Growth rate of the market in which the business operates. A market growth rate above 10 percent is considered to be high. On the horizontal axis is the Relative Market Share. It refers to the Strategic Business Unit’s market share as compared to the firm, which is its largest competitor in the segment under consideration. The relative market share serves a measure of the company’s strength in the market segment.

The two axes are divided into high & low. The growth matrix is divided into four cells each indicating a different type of business profile. QUESTION MARKS: These are Businesses that operate in high- growth markets but have low relative market shares. A question mark requires a lot of cash because the company has to spend money on plant, equipment and personnel to keep up with the fast growing market and because it wants to overtake the market leader. The company has to think hard about whether to keep on investing money into this business or put an end.

Strategic options for question marks include.. I. Market penetration II. Market development III. Product development IV. Which are all intensive strategies or divestment? STARS: – It is a market leader in a high growth market. A star does not necessarily produce a positive cash flow for the company. The company must spend substantial funds to keep up with the high market growth and to fight off competitor attacks. A star is a potential business which has the competitive advantage to be a market leader in an industry that is growing fast. Strategic options for stars include.

I. Integration – forward, backward and horizontal II. Market penetration III. Market development IV. Product development V. Joint ventures CASH COWS: – Stars with a falling growth rate that still have the largest relative market share and produce a lot of cash for the company is called a cash cow. The company does not have to finance expansion because the markets growth rate has slowed because the business is the market leader it enjoys economies of scale and higher profit margins. The company uses its cash cows to pay bills and support other business. ). Strong position:-strategic options are I. Product development II. Concentric diversification b). Weak position :- strategic options are I. Retrenchment II. Divestment DOGS: – Businesses that have weak market shares in low-growth markets are in the dog category. The company should consider whether they are expecting a turn around in the market growth rate or a new chance for market leadership else they should divest this business. It would be fruitless to spend and money on this matrix business. Strategic options for Dogs include I.

Retrenchment (if it is believed that it could be revitalized) II. Liquidation III. Divestment (if you can find someone to buy! ) Successful products may well move from question mark through star to Cash Cow and finally to Dog. Less successful products that never gain market position will move straight from question mark to dog BCG MATRIX IN HAVELLS:- Indian Operations of the Company are divided into 4 key segments: Switchgear: Havells is the largest manufacturers of MCBs, RCCBs, and distribution boards in India . With the market share of around 25% in the market for MCBs.

In FY08, switchgear contributed 25% at Rs. 5420 million to its overall revenue. This segment is the most profitable one with operating margins to the tune of 33% in the FY08. The Company currently exports MCBs to over countries, including the quality conscious European countries. The Company is the number one player in domestic switchboards with more than 20% market share and is the 4th largest in Industrial switch boards. With continued investment in power sector they expect Company to grow at 15% CAGR over FY08-FY12. Switch Gear division had EBIT margins of 32% for Q3FY09.

They expect margins in this business will remain stable above 30% over long term. Cable and Wires: The cable & wire segment generated Rs 2133 million in the Q3FY09 registering y-o-y de-growth of 14% EBIT margins fell from 9. 5% 9M YTD FY08 to 5. 4% in FY09. Fall in revenues was registered due to drop in prices of cables and wires and huge margin drop in was due adjustment in inventory due to massive reduction in prices of Copper in this Quarter. Company had negative EBIT of Rs. -76 million on revenues of Rs. 2133 million for Q3.

The Company is recognized as quality manufacturers of cable & wires and offers a complete range of low and high voltage PVC and XLPE cables, besides, domestic/FRLS wires, Co-Axial TV and telephone cables. Lightning and Fixtures During FY08, the turnover of the division grew at 25% y-o-y to Rs 2900 million, first quarter revenues stood at 650 million, 11% up from same period of previous year. The Company generated operating profit of Rs. 190 million with 26. 7% margins as against 12. 3% margin last year. In this division, the Company expanded its CFL capacity to become the largest CFL manufacturer in the country.

They expect Company to aggressively pitch this segment by launching a range of products in lightings and fixtures as it brings products from the stable of Sylvania into the Indian markets. Currently 60% of the CFL and only 30% of the fixtures market is organized. Their estimates put Lightings and Fixtures business growth at 25% CAGR FY10E –FY12E as industrial growth is likely to pick up. Electrical Consumer Deliverables & Others Havells also offers products like electric fans, meters and ‘Crabtree’ brand bath fittings which are largely consumer products and add diversity to Havells product profile.

With strong brand image among domestic consumers, Havells may launch new products like Geysers in this segment. They believe the electric fan segment, which contributes 10% to consolidated revenues, and generates operating margins in excess of 20%, is the key focus segment. The Company has increased its share form 3% to 13% in the organized fan market of INR 17 bn form FY 05 to FY08 PESTLE ANALYSIS (PEST analysis) Political (Global, national, regional, local community and trends) Economic (world, national and local trends) Social (development in society – culture, behaviour, expectations).

Technological (developments: computer hardware, software, applications) Legal (world/ EU/ national legislation). Environmental (global / EU/ National issues). PESTLE Analysis is a simple technique which can be used in a fairly sophisticated way, Particularly when it is combined with Risk Analysis, SWOT Analysis, an Urgency/Impotency Grid and expert knowledge about the organisation and its external factors. PESTLE Analysis is normally used to help organisations identify and understand the external environment in which they operate and how it will operate in the future. SOCIAL FACTOR

Havell acquires companies and builds internally, havells Group never loses sight of its responsibility as a good corporate citizen. Havells believes that serving people with meager or no means is the duty of every well-to-do person. It consistently puts that philosophy into action and has initiated several projects for social causes. This has greatly increased the number of children attending school regularly and also alleviates hunger. Corporate Social Responsibility (CSR) at havells portrays the deep symbiotic relationship that the group enjoys with the communities it is engaged with.

As a responsible corporate citizen, we try to contribute for social and environmental causes on a regular basis. Kitchen with Modern Facilities The company has acquired land for constructing a large kitchen with all the modern facilities to serve the meal to around 40000 to 50000 students. Mid Day Meal Being a responsible and concerned corporate citizen, QRG also undertakes other welfare activities in and around its plant locations, In Alwar region; the company is providing mid-day meal close to 15000 students of primary schools. Check-up Camps Blood Donation Camps

Contribution towards Tsunami and Kargil National Relief Fund. TECHNOLOGICAL FACTOR Research and Development Innovation is the hallmark of every vital development at havells Group. New ideas, inventions deepen scientific knowledge and give its work force a new impetus towards technical progress. Havells’s technological strengths and its endeavour towards continuous research & development have allowed it to fulfils its responsibilities towards its customers. The responsibility of providing its customers the best products and zero defect services to enable them to be comfortable and secure in usage of electricity.

Havells has recently invested 50 crores in the QRG Center for Research and Innovation, set-up at the company’s Head Office premises in Noida, U. P. The objective of this centre is to provide the theoretical & experimental foundations for all segments of electrical engineering. The centre closely cooperates with the various departments so as to provide the best and the latest in terms of technology and design. Quality Control The essence of quality is closely wrapped in the way we think, plan and work. It finds its true expression when we extend beyond ourselves to exceed our customer’s expectations.

To deliver products those are safer, faster and simply better. Each time, every time. Building customer confidence through teamwork is a top priority to provide a wide variety of products and services. Realising and respecting the basic needs of customers to feel more secure, we’ve committed ourselves to make our products better, safer and smarter than what he or she is looking for. That’s a passion that began 30 years ago and that’s how it continues to be even today. Our customers rely on us and it is our responsibility to give them the very best.

All our products are as per IEC standards. QRG has a simple rule on quality. If it doesn’t exceed customer expectation, it’s not quality ECONOMIC FACTOR The Havells Group defines corporate governance strategically, which encompasses not only what we do as a company with our profits, but also how we make them. It goes beyond philanthropy and compliance and addresses how our company manages its economic, social, and environmental impacts, as well as its relationships in all key spheres of influence: the workplace, the marketplace, the supply chain, the community, and the public policy realm.

We as a company have been in lead in offering a portfolio of eco responsible products and services that deliver powerful, sustainable, energy-efficient solutions that don’t compromise on capacity and security. Our eco responsibility initiative also focuses on how we run our business, and includes efforts to develop an alternative-energy strategy, and thus reduce the environmental impact of our operations. We strive to bring corporate responsibility to every aspect of our business. We’re committed to managing a responsible and diverse supply chain that’s consistent with our high standards for environmental and business practices.

Breaking down the barriers that constrain innovation is a challenge; we have readily embraced right from the start. Our ability to build communities and promote the exchange of ideas through assistive technologies, participation programs, and standardization is transforming the way people experience our products. We offer our customers holistic energy-efficient solutions, enabling them to not only save money and protect their capital investment, but also lower their energy usage and protect the environment, thus fulfilling our CSR responsibility of sustenance of depleting environmental resources.

CORPORATE GOVERNANCE AND ETHICS An implicit sense of ethical business conduct has been the cornerstone of the havells way on corporate governance. On issues ranging from customer care and business excellence to financial propriety and more, explicit rules and regulations supplement the traditional values on which our group companies have been shaped. This is what we have endeavored to do in the 50 years of our existence. Our values of understanding, trust, integrity and ethics have served us in good stead.

Corporate governance as practiced by our Group translates into being fair and civic-minded, fulfilling our duties to the entire spectrum of stakeholders, and, most importantly, making integrity an article of faith across all our operations. The group’s adherence to ethical business conduct is rooted in the vision of its Founder Mr Qimat Rai Gupta. We started on sound and straightforward business principles, considering the interests of our shareholders and welfare of our employees as foundation of our long term success.

The ‘leadership with trust’ philosophy that has come to play such a vital role in how our customers perceive us is all the more remarkable given the climate of unparalleled public distrust of people in positions of authority today both in business and politics. Employee Relations Our people are the key to our success. Their skills, knowledge, ideas and enthusiasm drive our business. We have high-quality, diverse workforce and employees who fulfill their potential.

We have achieved this by giving them development and advancement opportunities along with competitive compensation and benefits that appropriately reward performance We communicate widely with employees to demonstrate how their efforts contribute to our success and to listen to their concerns. We also encourage them to align with our vision. We are committed to open communications and a workplace where everyone’s voice is heard. We use several channels to communicate with employees, including an internal web portal and company website along with communication sessions with the top management of the company.

These sessions provide assessment of employee satisfaction and are inputs for business planning, management decision-making and company strategy development. They also help employees implement company policies, meet high standards of conduct and ensure their behavior reflects company values and policies. We seek to meet leading health, safety and wellness standards to enhance our business performance while optimizing employee health. Our facility policies are designed to continually reduce the risk of occupational injury and illness while promoting employee health and wellbeing.

We wish to be a company that is known for its leadership in corporate ethics and responsibility. A company where employees are proud to work, and customers, partners and suppliers want to do business with. 5. SPECIAL TASK MARKET ANALYSIS ON PURCHASING PATTERN OF HAVELLS DEALER SURVEY OBJECTIVE OF THE STUDY: ?To study the Purchasing Pattern of Dealers of Havells product ? To find how the product is accepted in the market. ? To know the perception of customer regarding the quality of Havells. ? To know how satisfied are Dealers with the products they purchase and the services provided by the company

RESEARCH METHODOLOGY: Research refers to a search for knowledge. It is a systematic way of collecting and recording the facts in the form of numerical data relevant to the formulated problems and arriving at certain conclusions over the problem based on collected data. Thus formulation of the problem is the first and foremost step in the research process followed by the collection, recording, tabulation, analysis and drawing the conclusions. The problem formulation starts with defining the problems or number of problems in the functional area.

To detect the functional area and locate the exact problem is most important part of any research as the whole research is based on the problem. Research extends knowledge of human being, social life and environment. It unravels the mysteries of nature. It verifies and tests existing facts and theory and these help in improving our knowledge and ability to handle situation and events. The questionnaire method is closed-ended questionnaire. It is a structured ones with four alternative responses from which respondent can choose. They contain standardized answers and they are simple to administer and easy to compile and analyse.

SAMPLING: Sampling is the selection of some of some part of an aggregate or totality on the basis of which a judgment or inference about the aggregate or totality is made. In briefly, “sample is a smaller representation of whole”. SAMPLE SIZE: 30 SAMPLE UNITS: Electrical Dealers at Bangalore (Chikpet, Balepet, B. V. K Iyengar Road, R. T. Street) SOURCES OF DATA COLLECTION: Data serves as the basis or raw materials for analysis. The relevance, accuracy, adequacy and reliability of data determine the quality of the findings of the study.

Data collection includes gathering the relevant information from different sources of data pertaining to the study under consideration. PRIMARY DATA: Primary date has been collected through:- I. OBSERVATION: – Here we have observed retailers About their purchasing behaviors . II. SURVEYS: – In Survey We have used Questionnaire Method, few Questionnaires have been asked to the Dealers. SECONDARY DATA: Secondary data was taken mainly from the internet and the URL are as follows:- I. www. havells. com II. www. wikipedia. com III. www. scribd. com IV. www. icra. com

DURATION OF THE STUDY:- The study was carried out for a period of 20 days . DEALER SURVEY 1. Have you heard about Havells ? a. Yes b. No 2. Do you buy Havells product? a. Yes b. No If No why …………………………….? 3. How many different products of Havells you know? a. 1-2 b. 3-5 c. 6-8 d. 9-12 4. What are the Havells Modular Switches you are dealing with? a. Corel Range b. Pearlz Range c. Oro Range 5. What are the Havells CFL you are dealing with? a. Normal b, Spiral c. Higher Range d. T-5 6. What are the Copper Flexible Cables you deal with? a. Flat Cables b.

Co-axial TV Cables c. Telephone Switch Board Cables d. Multi Core Round 7. What are the Havells IP you deal with? a. Industrial Switch Gears b. Meters c. Capacitors d. Motors 8. What are the Havells DP you deal with ? a. MCB b. RCCB c. DB 9. Which Havells Fans do customers prefer the most ? a. Ceiling Fans b. Table Fans c. Wall mounted d. Exhaust Fans 10. How Effective are the promotional activities of Havells ? a. Very Good b. Good c. Average d. Poor e. Very Bad 11. What are the other brands they are dealing with ? a. IP ………… ………… ………… . .. ……… b. DP …………. ………… ……….. ………. c. Switches ………… ………….. …………… …………. d. Fans …………. ………….. …………. ………….. e. CFL ………… …………. ………….. …………. f. Wires …………. …………. …………. …………. g. Cables …………. …………. …………. ………….. h. Geysers …………. …………. …………. …………. i. Motors …… …… ………….. ………….. ……………. j. Professional Luminous ……….. ………. ……….. ………….. k. Consumer Luminous ………… ……….. ……….. ………. 12. Which Range is highest sold in your counter ? a. Lights b. Fans c. Industrial Circuit Protection d. Building CP 13. How do you rate Havells Sales staff support ? a. Very Good b. Good. c. Average d. Poor. e. Very Bad 4. What type of products do you want to sell ? a. Quality Products b. Guarantee Products c. Less Price Products d. Good Service Products 15. Which Company Products you buy the most ? a. Philips b. Havells c. Anchor d. Crompton Greaves 16. Do you get enquiry for our products from customers ? a. Yes b. No 17. What is the proportionate ratio of Havells sales in your counter with respect to other brands you deal ? ……………………… 18. How do you rate Havells in dealing with commercial terms? a. Very Good b. Good c. Average d. Poor 19. How do you rate the after sale service of Havells company ? . Very Good b. Good c. Average d . Poor 20. How Satisfied are you with Havells ? a. Strongly satisfied b. Satisfied c. Dissatisfied SUGGESTIONS :- Data Analysis and Interpretation 1. Have you heard about Havells? The Dealers have heard about Havells 2. Do you buy Havells product? All the Dealers buy Havells product (Since Dealers survey was restricted to the Dealers who buy Havells product) 3. How many different products of Havells you buy ? INTERPRETATION: Most of Dealers buy products in the range of 3-5, which includes Lights, Circuit Protection and Switches and Fans 4.

What are the Havells Modular Switches you are dealing with? Coral Range5 Pearlz Range2 Oro Range1 INTERPRETATION: Most of the Dealers deal with Coral switches, few with Pearlz 5. What are the Havells CFL you are dealing with? Normal8 Spiral4 Higher Range2 T-2 Spiral3 G 24 Base1 INTERPRETATION : Normal Range CFL is highest sold in there counter when compared to other range of CFL’S 6. What are the Copper Flexible Cables you deal with ? Flat CablesNil Coaxial1 Telephone Switch boardNil Multi Core Round2 INTERPRETATION : Polycab and Finolex rule the market in Multic core round and Coaxial cables . What are the Havells IP you deal with ? Industrial Switch Gears8 Meters3 Capacitors2 Motors2 INTERPRETATION : In Industrial Circuit Protection , Most of the Dealers deal with Industrial Switch Gears and rest of them have equal share 8. What are the Havells DP you deal with ? MCB8 RCCB8 DB2 9. Which Havells Fans do customes prefer the most ? Ceiling Fans7 Table Fans7 Wall Mounted7 Exhaust Fans4 10. How Effective are the promotional activities of Havells ? Very Good2 Good16 Average2 PoorNIL 11. What are the other brands they are dealing with other than Havells ? a.

IP b. DP c. Switches d. Fans e. CFL f. Wires h. Geysers 12. Which Range is highest sold in your counter ? Lights4 Fans7 Industrial Circuit Protection4 Building CP3 13. How do you rate Havells Sales staff support ? Very GoodNil Good7 Average6 Poor4 14. What type of products do you want to sell ? Quality Products12 Guarantee Products10 Less Price5 Good Service Products10 INTERPRETATION : Most the Dealers want to purchase Quality and Guaranteed Products 15. Which Company Products you buy the most ? 16. Do you get enquiry for our products from customers ? Yes30 No3 17.

What is the proportionate ratio of Havells sales in your counter with respect to other brands you deal with? 18. How do you rate Havells in dealing with commercial terms? Very GoodNil Good10 Average6 Poor5 19. How do you rate the after sale service of Havells company? Very GoodNil Good11 Average7 Poor8 20. How Satisfied are you with Havells? Strongly SatisfiedNil Satisfied15 Dissatisfied2 FINDINGS 1. More than 70% of the Dealers are selling Havells products 2. 80% of the Dealers think that the price of the Havells is higher when compared to other company. 3. 0 % of the Dealers are satisfied with Havells and 20% are dissatisfied. 4. 60% of the Dealers told that the sales of Havells increased from before. 5. Out of all categories of Havells Products MCB is the highest selling in most of the stores. 6. 60% of the Dealers told that they will prefer selling Havells because customers are demanding it more. 7. 70% of the Dealers are satisfied with the delivery services the Havells but 20 % of the Dealers are not satisfied with the delivery services. 8. Replacement of Havells Products when compared to other company products takes longer duration.

The ALMS providers are consolidating their grounds in the highly competitive market through mergers and acquisitions to build feature-rich solutions and attain better market visibility. We Believe that the need to manage and elevate e;learning process, along with the cost-efficient and effective learning and development programs is manifesting the Roth in the Learning Management Systems market. Though the adoption of these solutions was initially gradual, due to concerns of integration support and compliance standards, these solutions are witnessing wide acceptance across various verticals.

The convenience of flexible learning and choices for curriculum creation and delivery that ALMS provide is expected to bring more demand for the learning management solutions. To serve a grouped audience, the ALMS providers are addressing the integration challenges by designing solutions that adhere to the compliance standards. The amalgamation of ALMS within the existing learning ramekin will enable continuous learning and content risibility.

The ALMS research Is a comprehensive study of the global market for learning management solutions. The “Learning Management Systems (ALMS) Market- Worldwide Market Forecasts and Analysis 2013 2018″report forecasts the revenues On the basis of products: Content management Student management Performance management Collaboration Administration Others On the basis of users: Academic Corporate On the basis of verticals.

Pyramid Research expects the Sea’s total market revenue to reach $10. Bin in 2018, with a cumulative revenue total of $46. Bin during 2014-2018. Mobile data will be the fastest-growing revenue segment in the Emirate market: we project that from 2013 to 2018, it will grow at a CARR of 19. 3%. Along with the presence of nationwide all-IP FIFTH networks, the importance of developing local content and ads in the pay-TV market will encourage operators to embrace the new PIPIT platforms.

Synopsis Country Intelligence Report by Pyramid Research, provides an executive-level overview of the telecommunications market in the united Arab Emirates today, with detailed forecasts of key indicators up to 2018. It delivers deep quantitative and alliterative insight into the AAU telecoms market, analyzing key trends, evaluating near-term opportunities and assessing risk factors, based on proprietary data from Pyramid Research’s databases. It provides in-depth analysis of the following: The I-JAKE in a regional context: a review of telecoms market size and growth rate compared with other countries in the region.

Economic, demographic and political context In the AAU. The regulatory environment and trends: a review of the regulatory setting and agenda for the next 18-24 months as well as relevant developments pertaining to picture licensing, national broadband plans, number portability and more. A demand profile: analysis as well as forecasts and historical figures of service revenue service evolution: a look at the change in the breakdown of overall revenue by fixed and mobile sectors and by voice and data in the current year as well as the end of the forecast period.

The competitive landscape: an examination of key trends in competition and service providers’ performance, revenue market shares and expected moves over the next 18-24 months. An in-depth sector analysis of fixed telephony and broadband services, mobile voice and data services: a quantitative analysis of service adoption trends by technology/platform as well as operator, average revenue per line/subscription and service revenue through the end of the forecast period.

Main opportunities: this section details the near-term opportunities for operators, vendors and investors in the Use’s telecoms market. Reasons To Buy This Country Intelligence Report on the I-JAKE helps executives build proactive, profitable growth strategies by offering comprehensive, relevant analysis of the United Arab Emirates’ telecommunications and pay-TV markets based on insights directly from the local market players. The report offers a wealth of data on the I-EASE’S telecoms and pay-TV markets, with the mobile and fixed segments examined in detail.

The competitive landscape and the major players are also given extra attention, enabling local players or prospective market entrants to gain the insight they need. The broad but detailed perspective will help operators, equipment vendors and other telecoms industry players to succeed in the challenging telecommunications market in the Emirates. The report is designed for an executive-level audience, boasting presentation quality that allows it to be turned into presentable material immediately.

Baby milk powder is growing strongly and rising as a necessary nutrition item for baby at the beginning of development state of life in Vietnam. According to “Baby formula price rise hits poor families” (2013), In recent years, many parents who very care about their children’s development, usually choose milk which is imported from US or New Zealand because it may be more nutritious than domestic products although the price is higher than. Also, according to Euromonitor International, Vietnam is estimated as activeness and strongly develop economy, people are living ith the hectic lifestyles, shorter maternity leave and longer working hours lead woman spend less time for nursing their children. Therefore, they tend to nurse babies by infant formula which offers better nutrition and necessary vitamin for children. In this research, the research team aims to find the relevant information about infant formula market in Vietnam in order to help Oz Dairy Foods enter this market.

By applying the qualitative research methods, especially in- depth interview, the research team wants to identify what Vietnamese parents expect and their perception toward foreign infant formula product. Through that, Oz Dairy Foods may have a suitable marketing strategy to achieve their goal. Secondary research a. Vietnam economy and population research According to World Bank, Vietnam is a lower middle income country which has Gross National Income (GNI) at 1,400 dollars in 2012. The GNI of Vietnam is still lower than average lower middle income level and the growth is Just parallel together.

Comparing to other developing countries in East Asia ; Pacific, GNI of Vietnam is much lower and the gap will probably larger in the future. Moreover, according to the General Statistics Office of Vietnam, Vietnam’s birth rate lightly grows to 16. 9 births/1000 people in 2012 which defines the increase in demand for infant formula.  Market overview Vietnam is highly competitive market for infant formula industry and dominated mainly by international companies including Abbott, Friesland Campina and Mead Johnson; and one domestic company, Vinamilk (Euromonitor, 2013).

Dielac is the market leader of brand shares in 2012 and follows by Gain, Dutch Lady, PediaSure and Enfagrow. Consequently, this will create many challenges in gaining and remaining market snares especially tor new entries. In general, powder ilks prices range from 1 50,000 to 800,000 VND/can that NET weight varies from 400gto 900g/ can. “Help growth and immune system” is the general message of current brands using to attract consumers. It tends to succeed in communicating outstanding quality of additional nutrition and vitamins to consumers.

Besides many opportunities that Vietnam market brings to infant formula providers, they have to face with barriers from the government and consumers’ expectation. According to Communist Party of Vietnam online newspaper, Vietnam government applies tariff for imported brands at 10% that is highest in region. Moreover, the distribution system is fragmented and unorganized. The study of Euromonitor in March 2013 about infant formulas in Vietnam points out that Vietnamese parents are increasingly worried about nutrition in infant formula due to the negative effects of a series of scandals through media channels.

The study also clarifies the challenge from Vietnamese government when there is a policy for restricted advertising on infant formula for children younger than two years old in effort to encourage breastfeeding. Forecast Despite the difficulty in economic growth, sale volume of infant formula is foreseen to each 53,402 tons in 2017. Consequently, the statistics proves that Vietnam is the potential market for infant formula. Research problem a.

Research objectives:

• Identify Vietnamese customers’ perception and expectations toward foreign infant formula product
• Identify key factors that affect infant product marketing mix

Research questions

• Which constitutes that influence customers’ decision in buying infant formula products?
• What is customer’s expectation towards price over value of infant formula product?
• What is the most appropriate distribution and SCM for infant formula roduct to reach the majority of customers? What kinds of promotion strategies and tools that could be successful in Vietnam infant formula product market?

Research purpose: The purpose of this research is to determine Vietnamese customers’ expectations toward foreign infant formula products; in order to construct appropriate marketing strategy that reaches the majority of customers. Without market research, the company might apply inappropriate marketing strategy; which might lead to failing in Vietnam infant formula market. Research method: Basically, to exploring the customers’ perception and expectations toward infant ormula product, in-depth interviewing method will be applied as the most appropriate method for the company to chosen.

Clearly, this is a type of qualitative research which could probably help the company to have a deep understanding about the infant formula market which focus group interview and quantitative methods cannot do. Moreover, two crucially important factors for doing in-depth interview are having more explanation and receiving better results when the respondent is not influenced by other respondents’ opinions as well as there is more time and a comfort environment for the interview and respondent to discuss about he subjects. Instrument development and fieldwork: In order to make the in-depth interview more completed, an interview guide which including prepared questions matching with the identified research problem and the research’s needs will be created. Moreover, we will find around 10 appropriate respondents to do interview with them in their preferred places. Furthermore, the chosen interviewer (from the group) needs to be trained and well-prepared before coming to the rendezvous to do the interview.

For instance, the interviewer need to have a deep understanding about the research, the topics or questions need to be overed in the interview and also the respondents’ background information to ensure that they can be able to control and lead the interview well. Additionally, when doing the in-depth interview, one member will take the role of an interviewer and the others member will take notes and record the interview. Namely, each in-depth interview between 1. 5 hours to 2 hours will be recorded on tape for the following analysis and completing the final report.

Marketing research Is the process of systematic research of collecting, analyzing, and reporting marketing Information that can be used to solve problems, so as to improve a company’s bottom line. Here I agree with Nathan that it helps the organization to decide whether the product has a potential to survive in the market or not. This research will help Crispy Creak to Identify the need of their specific low- crab diet consumer. As In the video, Crispy Creme specified that they can adjust their product to suit the specific needs of the consumer.

It helps them to determined how racket will respond to their product. For example, in under developed countries, as a whole people are not much educated about health related issues as compared to the developed countries. So Jumping In to the mature and educated market will be beneficial for them where they can easily introduce health conscious product. By modifying product according to the markets, segments, and geographical location, they can attain their long term objectives. To promote such kind of products, they must educate the people and answer the health craze Issues In upcoming years.

To succeed in the global market, what market research should Crispy Creme undertake? To understand the need of this fast booming industry, it is important to consider how things are changing rapidly In a global village. There are lot of factors which should be taken Into consideration by Crispy Cream to penetrate and gain success in global market. The most important thing Crispy Cream should take before crossing borders to carry out research on their market culture, if country/market culture fits their product or not? How people respond to new products and brands?

They also need to carry out research on the available distribution channels in the targeted market, and to see whether they are cost efficient and time effective or not. They also need to conduct detail research on the existing market competitors in the target market, which are directly or Indirectly competing in the same industry. They need to study their pricing, product range, distribution channels, strategies and their market share before entering in to the global market. They also need to study the market barriers to entry, e. . Country government support foreign products and rand’s. Country economic condition is another Important factor which should be taken In to consideration by Crispy Cream, which gives them an Idea whether consumer in that specific market can afford their product or not. Market demographics, economic conditions, political stability are another factors which should be researched before crossing borders. Because country stability, geographic location, and demographics has direct relationship with the profitability of their success.

To understand the research needs of the 21st century it is important to consider how hey have changed over the past four decades. In this Initial phase of International market entry, firms were mostly concerned with collecting Information to Identify and assess market opportunities in other countries to determine which markets to enter, how to position products in these markets and how far to adapt different elements of I OFF and cultural barriers, the country was the focal point of entry decisions Conclusion Change is occurring in virtually all aspects of business and personal life.

These changes are being played out at different rates in different parts of the world. Against this backdrop, marketing researchers are being challenged to conduct research that is of the highest possible quality, as quickly as possible, in multiple diverse settings. The issues marketing researchers face are multifaceted and relate to where and how research will be conducted, who the respondents will be, and the tools and techniques that will be used. Marketing researchers must find creative ways to harness the new technologies to facilitate the conduct of research and enhance its value to clients.

At the same time research organizations must begin to evolve the capability to conduct marketing research simultaneously in the developed and the developing world. Increasingly multi-national marketers are designing and selling global brands and need research to guide their decision making across an increasingly diverse and disparate world. Sound and timely marketing research becomes even more critical for firms as they compete in the 21st century Uncertainty Avoidance: Uncertainty avoidance refers to the level of anxiety about the future (Hefted 1980, 2001).

Societies that are high in uncertainty avoidance continuously feel the inherent uncertainty in life as a threat that must be fought, while societies low in uncertainty avoidance more easily accept uncertainty and take “each day as it comes” Education: Education involves the exposure of people to a constant of new ideas, which makes them more receptive to innovations. Education also sensitizes people to the importance of technology in human progress. That again makes them more receptive to innovations. Indeed, a general finding in diffusion research is that educated people tend to adopt new products earlier than none educated people

A shift in consumer demand to want healthier fast-food options has hit the industry hard. Dunking’ Donuts and Cataracts have combated this shift by offering healthier menu items, something Crispy Creme has failed to do. Dunking’ Donuts offers healthy breakfast sandwiches and a variety of flattered sandwiches that are based on both morning and lunch styles Cataracts is even more impressive when it comes to variety on its menu as they offer pastries, muffins, fruit plates, salads, oatmeal, yogurt, and breakfast sandwiches to complement their main product, coffee. Even with a forecasted profit for 2010, how Crispy Creme addresses and answers the health craze in the upcoming years will define the company’s future Industry Environment Threat of substitutes is at an extreme high Especially in today’s society where consumers are becoming more aware and conscientious of what they eat, substitutes are readily available and on the rise. Healthy alternatives to traditional bakery items yogurt or fruit bars, nuts, and even fruit. 28 The threat of new entrants into the bread production industry is moderate.

Barriers to entry are low because the capital squired to successfully start a profitable business is fairly significant. What new entrants have to face is the entrenchment of strong players within the industry who have the resources to maintain contracts with their suppliers for stable raw input prices, the capital to invest in technologically advanced manufacturing equipment, and customer brand loyalty Competitive Environment The top three competitors that Crispy Creme faces are Dunking’ Donuts, Cataracts Coffee, Inc. , and Hostess.

Each has similar product offerings, however, are quite fractionated at the same time – both in their focus as well as strategies. Risks Facing Crispy Creme Competition Costs Expansion Recommendation The first recommendation for Crispy Creme is to begin a accompanied analysis of all corporately owned stores to determine which ones are generating the greatest amount of sales and more importantly the highest return on investment The second recommendation is to simply implement a new store model based on smaller factory stores in all new business locations.

Smaller stores require less real estate and lower axed costs while providing the ability to serve a wider customer base with more locations The third recommendation involves changing Crispy Seeker’s menu a little bit to better meet the changing needs of consumers; in today’s market more and more consumers are focusing on health conscious products. Despite the company’s previous attempt to alter products to be more health conscious by removing all trans fats, doughnuts are still not very healthy and are generally considered a snack food.

With a population largely living In cities and with each city having over half a million people, there will be sufficient traffic for a coffee store which offers quality products at a reasonable price. Our strategy Is to set up a few stores In a second tier city in Japan to show case our products and our philosophy that we are a coffee shop for the mass who can enjoy freshness at a good price. We will expand our territory after we gain acceptance in the market place. Research Methods Research methods Include analyzing graphs and charts of the growth of coffee In Japan from various reports, reviewing the history of coffee In Japan and using risk analysis and the four As.

Key Results Coffee remains to be a booming market in Japan and it is the 3rd largest importer in the world. There are many powerful competitors in both wholesale and retail markets of coffee. The market seems to be slightly shifting towards Instant/canned coffee due to the uncertain economic times. Ultimately, Japan may not be the best alternatives. However, in light of the current situation (a relatively stable new overspent, weakening Japanese Yen, positive economic sentiment) in Japan, coffee chain stores which can provide quality product at a reasonable price (such as half of what is being charged by Struck) may have a chance of success with a proper entry and operation strategy.

Market Overview Japan has not been a coffee drinking culture in the early 20th century. The culture started to spread a few decades after World War II when coffee import was liberalized. Since then, Japanese coffee consumption has grown vastly over the last 40 years. (See Appendix 1 for the Evolution of Coffee Import in Japan). This growth was due to several reasons, namely: Westernizes of consumers. Product innovation with the use of canned ready-to-drink coffee in both hot and cold forms. Initial growth of coffee shops which peaked at 162,000 in 1982 Availability through vending machines The wholesale coffee market in Japan is led by Nestle, a Swiss multinational company with a 32% market share.

It owes most of its success due to its strength in instant coffee and the popularity of Nestles Barista system, a machine that can create various types of coffee at home. It would be extremely costly to compete with Nestle. Struck also owes a large of its success due to the thriving market in Japan where it opened their first shop outside of the US to great success. One interesting aspect here to note is that the consumption of once popular traditional drinks such as green tea and fruit Juices from the past 20 years has been decreasing substantially while both ready-to-drink coffee and roasted coffee have been increasing. (See Appendix 2 for the Beverage Consumption in Japan). Market Potential Over the past century, the market segment for coffee has been exploding in popularity.

However, due to the uncertain economic situation, the import of coffee has not increased the past few years since the recession in 2008. However, coffee remains to be in high demand in Japan which remains to be the third largest importer of coffee in the world. With the increasing popularity of homemade instant coffee, while it may be a feasible idea to create a brand promoting quality and encouraging consumer loyalty, it is not easy to compete with Nestle (the largest food wholesaler in the world). Furthermore, it is almost impossible for the Japanese trading houses to break ties with Nestle for a new entrant to the Japanese market. On the other hand, a chain of stores selling quality coffee at a reasonable price may have a chance of success.

Major Economic Features Japan is located east of Asia in an area called the Pacific Ring of Fire. It has a population of about 1. 3 billion people and is fairly small with an area of 0. 4 million square kilometers. Although Japan is a small island country, Japan has the third largest economy in the world by nominal GAP, the fourth largest by Purchasing Power Parity and is the world’s second largest developed economy. Japan is also the world’s largest creditor nation and generally has annual trade surplus and net international arrest and most technologically advanced producers of automobiles, electronics and other industrial goods. The country is often ranked among the world’s most innovative and high technological countries.

The structure of Japan’s economy determines the internationalization of Japanese tastes and Japan’s high quality standards and dynamic market. As an international and innovative nation, new and especially western goods and products are always welcomed in the Japanese market. Japan imports all its coffee supply from overseas. Like China and some other Asian countries, Japan has a strong tea tradition culture. In Japan, green tea is the most popular beverage to drink with traditional Japanese cuisine and snacks. In the Japanese society, green tea is usually served for special guests and special occasions. The Japanese tea ceremony is a Japanese culture activity involving the preparation and presentation of green tea.

According to the resource, tea ceremony had spread to all levels of society in Japan. In the traditional days, many schools in Japan had a course to teach the tea ceremony which is considered as an art. In comparison, the role of coffee in western culture is very similar to the role of green tea in Japanese culture. First of all, both are very popular beverages and secondly they keep people awake and refreshed. However, as we know, the modern Japanese society is well known for its extremely busy and fast paced environment; the preparation and drinking progress of green tea has become too complex and time consuming to keep pace with the rush of modern life.

At the same time, the introduction of canned ready-to-drink coffee, an innovation from Japan and the expansion of vending machines serving both hot and cold coffee helped a lot to promote coffee consumption among the younger generation. As a result, coffee has become the most unconsumed beverage in Japan. Japanese Coffee Vending Machine Labor Market Japan is an island nation, so all the coffee products consumed in Japan are imported from the outside. One important issue that those outside suppliers need to think about is the labor market. Japanese society is culturally and linguistically homogeneous, with small populations of foreign workers and 98. 5% ethic Japanese. In Japan’s work environment, the culture teaches them to value their work over even their family and employees are content to stay with the same company for their entire lives.

Because of Japan’s low fertility rate and labor force participation rate see Appendix 3); this means that Japan will face a shortage of labor in the future. Having coffee sold in vending machines however eases the number of people needed to sell coffee as much of it can be automated. In Japan, vending machines first appeared in sass, and the number of machines soared in the following decades. Today, Japan has the highest per capita rate of vending machines in the world. Canned ready-to-drink coffee can help alleviate the problem of labor shortage when it comes to selling coffee. On the other hand, the recession since 2008 has resulted in a growing number of unemployed and under-employed workers. The labor market is not as tight as before.

At the same time, there are still a lot of students looking for part time Jobs. This will provide the required labor force for running coffee stores. Political Features The Japanese political system is quite different from Western systems. Dating from the defeat of Japan from World War II, the present Japanese system is a constitutional monarchy where the emperor’s power is limited. The Prime Minster of Japan is selected for a period of four years but almost no one serves a full term and his power is weaker than that of other democracies. Most of the power in Japanese society is in the industrialists and civil servants rather than politicians compared to the United States where politicians wield enormous power.

Presently, the Japanese society has gotten used to the changes in the leadership in the government and is currently functioning well. Risk Analysis Japan is widely considered to be a stable country to do business due to its modern, diversified economy and its strength in exports. However, like many other countries, it was strongly affected by the 2008 recession with GAP decreasing by 8%. Despite this, the economy was on an upturn in 2010 until the Great East Japan earthquake and tsunami that setback the economy in 2011. As it is located in an area with many shifting tectonic plates, Japan suffers from frequent earthquakes and tsunamis over the years. Japan’s economy however is still fairly decent in respect to other developed countries.

The political system in Japan is fairly unstable with frequent changes and short terms to members in power due to a lack of confidence from their peers. The system as it is right now fails to attract strong personalities that can take charge. However, things may be changing as the current Prime Minister, Shinto Abe, is able to control both the upper and lower houses to store people’s hope about the future. Some other notable risks include: Declining active population Many powerful competitors in each different market of coffee Low productivity of Small Medium Enterprises Despite this, Japan remains to be AY when it comes to their country and business climate in risk analysis according to Michigan State University and tier 2 out of 5 according to Rooney in country risk.

However, when it comes to the market in coffee, there are many dominant companies such as Nestle and Struck and many different competitors who may make it very difficult to gain any market share thou a proper entry and operation strategy. Recommended Strategy for Entry and Operation As international trade progresses, the effect of cultural distance should not be overlooked. To consider about the influence of culture distance on the coffee market, there are many areas to consider. The first one is the drinking habits, the of the rushing modern society, coffee has become a daily beverage that many people drink with the Japanese innovation of vending machines selling canned ready-to- drink coffee.

Japan is always labeled as a place with advances in innovation ND fashion; their products are famous for high quality and full of creativity. In order to fit Japanese market’s taste, we should carefully choose the right position for the coffee product by utilizing the four AS, product, promotion, place and price according to Japan’s unique eastern culture. It has been mentioned that it would be costly to compete against Nestle. To set up a wholesale operation is not an easy task as it is difficult to establish connections with the various retailers. Struck have a leading position in selling premium coffee. However, there is a market niche for quality product at a reasonable price. In term of 4 AS:

Product: We will have freshly brewed coffee. To ensure good quality, coffee will be disposed after 30 minutes. Staff will be trained to provide friendly and efficient services required for today’s fast pace society. The product aims for mass labor market. There will also be bakery products to compliment the coffee. A product similar to Struck bottled approach will also be sold to vending machines to gain further market penetration. Price: It would be well below that of Struck and a bit more expensive than other canned ones to promote a middle ground of quality and value Place: Japan as a large populated country, city population is easily in hundred of thousands.

We would suggest to have the stores not in Tokyo or Osaka due to high cost in setting up but in second tier cities like Nagoya where the set up cost will be lower. In term of labor, we will make use of students and under-employed people to keep cost down. Promotion: We will run advertising locally stressing on quality and value of the product with efficient and friendly services. We will establish our store as one for the working mass who would like to enjoy fresh coffee at a price that they can afford. We may be able to start 3 to 5 stores/subsidiaries in one city. Should the result turn out to be positive, we can increase the number of stores in the same city and expand to a new city. This strategy will help to reduce the cost outlay initially and at the same time establishing our presence in Japan.

Summary and Conclusion To summarize, while Japan is the 3rd largest importer of coffee, there are incredible number competitors that are well established in Japan such as Nestles Unsafe, Struck and local coffee brands. In the modernizing world, convenience is a large part of a beverage’s success which explains why instant and canned ready-to- drink coffee is so popular in Japan. However, the right product that meets the consumer demand is also very important. We do not want to get into the wholesale market to compete with Nestle for two reasons. First of all, it would be difficult to challenge Nestle who holds a big market share already. Secondly, connection is everything to do business in the East.

It is inconceivable for the large Japanese trading houses to cut its ties with Nestle for a newcomer. Struck look after the looking for quality and value. In this study, we find a niche market that we can explore, namely the segment of the market with value, efficiency and quality in mind. With a proper entry and operation strategy to run a chain of coffee stores in the second tier Japanese cities each with population over half a million, we can limit our initial investment and at the same time give us a reasonable chance of success. By carefully exercising the ups concept, we can properly position our products to the right people at the right prices and places. As we are not going in a large scale, we can target our promotion locally.