TERM PAPER

OF

STRATEGIC

MANAGEMENT

SUBMITTED TO:

MS. IMPREET KAUR

SUBMITTED BY:

ANCHAL DHAWAN

MBA-LIT(IV)

RT1804B33

REG. NO.: 10810204

INTRODUCTION TO VIDEOCON

Videocon is an industrial conglomerate with interests all over the world and based in

India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy

and Mexico. It is also the third largest picture tube manufacturer in the world.

The Videocon group has an annual turnover of US$ 4.1 billion, making it one of the

largest consumer electronic and home appliance companies in India. Since 1998, it

has expanded its operations globally, especially in the Middle East.

Today the group operates through five key sectors:

Consumer electronics

In India the group sells consumer products like Colour Televisions, Washing

Machines, Air Conditioners, Refrigerators, Microwave ovens and many other home

appliances, selling them through a Multi-Brand strategy with the largest sales and

service network in India. Videocon Group brands include Kenstar, Next etc.

Mobile Phones

In November 2009 Videocon launched its new line of mobile phones

DTH

In 2009, Videocon launched its DTH product, called 'd2h'. As a pioneering offer in

the Indian DTH market, Videocon offered LCD TVs with built-

in DTH satellite receiver with sizes 19" and 32".This concept in the DTH service is

relatively new in the presence of other players like ZEE TV’s Dish TV, Tata Sky,

Airtel Digital TV and Reliance's BIG TV providing only the set top box.

Telecommunication

Videocon has subsidiary named Datacom Solutions Pvt Ltd which has license for

Mobile Service operations across India. It is commercial launch on 7th march 2010

in Mumbai.

COMPANY BACKGROUND

Founded: 1987

Founders: Nandlal Madhavlal Dhoot

Headquarters: Aurangabad (Maharashtra)

Area served:

Home Appliance

Components

Office Automation

Internet

Petroleum

Power

Consumer Electronics

Industry: Consumer Durables, Oil and Gas etc.

Share Type: Ordinary

Revenue: US$4.1 billion (2008)

Net Income: US$276 million (2008)

Web site: www.videoconworld.com

VIDEOCON PRODUCTS

VIDEOCON LCD TV

Touch the true essence of multimedia entertainment with Videocon LCD TV

& experience tv as you've never seen it before.

VIDEOCON Refrigerators

Experience the new revolution in freshness with Eco Fresh refrigerators.

VIDEOCON Air Conditioners

Intelligent technology, Intelligent design, Intelligent range. VIDEOCON Air

Conditioners.

VIDEOCON Washing Machine

The power of Quanta Wash with the edge of U V Ray technology.

STRATEGIC BUSINESS UNIT

An SBU, in the strategic management sense, is normally an entire division in large

corporations or one of the firms of a diversified company that carries out a certain

business - in one of the business sectors the firm operates. This approach entails the

creation of SBU's to address each market in which the company is operating.

SBU OF VIDEOCON COMPANY

KEY STEPS TOWARDS STRATEGIC

PLANNING

MISSION

“To delight & deliver innovative product through ingenious strategy intrepid

entrepreneurship, improved technology, insightful marketing and inspired thinking

about the future.”

VISION

“To bring happiness in every home with global presence offering high quality “e”-

products to ease & enrich human life”

GOAL

“To provide a much higher level of service to all those who seek information”

BCG MATRIX

In BCG Matrix product or business unit are identified as Stars, Cash Cow,

Dogs, Question mark. BCG Matrix can use for resource allocation. The Matrix can be

explained are as follows.

Stars (high growth, high market share)

Stars are using large amounts of cash. Stars are leaders in the business.

Therefore they should also generate large amounts of cash.

Stars are frequently roughly in balance on net cash flow. However if needed

any attempt should be made to hold your market share in Stars, because the

rewards will be Cash Cows if market share is kept.

Cash Cows (low growth, high market share)

Profits and cash generation should be high. Because of the low growth,

investments which are needed should be low.

Cash Cows are often the stars of yesterday and they are the foundation of a

company.

Dogs (low growth, low market share)

Avoid and minimize the number of Dogs in a company.

Watch out for expensive ‘rescue plans’.

Dogs must deliver cash, otherwise they must be liquidated.

Question Marks (high growth, low market share)

Question Marks have the worst cash characteristics of all, because they have

high cash demands and generate low returns, because of their low market

share.

If the market share remains unchanged, Question Marks will simply absorb

great amounts of cash.

Either invests heavily, or sell off, or invest nothing and generate any cash that

you can. Increase market share or deliver cash.

BCG MATRIX OF VIDEOCON COMPANY IN

COMPARISON TO OTHER ELECTRONIC

COMAPNIES

BCG MATRIX OF VIDEOCON COMPANY

ACCORDING TO ITS PRODUCTS

SWOT ANALYSIS OF VIDEOCON

COMPANYThe SWOT is a strategic planning tool to evaluate Strength(S) Weakness (W)

Opportunities (O

) & Threats(T) involved in a project, in a business venture or in any other situation

requiring a decision. The SWOT analysis is to explained with help of following

diagram:-

PRODUCT LIFE CYCLE OF VIDEOCON

VIDEOCON LCD AT INTRODUCTION STAGE

VIDEOCON APPLIANCES IS AT STAR STAGE

VIDEOCON MOBILE PHONES &

TELECOMMUNICATION SERVICES IS AT CASH COW

STAGE

VIDEOCON OIL & GAS DIVISION IS AT DOGS STAGE

REVIEW OF LITERATURE

ARTICLE 1:- VIDEOCON HITS THE HINTERLAND

Author: - John A. Ronald

Publisher: - Business World

Year: - 1998

This article includes that the market share of Videocon International (VI) has declined

to 22 percent from 27 percent in colour televisions (TV). its operating profit margins

have fallen to 5.9 percent in 1998 from 7.5 percent in 1995. Its net profit had

increased to Rs125.04 crore in 1997-98 from Rs82.3 crore in 1996-97. It gives a

commission of Rs1,500-2,000 per TV set to its dealers, compared to Rs1,000 of Akai.

VI sells more than 5 lakh black & white TVs per annum. The Videocon group's

investment of Rs300 crore in real estate and other deals has declined considerably. VI

has a research and development wing which has developed receivers, transformers

and sound systems to suit the Indian conditions. VI offered a money back scheme for

its Bazooka TVs. It sold 50,000 sets in a month under the scheme, resulting in 37

percent of the sales in the last quarter. It is trying to reduce cost by re- designing its

production line to produce 18-20 products and models. The promoters, the Dhoots,

have made an open offer for a 2 percent stake in VI at Rs140 per share. VI plans to

buy Philip's factory in Calcutta. It has made capital investments and its depreciation

has increased to Rs70 crore from Rs25 crore. Videocon Appliances, engaged in the

manufacture of air- conditioners, refrigerators and washing machines, had posted a

net profit of Rs15.1 crore in 1996-97 from Rs34.8 crore in 1995- 96. Videocon VCR,

which makes video cassette players and recorders, has posted a net profit of Rs8 crore

in 1996-97 (Rs37 crore in 1995-96). Videocon Narmada Electronics, which produces

glass shells for picture tubes, incurred a loss o Rs7.7 crore in the 6 months ended

September 1997. The Dhoots plan to merge this company with VI.

ARTICLE 2: - VIDEOCON LAUNCHES NINE MOBILE

HANDSETS; EYES 1 MN SALE MONTHLY

Author: - S. kaither

Publisher: - Times Of India

Year: - 2010

In this article it has discussed that Videocon today launched nine mobile handsets and

it plans to sell a million devices per month in the country same year. Videocon has

been so far selling 2.5-3 lakh units a month. With the nine launches, its offering has

risen to a total of 21 handsets from 12 at present. Thus the company plan to sell one

million units every month as per the customer approachable price. At present, global

brands like Nokia, Samsung, LG, and Sony Ericsson together with Indian players like

Micromax have over 90 per cent market share. Mobile phone market has been one of

the fastest growing markets. However, there is a big gap between the international

brands and domestic ones. Videocon aimed to bridge the gap.

ARTICLE 3: - VIDEOCON TO EXTEND REACH IN WEST ASIA

Author: - Vinnit Alex

Publisher: - Business World

Year: - 2009

As part of its strategic plans to become an established global player, Videocon group

has decided to extend its operations in West Asia by January 1999. The operations are

expected to be based in Dubai where it plans to launch its entire range of products. It

has also decided to revive its operations in Indonesia which is affected by the South

East Asian crisis. It has already entered into Bangladesh market by establishing its

presence in Dhaka.

ARTICLE 4: - VIDEOCON ADD COMFORTS TO YOUR LIFE

Author: - Shefali Roy

Publisher: - Capexil

Year: - 2009

Videocon is the Indian Multinational that is also known as the 'desi' brand which is

favourite among Indians in terms of electronic appliances. It knows its customers

from their nerves as they share the same roots. Since years, Videocon has been

nurturing Indian homes and ruling in their hearts. The company has always served its

nation with the latest technology rich in environment friendly features and prices

according to the citizens. Its popularity among Indians made it the major shareholders

of the electronic industry. Videocon has made them a serious brand by building the

products that are available and easily approachable for every kind of person.

Videocon Refrigerators are famous for the quality that they have in their architecture

and enduring performance. A technical tie-up with Toshiba Corporation of Japan

launched India's first world-class colour Videocon televisions.

ARTICLE 5:- VIDEOCON TO LAUNCH GSM SERVICES IN

GUJARAT

Author: - Arnaw Kumar

Publisher: - times of india

Year: - 2010

Videocon Telecommunications Limited is all set to launch its GSM Mobile services

in Gujarat Telecom circle. GSM Mobile services will be launched initially in

Ahmadabad, Anand, Ankeleshwar, Bardoli, Vadodara, Bhavnagar, Junagarh, Navsari,

Rajkot, Surat, Valsad and Verawal. It will gradually expand its network in other parts

of Gujarat. Videocon’s GSM SIM-Kits will be available in all the Next Retail outlets

in the major cities of Gujarat. Currently Videocon Telecommunications Ltd has

commercial GSM Mobile services in Tamil Nadu, Chennai and Mumbai circles. It has

planned to extend its services to all the major states by the end of this September.

ARTICLE 6: - VIDEOCON PLANS 500MW POWER PLANT IN

MAHARASHTRA

Author: - Amritha Pillay

Publisher: -Business Today

Year: - 2010

The Videocon Group is planning to start a 500MW power plant in its homeland and is

looking for suitable land as well as a coal-transportation solution in Maharashtra. It

also expects to achieve financial closure for its Gujarat-based 1,200MW power plant

by end-March. The financial closure for the first phase of 600MW has been achieved;

the second phase’s financial closure is getting completed. After financial closure,

power projects take another three and a half years to be commissioned.

ARTICLE 7: - SHAHRUKH KHAN AND MS DHONI TOGETHER FOR VIDEOCON AD

Author: - Krissy

Publisher: -

Year: - 2007

Shahrukh Khan and Mahendra Singh Dhoni will swap their respective roles for the

Videocon advertisement. ShahRukh Khan and MS Dhoni will first time appearing for

a commercial. The idea behind it is that Videocon has created magic by bringing both

the super stars together on a single platform to create a unique campaign. The core

idea of the campaign is to celebrate the spirit of success - no matter the role life gives

you, always play it big and emerge as a champion. It is heard that both the superstars,

SRK and MS Dhoni gel pretty well on the set. Ogilvy and Mather (O&M) has created

the Videocon ad.

CONCLUSION

Videocon is an industrial conglomerate with interests all over the world and based in

India. The group has 17 manufacturing sites in India and plants in China, Poland, Italy

and Mexico. It is also the third largest picture tube manufacturer in the world.

Today the group operates through five key sectors:

Consumer electronics

Mobile Phones

DTH

Telecommunication

In BCG Matrix product or business unit are identified as Stars, Cash Cow,

Dogs, Question mark. BCG Matrix can use for resource allocation.

STARS (high growth, high market share)

CASH COWS (low growth, high market share)

DOGS (low growth, low market share)

QUESTION MARKS (high growth, low market share)

BCG MATRIX Of Videocon according to its products:

VIDEOCON LCD at Introduction stage.

VIDEOCON APPLIANCES at Star stage.

VIDEOCON MOBILE PHONES & TELECOMMUNICATION

SERVICES at Cash Cow stage.

VIDEOCON OIL & GAS DIVISION at Dogs stage.

REFERENCES

http://www.faqs.org/abstracts/Business-international/VIDEOCON-HITS-

THE-HINTERLAND-THE-PICTURE-GETS-SHARPER-AT-

PHILIPS.html#ixzz0mh9ItA5G

http://www.faqs.org/abstracts/Business-international/VIDEOCON-TO-

EXTEND-REACH-IN-WEST-ASIA-RIDING-ON-SALES-VIDEOCON-H1-

NET-UP-AT-Rs6897-CRORE.html#ixzz0mhGjUyOC

http://www.articlealley.com/article_1199524_45.html

http://www.bpotiger.com/2007/11/shahrukh_khan_and_ms_dhoni_tog_1.html

www.highbeam.com/doc/1G1-149628585.html

www.liebertonline.com/doi/abs/10.1089/153056201750279584

www.article .wn.com/.../

Videocon _launches_nine_mobile_handsets_eyes_1_mn_sale_monthl