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Submitted by:
Abhishek Sehgal (46)
Kavita Singh (56)
Ankit Verma (59)
Abhrajit Sett (140)
Blue Star India Ltd
Business Policy - Company Strategic Analysis
Table of ContentsBlue Star: Company Profile..........................................................................................................................3
Blue Star Business Portfolio.........................................................................................................................3
Blue Star: Largest single source of Air-conditioning Equipment...............................................................4
Air-Conditioner Market Analysis..............................................................................................................4
Blue Star Market Performance & Competitors........................................................................................5
Strategic Key Decisions & Company milestones.......................................................................................6
SWOT Analysis.............................................................................................................................................9
Strategic Decisions.....................................................................................................................................11
Porter’s Five Forces....................................................................................................................................11
Firm Rivalry........................................................................................................................................12
Threat of new entrants......................................................................................................................12
Bargaining power of suppliers...........................................................................................................13
Bargaining power of buyers...............................................................................................................13
Critical Success Factors..........................................................................................................................14
Key Challenges.......................................................................................................................................14
Tetra Threat Framework............................................................................................................................15
Threat of Imitation.............................................................................................................................15
Threat of Substitution........................................................................................................................15
Threat of Hold Up..............................................................................................................................15
Threat of Slack...................................................................................................................................16
ADDING Framework..................................................................................................................................16
International Presence...............................................................................................................................17
International Partnerships.....................................................................................................................18
ECO FRIENDLY....................................................................................................................................18
CAGE Framework.......................................................................................................................................19
Strategic challenges Faced........................................................................................................................19
Quality of R&D...................................................................................................................................19
High Number of Players.....................................................................................................................20
Foreign Players..................................................................................................................................20
Page | 2
Blue Star: Company ProfileBlue Star Limited (originally known as Blue Star Engineering (Bombay) Pvt Ltd) was founded by Mohan T. Advani in 1943. The Company was initially engaged in reconditioning of refrigerators and air-conditioners. Today, Blue Star is India's largest central air-conditioning company with an annual turnover of Rs. 1178 crore crores, a network of offices in 29 cities and three modern manufacturing facilities. Blue Star became a public limited company in 1969 with its corporate headquarters at Kasturi Buildings in Mumbai. Blue Star is India's largest and most preferred air-conditioning and commercial refrigeration company. With six decades of experience in providing expert cooling solutions, Blue Star has been associated with the most prestigious corporate and commercial installations in the country.
Blue Star Business PortfolioBlue Star manufactures and markets a wide range of air-conditioning and refrigeration systems and products. These include large central air-conditioning plants, packaged air-conditioning systems, split and window air conditioners; commercial refrigeration equipment such as water coolers, bottled water dispensers, ice-cube machines, deep freezers and walk-in cold rooms.
Blue Star's other businesses include marketing and maintenance of hi-tech electronic and industrial products such as Testing Machines, Data Communication products, Medical and Analytical Instruments and Special Control Valves. The Company has business alliances with world-
Page | 3
Blue Star
Central Air-Conditioner
Room Air Conditionin
g
Commercial Equipment
Hi-tech Electronic and
Industrial Products
Commercial Refrigeratio
n
renowned technology leaders such as York International, USA; Hitachi, Japan; Kolpak, USA; Vestfrost, Denmark; Electrolux, Sweden and many others, so as to offer superior products to the customers. The lines of business include Central Air-conditioning, Room Air conditioners, Commercial Refrigeration, Commercial Equipment and Professional Electronics and Industrial Products. The International Software Services business was spun-off into a separate company, Blue Star Infotech Limited (BSIL) in April 2000. BSIL provides Internet/E-commerce, HP 3000/ MPE, Baan ERP services, Client Server applications and Embedded Systems to clients in USA, Europe and Japan. This software export business was started in 1983 and is headquartered in Mumbai, at the Santa Cruz Electronics Export Promotion Zone (SEEPZ) with offices in the U.S. and U.K.
Blue Star: Largest single source of Air-conditioning Equipment Blue Star is the largest single source for air-conditioning equipment in India. It offers the widest range of air-conditioning products - window and split air conditioners, air-cooled / water-cooled packaged air conditioners, centrifugal, absorption, reciprocating scroll, rotary screw chillers, variable air volume systems, fan coil units, air handling units, etc. Never seen, never heard, yet quietly at work in homes, hotels, offices, factories, showrooms, airports, laboratories, satellite launch stations, hospitals all over India and abroad.
Air-Conditioner Market AnalysisIndustry: In 2008-09, the estimated total market size for air-conditioning in India was around Rs. 10,250 crores. Of this, the market for central air-conditioning, including central plants, packaged/ducted systems and VRF systems was about Rs. 5750 crores, while the market for room air conditioners comprised the balance Rs. 4500 crores. The commercial air-conditioning segment catering to corporate and commercial customers amounted to around Rs. 8000 crores. The market for commercial refrigeration equipment and systems was estimated at around Rs. 2000 crores. The commercial refrigeration segment includes a wide range of products such as cold storages, supermarket refrigeration equipment, water coolers, bottled water dispensers, deep freezers, milk coolers, bottle coolers and ice cubers.
Rs. 5,750 Crores
Rs. 4,500 Crores
Rs. 2,000 Crores
Central and Pack-aged Air-condition-ing SystemsRoom Air-condi-tionersCommercial Re-frigeration
Page | 4
The air-conditioning and commercial refrigeration market in India is growing at a CAGR of 22.5%. Market of Central and packaged AC system is growing at a CAGR of 27.2%, while market of Room ACs and Commercial Refrigeration is growing at a CAGR of 19.5% and 17.5% respectively.
2004-05 2005-06 2006-07 2007-08 2008-090
1000
2000
3000
4000
5000
6000
Central and Packaged AC System
Cooling Appliances
Commercial Refrigeration System
Financial Year
Mar
ket S
ize (R
s. Cr
ore)
Blue Star Market Performance & CompetitorsMarket share of Blue Star in India is 19.53% in air-conditioning and commercial refrigeration market. Company is market leader in central and packaged air-conditioning segment with the market share of 31.34% in this segment. In the Room AC segment company has market share of 6% while in commercial refrigeration segment again Blue Star is market leader and it has a market share of 16.10% in this segment. Main competitor for Blue Star in central and packaged air-conditioning business is Voltas, Hitachi, Diakin and Carrier. In room AC segment approximately 20 players are there. Market leader in India in this segment is LG Electronics.
19.54%
15.13%
65.33%
Blue StarVoltasOthers
Market Share in Air-conditioning and Commercial Refrigeration
Page | 5
31.34%
16.35%
52.31%Blue StarVoltasOthers
Market Share in Central and Packaged Air-conditioning
25%
16%6%
53%LG ElectronicsVoltasBlue StarOthers
Market Share in Room AC
Strategic Key Decisions & Company milestonesBlue Star has over a period of time established itself as an expert in the field of central air-conditioning
and commercial refrigeration. Their expertise lies across different industries and sectors and they
constantly try to leverage this expertise to expand the purview of their operations in diverse industries.
Blue Star was founded in 1943, by Mohan T Advani, an entrepreneur of exemplary vision and drive. The
Company began as a modest 3-member team engaged in reconditioning of air conditioners and
refrigerators. Within three years, the Company secured the agency for US-based Melchoir Armstrong
Dessau's air-conditioning equipment. Shortly after, the Company was selected by Worthington, the US
leader in air-conditioning, as its India based partner - these were the first of numerous foreign
associations to follow. An expanding Blue Star then ventured into the manufacture of ice candy
machines and bottle coolers and also began the design and execution of central air-conditioning
Page | 6
projects. Then came the manufacture of water coolers. In 1949, the proprietorship company set its
sights on bigger expansion, took on shareholders and became Blue Star Engineering Company Private
Limited. Ever since, there has been a constant and profitable growth. Blue Star diversified and took up
agencies for Material Testing Machines and Business Machines. The export arena beckoned and the
Company began exporting water coolers to Dubai, where in fact, 'Blue Star' soon became the generic
name for water coolers. The sixties and the early seventies witnessed Blue Star continuing to expand
and thrive. A team of dedicated professionals aided Mohan T Advani in ever furthering his vision of a
profitable company dedicated to its ideals of professionalism and success. Employee strength crossed
the 1000 mark and the company went public in 1969 to become Blue Star Limited, as it continues to be
called today. In 1970, the Company took up the all-India distributorship of Hewlett-Packard products, a
business relationship which continues today and has grown ever stronger through the years. As the
Company's reputation for delivering the goods in the most challenging of air-conditioning projects grew
steadily, the early seventies saw a series of prestigious projects being entrusted to Blue Star -
skyscrapers such as Air India Building, Express Towers, the Oberoi Hotel in Mumbai, apart from several
others. Revenues touched the Rs. 10-crore mark and staff strength doubled to exceed 2000. As its Indian
presence reached greater heights, the Company began building determinedly upon its existing overseas
presence, Blue Star set up a joint venture with Al Shirawi in Dubai and went on to execute some
outstanding projects in Syria, Iraq and Saudi Arabia. To complement its air-conditioning projects and
undertake turnkey industrial projects, an Industrial Division was set up in 1978. Always moving with the
times and ever on the lookout for business possibilities, Blue Star next set up a software export unit at
Seepz, Mumbai in 1983. Then came associations with more global leaders - a collaboration with York
International of USA for central air-conditioning equipment and joint ventures with Motorola and
Yokogawa. In 1984, Ashok M Advani & Suneel M Advani, the sons of Mohan T Advani, took over the
reins of the Company, after spending nearly 15 years within the Company steadily climbing up the
ladder. A renewed thrust was placed on the company's core business areas - air-conditioning and
refrigeration and the distribution of professional electronics equipment - and the company emerged a
market leader in these focus areas. The nineties witnessed India entering an era of economic
liberalization and an upsurge in competition as the dynamic business scenario attracted the world's
most forward-looking corporations. It was time to re-look at existing business competencies, re-
engineer those that were obsolete and forge ahead in acquiring new business competencies. Blue Star
was more than equal to the challenge and expansion continued unabated.
Page | 7
In keeping with this focus, an advanced manufacturing facility was set up at Dadra in 1997, in technical
collaboration with Rheem, USA, to enhance manufacturing competency. Today it bears the distinction of
being regarded as the best such plant India-wide. The dealer network was strengthened and expanded
to bring products within easy reach of every customer. With the advent of the much awaited new
millennium in 2000, the action continued. The software unit was spun off into a separate company, Blue
Star Infotech Ltd., the export of air-conditioning products from the Dadra factory began and contract
manufacturing for local and foreign brands commenced. A new Corporate Vision was developed - "To
deliver a world-class customer experience". Every employee is determined to follow this vision and keep
their organization a competitive and forward-looking one. Blue Star crossed the Rs. 500 crore milestone
in 2000 and the Rs. 600 crore milestone in 2002-03. With the boom in construction activity and
increased infrastructure investments, the Company leveraged its leadership position to grow
aggressively. In the following three years, the Company nearly doubled its turnover, clocking Rs 1178
crores in 2005-06.Even more than size, Blue Star enjoys an enviable reputation as an ethical corporation,
ever mindful of its obligations towards customers, shareholders, dealers, business partners, employees
and the environment in which it operates.
Page | 8
SWOT Analysis
Strengths:
Only Blue Star manufactures open-type centrifugal chillers with ozone friendly refrigerant
HCFC 123.
Only Blue Star manufactures variable air volume systems for economic localized cooling
control.
Only Blue Star manufactures air handling units with dependable ratings to factory precision
and the widest choice with single skin, double skin, horizontal, vertical, ceiling suspended
and unitary.
Air-conditioning of the largest number of synthetic fiber plants in India exceeding 25,000
Tons and 36 customers.
Largest Industrial air-conditioning contracts in India - RBI Note Mudran Private Limited:
Rs.40 crores.
First to manufacture semi hermetic reciprocating compressors in India to international
standards. First air-conditioning company to introduce the concept of a Comfort Shop.
Page | 9
It has a strong setup, Willis Carrier Engineering Center, to provide technological support to
develop new products and upgrade existing ones.
It has successfully introduced finance schemes that have taken air-conditioners out of the
luxury category and made it affordable for the homebuyer.
Weaknesses
Considered as premium brand so middle class people think it is unaffordable.
Although BLUE STAR protects its Position in Domestic AC market but is regularly losing
market share.
Market penetration is still very low.
Low qualities resulting in exports prices being non competitive.
Opportunities
Confederation of Indian Industry (CII) has urged the government to reduce special excise
duty (SED) on air-conditioners from 16% to 8% in the forthcoming budget.
Opportunity to influence Growing Indian middle class in influencing their decisions with
regard to the products offered by Blue Star through comparatively lower prices.
Advent of Internet provides an excellent opportunity to reach to a large base of customers
and cut costs.
The increasing presence of multinationals in India for manufacturing be it Samsung, LG,
Carrier, Hitachi, thus providing an opportunity for upgrading the quality of manufacture in
the country.
Threats:
Likely to face fierce competition from domestic companies as they have well- acknowledged
brands, an extensive distribution network and better insights about the local market
conditions.
Increased threat from cheaper imports, especially from China MNC’s like Samsung, Carrier,
LG and Voltas are continuously raising their share while Blue Star despite of increasing
sales is losing its market share.
Strategic Decisions
Page | 10
Within 3 years of inception Company was selected by Worthington, the US leader in air-conditioning, as its India based partner
Blue Star diversified and took up agencies for Material Testing Machines and Business Machines
In 1970 Company took up the all-India distributorship of Hewlett-Packard products, a business relationship which continues today
Prestigious projects being entrusted to Blue Star - skyscrapers such as Air India Building, Express Towers, Oberoi Hotel in Mumbai
Blue Star set up a joint venture with Al Shirawi in Dubai and went on to execute some outstanding projects in Syria, Iraq and Saudi Arabia
Air-conditioning and refrigeration and the distribution of professional electronics equipment - and the company emerged a market leader in these focus areas
Technical collaboration with Rheem, USA, to enhance manufacturing competency & open a state of art plant in Dadra in 1997
Software unit was spun off into a separate company, Blue Star InfoTech Ltd in year 2000 A new Corporate Vision was developed - "To deliver a world-class customer experience".
Porter’s Five Forces
Firm RivalrySize of Industry
Page | 11
Degree of Competition:
High
Bargaining Power of Suppliers
Threat of Substitutes:
Bargaining Power of Buyers
Threat of New Entrants
The industry is not concentrated & there are large number of Indian companies and MNCs, hence there is a high degree of rivalry.
Industry Growth rate
As long as the entire economy is in a growth face and real estate sector is in boom there will be a huge growth in the industry
Fixed Cost
The manufacturers of air conditioners and refrigeration products have high fixed costs as there is heavy investment in plant and the development of new technologies thus decreasing the degree of rivalry amongst them.
Product Differentiation
Product differentiation is very less hence high degree of rivalry.
Brand Identity / Client loyalty
This plays a very important role in the market of HVAC industry. Generally it is seen once a client go for some brand he stick to the same brand in the future also.
Threat of new entrantsCapital Requirements
The initial investment that goes into setting a plant is considerably high as there needs to be sufficient investment in providing quality components and also in R&D to meet the changing technology. Thus there is a low threat of entry into this sector.
Economies of Scal e
Manufacturers in HVAC industry need to build economies of scale due to high fixed costs and meet the demands. Due to this there is a low threat of entry into this sector.
Customized Products
In the central and packaged AC system level of customization is high and it is not possible for new player to do that customization. Due to customization, the threat of new entrants is low.
Switching costs
It is not easy to switch to the new players in the field due to high initial investment & also a number of collaborations & contracts exist among the players of the world who are into the same line of business. There is thus a high switching cost and thus a low threat to entry.
Distribution Channels
Page | 12
The existing players have strong distribution channels and thus are thus difficult to match proving to be a high barrier of entry.
Bargaining power of suppliersSupplier Concentration
There is comparatively higher number of suppliers. So the bargaining power of suppliers is low.
Importance of volume to suppliers
The industry is dependent on volume sales and hence facilitates bulk buying. This reduces the bargaining power of the suppliers.
Presence of substitute inputs
In the current scenario there is little substitution that is possible to the raw materials that go into the manufacturing of air conditioning products. This increases the bargaining power of suppliers.
Bargaining power of buyersQuality vs Performance
There are large numbers of players in the market. So quality and performance is the most important factor while selecting the product. It gives high bargaining power to buyers.
Backward Integration
Backward integration to make the air conditioners means a high investment and also expertise in the manufacturing would be required. Bargaining power would be less since the probability that the companies would integrate backward would be less.
Page | 13
Critical Success Factors
Key Challenges
Page | 14
India is witnessing big growth in segments such as infrastructure, power, healthcare, telecom and hospitality and large IT/ITES companies are continuae with their aggressive expansion plansHigh growth
Retail sector is also in boom in India. Based on plans announced by several players, the cumulative non-residential air-conditioning opportunity over the next 5 years is estimated to be around Rs.38,000 croresRetail BoomIndia has great potential for the production and distribution of perishable agricultural commodities including fruits and vegetables. This potential needs a modern cold chain infrastructure including conventional, controlled and modified atmosphere cold storages, to be effectively harnessed.
Distribution of perishable agricultural
output
This includes facilities such as pre cooling, pack houses, ripening chambers, controlled atmosphere storages, reefer vans, refrigerated containers, retail cabinets and mobile refrigerated units
Cold Chain Infrastructure
With most of the multination companies entering into Indian market most of the quality people are going to those companies as they are paying high salaries.
Quality of R&D
There are more than 20 players in the market in this industry and they are killing the market share of Blue Star. Though revenue of Blue Star is increasing but marketing share of company is decreasing from last couple of years.
High Number of Players
Now number of foreign players has entered in the Indian market. It is observed that real estate/IT companies of foreign origin prefer foreign companies over Indian companies.
Foreign Players
Tetra Threat Framework
Threat of Imitation Threat of imitation is high for Blue Star. There are number of players in the market like Hitachi,
Voltas, LG etc. They can easily imitate what Blue Star has done by using the reverse engineering. They can also recruit existing Blue Star employee and can easily copy the new developments in
Blue Star products. Upgradation of technology is one way by which threat of imitation has been reduced by
Blue star. They have upgraded the technology in the long run and have been doing so to keep the imitators at bay.
Threat of Substitution Threat of substitution is almost nil for company. Most of the people now shifting to air conditioners from the conventional cooling products like
fan, coolers etc. Leapfrogging is the way out opted by Blue star as by this it looks to respond to the
threat of substitution; it involves trying to oust substitute threat by looking for a performance improvement and/or value innovation that promises even better performance . This is one field where Blue star has been consistent and has been successful to avoid competition by constantly renovating especially in the institutional domain of AC selling.
Threat of Hold Up Holdup threatens to divert the sustained added value to buyers, suppliers and complementors. Blue star has had a hold up problem when the suppliers of a big order at Infosys as the suppliers
were not co-operating with the management.Even if the company can protect its added value from the threats of imitation and substitution, the ability of its owners to appropriate the added value cannot be taken for granted.
Page | 15
Threat of Imitation
Threat of Substitution
Threat of slack
Threat of holdup
A d d e d v a l u eA p p r o p r i a t e d v a l u e
Long term contracting, building mutual dependence and developing trust were the most important factors that helped Blue star to counter the threat of hold up.
Threat of Slack This refers to the difference between the potential values available to the company and how
much of it is the company able to capture. This happens when the company has been consistently making excess profits or has done so presently. The way to respond and eliminate this slack is to ensure optimum utilisation of resources.
Blue Star is continuously making huge investments in state-of-art technologies in manufacturing, IT etc all with the overall objective of being more efficient and scaling up the production to meet the higher levels of energy requirements of the country. The problem of slack is not imminent in Blue star as the firm is not performing as per the competitive standards of the industry and has been making less profit.
ADDING FrameworkGhemawat provides a framework —the ADDING Value Scorecard—to help companies assess whether a particular strategic move makes sense. In other words, will it add value to the business both locally and globally. The acronym stands for
Adding volume, or growth; Decreasing costs; Differentiating or increasing willingness—to—pay; Improving industry attractiveness or bargaining power; Normalizing (or optimizing) risk; and Generating and deploying knowledge (and other resources and capabilities.
Levers of Value Addition DC’s Attempts/AchievementsAdding Value It is India’s largest central air-conditioning
company that caters to the industrial, commercial and hospitality sectors.
Decreasing Cost The extensive use of IT to enhance productivity and product development capabilities has helped Blue star decrease cost in manufacturing
Differentiating/Increasing willingness-to-pay Better PUF Installation and Brazing technology used in ACs than competitors
Page | 16
Improving Industry attractiveness/ bargaining power
With the increase in the number of malls and other real estate cropping up and better technology and customisation options being offered by Blue star they have decreased the bargaining power of buyers
Normalizing Risk They have a Risk Management framework under which all internal and external risks across the various business functions are identified, assessed and acted upon by risk owners
Generating and updating resources Blue Star has business alliances with world renowned technology leaders such as Rheem Mfg Co, USA; Hitachi, Japan; Eaton - Williams, UK; Thales e-Security Ltd., UK; Jeol, Japan and many others, to offer superior products and solutions to customers.
International PresenceBlue Star's air-conditioning expertise extends beyond Indian horizons, from Indonesia in the East to
Libya in the West. Blue Star has competed with other European companies on International terrain and
satisfied demanding foreign consultants.
Blue Star has set up a joint venture in Malaysia with Arab Malaysian Development Berhad
(AMDB). The joint venture company has executed large turnkey Central Airconditioning Contracts
- 21-storey Bangunan AMDB, Kuala Lumpur, 35-storey Menara Dion, Kuala Lumpur, 22-storey
Menara Pelita, Kuching, Sarawak, 48-storey Plaza MBF, Kuala Lumpur, 18-storey Tower A and
Tower B AMCORP Trade Centre, Petaling Jaya Selangor Darul Ehsan, 364-room Vistana Hotel, Kuala
Lumpur, 269-room Ritz Carlton Hotel, Kuala Lumpur, Arab-Malaysian SGB factory, Nilai, Negeri
Sembilan, 275-room Castle Inn Hotel cum Office, Johor Baru, Johor Darul Takzim, 340-room Hilton
Hotel, Seremban, Nageri Semibilan Darul Khusus, 420-room Hotel, AMCORP Trade Centre, Petaling
Jaya, Selangor Darul Ehsan and Summit Centre Shopping Complex, Selangor Darul Ehsan.
Page | 17
And the list of projects completed abroad is too long to be enumerated. Some of the most notable are:
Syria's Presidential Palaces Complex at Damascus, the University, Railway and Radio and TV
Establishments at Baghdad, the State Bank of Mauritius, the Kewalram Indonesia P.T. Bandung,
Henrick Hotel, Kuala Lumpur, U.S. Geological Survey, Saudi Arabia and Hotel Krom, Russia.
International PartnershipsIn its quest to offer the most advanced air-conditioning technologies, Blue Star has entered into
several technical collaborations with York International, USA, Rheem Manufacturing Co., USA and
Climatrol, Italy for the manufacture of air-conditioning equipment - centrifugal chillers, reciprocating
chillers, screw chillers, air handling units. And collaboration with York Tempmaster, for variable air
volume systems.
ECO FRIENDLY Blue Star has made significant progress towards minimizing and even eliminating the
environmental hazards resulting from CFCs in certain refrigerants used for cooling. As a matter of fact,
Blue Star is one of the few companies selected in India for funding by "The Multilateral Fund for
the implementation of the “MONTREAL PROTOCOL”. Blue Star has already introduced 'ozone friendly'
centrifugal chillers using HCFC-123, the safe refrigerant replacing CFC-11. Blue Star also markets
absorption chillers, which use water as refrigerant. All Blue Star reciprocating chillers already use
HCFC-22 refrigerant, which is more friendly to the environment than the older R-12. The
Company actively promotes wider use of large refrigeration systems using ammonia as the
refrigerant. In fact, Blue Star is a member of the International Institute of Ammonia Refrigeration,
USA.
Page | 18
CAGE Framework
CAGE Cultural Administrative Geographical Economical
Malaysia Being
within
Asia not a
huge
difference
AMDB ensured
bids for
turnkey
projects.
Advantage
being within
ASEAN region
Real estate
company
AMDB
ensured
sharing of
resources
Page | 19
Blue Star M & E Engineering Snd. Bhd. - Malaysia A joint venture formed in 1993 between Arab-Malaysian Development Bhd. (AMDB) and Blue Star Limited of India, Focuses on taking care of the Heating, Ventilation, Airconditioning and Refrigeration (HVACR) installation business in Malaysia.
Blue Star – Middle East
Presence since 1976 through collaborating with local group of engineers and distributors.Based in Dubai, Bluestar caters to demands in UAE, Qatar, Bahrain, Oman and Kuwait. Mainly focused on HVAC contracts.
UAE / Middle East Being
within
Asia not a
huge
difference
Local
distributors
act as the face
of the
company for
negotiation
with
government
All
US/European
MNCs have
presence.
Easy to
export
material
and deliver
domain
expertise
from India.
Strategic challenges Faced
Quality of R&DWith most of the multination companies entering into Indian market most of the quality people are
going to those companies as they are paying high salaries. Because of this Blue Star in not getting quality
people for their R&D and hence facing challenge in doing the quality of R&D work in India.
High Number of PlayersThere are more than 20 players in the market in this industry and they are killing the market share of
Blue Star. Though revenue of Blue Star is increasing but marketing share of company is decreasing from
last couple of years.
Foreign PlayersNow number of foreign players has entered in the Indian market. It is observed that real estate/IT
companies of foreign origin prefer foreign companies over Indian companies. Means though
infrastructure development is happening in India but most of the foreign players are getting benefited
from that as domestic companies do not discriminate while giving order to particular company.
Page | 20