Havells Value CHain Analysis

1. Havells India - Value Chain Analysis
Pavan Gujar | 39233 | MBA II | Operations | SIBM Pune

4. Fluctuating LNG prices, Freight,
power and gas – increasing raw
material prices
Havells Exim ltd, Hong Kong is a central procurement company to procure various raw electrical products for Havells
S
U
P
P
O
R
T
Procurement
20+ JV over the world being focused in Asia, Africa and Middle East 14+, 185+ IPR in 2015 alone and various innovative productTech. Dev.
6500 employees, Performance management, ESOP 2015 | Vigil Mechanism: Whistle Blower PolicyHRM
Gen. Admin. IT for processes, catalysts to support existing business & advanced troubleshooting | Stakeholders Relationship Committee
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R
I
M
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Y
• Automation in
Testing Methods
to speed up testing
• Bulk Shipment of the
raw materialfrom
Hong Kong via Water
Ways (Low Cost)
Inbound Logistics Operations
Outbound Logistics Marketing & Sales Service
• Focus on Automation
Manufacturing Standards
IDO 9001, 14001,50001
OHSAS 18001
• Use of Renewable
energy and bio-fuel 4
million KWH
• Saving water
consumption by 50000
kL, across all plants
• 6500 direct dealers,
10000+retailers,
• 150000 electricians,
• 398 galaxies.
• Multi Tier distribution
channels work on
Rebate Policy
• Responsive Order
handling, using Robust
IT systems – Mconnect
• Highest marketing and
advertisement spending
in industry
• Shop in shop in various
retailer and exclusive
galaxies
• Focus on Youth and
women as target group
• Use of Technology to sale
through various channels
• Service center in
each major cities
across the India
• Network of over
lakh electrician to
cater to customer
service issues
• Use of MConnect
and Online
portals

5. 1%
0%
2%
1%
H A VE LLS S C H NE IDE R
SWITCHGEAR
Advertising expenses Marketing expenses
1%
1%
0%
0%
4%
1%
1%
2%
H A VE LLS P OLY C A BS K E I F INOLE S
CABLES AND WIRES
Advertising expenses Marketing expenses
0%
5%
0%
1%
14%
1%
H A VE LLS BA JA J C ROMP T ON
LIGHTING AND FIXTURES
Advertising expenses Marketing expenses
1%
3%
4%
0%
2%
2%
10%
3%
H A VE LLS RA C OLD BA JA J C ROMP T ON
CONSUMER DURABLES
Advertising expenses Marketing expenses
Marketing
50%
90%
IN-HOUSE MANUFACTURING OF ELECTRICAL PORTOLIO
IN- HOUSE MANUFACTURING
Crompton Greaves Havells
-20
0
20
40
60
80
100
Interest Coverage Ratio
Interest Coverage Ratio
Havells Polycab Finolex Schneider Crompton Kei
Finance
18%
23%
31%
21%
24%
22%
36%
26%
BA JA J S C H NE IDE R RA C OLD P OLY C A B F INOLE X K E I H A VE LLS C ROMP T ON
PROFIT MARGIN
Manufacturing

6. 0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
Dealer Commissions
Dealer Commissions/Rebate
Bajaj Crompton Greaves Havells
0
1000
2000
3000
4000
5000
6000
7000
Distriputors by company
Number of Distributors
Bajaj Crompton Greaves Havells
0
0.2
0.4
0.6
0.8
1
1.2
Distribution Expense
Distribution Expense
Havells Polycab Kei Finolex Bajaj Crompton Schneider
Outbound Logistics

7. Organization
ControlCoordination
Competitive Advantage
As resources are generic,
the deployment can better
utilize the resources through
transfer
coordinating mechanism
Financial control of each
business unit
Wide offerings, Brand Value, Niche market
positioning, Innovation, Reach
Common mfg. facility,
common R&D, common HR
Generic Resources
COMPETATTIVE STRATEGY
Structure: 12 mfg. plants across 7 location in
India and 7 abroad in 4 regions
Formal systems: Integrated financial system;
Distribution channels diff. for B2B and B2C
Informal systems: Central learning centre at
Guwahati, retained the brand of diff. acquisition

8. Thank You