Tinplatee Company of India
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Tinplatee Company of India

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Tinplatee Company of India Presentation Transcript

  • 1. TINPLATE COMPANY OFINDIA – NEED FOR ACONCEPTUAL FOCUS Syndicate 5 : Ria Agustriana 29111321 Agung Mahendra 29111324 Rangga Tri Raeros 29111314 Joseph Enrico 29111349 Karina Soedjati 29111309
  • 2. Company Overview• Established in 1992• Produce tinplate• Using Tin Mill Black Plate (TMBP) for raw material• Jointly held by three companies • Burmah Shell • Shaw Wallace • Tata Steel• 1997  TCIL establish a new cold rolling facility• TCIL supplied tinplate to manufacturers in four major segments : • Edible oil cans • Soft drink crowns • Processed food • Batteries
  • 3. Tinplate product and Classification• Tinplate is a low carbon steel• Used primarily for packaging for any food or non-foodPrime Grade Tinplate Secondary Grade Tinplate• Free from any visual defects • Banned for food packaging in a few countries (carcinogenic)• Used for food packaging • Used for non-food• The customer had high-speed • Unsuitable for battery jacket can-making equipment Classification
  • 4. Tinplate product Competition• Compete with other materials • Plastic • PET (polyethylene terephthalate) • Aluminum • Black plate • Tetra Pak • Paper• Foreign Tinplate Company • Fritz • Sukai • TMN• Domestic Tinplate Company • SAIL• SAIL did not compete directly with TCIL in any segment
  • 5. Tinplate product Market Tinplate market was 210,000 metric tons / annumThe domestic industry installed capacity of 240,000 metrics tons / annum TCIL production TCIL produce about 60,000 metric tons / annum SAIL production imported tinplate SAIL produce about 20,000 metric tons / annumBoth producers operated much below their installed capacity
  • 6. Tinplate product MarketMarket Size = 210,000 Metric tons (MT) 6% The market size is dominant by Food sector with 94% Non-food sector Food sector 94% Consumption of Tinplate 1% 7% 5% Almost ¾ 17% Edible Oil consumption of Processed FoodTinplate were used for Crown 70% Edible Oil Battery Miscellaneus
  • 7. Growth of Tinplate in Specific Segment 1993 to 1997 (in percentage) (from exhibit 4) 25 20 15 10 5 0 1993 1994 1995 1996 1997 Battery Edible Oil Crown Precessed Food• Battery segment is in the growing stage• Edible Oil segment decreased slowly each year• Crown segment is steadily increase every year• Processed food segment having a slight increase
  • 8. Market Share (from exhibit 5) Edible Oil Market Share Battery Market Share 10% 18% 45% 28% TCIL TCIL 45% FRITZ UNORGANIZED SUPPLIER SUKAI 54% SAIL Crown Market Share Precessed Food Market Share 10% 22%45% TCIL TCIL 45% FRITZ TMN SUKAI 78%
  • 9. Market Characteristics• Edible Oils • Bought directly by the edible oil manufacturers • The consumers bought in loose quantities • The products were not branded and highly price sensitive • Competition was largely from unorganized companies and SAIL • Unorganized and small companies tended to use prohibited imported tinplate • Consumers were unaware of the negative consequences of using secondary tinplate as packaging material for food products • Manufacturers are willing to waive the required specification
  • 10. Market Characteristics• Soft Drink Crowns • Indian soft drink industry were dominated by Coca-Cola and Pepsi • These brands demanded high standard crowns • The manufacturers puchased their requirements from foreign companies such as Fritz, Sukai, and TMN • Changing and sensitive needs of customers
  • 11. Market CharacteristicsBattery• Required high standard of tinplate quality• 90% of the tinplate were bought from foreign companies• High profitability• Changing and sensitive needs of customersProcessed Food• Nestle and Brooke Bond bought 22% of their cans from TCIL• The majority was owned by foreign companies• Changing and sensitive needs of customers
  • 12. Imported Product• The secondary grade being imported under the low customs tariff with a large portion• Usage of non food grade tinplate for food packaging in India• Consumers were unaware of the negative consequences of non-food grade tinplate.• India’s low literacy level
  • 13. Imported Product CUSTOMS DUTY STRUCTURE ON TINPLATE IMPORTS (in percentage) (from exhibit 1a)120%100%80%60%40%20% 0% 92-93 93-94 94-95 95-96 96-97 Tinplate Prime Tinplate Secondaries
  • 14. Imported Product PRIME AND SECONDARY TINPLATE IMPORT (MT = in metric tons) (from exhibit 1b)100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 92-93 93-94 94-95 95-96 96-97 97-98 98-99 Tinplate Prime Tinplate Secondaried
  • 15. TCIL and the Buying Behavior• TCIL was caught between the highly price sensitive lower-end customer and the high-service expectations of the high-end customers• The high-end customers have more favorable perception of foreign companies• TCIL wasn’t capable of responding to the changing and sensitive needs of customers
  • 16. Distribution and Promotion• TCIL factory in Jamshedpur India• Distributed its products through a network of 15 agents throughout the country• Personal selling was the dominant promotion method used by all companies in all segment.
  • 17. Customer Satisfaction (from exhibit 3) Product parameter TCIL FRITZ SUKAI Average Battery : Temper 2 5 4 3.6 For all parameter Size 2 5 5 4 except price, TCIL had Dimension 2 5 5 4 the lowest scoreBattery Productivity 3 5 4 4 Service 3 4 3 3.3 compared to its two Price 5 4 4 4.3 competitors Delivery 3 5 5 4.3 Total Score 20 33 30 27.6 Product parameter TCIL SAIL Unorganized Average Edible Oil : Price 3 4 5 4 In this segment TCILEdible Oil Brightness 5 4 2 3.6 has the highest Delivery 5 3 2 3.3 score, but the Service 5 3 2 3.3 Total Score 18 14 11 14.3 competitors had better price
  • 18. Customer Satisfaction Product Soft Drink : parameter TCIL FRITZ SUKAI Average Size 2 5 5 4 TCIL is worse than the Soft Dimensional 2 5 5 4 competitors in all Drink Price 3 5 5 4.3 parameter exceptCrowns Delivery 5 4 4 4.3 delivery Temper 3 5 5 4.3 Total Score 15 24 24 21 Product parameter TCIL TMN SUKAI Average Processed Food : Delivery 5 4 4 4.3 TCIL’s delivery and Lacquer adhesion 4 5 4 4.3Processed Temper 3 5 4 4 price is better than its Food competitors, but Price 5 4 4 4.3 Dimensional 3 5 4 4 overall TMN has the Total Score 20 23 20 21 highest score
  • 19. TCIL’s Costs by Segment(from exhibit 6a) TCILS COSTS BY SEGMENT 35,000 30,000 25,000 20,000Axis Title 15,000 10,000 5,000 0 Battery Edible Oil Crown Processed Food Total Cost 29,450 22,900 26,950 28,200 Profit 6,000 3,000 3,000 5,500
  • 20. Selling Prices of TCIL and Competitors(in Indian Rupees per metric ton)(from exhibit 6a)5000045000400003500030000 TCIL SAIL25000 FRITZ20000 SUKAI TMN1500010000 5000 0 Crowns Battery Processed foods Edible oil
  • 21. Standard Required for TheFood Sector Mandatory to use prime tinplate Free form defects  food products no become carcinogenic Can manufacturers for national brands followed BIS Small scale manufacturer may not follow standard because of price consideration The lack of mechanism to monitor the standard of the tinplate encouraged the use of secondary tinplate for food packaging
  • 22. Buying Influences in Tinplate Purchases(from exhibit 7) Buying Centre Influences Purchaser Decision-maker Influences User Battery Purchaser CEO Production/ Production/ Marketing/ Quality Control R&D Edible Oil Purchaser/ CEO/ owner of the Middleman/ Production/ owner of the edible oil/ vanaspati Marketing Quality Control edible oil/ company vanaspati company Crown Purchaser CEO Production/ Production/ Marketing/ Quality Control Quality Control Processed Purchaser/ CEO/ owner of the Marketing/ Production/ Food owner of the company Packaging Quality Control/ company division/ Packaging Production/ division Quality Control
  • 23. The Problem• Should it continue in the edible oil segment?• How TCIL compete with foreign companies?• What strategies can TCIL formulate based on organizational buying behavior concept?
  • 24. Threats, Opportunities and ItsImplications in the Tinplate Industry(from exhibit 2)Threats ImplicationsLowering of customs tariff Global tinplate manufacturers compete aggresivelyHousehold units Demand for smaller packaging with increasedbecoming smaller buying frequency (tinplate manufacturers rely heavily on bulk container units)Regulating standards Widespread use of defective tinplatelacking enforcementOpportunity trends ImplicationsGrowth in the hotel industry Sustained demand for bulk packsPolitical climate showing signs of Survival of strongly focused, customer-continuity in policies towards oriented companiesindustriesHigh industrial growth (9%) Increased demand for branded/packed products, the driving force would continue to remain buoyant
  • 25. SWOT AnalysisStrength Weakness• The highest score of customer • Other segment like battery, soft drink satisfaction in Edible Oil segment crown and processed food has the• Capable to cater to the technical lowest score in customer satisfaction requirements of the customer • Operated much below their installed• High production capacity capacity • Wasn’t capable of responding to the changing and sensitive needs of customersThreat Opportunities• Compete with other tinplate producer • Food sector is the biggest market size and other company product of tinplate especially in Edible Oil• The secondary tinplate grade being • Processed food is the second imported in a large portion profitability segment and it’s only• Edible Oil segment decreased slowly compete with 1 competitor each year and highly price sensitive • Battery segment is in growing rapidly• Lack of tinplate standard control and has high profitability
  • 26. Solution• TCIL should continue in Edible Oil segment although it had the smallest profitability and decreasing growth, but it had the biggest market percentage, TCIL share in this segment is quite large, and TCIL’s customer satisfaction in this segment is higher than its competitors.• Recommendation for edible oil segment: make smaller package for consumers communicate the danger of using secondary tinplate for food packaging minimize cost and reduce the price to gain more customers influence the influencer which is the middleman/marketing to choose TCIL’s tinplate
  • 27. Solution• To compete with foreign company TCIL should choose processed food segment, because it already had 22% share and only had 1 competitor which is TMN, also has a high profitability• Battery segment also has a good prospect because of the high growth and the highest profitability• Recommendation for processed food and battery segment: improve the quality based on product parameter to increase customer satisfaction improve the ability of responding to the changing and sensitive needs of customers influence the influencer which is the Marketing/Packaging division/Production/Quality Control for processed foods segment and Production/ Marketing/ R&D for battery segment to choose TCIL’s tinplate
  • 28. Forecast – Battery 1993 Battery segment 10000 TCIL Share 10% TCIL Battery size 1,000 Battery profit 6,000 TCIL profit 6,000,000 1993 1994 1995 1996 1997Battery 5% 8% 10% 15% 20%Total (in Rs) 6,300,000 6,804,000 7,484,400 8,607,060 10,328,472 1998 1999 2000 2001 2002 22% 25% 27% 29% 31% 12,600,736 15,750,920 20,003,668 25,804,732 33,804,199
  • 29. Forecast – Edible Oil 1993Oil segment 148000TCIL Share 28%TCIL Battery size 41,440Edible Oil profit 3,000TCIL profit 124,320,000 1993 1994 1995 1996 1997Edible Oil 7% 7% 6% 6% 5%Total (in Rs) 133,022,400 142,333,968 150,874,006 159,926,446 167,922,769 1998 1999 2000 2001 2002 6% 7% 7% 8% 9% 177,998,135 190,458,004 203,790,065 220,093,270 239,901,664
  • 30. Forecast – Crown 1993 Crown segment 15000 TCIL Share 10% TCIL crown size 1,500 Crown profit 3,000 TCIL profit 4,500,000 1993 1994 1995 1996 1997Crown 9% 10% 12% 12% 15%Total (in Rs) 4,905,000 5,395,500 6,042,960 6,768,115 7,783,332 1998 1999 2000 2001 2002 17% 17% 18% 19% 20% 9,106,499 10,654,604 12,572,433 14,961,195 17,953,434
  • 31. Forecast – Processed Food 1993Food segment 35000TCIL Share 22%TCIL Food size 7,700Processed Food profit 3,000TCIL profit 23,100,000 1993 1994 1995 1996 1997Processed Food 8% 7% 8% 9% 10%Total (in Rs) 24,948,000 26,694,360 28,829,909 31,424,601 34,567,061 1998 1999 2000 2001 2002 11% 11% 12% 13% 14% 38,369,437 42,590,075 47,700,884 53,901,999 61,448,279