Project on IFB


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Project on IFB

  1. 1. Agenda• Industry overview• Company overview – Company profile – Financials – Home appliances division – New launches• Competitors• Multi level marketing
  2. 2. Agenda• IFB Chandigarh• Analysis —Porter’s five forces model —Pest analysis —SWOT analysis —BCG Matrix —Product life cycle —Ansoff Matrix
  3. 3. Agenda• Project Description –Overview –Situational Analysis –Problem Statement –Options –Criteria –Evaluation of Options
  4. 4. Agenda• Recommendation• Action Plan• Benefit derived• My learning
  5. 5. Industry overview
  6. 6. Industry overview• Durable goods are those which don’t wear out quickly, yielding utility over time rather than at once• Electronics products are of technical nature• Effective after sales services are required• Consumer durables industry – White goods – Brown goods – Consumer electronics
  7. 7. Industry overviewPerformance Challenges• Riding the crest of country’s economic • On the supply side boom • Competition from imported goods• Market size of Indian durable market • Lack of well developed distribution network in 2008-09 was US$ 27.38 billion • Regular power cuts and poor road• Grown by 7.1% over the previous year linkages• The market is projected to grow at a • On the demand side CAGR of around 15% during 2010- • Customers’ increasing choice 2013 • Choices among domestically produced and imported goods
  8. 8. Industry overviewFuture prospects Emerging Consumer Demand in India• Industry’s future remains • Market is set to explode over the next two robust decades • Total private consumption will grow from• Scope of knowledge and $370 billion today to over $1,500 billion by experience 2025• Scope to develop and • Urban India will account for over two- thirds of market growth innovate the product variants • Average per capita consumption will grow to about $1,000 by 2025 • (Source: McKinsey Global Institute)
  9. 9. India’s consumer market will quadruple over the next two decades Total household consumption, billion, Indian rupees, 2000
  10. 10. Urban India will account for more than two-thirds of consumption growth over the next 20 years Aggregate annual consumption, billion, Indian rupees, 2000
  11. 11. Company overview
  12. 12. Company overview• Originally known as Indian Fine Blanks Limited• Started operations in India during 1974 in collaboration with Hienrich Schmid AG of Switzerland• Pioneer in the production of fully automatic washing machine in India in agreement with BOSCH, Germany in the year 1989• Engineering divisions are located at Kolkata & Bangalore
  13. 13. Company overview• The Bangalore unit, apart from Fine Blanked components, manufactures motors for White goods as well as Automotive applications• Offers Fully Automatic Washing Machines, Micro Wave Ovens, Dish Washers & Dryers with factories in Goa and Bhopal• Ventured abroad by setting up European Fine Blanking Plant at Wrekhan, Northern Wales, UK
  14. 14. Company overview• The group co.’s are: – IFB Industries Ltd. – Engineering Division. – Home Appliances Division. – IFB venture Capital Ltd. – IFB Agro Ltd. – IFB Securities Ltd. – IFB Leasing and Financing Ltd. – IFB Subsidiaries
  15. 15. Company profile• Vision —To be customer’s first choice• Mission —TO BE THE BEST IN THE EYES OF OUR CUSTOMERS, EMPLOYEES, BUSINESS PARTNERS & SHAREHOLDERS —For Our Customers – The best product to buy, an innovative product that consistently outperforms peers and outstanding service that makes every customer smile. —For Our People - An environment where individuals can constantly learn, grow and prosper. —For our Business Partners – IFB should be the first choice for their products and services. —For Our Investors - The company should be acknowledged as one with the highest standards of corporate transparency that delivers on promises given to shareholders. — TO BE IN EVERY HOME VALUED AT Rs 15 LACS + (AND ACHIEVE OUR TARGET OF Rs 4000 CRORES TURNOVER BY 2013 – 14)
  16. 16. FinancialsFrom April’10 to April’11
  17. 17. Home appliances division• The products – Front loaded Washing Machine – Top loaded Washing Machine – Microwave oven – Dishwasher – 100% clothes dryer – Wash care products• Recently launched fully built up modular kitchens and kitchen equipments
  18. 18. Home appliances division• Front loading design is based on German principles• High quality brand of fully automatic machines• Dealer network spread all over India and 12 other countries• The main washing machine production plant is at Goa
  19. 19. New launches• Water Filter• Combo kit Washing Machine• Combo kit Dish Washer• Combo kit Microwave Oven• Dry sheet• Electrical & Plumbing• Small Appliances• Refrigerator
  20. 20. Competitors
  21. 21. Competitors Washing Microwave oven Dishwasher DryermachineElectrolux Bajaj Faber Heatcraft HaierHaier Daewoo Kaff SiemensHitachi Electrolux LG WhirlpoolOnida Godrej Siemens BoschPanasonic Haier BoschSamsung InalsaWhirlpool KenstarLG LGGodrej OnidaSanyo PanasonicSharp SamsungSiemens SharpToshiba SiemensVideocon VideoconBosch Whirlpool Bosch
  22. 22. Multi level marketing
  23. 23. Multi level marketing• Launching its products in Network Marketing• Company is just in launching stage• Opportunity to be a Brand Ambassador• Easy way to earn and learn together• Get registered with a life time fee of Rs. 1000/- only• Buy a product or recommend anyone else
  24. 24. Multi level marketing• You are now a brand ambassador with IFB• Get your ID, password and a virtual office• Start reference and recommending its product to others• Opportunity to earn approx Rs. 20,000/- per day and Rs. 6,00,000/- per month• Increase the sense of brand loyalty
  25. 25. IFB Chandigarh
  26. 26. IFB Chandigarh• Located at Plot no.640-A, Phase-IX, Industrial area, Mohali• Comes in North II region• Four other states of North II region are Punjab, Haryana, J&K and Himachal Pradesh• A ware house in Mauli Jagran, Chandigarh• 17 dealers, 2 franchisees and 1 direct service• Friendly and co-operative team of employees
  27. 27. Chandigarh Map
  28. 28. Analysis
  29. 29. High PORTER’S FIVE FORCES MODELModerate•Number of well-established•Most current players are Lowglobal players new playersplayers; several •Indigenous supply baseentering•New entrants will need Power of limited—most raw•Good technologicalto invest in brand, Suppliers materials are importedcapabilitytechnology, distribution•Many untapped potentialmarkets Threat of New Competitive Power of Entrance Rivalry Buyer High High •Unbranded products and •Multitude of brands cheaper imports could Availability across price points—wide enter the market of variety of choice for Substitutes customers
  30. 30. PEST ANALYSISPolitical factor Economical factor• High import duty • Increase in per capita income• Plants in tax-incentive areas like Goa • Growing GDP high disposable income and Bhopal • Increase in spending power• Export promotion schemes of the Indian Government like EPCG (Export Promotion Capital Goods scheme) and EOQ (Export Oriented Unit) status IFBTechnological factor Socio-cultural factor• Improvement in technology made the • Manufacturing eco-friendly product electronic product more featured • Increasing life style and comfort• Quality of product has been increased
  31. 31. SWOT ANALYSISStrengths Weaknesses• Brand image in Home Appliances Division • Price of the products• So many models to choose • Spare parts/AMC of the product are costly• Healthy financial banking • No Promotional activities• Innovative products • Less range of products in consumer• Compatible workforce durables• Strong after sales service • Products are for winter season but no• Wide distribution network in all over the product is specially for summer season country IFBOpportunities Threats• Scope for growth in the rural market • Competitive pressure on the domestic market• New launches can give more benefit • Threats from competitors in the area of pricing• The trust in company’s product by valued • Significant rise in material cost and exchange customers fluctuation that drastically impacts margins
  32. 32. BCG Matrix
  33. 33. Product life cycle
  34. 34. •Having wide range states•Almost covered allof product in marketwith its existing products •some can also •new productsnew products•cannot captureIFB is already ruralfollowing with its existingsegment this ANSOFF MATRIX like refrigerator, cover the new market with its unique features etc. are in water filter andstrategy of market priceproduct due to high pipeline reasonable prices•targeting B2Bpenetration market withits B2B products
  35. 35. Project Description
  36. 36. Overview• Based on secondary distribution model of IFB, Chandigarh• Weekly divided into 8 weeks• Studied the existing secondary distribution model of Finished Goods and Spares• Identified the gaps and improvement areas• Introduced an improved model• By implementing the new improved model accessed the benefit to the company
  37. 37. Situation analysis Various Bhopal Primary Chandigarh Secondary distribution distribution dealers ofwarehouse warehouse Chandigarh
  38. 38. •Then the company give outstanding of the branch to Situation analysis the head office •In some cases, it takes time till the end of the month • Stock of last month should be cleared from Chandigarh warehouse Bhopal • Outstanding of last month sales should be sent to the head office warehouse • Sales target of each month given by the company • Outstanding of last month sales from each dealer should be Chandigarh warehouse collected •Sometimes it lead to late submission of outstanding to the •Sales people is why stock head office and thattake order • Further sales to the customers move fromfromdealers eachware late the the Bhopal • Stock left in their shopVarious dealersof Chandigarh housemonth •Now dealers further sale •Due to this, major secondary distribution occur in the market the product at the time of •Within specified time month closingawhich ultimately increase the cost amount of the they pay the stock to the company
  39. 39. Situation analysis• Sometimes late submission of outstanding lead to account closing of branch• In such case, they get their stock from other states• It lead to the stock transfer which ultimately increase the cost of secondary distribution of that state• If the same case happens with Chandigarh branch then stock comes from other state to Chandigarh warehouse which gives extra cost to the secondary distribution• This whole system breaks at the festival season when there is heavy demand and high sales in the market
  40. 40. Problem Statement• The major problem in existing secondary distribution model is that the maximum sales and billing occurs at the end of the month which cause heavy transportation at that time for which there is a need to hire more vehicles for transportation and the challenge is to maintain the sales in whole month evenly so that there can be the maximum utilization of the vehicle owned by the company
  41. 41. Options• Weekly billing• Proper distribution from Bhopal itself• Division of Chandigarh into different zones
  42. 42. CriteriaBefore coming to any decision these important points should be taken in consideration-• Sales-The new model should not hamper the sales anyhow• Service-In order to minimise the cost of transportation service should not be hampered• Profitability-The profit that new model will give to the company
  43. 43. Evaluation of Options Weekly billingPros Cons• It will evenly distribute the • The dealers don’t need the sales for entire month stock each week• Maximum time vehicle will • It totally depend on the not move half loaded demand from customers’ side• Proper utilization of owned vehicle
  44. 44. Evaluation of Options Proper distribution from Bhopal itselfPros Cons• There will be no need of stock • It may increase the cost of transfer primary distribution• There will be no need to hire • The extra stock which is not in the extra vehicles demand in Chandigarh will be lying in the warehouse and it will also capture the area of warehouse
  45. 45. Evaluation of Options Division of Chandigarh into different zonesPros Cons• Each zone’s dealers can be asked to • There are only 2 areas in order on a fixed particular date Chandigarh where our maximum• The same vehicle can be used for number of dealers exist so even the the distribution of goods to all the zones will not be equally distributed dealers of that particular zone • Even after the division there are some areas where only 1 or 2 dealers exist and demand is low then the vehicle will still move half loaded
  46. 46. Recommendation• There should be weekly billing so that sales could be evenly distributed in the entire month• Area wise distribution can minimize the cost to some extent• The collection from dealers should also be done at time to time and not at month closing only• Stock from Bhopal should come till the second week of the month to distribute the products evenly in the entire month
  47. 47. Recommendation• Products and its features are excellent but there should be some promotional activities like TV ads to promote the products and its features in market• Quality of products is good in dealers’ point of view• Dealers want the new kitchen equipment products to be promoted because there is some demand from customers’ side• There should be some products which can target the rural segment because still India has its major population in rural areas
  48. 48. Action Plan• Area wise distribution gave some convenience in distribution• This time secondary distribution is done in a very systematic way so that each vehicle don’t move half loaded• This is done under the guidance and efforts of all concerned people• We also tried to avoid the stock transfer as it is not needed now
  49. 49. Benefit derivedFebruary March AprilAuto fixed cost-19800/- Auto fixed cost-19800/- Auto fixed cost-19800/-Km charges-2149*2=4298/- Km charges-1800*2=3600/- Km charges-1408*2=2816/-Extra vehicles’ cost-14740/- Extra vehicles’ cost-3360/- Extra vehicles’ cost-2800/-No stock transfer Stock transfer-30860/- Stock transfer-4950/-Total cost-38838/- Total cost-57620/- Total cost-30366/-(All costs are in Indianrupees)
  50. 50. Benefit derived• Total benefit derived in comparison to March’11 is Rs.27,254/-• Total benefit derived in comparison to Feb’11 is Rs.8,472/-• Maximum utilization of owned vehicle• Only three extra vehicles hired• Only two stock transfer occurred• For spare parts, a rickshaw vehicle is owned by the company on a monthly rental basis Rs. 4,000/-• The prices of vehicles are going to increase from the next month due to hike in petrol price
  51. 51. My Learning• Practical insights into the life and work in a body corporate• To apply the management learning and soft skills while working at the coalface• To discuss an issue with the concerned people and come up with an agreed solution• Interacting with various dealers and franchisees to understand how whole logistics and operations work
  52. 52. My Learning• To know various details on agreements and costing• Exposure to the fierce competition and the struggle, where only the fittest survive• To remain patient and composed in the face of anxiety and pressure• To analyse each pros and cons related to various options of the solution
  53. 53. Thank You