Essar Brand Study Peshwa AcharyaEssar:India’s largest business conglomerate diversified into 6 core sectors of economy; Steel,Shipping, Oil, Power, Telecom & BPO, Construction.A brief on its Sectors: • Steel: India’s largest manufacturer and No. Exporter of Flat Steel Products • Shipping: Owns India’s largest double hull VLCC. The only Essar Group Company has been in profits since its inception • Oil: India’s first private company to venture into Oil Retail. Soon to commence is its 12 million son refinery at Vadinar, making it an integrated player • Telecom: With 36% stake in Hutchitson Whampoa and acquisition of BPL Mobile for Rs.4400 crores in 2005, Essar will soon be a pan India operator • Construction: The mother company of Essar which has many difficult projects to its credit • Power: With captive power plants and alliances with GSES and Jharkhand Govt, Essar Power in on its way to a bright future.Essar Mission (as per my thought):To be India’s largest Business conglomerate, taking India’s Growth to the fast track.Essar Values (as per my thought): • Positive Attitude: This is the key association of Essar. From getting steel business out from CDR to acquisition of BPL Mobile, Essar is t perfect blend of positive attitude. • Ambition & Commitment: Essar has been consistently upgrading its technology and process to get to the top of business and retain its No.1 position in India. • Entrepreneurship: Various No.1’s that are to the Essar Credit prove its values as entrepreneur. • Integrity: Integrity of promoters and employees helped Essar during its bad business phase and comeback as a winner • Cost Efficiency: This is the underlining value at Essar. It’s every business concentrated on minimizing coast and maximizing value thus gaining a competitive edge.
Essar as a Brand:Being working with Essar Steel Ltd, the Branding perspective is influenced from bothviews as an internal and external customer of its various products and services.This study can be divided into 3 Parts: 1. Pre 1997 2. 1997-2002 3. Post 2002Pre 1997:The company made great news in 1991 when it entered into the Steel Business bybringing down the plant that was almost discarded. The vision of the promoters madeEssar Steel, first plant to be located on the west coast of India. The idea was being closerto markets / consumption centers than raw material. This made the company to enter inmedia limelight.During 1997-2002:Steel being business with highly cyclical nature and Essar being new to it, made companyenter in a financial debt trap of Rs.3600 plus crores and thus the company had to gothrough a Corporate Debt Restructuring Program. This was a litmus test for both thePromoters as well as it Internal and External Customers.The company emerged out not just a winner but a Go-Getter. From loss of almost Rs.600crores the company marked a profit of Rs.65 crores. It also restructured its debt to Rs.900crores.Post 2002:There has been no stopping since then. The Steel business has reached new heightsmaking Essar Steel, India’s leading integrated manufacturer and No.1 Exporter of flatsteel.With more than 350 plus grades of premium quality manufactured at it state-of-the-artPlant at Hazira, Essar Steel today is ranked among the top 20 Corporates in India in termsof its EBITA.Thus based on the above thought process following are my key observations of Essar, asa Brand: • Got infamous for almost 5 years 1997-2002 when company went into CDR. The borrowings / debts were as high as Rs.3600 plus crores • Known for maintaining a low-media profile • Has no official spokesperson. For e.g.: Anil Ambani for Reliance Group (pre- split) • The only Media presence was during its “Think Positive” Campaign which goes with its baseline – A Positive Attitude
SWOT of Essar vis-à-vis Industrial Family Business Houses like Reliance and Tata: SWOT ESSAR RELIANCE TATAStrengths • Its presence across all • India’s No.1 Private • “Tata” extremely core sectors of business house strong and highly economy • Proven ability to sniff respected brand • The proven ability to business • Presence across fight back to the No.1 opportunities and FMCG and position in Steel reach No.1 position industrial brands Business in whichever business • 17 Companies • The vision of it operates Conglomerate Promoters • The Brand • Strong Indian and • People-centric. “Dhirubai Ambani” International • Tremendous Investor Network Confidence • People-Centric • Extensive Links with • Company with Government strong ValuesWeakness • Lack of presence in • Post split, there is a • Slow starter in Media loss to the equity any business • Lack of Investors • Company known for • Fuddy-duddy confidence “No Values” brand image • Rs.900 crore of Debt • Financials of Business is still a concern for company are in the Group ambiguityOpportunities • India is a growing • Company is economy. Essar’s expanding in every presence in core sector it is present sectors is win-win • New Business situation for both Development is the Nation and Company key • The proven ability to fight back to the No.1 position in Steel BusinessThreats • The arrival of global • Post split both competition in steel brothers are to prove business worth