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core business and diversified business

core business and diversified business

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    • 2. Core Business Vs Diversified Business
      • Robin Kapoor 47
      • Sourabh Garg 60
      • Deepak Kumar 13
      • Yogendra Dwivedi 72
      • Vikas Sharma 69
      • Tushar Garg 63
      • Prateek Nahar 34
      • Pankaj Jain 29
    • 3. Core Business
      • The core business of an organization is an idealized construct intended to express that organization's "main" or "essential" activity
      • The central, and usually the original, focus of an organization's activities that differentiates it from others and makes a vital contribution to its success
      • The concept of core business became prominent in the 1980s
      • In 1982, Tom Peters's and Robert Waterman's book In Search of Excellence suggested that organizations should stick to the knitting and avoid diversifying into areas beyond their field of expertise.
    • 4. Pros and Cons of core business
      • Advantages
      • Focus is defined.
      • Clear identity.
      • Bring innovations in their respective fields.
      • Disadvantages
      • risk
    • 5. Examples of Core business
    • 6. Maruti Udyog Ltd.
      • Incorporated-February 1981
      • Joint Venture-October 1982
      • Facilities - Gurgaon: 3 vehicle assembly plants Manesar: 1 vehicle assembly plant Head Office in New Delhi, India Regional offices: 16
      • Employees-4993 of Financial year 2006-07
      • Maruti assembles different models of cars for different segments.
    • 7. 11 Models of Maruti
    • 8. Infosys
      • Infosys Technologies Ltd. (NASDAQ: INFY) was started in 1981 by seven people with US$ 250.
      • Today, we are a global leader in the "next generation" of IT and consulting with revenues of over US$ 3 billion.
      • Infosys defines, designs and delivers technology-enabled business solutions that help companies globally.
    • 9. Infosys Continued…..
      • Infosys also provides a complete range of services by leveraging our domain and business expertise and strategic alliances with leading technology providers.
      • Infosys takes pride in building strategic long-term client relationships. Over 95% of our revenues come from existing customers.
    • 10. Arcelor Mittal
      • The world's number one steel company, with 310,000 employees in more than 60 countries.
      • Revenues of US$ 105.2 billion, with a crude steel production of 116 million tonnes.
    • 11. Products and Services of Arcelor Mittal
      • Tubular services
      • Stainless steel
      • Wire
      • Automotive
      • Construction Material
      • Distribution
      • Steel Services Centers
    • 12. Domino’s
      • Domino's Pizza India Ltd . was incorporated in March 1995 as the master franchisee for India and Nepal, of Domino's Pizza International Inc., of USA.
      • Domino's Pizza India Ltd. has proceeded to become one of the largest and fastest growing international food chains in South Asia.
      • First Domino's Pizza store in India opened in January 1996, at New Delhi.
      • Presently over 165 outlets in 33 cities and is the leader in the fast food delivery segment.
      • Customers can order their pizzas by calling a single countrywide Hunger Helpline - 1800-111-123.
    • 13. Dominos continued..
      • Domino's vision is focused on " Exceptional people on a mission to be the best pizza delivery company in the world! ".
      • Domino's is committed to bringing fun and excitement to the lives of our customers by delivering delicious pizzas to their doorstep in 30 minutes or less.
      • Domino's believes strongly in the strategy of 'Think local and act regional' that is subtly blended with a playful images personified by its ' Hungry Kya? ' positioning.
      • Time and again Domino's has been innovating toppings suitable to the taste buds of the local populace and these have been very well accepted by the Indian market.   
    • 14. Diversified Business
    • 15. Meaning
      • Business that operates in more than one industry or market, and uses different distribution channels as a matter of corporate strategy.
      • A company may attempt to manufacture the products itself, or it may acquire or merge with an ongoing organization.
    • 16. Diversified Business
      • Why Diversification?
      • The two principal objectives of diversification are
      • improving core process execution, and/or
      • enhancing a business unit's structural position
      • Forms and Means of Diversification
      • Diversification typically takes one of three forms:
      • Vertical integration - along your value chain
      • Horizontal diversification - moving into new industry
      • Geographical diversification - to open up new markets
    • 17. History of diversification
      • Diversification strategies play a major role in the behaviour of large firms. A sequence of diversification followed by restructuring has been common in countries such as Australia, USA, UK and Germany
      • In the Fortune 500 US industrial companies, the proportion that generated more than 25% of their revenues from diversified activities increased during the 1950s, 1960s and early 1970s, but then fell off again during the 1980s
        • Fortune 500 companies with >25% revenues from diversified activities
          • 1950 38%
          • 1974 63%
          • 1988 47%
    • 18. Firms Vary by Degree of Diversification A Eg DLF Eg UB Eg Hero Group Eg Tata Group Single-business > 95% of revenues from a single business unit Low Levels of Diversification Dominant-business Between 70% & 95% of revenues from a single business unit B A Unrelated-Diversified Business units not closely related High Levels of Diversification A B C Moderate to High Levels of Diversification < 70% of revenues from dominant business; technological & distribution links Related constrained Related linked (mixed) < 70% of revenues from dominant business, only limited links exist A B C B A C
    • 19. Pros and cons of diversified business
      • Advantages
      • Spreading risk
      • Increased opportunity
      • Market power (growth)
      • Surety about long term existence
      • Sharing of resources e.g. labs
      • Disadvantages
      • Complexity
      • New business can be over valued
    • 20. Examples of Diversified Business
    • 21. DLF
      • The group has over 224 million sq. ft. of existing development and 748 million sq. ft. of planned projects.
      • The company has also entered into several strategic alliances with global industry leaders
      • The business traditionally has been into three prime divisions: Homes, Offices and Shopping Malls. To these DLF has added three more divisions: Hotels, Infrastructure and SEZs
    • 22. Key business of DLF
      • Airport Modernization
      • Township Development
      • Hospitality
      • IT Infrastructure
      • Asset Management
    • 23. UB Group
      • United Breweries Group—popularly known Kingfisher group
      • The UB Group (United Breweries) Group is a multi-faceted conglomerate with business interests in
      • Beverage Alcohol-Bagpiper, McDowels,
      • Pharmaceuticals-Aventis Pharma Limited ,
      • Media-Asian Age Holdings Ltd,
      • Aviation-Kingfisher Airlines Limited ,
      • Fertilizer-Mangalore Chemicals & Fertilizers Limited ,
      • Research & Development-Vittal Mallya Scientific Research Foundation
    • 24. Tata Group
      • 98 operating companies in seven sectors
      • Group was founded by Jamsetji Tata in the mid 19th century,
      • The Tata Group is one of India's largest and most respected business conglomerates, with revenues in 2006-07 of $28.8 billion (Rs129,994 crore), the equivalent of about 3.2 per cent of the country's GDP
      • The Tata family of companies shares a set of five core values: integrity, understanding, excellence, unity and responsibility.
      • The Tata Group has operations in more than 80 countries across six continents, and its companies export products and services to 85 countries.
    • 25. Major Companies
      • TCS- software firm
      • TISCO- iron and steel firm
      • Tata telecommunications
      • Tata tea Inc-major brands are Tata Tea, Tetley Tea etc
      • Tata Motors- Indica, Indigo, Nano
      • Tata Construction Equipment company
    • 26. Reliance ADAGroup
      • Among India’s top three private sector business
      • Across different companies, the group has a customer base of over 100 million, the largest in India
      • a shareholder base of over 12 million, among the largest in the world.
      • Through its products and services, the Reliance - ADA Group touches the life of 1 in 10 Indians every single day.
    • 27. RelianceADAG companies
      • Reliance Capital-interests in asset management and mutual funds, life and general insurance, private equity and proprietary investments, stock broking
      • Reliance Communications Limited
      • Reliance Energy Limited-generation of electricity
      • Reliance Health
      • Reliance Media & Entertainment-ADLABS, BigFM, Mobile TV, DTH
    • 28. Comparison w.r.t. businesses
      • US economy is heading towards core business
      • Indian economy is heading towards diversified business
    • 29. Reasons
      • Collectivism in Indian economy
      • Opportunities in India are more
      • US Economy is stagnant and India is developing economy
      • More and more companies want to come to India
      • Competition
    • 30. Thank You
      • Robin Kapoor
      • Sourabh Garg
      • Deepak Kumar
      • Yogendra Dwivedi
      • Vikas Sharma
      • Tushar Garg
      • Prateek Nahar
      • Pankaj Jain