Strategic Management report for course submission. Red Ocean and other competitive strategies. Done for Executive Development Program - Strategic Management, XLRI. Batch 2020

1. Gangs Of Lighting
Red ocean
Competitive strategies
Industry overview
From Crompton Greaves Consumer Electricals (Lighting)
point of view.
By Arjak Mitra
Reg. ID - 89933
LED presents

2. • Tungsten Bulb era till 2005 (Monopolism)
• COMPETETION is tough as it have
• a high entry barrier in earlier days.
• Required factories (not many suppliers)
• Fluro cent Bulb (CFL) era till 2005 - 2015
• Similar state and dominated by few
companies,
• LED Bulb era till 2015 – Present
• COMPETETION become Higher
• technology changed and suppliers increased
hence lot of regional and small player
emerged.
• Hence Buyers bargain power increased
because the difference of switching to
substitute is less and offering is similar mostly.
Industry Profile:
As India represents one of the biggest lighting markets,
As per market research and Elcoma,:
The LED lighting market in India is expected to reach to
INR 220 billion by the year 2020. If we talk in term of
contribution,
then 30 % is from commercial segment, 20 % from
residential, 30 % from street lighting and 20 per cent
from industrial lighting.
Government regulation and exposures:
Unnat Jyoti by Affordable LED for All (UJALA) program. Under UJALA scheme, LED bulbs, LED Tube lights are being provide to domestic
consumers.
Till date, over 36.46 crore LED bulbs, 72.01 lakh LED Tube lights distributed by EESL across India. This has resulted in reduction of 39 million t
CO2 per year and estimated annual monetary savings of INR 19,100 crore in consumer electricity bills.
Industry Benefits:
• Form 2015 LED revolution in India began in its full
pace
• Huge tender in both consumer lighting products
such as Bulb and tube lights as well as Commercial
such as streetlights and floodlights hence revenue
boosts.
• Consumers are also becoming well aware
Overall Lighting Industry comes Under RED
OCEAN Strategy
• Red ocean –
1. Every company want to beat the competition
2. Everyone want to exploit existing demand i.e. Syska want to eat Philips demand and Philips want to eat Crompton's demand - Every one
want to eat each other's pie
Industry timeline :
Industry Demographics

3. • New trend develops new market opportunity
• New portfolio introduction.
• Go beyond standard offering
• T – Bulb and related products was a design Disruption
• Lifestyle and statement (Smart or IOT base bulbs)
• Dual strategy persuasion by all red ocean players (Trying to achieve cost leadership and Differentiation both) Particularly
commodity sector as LED bulbs can be considered as a commodity only.
Note :
Only way remain strong is to develop intellectual property, patent
(Antibac is blue ocean strategy) Still there is no substitute for the product in the market because of Patent.
introduce Battery backup Copied by competitors. As the technology is common and have multiple ways of doing it.
External environment
Political
EESL - Energy Efficiency Services Limited
UJALA - Unnat Jyoti by Affordable LED for All
Tenders
Economic
Price erosion.
impacted by the economic slowdown and
witnessed delays in execution of Government
and institutional orders.
Legal
BEE - Bureau of Energy Efficiency
BIS - Bureau of Indian Standards
IP - Ingress protection
Sociocultural
Most of the companies share
similar portfolio
Diverse country – Diverse Needs
Different architecture
Technological
Constant tech changes in
electronics hence product get
obsolete quickly
Ecological
Light Pollution affect Fauna (e.g.
tortoise)
Energy efficiency
Day light factor
Blue ocean moments :
1. To create uncontacted market space for our self (Updating portfolio with new design and features)
2. Big company eat smaller company if they into their portfolio – Wipro Lighting Bought Clean ray (Horizontal Integration)
and a Chinese company (lateral but new geographic)e.g. of Acquisition, merger, Resulting Utilization of resources, low
risk, better product and efficiency.
3. To create new segment – Sensor lighting, Anti mosquito repellent bulb
4. Create and capture new demand

4. Crompton Lighting: B2C & B2B
•LED Bulbs
•Luminaires
•Lamps
•Streetlight
•Flood light etc.
Company Profile:
Crompton Greaves Consumer Electricals Ltd is one of the leading consumer companies in India with a 75+ years old brand legacy.
Products :
Fans
Lighting
Home Appliances
Pumps
Manufacturing Locations :
• Goa
• Vadodara
• Ahmednagar
• Baddi
Vision
Brand Excellence
Portfolio Excellence
Go to Market Excellence
Operational Excellence
Organisational Excellence
Five-Dimensional Growth Strategy:
Crompton lighting : Challenges
& Five forces model
With a greater number of companies – local as well
as international suppliers increased.
With new technology supplies with specialized skill
set such as IOT with have greater power as there are
more companies than suppliers.
Increase, because of more companies sharing
similar portfolio.
They get better deals.
Philips sales smart bulb set in Rs 10000
Whereas Wipro or Syska sales in half price
With similar price and
almost same every
company offer minute
or radical changes in
terms of feature

5. 1986 / 87
First in class Goniometer: Worli, Mumbai
Value adding by ensuring quality. India’s first
goniometer was installed to test Luminaires
performance.
Company innovative journey, strategy and learning :
Renowned and
established brand
Market leadership in key
product categories
High-quality
management team
Robust distribution
network in Tier I and tier
II cities
Mildly unique but
Limited product portfolio
Limited presence
beyond tier II cities
Perceived as a fans
brand
Housing for All by
2020”should create
robust demand for the
company’s product
portfolio
Huge untapped
opportunities in the LED
segment led by the
government’s initiative to
replace 770m GLS and
CFL bulbs
Competitive intensity
from the unorganized as
well as organized players
continues to remain high
Weak macroeconomic
outlook could weaken
demand for the
company’s key products
Market share
PHILIPS (Market leader), Surya, Bajaj, Crompton
Crompton Image –
Pump, Motor, Fan, Switch (Monopoly)(South strong)
Reflector Technology, HID
Mouth blown lamp – First in
market
Incandescent era
Double asymmetric Reflector
Technology, HID Flood light, For
petrol pumps (Unique use case
and technology)
1995 1999
2003/05
First LED Bulb IntroductionTwin light in single channel T12
First in class
2004/052006
T5 thin tube light
First in class, followed by Philips
First in class Edge Lit Panel
introduced affordable edge lit panel, ( But did not
succeeded as Competition was selling low cost panel
(back lit panel) at economical price and we were
selling premium (edge lit) panel at higher price).
Crompton is still trying to balance quality WRT
market prises.
Mushroom Batten was and
still a smashing hit among
customers.
Fluro cent era
LED Era
SWOT:
Design and technology
disruption

6. Case 1 Philips Bangladesh ad
Viral video of GLS lamp by Philips for Bangladesh with
slogan – “Macher raja elish, Bati er raja Philips” ( King of fish is Hilsa, King of bulb is Philips )
This ad become so famous that they published it in Kolkata and DD Bangla India
Hence Philips doubled their market share in Bangladesh and West Bengal. Hence dominated the segment very well even though it
though it was price sensitive segment.
How difference in market communication made Philips a market leader.
Philips well understood market and audience psychology
Case 2 Syska (Shree Sant Kripa Appliances Pvt. Ltd,)
Syska became the synonym of LED (Hammer based advertisement) they associated themselves to LED so much that whenever you
think LED you think Syska, so with in a time of 5 years they have captured the mind of customers.
(Even the news anchors have the brand on their laptops). Syska tried to create their own space in the red ocean space.
Syska was not an innovative brand like Crompton, Philips and Wipro etc. But still providing vanilla products they did managed to
bring their brand name. They are aggressively sponsoring prime time shows & are showing their presence in big events.
Where as Philips which commanded the conventional lighting space have dropped.. Which Syska have taken a lot of space from
Philips. ( Syska captured heavily on western region of the market)
Syska tried to educate the consumer about the benefits of LED and eventually turned themselves as the messiah of this new LED
technology in consumers mind.
So market leaders need to advertise themselves properly whenever the technology of their saleing product is changing.
Case 3 Innovation vs Psychology and product placement. (Commodity level innovation)
Lyor didn’t performed the Crompton as expected in the market, priced 30% over the normal LED Bulbs. It had 20% more lumen but
audience took low-cost bulbs because when Lyor was launched, the led bulbs already became a commodity.
Success of Mushroom Batten, Because of the affordable manufacturing process and smart designing.
Resulting Good optical spread of the light and low delta in price comparison in the market. Consumers were willing to go for a value
value for money proposition. Hence the product is a hit.
Case study, Marketing strategies, Learning :

7. Conclusion :
The company continues to drive innovation in the consumer lighting business by launching differentiated products with value-added
benefits
Cost optimization efforts have allowed the company to offer competitive product range to consumers across product segments.
The company also bagged the prestigious smart city projects during the year.
9 W bulb awarded as best energy efficient appliances.
New Launches
The company based on a consumer-led value proposition, has introduced ‘Back up Lamp’ which works even after a power failure.
Anti-Bac bulb that kills 85% bacteria have garnered positive feedback and image for the company.
Crompton Lighting Market share 2018 /19
CROMPTON (currently number 3 in the lighting segment) intends to focus on the LED segment by providing better technology and
innovative products in the market.
Note : Scope of Improvement
1. Need it innovate on marketing strategy and communication.
2. Need to understand diversified consumer need for unification of existing portfolio.
3. Can introduce separate brand of smart and customizable services and product.
4. Need to enrich the portfolio.
Thank You
2015 Crompton Advent Acquisition :
US private equity firm, Advent International and Singapore’s Temasek Holdings are set to sell up to $185 million (Rs 1,328 crore) worth of
shares in Crompton Greaves Consumer Electricals as the global investors are taking advantage of a stock market rally and making a near
three-times return on a four-year-old investment.
Well The present (2019 – 20) share of
Crompton is different when it stands at 3rd
position, Syska 2nd and Philips 1st.