MBA first year "economics for managers".

1. INDUSTRY ANALYSIS
Presented by: Aszad, Mahejabeen,
MBA 1ST SEM

2. INDUSTRY ANALYSIS???
 A market assessment tool designed to
provide a business with an idea of the
complexity of a particular industry.
 Industry analysis involves reviewing the
economic, political and market factors that
influence the way the industry develops.

3. INDUSTRIES
1. Textiles
2. Electronics
3. Automobile
4. FMCG
5. Telecom
6. FDI (in India)
7. Infrastructure
8. Banking
9. Insurance
10. Pharma

4. 1.TEXTILE INDUSTRY

5. Contribution of T&C industry to
India’s GDP 4%
Contribution of T&C industry to India’s
Industrial Production
14%
Contribution of T&C industry to
export earnings
12%

6. Indian textile industry can be divided into several
segments, some of which can be listed as below:
 Cotton Textiles
 Silk Textiles
 Woolen Textiles
 Readymade Garments
 Hand-crafted Textiles
 Jute and Coir

7.  Second largest provider of employment after agriculture.
 Cotton textiles has registered a growth of 8.2% during
April-September 2010-11, while wool, silk and man-made
fibre textiles have registered a growth of 2.2 % while
textile products including wearing apparel have registered a
growth of 3 %.
 India has the potential to increase its textile and apparel
share in the world trade from the current level of 4.5% to 8
% and reach US$ 80 billion by 2020.

8. EXPORT GROWTH
2005-06 2006-07 2007-08 2008-09 2009-10
APPAREL EXPORT 17.52 19.5 22.15 20.94 22.42
0
5
10
15
20
25
PERCENTAGE
APPAREL EXPORT

9. TEXTILE PRODUCTION CENTRES
Amritsar
Phagwara
Ludhiana
Bhiwani
Delhi
Faridabad
Modinagar
 Kanpur
 Kolkata
Ahmadabad
Surat
Mumbai
Bengaluru
Chennai
Coimbatore
Madurai
Raurkela
Tirrupur

10. MAJOR PLAYERS IN TEXTILE
INDUSTRY
Welspun India ltd.
Vardhaman Group
Alok Industries ltd.
Raymond Industries
Arvind Mills Limited
Bombay Dyeing
Garden Silk Mills
ITC Lifestyle

11. FACTS AND FIGURES
Current share in world export of textiles – 3.5 -
4 %.
Current share in world clothing export – 3 %.
Largest export segment – Readymade
Garments.
The apparel sector supports 7 million people as
a part of its workforce.

12. 2.ELECTRONICS INDUSTRY
 Business of creating, designing, producing and selling
devices such as :
radios
televisions
cameras
stereos
computers
semiconductors
transistors etc.

13. EVOLUTION
 The electronics industry came in 1900s when the
electron tube having two elements was invented by John
Ambrose Flemming.
 till the 1950s the techniques developed were known as
“radio techniques” as they were mainly used in the
radio appliances
 It was the 1960s when the analog devices were invented
that brought a revolution in the electronics industry
 In 1970s the consumer electronics were developed
 These years also saw the dominance of the United States
of America coming to an end with many new economies
showing their presence

14. IN INDIA
 The electronic industry in india took off around 1965
 Its was followed by consumer electronics mainly with
transistor radios, black & white TV, calculators and
other audio products
 In 1982 in the history of television in india the
government allowed thousand of colour TV sets to be
imported into the country
 And now growing at a brisk pace
 It is currently US$ 32 billion
 Constitute 0.7 per cent of global electronic industry

15.  The output of the electronic hardware industry in india is worth US$
11.6 billion at present
 India is also an exporter of a vast range of electronic components and
products for the following segments
a) Display technologies
b) Entertainment electronics
c) Optical Storage devices
d) Passive components
e) Electromechanical components
f) Telecom equipment
 The market for electronic products in India has witnessed significant
growth in recent years due to several factors, such as :-Manufacturing
growth
ICT penetration,
growing disposable income
retail boom
and attractive finance schemes

16. CHALLENGES
 Heavy taxation:- total tax around 25-30%
 65% of indian population still lives in villages
 increase in price wars due to the entry of new players in the
market
 Poor distribution network in semi-urban and rural areas
 Low awareness of consumer electronics products in rural
India
 Presence of gray market in consumer electronics products,
especially in DVD player, music players. Companies need
to increase focus on product differentiation to address
various segmental specific needs.

17. MARKET SIZE
The electronic industry in India constitutes
just 0.7 % of the global electronic industry.

18. MAJOR PLAYERS

19. CURRENT SCENARIO
 India’s consumer electronics devices market, defined as the
addressable market for computing devices, mobile handsets
and AV products, is projected at about US$29.4bn in 2011.
 This is expected to increase to US$50.6bn by 2015, driven
by rising incomes and growing affordability. Only nine out
of 1,000 people in India own a computer, one-fifth of the
level in China, while Indian handset population penetration
is about 57%.
 Spending on consumer electronics devices is projected to
grow at an overall CAGR of 14% through 2015, with the
key segments including low-cost mobile handsets, colour
TVs, set-top boxes and notebook computers.
 In 2010 demand for LED TV sets grew strongly, and touch
screen phones were another growth area.

20. 3. AUTOMOBILE INDUSTRY

21. INTRODUCTION
 Mainly engaged in manufacturing motor vehicles or
motor vehicle engines.
 Primary activities are:
o Motor cars manufacturing
o Motor vehicle engine manufacturing.
 Major products and services are:
o Passenger motor vehicle(Passenger cars, Utility
Vehicles & Multi purpose vehicles)
o Commercial vehicles(Medium & heavy & light)
o Two wheelers and three wheelers

22. INTRODUCTION CONTINUED…
 Contributes about 4 percent in India’s GDP.
 5 percent in India’s industrial production.
 Generated about 4.5 lack of direst employment.
 About one crore of indirect employment.
 Establishment of competitive Auto Ancillary
Industry, automobile testing and R&D centers.
 First car ran on India’s roads in 1897.
 Till 1930s, cars were imported directly.

23. POSITION OF AUTOMOBILE
INDUSTRY IN INDIA
 9th largest automobile industry.
 2nd largest two-wheeler market.
 11th largest passenger cars producers.
 4th largest in Heavy Trucks.
 2nd largest tractor manufacturer.
 Annual production of over 2.3 million units.
 Monthly sales of passenger cars in India exceed
100,000 units.

27. 4. FMCG INDUSTRY

28. INTRODUCTION
 The Indian FMCG sector is the 4th largest sector in the
economy.
 Intense competition between the organized and unorganized
segments.
 Availability of key raw materials, cheaper labor costs and
presence across the entire value chain gives India a
competitive advantage.
 Even during the slowdown of the economy, the FMCG sector
has registered a growth rate of 14.5 percent for the year
2007-08.
 The key players in FMCG sector are HUL, ITC, Dabur India
Limited, Procter & Gamble Hygiene & Health Care Limited,
Nirma Limited, Emami Limited, Colgate Palmolive India
Limited, Godrej Consumer Products Limited.

29. KEY SEGMENTS
 Household Care
 Personal Care
 Food & Beverage

30. RIVALRY AMONG COMPETING FIRMS
 In the FMCG Industry, rivalry among competitors is very
fierce.
 There are scarce customers because the industry is highly
saturated and the competitors try to snatch their share of
market.
 Market Players use all sorts of tactics and activities from
intensive advertisement campaigns to promotional stuff
and price wars etc. Hence the intensity of rivalry is very
high.

31. POTENTIAL ENTRY OF NEW
COMPETITORS
 FMCG Industry does not have any measures which can
control the entry of new firms.
 The resistance is very low and the structure of the
industry is so complex that new firms can easily enter
and also offer tough competition due to cost
effectiveness. Hence potential entry of new firms is
highly viable.

32. POTENTIAL DEVELOPMENT OF
SUBSTITUTE PRODUCTS
 There are complex and never ending consumer needs
and no firm can satisfy all sorts of needs alone. There
are plenty of substitute goods available in the market
that can be replaced if consumers are not satisfied with
one.
 The wide range of choices and needs give a sufficient
room for new product development that can replace
existing goods. This leads to higher consumer’s
expectation.

34. 5. TELECOM INDUSTRY

37. INDIAN TELECOM HISTORY
“This presentation covers long journey of Indian
Telecom.
We have tried our best to include major changes
occurred, reforms made and important dates.”
BEGINNING
1851: The sprawling Posts and Telegraphs Department,
for instance, occupied a small corner of the public works
department, in.
1854 :A regular, separate department was opened,
when telegraph facilities were thrown open to the public.

39. GOVERNMENT REGULATIONS
Indian telecom Industry is growing at a great pace and India is
expected to become a manufacturing hub for telecom
equipment. Indian telecommunication with 621 million
connections (as on march 2010) is the third largest in the
world . This sector is growing at a rate of 45 percent during
recent Years. The rapid pace in the telecom sector is
facilitated by liberal policies of the government that provide
easy market access for telecom equipment and a fair
regulatory framework for offering telecom services to the
Indian Consumers at affordable prices.
New Telecom Policy: - The most important milestone and
instrument of telecom reforms in India is the New Telecom
Policy 1999 (NTP 99). The New Telecom Policy, 1999 (NTP-
99) was approved on 26th March 1999, to become effective
from 1st April 1999. NTP-99 laid down a clear roadmap for
future reforms, thinking the opening up of all the segments of
the telecom sector for private sector participation.

40. PRIVATIZATION OF TELECOM INDUSTRY
 Prior to the National Telecom Policy 1994 (NTP94), telecom
operators were owned by the Government of India and there were
only two government owned telecom operators namely, Bharat
Sanchar Nigam Ltd. & Mahanagar Telephone Nigam Ltd.
 With NTP94, the Government of India aimed to increase the
availability of telephone on demand, world class services at
reasonable price, ensuring India’s emergence as major
manufacturing/ export base of telecom equipment etc. The
Government of India also recognized that the required resources
for achieving these targets would not be available only out of
government sources and allowed private investment and private
sector participation in the telecom sector. The DOT invited private
sector participation for providing telecom services and awarded
licenses to government operators and private operators in
different states of India.

41. TELECOM SECTOR
 The Telecom sector continued to register an impressive
growth during the year. The number of telephone
subscriptions increased from 846.32 million to 951.34
million, registering a growth of 12.41 %. The wireless
subscriber base increased by 107.58 million and the wire
line subscriber base recorded a decline of 2.56 million. The
wireless segment continued to dominate with a total base of
919.17 million connections. The overall teledensity in the
country increased to 78.66 from 70.89. The rural teledensity
increased to 39.22 from 33.79. The urban teledensity
increased to 169.55 from 157.32.

42. ANNUAL REPORT 2011-12
WIRELESS SUBSCRIBER (IN MILLION)
165.11
261.07
391.76
584.32
811.59
919.17
0
100
200
300
400
500
600
700
800
900
1000
Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12

43. INTERNET SUBSCRIBER (IN MILLION)
6.93 7.23 7.32 7.41 7.78
9.05
2.34
3.87
6.22
8.77
11.89
13.81
9.27
11.1
13.54
16.18
19.67
22.86
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012
Narrowband
Brodband
Total

44. 6. FDI (IN INDIA)INDUSTRY

45. What is the meaning of FDI ?
The Foreign Direct Investment means “cross
border investment made by a resident in one economy in an
enterprise in another economy, with the objective of
establishing a lasting interest in the investee economy.
Types of Retailing in India
 Single Brand- Single brand implies that foreign companies
would be allowed to sell goods sold a retail store with foreign
investment can only sell one brand .(Adidas, Lee, Nike)
 Multi Brand- FDI in Multi Brand retail implies that a retail
store with a foreign investment can sell multiple brands under
one roof. (Lifestyle, Metro shoes)

46. CURRENT POSITION:
FDI is permitted only in single brand product
retailing – 100%.(from January 2012)
In multi brand – 51% (from September 2012)
FDI cap in Broadcasting was raised to 74%
from 49%.

47. IMPACT OF FDI IN RETAIL IN INDIA
1. Consumers – access to some of the major
global brands.
2. Improved quality and variety of products.
3. Increase competition and expand
manufacturing.
4. It gives consumers competitive advantage.
5. Influences the consumers standard of living.

50. FDI EQUITY INFLOW
 Year 2013
(up to October, 2013) # 104,642 18,079
(in Rs. Cr.) (in US$ mn)
 Year 2012
(up to October, 2012) # 109,781 20,631
(in Rs. Cr.) (in US$ mn)
 %age growth
over last year ( - ) 5 % ( - ) 12 %

51. RECENT TRENDS IN FDI
 FDI in specialty stores: Multi-brand organized retail in
specialty stores such as Consumer Electronics, Footwear,
Furniture and Furnishing etc. are expected to expand and
mature in the next few years.(e-zone, Reliance footprint)
 Dominance of unorganized retail: Flexible credit
options and convenient shopping locations may help
traditional retail to continue its dominance in retail sector.
 Growth in small cities and towns: Stiff competition and
saturation of urban markets is expected to drive domestic
retail players to tap the potential in small cities

52. 7.INFRASTRUCTURE

53. Country Program Description
Brazil Growth
Acceleration
Program
This strategic investment program oversees and approves
initiatives and public works investment. PAC, the first phase of the
program launched in 2007, invested $349 billion in areas,
including energy, urban infrastructure, sanitation, and
transportation. PAC-2 is a $900 billion extension of the PAC
program for 2011–2014.
CHINA 12th Five-Year
Plan
The 12th Five-Year Plan, which began in 2011, is allocating some
$1 trillion in infrastructure spending over five years. The program
is developed by the Central Committee with help from the Ministry
of Housing and Urban-Rural Development. Much of the
investment will
go toward building high-speed rail, with a secondary emphasis on
water supply, electricity, and highways
INDIA 11th and 12th
Five-Year Plans
The 11th Five-Year Plan, which began in 2007, is developed and
implemented by India’s Planning Commission. Of the plan’s
estimated $500 billion in total infrastructure investment,
one-third will flow to roads, including a project to upgrade,
rehabilitate, and widen major highways in India. The rest will be
spent on transit, water, electricity, and other
infrastructure sectors. The country’s 12th Five-Year Plan, which
runs from 2012 to 2017, will double the amount spent on
infrastructure to $1 trillion.

56. SIZE – POWER SECTOR
• Generation capacity of 122 GW; 590 billion units
produced (1 unit = 1kwh)
- CAGR of 4.6% over the last four years.
• India has the fifth largest electricity generation
capacity in the world
- Low per capita consumption at 606 units; less than
half of China
• Coal-fired plants constitute 57% of the installed
generation capacity, followed by 25% from hydel
power, 10% gas based, 3% from nuclear energy and
5% from renewable sources

57. OPPORTUNITY
• Over 150,000 MW of
hydel power
is yet to be tapped in
India
• India requires an
additional 100,000 MW
of generation capacity by
2012

58. ROADWAYS
• India has second largest
Road network, in the world.
• Total length is 33 lakh kms
• Carry 65% of fright & 80%
passengers
• National highway constitute
only 1.7% of roads but
carries about 40% of traffic
• Annual projected growth is
12-15% for passenger traffic
& 15-18% for cargo traffic

59. RAILWAYS
 About 64000 km of rail
network
 Connects 7083 stations
 Carry 2.20 crore
passengers & 2.50 million
tones of goods everyday
 About 1.5 millions of
workforce

60. INFRASTRUCTURAL REQUIREMENT
SCENARIO IN INDIA
 Urban population is expected to grow about 50% by
2025
 Growth in GDP is predicted to be 8-9% per annum
 Road Traffic growth will be 15% per year
 Air traffic is growing by 25% per year
 101,000 MW of new power needed by 2012
 Sanitation Coverage is only 35% currently

61. 8. BANKING

63. MARKET SHARE OF BANK
 Share in Assets of Scheduled Commercial Banks

64. Technology in Banking

65. Public sector banks
Allahabad Bank
Andhra Bank
Bank of Baroda
Bank of India
Bank of Maharashtra
Canara Bank
Central Bank of India
Corporation Bank
Dena Bank
IDBI Bank Ltd
Indian Bank
Indian Overseas bank
Key Player in Indian Banking Sector
Oriental Bank of Commerce
Punjab & Sindh Bank
Punjab National Bank
State Bank of India
State Bank of Bikaner & Jaipur
State Bank of Hyderabad
State Bank of Indore
State Bank of Mysore
State Bank of Patiala
State Bank of Travancore
UCO Bank
Syndicate Bank

66. Private banks
Axis Bank
Bank of Rajasthan
Catholic Syrian Bank
City Union Bank
Development Credit Bank
Dhanalakshmi Bank
Federal Bank
HDFC Bank
ICICI Bank
IndusInd Bank
ING Vysya Bank
Jammu & Kashmir Bank
Karnataka Bank
Karur Vysya Bank
Kotak Mahindra Bank
Lakshmi Vilas Bank
Nainital Bank
Ratnakar Bank
SBI Comm& Intl Bank
South Indian Bank
Tamil Nadu Mercantile Bank
Yes Bank

67. OPPORTUNITY IN INDIAN BANKING
SECTOR
 Pension fund industry in India grew at
a CAGR of 122.44% from 1999-00 to
2006-07.
 Rural and semi-urban India is
expected to account for 58.33% of the
insurance sector by 2010.
 Debit cards and Credit cards.
 Rural and semi-urban centers account
for 66% of total bank branches.

68. 9.INSURANCE

69. INSURANCE SECTOR OVERVIEW
A Brief History Of The Market:-
 Life insurance in the Indian market has been historically
dominated by the government run Life Insurance
Corporation (LIC). The company was formed in 1956 by
incorporating all 154 private life insurance companies
existing in the country at that time. However, following a
strong wave of development throughout the country, the
Indian government allowed privatization in the insurance
industry in 2000, setting up the Insurance Regulatory and
Development Authority (IRDA) to issue licences to private life
insurers. Foreign direct investment (FDI) was also allowed
up to a limit of 26%, which meant that non-Indian entities
were allowed to hold up to 26% of equity/share capital in the
Indian insurance companies.

70. Insurance companies in India
Company Approximate market
share
LIC 50%
ICICI 10%
SBI 5%
Bajaj 4%
Reliance 5%
HDFC 6%
Birla 4%
Max Life Insurance 3%
Tata 2%
Met Life 1%
Kotak 2%
Others 8%

72. GENERAL INSURANCE
Product Percentage
Engineering 4
Motor Own Damage 27.63
Motor Third party 14.94
Health 22.58
Aviation 1.08
Liability 2.4
Personal accident 2.63
Fire 10.91
Marine 5.97
Others 7.37
LIFE INSURANCE
Product Percentage
Non linked life individual 21.7
Non linked gen annuity group 4.33
Non linked gen annuity individual 0.85
Non linked pension group 4.22
Non linked pension individual 0.25
Non linked health 0.09
Linked insurance 55.01
Riders 0.01
Linked life group 13.54

75. MEDIA SPENDS
Insurance bharti axa birla sunlife icici prudential
Theme brand and monthly plan retirement plan children plan and life insurance
Spends(april-feb'13) 86 lacs 48k 72.8 lacs
properties india-aus tests EPL ind-eng test & ind-aus test
period Feb'13 Feb'13 nov12 and feb13
Insurance edelweiss hdfc max life
Theme brand children plans brand and corporate
Spends(april-feb'13) 56.4 lacs 4.1 lacs 1.52 cr
properties india-pak t20 & studio show hdfc life quiz non india,epl,tennis&cricket
period dec'12 jun--july12 round the year
Insurance sbi insurance met life LIC
Theme brand monthly income plan jeevan anand & corporate
Spends(april-feb'13) 30.90 lacs 35.38 lacs 90.42 lacs
properties studio show non india & f1 olympics on dd and HIL
period dec'12-jan'13 april-june'13 aug12 and jan'13

76. BANKING SECTOR OUTLOOK 2013:-
 With insurance sector combined , contributes 7 % in the GDP
 Three banks SBI(1) , HDFC(2) and ICICI(3) are the most valued
banks in India and stand in top 10 most valued companies in India
 Primarily revenue stream is interests earned from customers
 New age revenue stream is coming from chargeable services like
wealth management services , advisory,credit card , investment
banking and demat services
 2011 census – 59% of population is banking in India , 40 % is still
not in reach – HUGE POTENTIAL
 RBI has not issued even ONE new bank license in last decade
 Law to issue new licenses is passed by Lok sabha and yet to clear
from Rajya sabha , once cleared , more foreign investments are
expected with more competition for the existing players , therefore
better value for customers
 Tap emerging markets in Asia & Africa - Oversees expansion in
agenda
 Mobile banking – Major technological leap

77. 10.PHARMA INDUSTRY