1. What is the way out?
Prepared By :
Sankar E S
Roll No. 11146 | Section 1
PGDM 2011- 13
T A Pai Management Institute

2. About the company…
 State controlled public sector electronics company located
in Kerala and headquartered in Thiruvananthapuram
 Trend setter innovations in electronics since 1973
 5000 employees and 14 production centers across Kerala
within five years of inception
 Company produced DCS,PLC,electronic devices such as
televisions, radios and other electronic goods
 Currently into production of mines for Indian navy and
various rocket parts for ISRO
 Also into basic electronic component production and
automatic traffic regulation systems
 Latest entry is into information technology, animation, web
designing and geo-informatics.

3. Vision
To be a world-class, growth oriented electronics corporation specialized in
providing quality , market focused products ,services and cost effective
system solutions to a large clientele
Mission
To transform itself to one of the Navratna corporations of the country
Objective
• To establish Good Manufacturing Practices .
• To upgrade infrastructure and human resources development at par with
global development indices.
• To focus on key areas such as power electronics, strategic electronics (for
defence and space applications), security and surveillance
electronics, control instrumentation and integrated traffic management
systems.
• To establish links with high-profile technology institutions such as
DRDO, VSSC, NPOL to keep pace with technology development and
adaptation
• To give thrust to frontier areas of knowledge management.
Strategic Outlook

4. Challenges
 Failure in providing quality consumer goods at competitive
rates
 Failure in competing in international market
 Failure in withstanding competition with newly arrived MNCs
due to globalization
 Huge accumulated losses
 Low productivity owing to antiquated machinery
 Absence of further capital investment
 Shortage of manpower including skilled technical labor
 High rate of financing charges
 Upward variation of foreign exchange value against rupee

5. SWOT
Analysis
External Opportunity
• High growth of infrastructure sector
at national level
• Globalization enhanced raw material
Imports
• Less requirement of promotional
programs
• Favorable government policies
• Government security
External Threat
• Increased competition due to
liberalization
• Fast changing technology
• Lack of availability of quality labor
• Market capitalization of low quality
low priced products
Internal Strength
• Infrastructure facilities
• Qualified technical expertise
• High net worth
• Uninterrupted power supply
• Highly placed clientele
• High credit worthiness
• ISO certification
Win- Compete (SO)
• Use government support to win
more PSU clients
• Optimize procurement costs
by cheap raw material imports
• Diversify into electronic
infrastructure industry to cater to the
needs of huge electronic hardware
Win- Explore (ST)
• Ensure high quality product and after
service to beat the competition
• Update with the latest technology
• Retain qualified technical experts for
quality improvement and product
innovation
Internal Weakness
• Uncontrolled price fluctuations of
raw materials and oils
• Lack of promotional activities
• Strong unionized work force
• Long maintenance down times
• Long procedural delays
• Under utilization of man and
machinery
• Requirement of government
approval for policy decisions.
Caution – Compete(WO)
• Improve raw material procurement
policies to reduce cost
• Relocate excess workforce and
resources to product development and
diversification
• Bring down delays and procedural
long waits in order to respond to the
market changes quickly and effectively
Caution- Explore (WT)
• Recruitment has to be carried out by
the company to get the best talent
•Bring organizational changes to
promote culture of innovation and new
product development

6. Rivalry
among
existing firms
(Moderate)
Threat of
new entrants
(High)
Bargaining
power of
buyers
(High)
Threat of
substitutes
(High)
Bargaining
power of
suppliers
(High)
Porters
competitive forces
framework
Is competition in Electronics industry badly affecting Keltron ?

7. • Possible due
to availability
of skilled
labor
Differentiation
• Difficult to
achieve due
to high
competition
Cost
Leadership
• Possible by catering to the
specific needs of customers like
ISRO,DRDO ,Indian Navy etc.
Focus
StrategicTarget
Strategic Advantage
Industry wide
multi-segment
Particular
segment
Uniqueness
perceived by
customer
Low – cost
position
Which generic strategy has to be adopted by Keltron?

8. Uniqueness Differentiation
Customer
Value
 Strong mechanistic
organizational structure
 Government support
 Superior technical expertise
 Proven player in electronics
industry
 Customer focused
 Production of customer
specific electronic goods
 Focus more on ISRO and
 Navy specific customized
orders
 Premium to be charged for
higher quality and service
 High quality product
 High end customer service
and support
 Effective maintenance and
future change requirements
 Training to end users
Differentiation Focus - Strategy

9. What are the various value addition activities in the company ?
PRIMARY ACTIVITIES SUPPORT ACTIVITIES
Product
Interrelationships
Market
Interrelationships
Product Inter
relationships
Infrastructure
Interrelationships
InboundLogistics
Operations
OutboundLogistics
Service
Marketing&Sales
Procurement
TechnologyDevelopment
FirmInfrastructure
HRManagement
MARGIN
Tech Inter
relationships
Value Chain Analysis

10. How to re-configure value chain to support differentiation strategy?
Primary Activity How to reconfigure ?
Inbound
Logistics
Implement an MRP system and place orders according to customer
orders
Operations Operations have to be streamlined and bottlenecks identified have to
be always kept busy
Outbound
Logistics
Order delivery has to be planned and customer delivered
Marketing &
Sales
Marketing has to focus on the customization of each product and
differentiated product features
Service After sales service has to ensure future orders
Support Activity How to reconfigure ?
Procurement Procurement has to be of best buy and planned well in advance
HR
Management
Retain the skilled talent and recruit the best talent available. Focus on
employee compensation and benefits
Technology
Development
Up to date technology updation and implementation in product
innovation and development
Infrastructure Maintenance and upgradation of existing infrastructure.

11. There is certainly a way out 
Recommendations
• Focus on target customers and differentiate the product by customizing to their
specific needs.
• Ensure high quality and charge premium to leverage the competitive advantage
• Improve the activities of the marketing department to communicate the
differentiated features of various products
• Ensure high customer satisfaction by modernizing and upgrading the technology
and adopt cost cutting measures to reduce operating costs
• Use government support to win reputed clients who can help as future references
• Improve Employer- Employee relations to usher in professionalism in the company
• Focus on training & development of employees and develop product innovation as
an organization culture and core competency
• Recruitment of KELTRON staff has to be carried out by the company under the
broad supervision of the government
• Diversify into hardware industry to cater to the needs of huge public sector
computerization and automation.