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Organisation Study Report on Star PVC pipes & fittings                Internship 2011




                                      CONTENTS


        CHAPTER                           CONTENTS                      PAGE NO
                         EXECUTIVE SUMMARY                                   2
       Chapter I         INTRODUCTION                                        3
       1.1               Industry Profile                                    4
       1.2               Company Profile                                     5
       Chapter II        STRUCTURE OF THE ORGANISATION                       11
               2.1       Organizational Structure                            12
               2.2       Organizational Chart                                12
               2.3       Organizational Outlook                              13
               2.4       Duties and Responsibilities of Dept. Heads          13
       Chapter III       FUNCTIONAL DEPARTMENTS                              16
               3.1       Finance Department                                  17
               3.2       Accounts Department                                 18
               3.3       Marketing Department                                18
               3.4       Human Resource Department                           26
               3.5       Production Department                               27
               3.6       Purchase Department                                 29
               3.7       Systems Department                                  31
       Chapter IV        PORTERS FIVE FORCES MODEL                           32
       Chapter V         SWOT ANALYSIS                                       40
       Chapter VI        FINDINGS AND SUGGESTIONS                            43
       Chapter VII       CONCLUSION                                          45
       Chapter VIII      BIBILIOGRAPHY                                       47




             Ramaiah Institute of Management Studies1SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings                    Internship 2011




                               EXECUTIVE SUMMARY

       The organizational study was conducted at STAR Plastics, Thrissur, Kerala. The
objective of the study is

            To study the organizational structure.
            To study about the structure and functioning of various departments.
            To study how the management control various departments for the attainment
               of the organizational objectives.

       The organization is into PVC pipes and fittings manufacturing. PVC is an
organochlorine, which was first patterned in 1913 by Fritz Klatte. However, its development
for hindered by pure PVC‟s chemical instability and its low workability. During the 1930‟s,
German experiments with various stabilizers and softeners lead to the first useable forms of
PVC. By the early 1950‟s PVC was second only to polythene, as the most important synthetic
product in Germany. It is now the single largest use for chlorine today, using about 1/3 of all
global production. About 40 million tons of chlorine is produced by the chemical industry
every year. PVC development was part of the huge expansion of the chlorine industry after
the Second World War. PVC, Dichloro Diphenyl Trichloroethane (DDT) and Chloro
FluoroCarbons (CFC‟s) are all products of post war boom in the chlorine industry. Currently
there are over 11,000 oregano chlorines now in commercial use. Organo chlorines are useful
to industry because they tend to be very stable and the resist natural breakdown process.

       Star Plastics have seven functional departments and it‟s the leader in PVC pipes &
Fittings in south India. Star Plastics is the first PVC pipe fittings manufacturer in south India
to receive ISO 9002 certification. While globalization and economic slowdown in the world
markets threw up new challenges the STAR group is busy chalking out plans to translate
these challenges in to opportunity. The company is going to make a centralization system of
the software network that the progress of work at any levels, at any units, at any centers can
be viewed from the corporate office itself. Each and every aspect of the business can be
checked from the corporate office.At present company is able to later about 10% of the
market requirements. In order to later the complete needs the company is planning to increase
the production level to maximum extent possible. The company is planning to increase the
present product level of Dubai units. The research and development team of STAR group is
engrossed in developing new product for the international markets.




            Ramaiah Institute of Management Studies2SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings             Internship 2011




           CHAPTER I

INTRODUCTIO
                                           N




            Ramaiah Institute of Management Studies3SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings             Internship 2011




1.1Industry Profile
       Plastics, in the modern meaning of the word, are synthetic materials that are
capable of being formed into usable products by heating, milling, molding and
similar processes. The term is derived from the Greek plastic, to form in simplest
terms; plastics can be described as resins in their molded form.

       The wonders of plastics cut across all sectors of society. It is a material of
choice due to its versatility, its physical strength, its economic viability; its easy
process ability and also its attractiveness and durability of all weather condit ions.
With the globalization of Indian economy and television entering into homes and
tiniest villages and communications demand for the materials for suitable functional
use more economic packing, durable all weather products has meant increasing
demand for plastics.

       Packing of cement bags, the end user is demanding plastics instead of
conventional jute, because it prevent transits loses and wastages. The hilly regions
of East India or drought prone districts of Rajasthan, Gujarat, and Tamil Nadu
demand auto molded tanks in thousands each day. The agriculturists of Himachal
Pradesh insist on plastic pipes for irrigation to their farms, the floriculturists of
Karnataka and Maharashtra cannot thrive without ultraviolet stabilized polythene
wide width films for huge tunnels and green polymers consumption and import.

      The Plastic industry in India has made significant achievements ever since it
made a modest but promising start by commencing production of polystyrene in
1957. The potential market has motivated Indian entrepreneurs to acquire technical
expertise. Achieve high quality standards and build capacities in various facts of the
booming plastic industry. Phenomenal development in the plastic machinery sector
coupled with matching development in petrochemical sectors, both of which




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Organisation Study Report on Star PVC pipes & fittings             Internship 2011




supports the plastic processing sectors, have facilitated the plastic processors to
build capacities to service both the domestic market and overseas.

The chronology of manufacture of polymers in India is summarized as under.

      1957     : poly styrene

      1959     : LDPE

      1961     : PVC

      1968     : HDPE

      1978     : polypropylene

      The economic reforms launched in India since 1991, joint ventures, foreign
investments, easier across to technology from developed countries etc. have opened
up new vistas to further Indian plastic industry are exported to over 150 countries
round the globe with major trading partners being USA,UAE, Italy,UK,Russia,
Honkong, Germany etc. The plastic processing sector comprises of over 30000 units
involved in producing a variety of items through injections molding, blow molding,
extrusion and calendaring. The capacities built in most of this industry coupled with
inherent capabilities have made us capable of servicing the overseas markets. The
development of plastics took place in 1920‟s with the introduction of cellulose
acetate, polyvinylchloride and nylon.

      Polyethylene evolved out of the need for a superior insulating material could
be used for such applications as radar during World War II. The decade of the
1950‟s saw the introduction of poly propylene and the development of acetyl and
polycarbonate. In 1960‟s and 1970‟s a sub group of plastic family started to emerge
,called high temperature plastics, which includes polyamides, aromatic polyesters,
polyether siphoned etc.

1.2Company Profile

a) Background of the company:

       The history of STAR is the history of pipe fittings production in south India.
In 1983, Vikas plastics and Star plastics amalgamated to form Star plastics,




            Ramaiah Institute of Management Studies5SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




Mullurkara that is 20kms away from Thrissur town, the cultural capital of Kerala. In
1988, star became the number one PVC pipe fitting manufacture in south India it has
received the best ISI mark for quality. In 1994 star began the production and
marketing of flexible hoses under the brand name STAR FLEX. In 1998 taking
advantage of the wings of globalization star started star impex and forayed into the
global market. Growth being as the key strategy the visionary Mr.P.K.Paul nurtured
star plastics into a corporate level. After the demise of Mr. P K Paul his eldest son
Mr. Bobby Paul took the charge of the chariot. His brother Mr. Anto Paul also
assists in the day to day activities of the company .Presently the group consists of
various companies like Star Plastics, Star Flex, Shine Star, Star Exporters& Fine
Polymers, A new group venture of star group of companies for the purpose of
exporters
       In the year 2000, to take on the challenge of globalization, star set up a core
team and applied core ISO certification. In August 2001, star became the first PVC
fittings manufactures in south India to receive the IS O 9002 certification. Star
plastic is the market leader in Kerala, Tamilnadu & the market challenger in Andhra
Pradesh and Karnataka. The company has made its presence significantly in Middle
East market having a branch office at Dubai. It is a multi -core, multi-Product
Company which has been deeply involved in the manufacture, distribution, sale, and
installation   and    servicing    to   bring   the      customer   satisfaction   and     social
responsibilities.

       In the last one decade unparalleled growth was witnessed in star gr oup of
companies to emerge as a leader in the PVC fitting and to diversify into the
manufacture of suction hoses, drainage fittings and PVC pipes. Star plastics are a
group of companies with a turnover of 30 crores per annum and with manpower
strength of 450 employees including 50 high caliber professionals. It has a32%
growth due to the young and dynamic MD‟s expansions and growth plans. The
company increased its production capacity over 50% in just two years incurring huge
additional investments. Presently it is enjoying the benefits. At the end of current
half year a growth rate of 35% when compared with the last year is witnessed.

       The company‟s operations include manufacturing of PVC fittings and allied
products in clearly defined core business areas at home and overseas. The star group
of companies is the single largest plastic industry in private sector over the years,



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Organisation Study Report on Star PVC pipes & fittings               Internship 2011




star group has steadily developed in to a professionally managed company
comprising of 8 manufacturing unit in 3 production centers wit h a total installed
capacity of 3850 meter per annum- 8divisions and effective centralize support
services wholly dedicated to the most existing standards of quality and customer
services, constantly motivated by the need to ensure total product satisfacti on.




b) Star group of companies:

Star Plastics: - star plastics, the parent company of the group was incorporated in
1983, and within these 21yrs it has grown up as one of the largest pace fittings
manufacturing companies in India and its products are approved by these authorities.

Shine Star: -shine star is another unit of star plastic, which is manufacturing pipe
fitting. This has been started as another manufacturing fitting unit.

Star Flex: - star flex is totally a new venture, manufacturing flexible s olution and
delivery hoses ranging from ¾ to 4 sizes. As on today the above companies are
making a combined sales turn over approximately worth of 30 crores per year.

Star Polymers: -It is the unit of star plastics. It is manufacturing pipe fittings.

Star Plus: - star plus is another unit of star plastics. It is also manufacturing pipe
fittings. The different units had been given different names in terms of marketing.

c) Nature of business carried:

STAR – This word is the combination of basic concepts and fundamentals believed
by its founder and carried over across the years, it has sailed hitherto and for the
future such as

  S - Service

  T- Transparency

  A - Accountability

  R - Reliability

d) Star which means:




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Organisation Study Report on Star PVC pipes & fittings                 Internship 2011




    Provider of basic requirement of all PVC related fittings, pipes, and allied
       products.
    Unstinted and continued supply and service since last 2 decades.
    Believer and Promoter of quality products than giving simple propaganda.
    The First PVC pipe fittings manufacturer in south India who is operational
       and reaching newer heights year after year.
    The First PVC pipe fittings manufacturer in south India to have received ISI
       mark.
    The First PVC pipe fittings manufacturer in south India to have received ISO
       mark.
    An entity who gave to its customer‟s qualitative products & value added
       services.
    To have received the best appreciation from its people.




e) Vision, Mission and Quality Policy:

“Our vision is to maintain the hegemony as the most reliable provider of high quality PVC
products to meet the diverse requirements of potable water distribution, domestic plumbing,
bore wells and lift irrigation purposes. We aim to make each of our products a paragon of
quality and technical excellence. Through our constant Endeavour‟s of research and
innovation we strive to come up with new products that help architects and builders keep
ahead of the times”

Mission: - serve water projects, construction activities and agriculture on global level to
ensure customer satisfaction.
Quality policy:

       To manufacture and market goods, which comply with the consumers requirements.
       To achieve customer satisfaction is the basic philosophy of the organization.
   In the last one decade, unparalleled growth was witnessed in STAR group of companies
to emerge as a leader in the PVC fittings and to diversify in to the manufacture of suction,
drainage fittings and PVC pipe. STAR PLASTICS is a group of companies with a turnover of
75 cores per annum and with a manpower strength of 450 employees including 50 high
caliber professionals.




            Ramaiah Institute of Management Studies8SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings                     Internship 2011




f) Product/Service profile:

       Star plastic product constitutes plumbing equipment materials such as PVC pipes,
fittings, S.W.R fittings and PVC adhesive. Star fitting is leading names fittings over all the
states. STAR PVC pipe fittings are manufactured from the finest grade PVC resin trusted and
acclaimed all over the-country for quality. Due to high tensile strength and reliability used in
industry, homes etc.

       STAR fittings are available in above 10 shapes and measures vary from 20mm to
200mm. These are also available in 3 different colors. Injection modulated STAR PVC pipe
fittings confirm to ISI specification and assure totally safe, non-toxic water for all purposes.

g) STAR-Plastic-Products:

The company concentrates on the manufacturing of a wide range of PVC pipes and fittings
and allied products. Their products are basically categorized as

       STAR Drainage fittings BS 4514
       STAR Pressure Fittings BS4344
       STAR Pressure Fittings
       STAR SWR Fittings
       STAR Flex section & Delivery Hose
       STAR Solvent cement
       STAR PVC pipes

h)Production centers:

     STAR plastics Mullakkara, Thrissur


       STAR plastics, the parent company of the group was the incorporated in 1983, and
within these 24 years it has grown up as one of the largest PVC fittingsmanufacturing
companies in India and its products are approved by ISI authorities. Manufactures the PVC
pipe fittings, drainage fittings, SWR fittings, Pressure fittings, solvent cement. Lisna Inc. is
situated in same premise.

     Shine Star Minaloor, Thrissur




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Organisation Study Report on Star PVC pipes & fittings                Internship 2011




   STAR manufactures the PVC pipe fittings, SWR fittings, Pressure fittings. Also
   manufactures PVC granules mainly master batches. SILVERSTAR, NEW STAR, FINE
   POLYMERS, LISNA TECH are situated in the same premise.




     Star Flex, Velappaya, Thrissur


STAR Flex manufactures the PVC flexible hoses, suction and delivery hoses ranging from
0.75 to 4 inch diameter.

     Star Pipes, Choolissery, Thrissur


       STAR pipes manufacture the rigid PVC pipes for plumbing and electrical purpose.
It‟s a semi-automatic manufacturing unit which manufactures rigid PVC pipes ranging from
20mm to 200mm.

   Star pvc pipe fitting (p) ltd, sri perumbathur, chennai


       Manufactures the rigid PVC pipes for plumbing and electrical purpose it‟s a semi-
automatic manufacturing unit which manufactures rigid PVC pipes ranging from 20 mm to
200mm.This unit does the production for TAMILNADU and KARNATAKA.

   Star Implex industries llc, Dubai, UAE


       Manufactures the rigid PVC pipes for plumbing and electrical purpose it‟s a semi-
automatic manufacturing unit which manufactures rigid PVC pipes ranging from 20 mm to
200mm. also manufactures the PVC pipe fittings and solvent cement. This unit does the
production for the Middle East Asia, Africa and Europe. Each division is self-reliant in its
activities of research and development, Manufacturing and marketing, now moving for total
automation and integration. STAR group of company is structured in to business units
comprising synergistic group of responsibility centers, division backed up by an extensive
marketing infrastructure and front line support services.




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Organisation Study Report on Star PVC pipes & fittings            Internship 2011




                       CHAPTER
II

        STRUCTURE
                         OF THE
           Ramaiah Institute of Management Studies11SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings                  Internship 2011




ORGANISATIO
                                           N




2.1 Organizational Structure

The STAR group follows absolute dedicated approach. The organization of its manufacturing
operations is based on product divisionalisation in to group of products in which are similar
in technology or manufacturing process. Each group is constituted by divisions or profit
centers. Each of these group, are led by absolute manager. A central manager leads the
corporate function. Some of these functions in turn are reported to the managing director.




2.2 Organizational Chart




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Organisation Study Report on Star PVC pipes & fittings                      Internship 2011




                                                DIRECTOR




                                               MG- DIRECTOR




                                                GENERAL
                                                MANAGER



                                                                   HR




    FINANCE
                  PURCHASE    PRODUCTION       MARKETING        ACCOUNTS          SYSTEM




                                                                                   ASST
    FIANCE        PURCHASE    PRODUCTION        MARKETING         CHEIF          MANAGER
   MANAGER        MANAGER      MANAGER          MANAGER        ACCOUNTANT
                                                                                 (SYSTEMS)




2.3 Organizational Outlook

Managing Director                          -    BOBBY PAUL

Other Directors                            -    Anto Paul & Rosy Paul

General Manager                            -    K.B. Suresh Kumar

Marketing Manager                          -    C.L.George

Finance Manager                            -    Biju Thomas

Accounts Manager                           -    A.C. Chummar

Established in                             -    1984

Main production                            -    PVC pipe fittings and adhesives



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Organisation Study Report on Star PVC pipes & fittings                      Internship 2011




Raw materials for production                -   Resin and other chemicals

Production range                            -   Wide range of products

Present production                          -   Best in southern India with 85 percent

Of total production

Number of machines                          -   202 machines with generation backup

Number of office staff                      -   50

Number of workers at factory                -   400

Trade discount                              -   50%

Special discount for

Payment within one week                     -   5%

2.4Duties and Responsibilities of Departmental Heads

   1) Finance Manager
       He is responsible for financial matters in the organization. He prepares financial plan.
       He assesses the financial needs of the organization and sources of the finance. He
       should be an expert in the field of financial management. He should know different
       tools used in the financial management ratio analysis, fund flow analysis, cash flow
       analysis, Budgeting etc. All these are necessary to prepare a sound financial policy for
       the organization. He is also responsible for financial planning, raising necessary fund,
       controlling the use of funds, appropriation of profits etc. Other functions include
       financial forecasting and planning, procurement of funds, investment decision,
       management of income, management of cash, deciding upon borrowing policy,
       negotiations for new financing, analysis and appraisal of financial performance,
       advising the top management, co-coordinating and control, helping in valuation
       decisions, and tax administration.
   2) Accounts Manager
       He is responsible for keeping the details of day book, ledger and P.F registers.
       Moreover, he should record and maintain all the details of the sales tax calculation
       and related documents and produce them on demand.




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Organisation Study Report on Star PVC pipes & fittings                 Internship 2011




   3) Marketing Manager
       He is charge of the marketing department of the organization. The marketing
       department aims to increase the turnover of the organization, market share, and
       profitability of the organization. The marketing manager should be tactful. He should
       know marketing concepts product mix, promotion mix, price mix, distribution mix
       etc. He should be known the strength and weakness of the firm‟s products. He is also
       able to design and implement market strategies to enhance turn over and capture new
       markets.
   4) Human Resource Manager
       A human resource manager occupies a very important position in an organization.
       The duty of the human resource manager is to recruit and develop Personnel required
       by the organization. They are involved in manpower planning, training, maintenance,
       compensation etc. The other responsibilities of the human resource manager are
       formulation and development of personnel policies, employees training and
       development, transfer, promotion, etc., maintaining personnel records of each
       employee in the organization, establishment of good relation with employees,
       effective    communication of the personnel policies and programmers of the
       management to employees, responsible for advising line manager, responsible for
       welfare activities and responsible for solving the problem of employees.
   5) Production Manager
       He is responsible for the production of goods services in the organization. He looks
       after the purchasing function and manages the production design and process. He is
       called in different names such as production engineer, plant engineer, operation
       engineer etc. They are responsible for plant layout, inventory management,
       production control and quality control.
   6) Purchase Manager
       Duties and responsibilities of the purchase manager are:
             Prepare purchase budget.
             Receive purchase requisition, and ascertain the material requirements.
             Ascertain the sources of supply.
             Invite tenders from the approved suppliers.
             Select the supplier offering the best terms and conditions.
             Issue purchase order to the supplier selected.



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Organisation Study Report on Star PVC pipes & fittings                 Internship 2011




             Follow-up the purchase order to avoid any delay in delivery.
             Receive goods received note and the inspection report.
             Return the material which are not according to specifications or secure
                adjustment with the supplier.
             Verify the invoice with regard to quality, price and other relevant particulars
                and pass it for payments.
             Send the invoice to the accounting section.




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Organisation Study Report on Star PVC pipes & fittings            Internship 2011




               CHAPTER
III

     FUNCTIONAL
DEPARTMENTS




3.1 Finance Department




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Organisation Study Report on Star PVC pipes & fittings                    Internship 2011




       Finance department manages the fund available for the operations of the business, by
       making a balance between the fund inflow and fund outflow. The management of all
       activities related to finance requires considerable expertise and specialized knowledge
       of banks, financial institutions, the different sources of finance and ways to
       profitability utilize these funds. Finance Manager directly does the planning,
       organizing, directing and controlling financial activities in the society.

Organization Structure:-


                                   GENERAL MANAGER

                                   FINANCE MANAGER

                                   FACTORY MANAGER

                                   BRANCH MANAGER


Finance department is headed by finance manager. Finance manager reports to the General
Manager and in certain strategy and urgent issues directly report to managing director and
take decisions. Finance Manager works in the coordination with chief accountant, production
manager, marketing manager, branch managers.

Sources of Finance:-

STAR Plastics find sources of finance through banks and other private financial institutions.
As it is a partnership firm, the partners contribute their funds to make capital requirements
and other expenditure with the help of banks and financial institutions. STAR Plastics deals
all finance requirements with South Indian bank, Kerala State Financial Enterprises (KSFE)
and State Bank of India. Vehicle loans are provided by Cholamandalam finance.

Company’s Financial Policies:-

    Low cost of operation of funds.
    Efficient receivable management, through acceleration of funds.
    Faster sourcing of funds from institutions.

Functions of Finance Department:-




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Organisation Study Report on Star PVC pipes & fittings                    Internship 2011




Finance function is concerned with all aspects of business operations. It is very difficult to set
limits to the finance function. The key activities under finance department are:

            Management of firm‟s assets structure.
            Financial analysis, planning and control.
            Management of firm‟s financial structure.
            Estimating capital requirement.
            Determining sources of fund.
            Utilization of fund.
            Disposal of surplus.
            Management of cash.
            Financial controls.

3.2 Accounts Department

Accounts department deals with day to day book keeping, daily collections, salaries of all
employees, etc. Accounts department is headed by chief accountant. He is assisted by four
assistant accountants. In each production centers and marketing branches have an accountant
and cashier which does the daily function at the places

      Chief accountant works in coordination with finance manager, on the fund flow issues
and in case of any shortage of cash occurs. Finance manager canalized the shortage from
financial institutions in case of emergency and normal cases, chief accountant tightness the
payment collections from the whole sellers and other sources.

       Other main function of accounts department is tax payments. They deal with the
central sales tax, K VAT, excise and other department. Monthly returns are prepared by the
accounts department.

3.3 Marketing Department

Marketing department is entrusted with the function of planning and executing the
conception, pricing, promotion and distribution of ideas goods services, to create exchanges
that satisfy individual and organizational boards. In simple terms the marketing function is
catered around the customer and his needs.

Organization Structure:




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Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




                                 MARKETING MANAGER

                                    BRANCH MANAGER

                                     SALES EXECUTIVE

                                     REPRESENTATIVES


Marketing Policy:

STAR Lights to reduce the number of intermediaries, so they have no distributors. Billing is
directly done to the wholesalers and retailers. In case of other state sales, it‟s a one through
the branch offices. No direct export to any customers. STAR is operating by exporting to the
branch office at Dubai, STAR IMPEX INDUSTRIES L.L.C. and billing directly to the
customers. In the case of logistics the supply of products is done through company owned
feet of vehicles. Same policy followed with inter-state also.

Functions of Marketing Department in Star Plastics:

   The major functions are explained below:

         1. Demand Forecasting
         2. Marketing Research
         3. Marketing Control

1.Demand Forecasting

Demand forecasting is the main function of marketing in STAR plastics .It should be done
through sales force in the company such as sales representatives‟ sales executives‟ etc.
collecting information from customers. On the basis of this information demand forecasting
is to be done.




2. Marketing Research




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Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




Marketing research is more comprehensive composing all the functions of a marketing
manager that is it covers product, price, sales, market, promotion, distribution policies. It is
commonly says that marketing research begins where manufacturing ends. In fact it
commences well before the product is fabricated. It goes in to operation even before erecting
the factory. It covers analysis of competitive advantage, market share analysis and new
product development. The main objectives of market research are:

             To know buyers.
             To measure the impact of promotional effort.
             To know consumer response.
             To know market costs and profits.
             To master external forces.
             To design and implement marketing control.

3. Marketing Control

Various tools used for marketing control are cost control and a market share analysis. Cost
control is one task for monitoring the cost of marketing and it is compared with planned cost
standard, so as to identify deviations and take corrective action. Market share analysis is also
used for marketing control.

Objectives of Marketing:

The basic objectives of marketing are to satisfy human wants. The important objectives of
marketing are briefly explained below:

1. Customer Satisfaction through Quality Products

       Marketing activities aims at achieving customer satisfaction by offering quality
products. It is also help more increasing profit, increasing goodwill, increasing image of the
organization etc.

2.After Sales Service

       This another objective of marketing company provides after sales services to its
customers. The service of the company does not end with process of distribution the company
has been waited until good result comes by giving their products to consumer and they
always rendered their services at the time needed by the customers. The marketing and sales




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Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




department keeps their eyes and ears to open to know changes in the market. The complaint
and suggestions if any are well accepted by the company from their customers. There is any
complaint about the sold product the company will take it back at the company‟s costs.

    Method Of After Sales Service:
       For providing after sales service company may use thefollowing methods:
             Sending special staff to the customers.
             Arranging service with dealers/agents.
             Appointing in depending service specialists.

3. Maintaining Price Leadership:

Company‟s important objective is to maintain price leadership. Company is always trying to
become a price leader. It does not like become a price follower.

4. Achieving Maximum Market Share:

       Companies another objective is to achieving maximum market share. In order to
achieve maximum market share, company will spend more on advertising and offering
quality products to the customers.

5. Other Objectives:

     Other objectives include:

             Increasing firms sales.
             To guarantee firms survival.
             To fortify better resource utilization.
             To meet customer needs.

Present market condition:

For their products STAR is facing demand higher than supply, which is a healthy situation. In
case of seasonal products like suction and delivery hose, demand exceeds supply. It tries to
later products to major customers. It is the main reason for expansion of production facilities.




Market Segmentation:




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       STAR is the dominant player in the South India. Geographically the market is
segmented into five regions and branch officers are responsible for marketing activities in
their regions.

           1. Bangalore (Karnataka)
           2. Chennai (TN)
           3. Dubai (Middle East, Russia, South Africa etc.)
           4. Nagari (AP)
           5. Thrissur (Kerala)

As per the consumers, market is segmented into three:

            1. Government Works
            2. Household Consumers
            3. Builders

Presently highly concentrated on the builders, as the construction industry is booming,
appointed two sales executives exclusively for this sector and have a considerable market
share in the other two segments.

Promotion:

In STAR PLASTICS promotion is done in the case of sale of products, in the case ofdealers,
and in the case of sale force.

1. In the case of sale of products

Sales promotion includes short term incentives like‟s discounts, free gifts and contests to
stimulate sale of products. Sales promotion builds a bridge between the products and
consumers. In the case of STAR, sales and brand promotion is done by providing information
about the products through advertisement, demonstrations, organizational shows etc.

2. In the case of dealers

   Company provides incentives to their dealers and also provides dealers with discount at
the time of purchasing the product from the company. The company also provides after sale
services to dealers. It is based on the nature of product the company offers their dealers with
replacement facility after checking the product.




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3. In the case of sales force:

          Company provides incentives to sales force. This includes the activities which
induce and motivate sales person. The aim of sales forces promotion is to make the sales
men‟s effort most effective. The various schemes of sales promotion are:

         Bonus to sales force.
         Sales force contest.
         Sales meetings, convention and conferences.

Advertisement:

In the case of STAR advertisement is the most glamour element of the promotion mix. It
covers all the activities connected with the giving of publicity regarding goods and services
offered for sale. Advertising is transmitting through mass media such as television,
newspapers, magazines etc.

Advertising Policy:

„Each potential customer must see an advertisement’

Brand awareness is not much with the customers. Brand awareness to be created, it‟s in
growth stage. Advertisement focused on creating the brand image and promoting the STAR
brand for their entire product. Earlier advertisement (Hoarding) were exhibited at district
headquarters and important junctions. Presently, apart from above mentioned places, at areas
of potential customers, each retail and whole sale outlet etc.

Mode of Advertisement:

1. Earlier as wall paintings, banners etc. now changed to huge flex hoardings.

  Reason for change is:

      a. Attractiveness.

     b. New technology acceptance with change in market.

c. Real and clear image of product.

     d. Quality advertisement gives better company image.




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2. Newspapers: heading Malayalam newspaper, The Hindu, Indian Express.
3. Website.
4. Sponsoring cultural and institutional programs, management and dealers meet, plastic
manufactures association and export promotion counsels meetings.
5. Presently no visual media.
Advertisement Budget:

Budget of advertisement depends mainly on market needs as it‟s the growth stage need to
promote the brand. Once established the budget could be reduced followed poly is 3-5% of
net profit.

Distribution Channel:




Pricing Strategy:

        In STAR pricing strategy is a special kind of plan formatted in order to meet the
changes of external factors particularly from the policies of competitors. Pricing strategies
change with competitive situation. Some of the common pricing strategy followed STAR
plastics are:

    1. Competitive pricing.
    2. Premium pricing.
1. Competitive pricing:

It depends upon market condition competitor‟s price, seasonal variation etc. customers are
very much aware of the quality and price of the product.

2. Premium pricing:




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In the case of suction and delivery hose, adopted a premium price strategy to utilize the ISI
marking and brand image. As the brand awareness is less with customers market will still
depends on price of the product.

In the case of new product:

Following pricing strategy followed in the case of new products:

   1. Skimming price policy:

Company adopts skimming price policy in the case of new products. This is done with the
basic idea of gaining a premium from those buyers who always ready to pay a much higher
price than others. The main reason for adopting this strategy is to attract the consumers of
high income group. .

    2. Penetration price policy:

Sometimes company adopt penetration price policy that means changing low price from
beginning in order to stimulate the growth of the market and to capture a large share of it.
Since the customers with low income are able to purchase it.

Price Fixation:

Price of the product depends on two components:

       a. Cost of raw material - variable.
       b. Operational &Processing cost - fixed.

       Product price changes with change in raw material price, which is considered as a
variable. Minimum period of two weeks taken for price revision, though in some cases raw
materials price fluctuates each day.

Risk Involved:

Usually bad debts may occur in a business concern. But in STAR PLASTICS till now no bad
debts have been incurred. The usual credit period given to customers is 15 days. If one
customer delays the payment, they collect the amount by the way of sending reminders to
him, although they are keeping some amount as reserve for bad and doubtful debts. The
society is keeping large quantities of direct materials as stock because the price of such




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materials is growing day by day. Therefore these excessive raw materials don‟t result in loss
though some heavy investment is required in it.

To avoid the risk involved in transportation of goods to customers outside Kerala, the goods
are insured accordingly. It helps the society to avoid the risk involved in transporting goods
to distant places.

3.4 Human Resource Department

    Human resource management involves personnel management, personnel administration,
employee welfare, manpower planning, industrial relations etc.Human resource department is
headed by General Manager and assisted by all the department heads, factory managers, and
branch managers.

    STAR does pro-active approach to managing people in the organization. It constitutes a
series of integrated decisions that helps to consolidate the employment relationship and
believes that their quality contributes to the efficiency of the organization and helps the
employees to achieve their objectives.

    In the case of production centers, factory manager manages all personal staff and creates
a good relationship with office staff and workers. He undertakes their wants. He will motivate
entire unit as a whole. Each unit works as an independent unit with its own modes of training,
induction, performance, appraisal etc.

               All the functions are done in consultation with the production manager and the
general manager. In the branch offices Branch manager maintains the warmth employee
relationship and assessment and training is provided by branch manager in consultations with
marketing manager and the General Manager.




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Organization Structure:



                                              HUMAN RESOURCE




                               MIDDLE                          SUPERVISORY          OPERATIONAL
  TOP MANAGEMENT
                             MANAGEMENT                        MANAGEMENT           MANAGEMENT




 BOARD OF DIRECTORS
                          DEPARTMENTAL HEADS              SENIOR SUPERVISORS       SKILLEDWORKERS
 CHEIEF ACCOUNTANT
                           DIVISIONAL HEADS                    INTERMEDIATE      SEMI- SKILLED WORKERS
     FINANACIAL                                                 SUPERVISORS
                            SECTIONAL HEADS                                       UNSKILLED WORKERS
     DIRECTORS




Working Hours in STAR:

Office time begins with 9 A.M up to 5.30 P.M. In that time all transactions and official
function of that day are completed. All functions are controlled by HR Manager. HR
Manager handles many planning process they are:

          Forecasting future manpower requirement, it is estimated based upon specific
              future plans of the company.
          Identifying present manpower resources and analyzing the degree to which these
              resources are employed optimally.
          Anticipating manpower problems by projecting present resources into the future
              and comparing them with the forecast of the requirement, to determine their
              adequacy, both quantitatively and qualitatively.
          Planning the necessary programs of requirement, selection, training and
              development, utilization, transfer, promotion, motivation and compensation. So
              that future manpower requirement will be met.

3.5 Production Department

Production is the core function concerned with STAR as it has wide range of products and
production take place in plants located at faraway places. More over as faced with stiff
competition, the only way to increase the profit is by the cost reduction, as price increase is
not at all possible. So each unit has its own research and development facilities working for




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the better production functions to increase the efficiency in a way result in cost reduction.
Production takes place in six production centers located at different place. Each division is
self-reliant in its activities of manufacturing, quality control, research and development
production center is headedby factory manager‟s reports to a production manager at the
corporate office.

Organization Structure:


                                             PRODUCTION
                                              MANAGER



                                                FACTORY
                                                MANAGER



            ASST. MANAGER         PRODUCTION                            QUALITY IN CHARGE
                                                      STORE IN CHARGE
           (ADMINISTRATION)       SUPERVISORS                             (TECH & R&D)




             ACCOUNTANT             WORKER




               CASHIER




           CLERK, RECEPTION




The Company‟s production department handles the production of PVC pipe fittings. The
main raw material for product is „Resin‟ and other related components like chemicals. 95%
resin and 5% other chemicals are used for the production. The plant is set up in process
layout. The raw materials go through the various processes for development of final product.
Other than company fittings Company also produce solvent cement and in different
measures. There are 20 machines in production plant, each costing up to 35 lacks.

Depending upon the type of products, the production process is divided in to three:

          Extrusion: - For rigid pipes and flexible hoses.

          Injection Molding: - For PVC Pipe Fittings.

          Mixing: - For solvent cement.




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3.6 Purchase Department

The purchase department is entrusted with the function of purchasing row materials. In the
present scenario with the cut throat competition, cost reduction is practiced in every sphere of
the business and purchase is one of the important functions where cost can be highly
controlled. High quality materials with lower cost became the motto of every organization for
a meaningful survival, for this organizations practice supplier rating and vender management.
There is a centralized purchase department headed by purchase manager who is responsible
for taking purchase decisions for all units. The decisions are made on the basis of following
factors:
           Market conditions
           Availability of raw materials
           Price of raw materials

Organization Structure:



                          PURCHASE MANAGER


                            SENIOR ASSISTANT



                            OFFICE ASSISTANT


The purchase manager concerns with the factory managers regarding the technical
specifications, manufacturer, quality standards, cost of materials, availability, time delay etc.
In case of engineering goods, testing equipments, speciality chemicals, instruments etc the
purchase manager seeks help from the engineers and the other technical persons working
with the research and development. Purchase manager also works in coordination with the
chief accountant, to know the position and about the credit position with the suppliers.




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Role of Purchase Manager:

           Raw materials purchase.
           Purchase of consumables and stores.
           Negotiation of prices of raw materials with the supplier.

Procurement and Issue of Materials:

           Purchase.
           Store.

A.Purchase

       The production department, usually factory manager informs the purchase department
about the requirements of materials. The information is passed through the purchase intent
issued by factory manager to the purchase manager. In case of regular product like stationary
and small purchase, the store in charge issues the purchase intend giving a copy to the factory
manager item specification, required quantity, name of the manufacture, approximate costs
etc. are mentioned in the purchase intend. The purchase department then enquires with the
suppliers and invites quotation. From the received quotation mentioning the offered price,
mode of payment, discount if any, time need for dispatches etc., purchase department chooses
the most appropriate by considering all the criteria.

          Purchase manager consults with accounts department about the availability of cash,
payment condition, balance of any paid, whether the account with the supplier crossed the
credit limit etc. with the approval of accounts department, purchase manager then sends a
purchase order to the supplier. In case of new materials or new supplier, purchase department
insist or samples to be supplied before the purchase. These samples are tested within house
laboratories. Orders are given only when the sample confirms to the required quality levels.

B.Store

Store is very important to arrange different items of materials in a systematic manner. Store
records information relating to receipts and issue of materials and products. Proper storage is
essential for material cost control. Store is headed by the store in charge who report to the
factory manager and purchase manager. Each production center has its own store. Material
purchasing is done as a centralized activity and then it is supplied to stores at production
centers. Store is divided into three:




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     Raw material stores.

     Engineering Stores (electrical suppliers).

     Finished goods store.

3.7 Systems Department

       STAR started the computerization of its department‟s way back. Personal computers
with UNIX as the operating system were used in the late 1980‟s. But the computers of
various departments are not networked. In the year 1999, STAR went to upgrade its EDP
setup further. Costume made ERP software was developed for its units and head office. The
installation of ERP software made the work of the departments of STAR easier. Being
costume made this ERP software, with SQL RDBMS, Front end on Visual basic and
windows NT 2000 and XP, seamlessly had integrated all function of the organization VIZ,
production, inventory billing. Payroll, Accounting etc.

The head office at Thrissur has three servers and forty nodes running the application. One
server is networked and other is kept as back up, another one is used as internet server. Other
units totally have about eight servers and about 50 nodes. Their latest plants at DUBAI,
CHENNAI has computerized control room for monitoring and production controlling. In
addition with ERP system, STAR also had implemented an electronic messaging solution
with its organization, which is centered on the company‟s website. This messaging solution
obviates the communication bottle neck of company.




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Organisation Study Report on Star PVC pipes & fittings            Internship 2011




         CHAPTERIV
                PORTERS
                                FIVE
FORCES MODEL




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                        PORTERS FIVE FORCES MODEL

Porter's Five Forces is a framework for industry analysis and business strategy development
formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial
Organization (IO) economics to derive five forces that determine the competitive intensity
and therefore attractiveness of a market. Attractiveness in this context refers to the overall
industry profitability. An "unattractive" industry is one in which the combination of these five
forces acts to drive down overall profitability. A very unattractive industry would be one
approaching "pure competition", in which available profits for all firms are driven down to
zero.

The Five Forces are

   1. The threat of the entry of new competitors.
   2. The threat of substitute products or services.
   3. The bargaining power of customers (buyers).
   4. The bargaining power of suppliers.
   5. The intensity of competitive rivalry.

For plastics producers worldwide, India represents a range of highly new opportunities for
growth. The plastics industry in India has made significant achievements ever since it made a
modest but promising beginning by commencing production of polystyrene in 1957.The
Indian plastic industry conforms to the levels of sophistication required to produce plastic and
plastic products of international quality standards. The consumption of plastics 1999 is
estimated at twelve million tons by the year 2010. The demand for plastics is growing
approximately @ 22% annually and plastic consumption in India is expected to increase from
almost 2.7 million tons of various commodity plastics in 1998 to almost fifteen million
tonsby 2010.

During the organizational study undertaken in Star Plastics, Kerala, the information collected
regarding its competitors, products, the bargaining power of customers and the suppliers and




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the intensity of competitive rivalry has been analyzed using Porters five forces model and is
as follows:




1. The Threat of the Entry of New Competitors

Profitable markets that yield high returns will attract new firms. This results in many new
entrants, which eventually will decrease profitability for all firms in the industry. Unless the
entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards
zero (perfect competition). The history of star is the history of pipe fittings production in
south India. In 1983, Vikas plastics and Star plastics amalgamated to form Star plastics,
Mullurkara that is 20kms away from Thrissur town, the cultural capital of Kerala. In 1988,
star became the number one PVC pipe fitting manufacture in south India it has received the
best ISI mark for quality. Afterwards more organizations came into the plastic manufacturing
industry and so that the competition also becomes huge.

The main competitors for Star in the market now are:

       Hycount Plastics & Chemicals.
       Hycount Plastics & Chemicals was commissioned two decades ago at Kollam.
       HYCOUNT PIPE - One of the brand PVC pipes in the country and the market in
       Kerala in its kind with an installed capacity over 12,000 Metric tons per annum
       produced at different locations in Kerala.


       A-One Polymer Ltd.
       A-One Polymer Ltd. is yet another glorious contribution of the century old Anwar
       Group of Industries in strengthening the developing industrial base of Bangladesh.
       Manufactured in strict compliance with ISO 3633:2002 & BS Standard 4514, „A-One
       u PVC Fittings‟ possess attributes equivalent to any international premier quality
       pipe-fittings. A-One Polymer, established in 2006 with uPVC pipe & fittings
       manufacturing facility, is also in production of 50MT of PTFE Thread Seal Tape per
       month, making it the first manufacturer of this product in Bangladesh. With the aim to
       diversify its product range further, A-One Polymer seeks to manufacture a wide range




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       of plumbing related materials (PVC, uPVC, cPVC) in the years to come. Already
       serving the world market, A-One polymer plans to further expand its production
       capacity by 150MT/month to strengthen its export market in 2013.




      Finolex Industries Ltd.
       Finolex Industries Ltd is the largest manufacturer of rigid poly vinyl chloride (PVC)
       pipes and fittings in India having a market share of nearly 10 per cent. The company's
       manufacturing capacity of 36,000 tons for PVC pipes and fittings is likely to be
       increased to 50,000 tons by the end of next year. Recently, FIL commissioned an
       ultra-modern PVC pipes plant at Ratnagiri in Maharashtra. The company also has a
       plant in Pune.


      Nediyara Group "SHAKTHIMAN SUPER".
       "SHAKTHIMAN SUPER" is the flagship brand of Nediyara Group, a synonym for
       plastic processing in Kerala. The headquarters of the group is at Kodanad,A
       picturesque village on the banks of river Periyar. Besides PVC pipes, the group
       churns out a myriad of plastic products like Soft PVC Garden Hoses, ISI Marked
       Electrical Wiring Pipes, Printed Food Packaging Containers, Water Storage Tanks,
       Toilet Seat Covers, Cisterns etc. Launched in 1974.


      Eurotech Pipes and Fittings.
       Eurotech Pipes and fittings are made from VESTOLEN P9421 polypropylene random
       co polymer specially developed for this use. Eurotech is a system of pipes and fittings
       made from VESTOLEN P9421 random copolymer polypropylene, specially
       developed for this use. The system‟s characteristics make it suitable for the
       construction of heating and water supply systems of the most widely varying forms
       with outstanding reliability over time. Eurotech office in Kerala: Thrissur Road,
       Chagarakulam, and Kerala.


       Some Other Companies in Thrissur
          I.   UNIVERSAL DISTRIBUTORS, Masjid Road, Kokkalai, Thrissur.
         II.   Moyalan HDPE -PVC Pipes, Market Rd, PB-76, Ollur P O, Thrissur.




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        III.   MazPolymers, Industrial Development Plot, Athani P O, Peringandoor
               Thrissur.




2. TheThreat of Substitute Products or Service

           The threat of substitute is high when the price of that substitute product falls or it is
easy for consumers to switch from one substitute product to another or when buyers are
willing to substitute. Star Plastic product constitutes plumping equipment materials such as
PVC pipes, fittings, SWR fittings and PVC adhesive. Star fitting is leading names fittings
over all the states. STAR PVC fittings are manufactured from the finest grade PVC resin
trusted and acclaimed all over the country for quality. Due to the high tensile strength and
reliability used in industry, homes etc. STAR fittings are available in above 10 shapes and
measures vary from 20mm to 200mm. They are also available in 3 different colors. Injection
molded STAR PVC pipe fittings confirm to ISI specification and assure totally safe, non-
toxic water for all purposes.

         The development of PVC pipes and all type of Plastic fittings and equipment‟sall
over the world is by using the organochlorine called Poly Vinyl Chloride (PVC). STAR is
also developing all type of pipe products (rigid pipes, flexible hoses etc.) using the same
organochlorine PVC. The competitors are also using the same technology. So there is no
substitute products made from other organochlorine, the plastic products are all made from
the same organochlorine PVC.


3. The Bargaining Power of Customers (Buyers)

          Buyers or customers can exert influence and control over an industry in certain
circumstances. This happens when:

      There is little differentiation over the product and substitutes can be found easily.
      Customers are sensitive to price.
      Switching to another product is not costly.




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Nowadays customers have the buying power and they have the choice in the market to
choose the product what they want. In 1994 Star began the production and marketing of
flexible hoses under the brand name STAR FLEX. Before that Nediyara group came with
Soft PVC Garden Hoses and it has a good name among the customers and has a good market
also. So when Star came with flexible hoses, it is difficult to market the product. But while
comparing to other company‟s products, Star have international standards and also have the
ISI certification and the product flexible hose is for both domestic and industrial use. This
made Star to gain supremacy of the products over others products, market ascendancy was
not difficult. Star now is a ubiquitous presence in the entire Middle-East and South Africa. In
2001, STAR received the ISO 9002 Certification, yet again the first in South India. The
customers of STAR are satisfied with their products. They continue to use the product and
will purchase them in future. Quality is the main factor that helps STAR to compete with
other brands. Advertisements were done in print media only.

4. The Bargaining Power of Suppliers

Suppliers are also essential for the success of an organization. Raw materials are needed to
complete the finish product of the organization. Suppliers do have power. This power comes
from:

        If they are the only supplier or one of few suppliers who supply that particular raw
        material.
         If it costly for the organization to move from one supplier to another (known also as
        switching cost).
        If there is no other substitute for their product.

STAR plastics have suppliers all over South India. STAR plastics concentrates there market
in India mostly in southern region. STAR has a monopoly market in southern area. The
company can market their product very smoothly through the market segmentation. The
company is selling their products by dividing the market state wise. The company
concentrates in Tamil Nadu, AndhraPradesh, Karnataka and Kerala. In North India the
company continues marketing of their products.

        To be more precise, the product of the company makes its presents felt in the
following counties:




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           INDIA
           UAE
           RUSSIA
           IRAN
           AFGHANISTAN
           MUSCAT
           QATAR
           BAHRAIN
           SAUDI ARABIA
           EGYPT
           SUDAN
           ETHIOPIA
           SOMALIA
           SOUTH AFRICA

5. The Intensity of Competitive Rivalry

If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for
customers to move to substitute products for example from coke to water then again rivalry
will be high. Generally competitive rivalry will be high if:

       There is little differentiation between the products sold between customers.
       Competitors are approximately the same size of each other.
        If the competitors all have similar strategies.
        It is costly to leave the industry hence they fight to just stay in (exit barriers).

In India the PVC industry is going through high competitive rivalry. As too many
organizations are coming to PVC pipes & Fittings manufacturing industry yearly, the
competition is also becoming higher. In the last one decade unparalleled growth was
witnessed in Star group of companies to emerge as a leader in the PVC fitting and to
diversify into the manufacture of suction hoses, drainage fittings and PVC pipes. The
companies operation includes manufacturing of PVC fittings and allied products in clearly
defined core business areas at home and overseas. The Star group of companies is the single
largest plastic industry in private sector over years, star group has steadily developed into a




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professionally managed company comprising of 8 manufacturing unit in 3 production centers
with a total installed capacity of 3850 meter per annum-8 divisions and effective centralize
support services wholly dedicated to the most existing standards of quality and customer
services, constantly motivated by the need to ensure total product satisfaction. In the year
2000, to take the challenge of globalization, star set up a core team and applied core ISO
certification. In August 2001, star became the first PVC fittings manufacture in south India to
receive the ISO 9002 certification. Now Star Plastics is the market leader in South India. The
company has made its presence significantly in Middle East market also.

Strategy persuaded by Star PVC is:

                   Produces good quality product.
                   Makes use of modern techniques for production to meet the demands
                      mostly with the help of pop‟s.
                   Assigning targets to each store manager and as such rewarding then
                      with attractive prizes.
                   Everyday feedbacks are taken.


The value which exists in Star PVC is:

                   No discrimination for race, religion, decision making and actions.
                   To develop a sense of respect for oneself in other‟s mind.
                   Discipline is given great importance.

These all help them to overcome the intensity of competitive rivalry in the PVC pipes &
Manufacturing industry.




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Organisation Study Report on Star PVC pipes & fittings            Internship 2011




                    CHAPTER V
                                  SWOT
                 ANALYSIS


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Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




       SWOT analysis is a strategic planning tool used to evaluate the strengths, weakness,
opportunities and threats involved in a project or in a business venture. It involves specifying
the objectives of the business venture or project and identifying the internal and external
factors that are Favorable and unfavorable to achieve the objectives.

Strength:

   1. The company has a good brand image among the consumers.
   2. Products accepted all over the world for its quality.
   3. Multi – Unit Multi – Product organization catering all products in PVC pipe industry.
   4. Global presence in Middle East Asia, Europe, Africa.
   5. The company has the direct marketing network with well established distribution
       system
   6. Dedicated marketing force with effective promotion strategy.
   7. The company has fully computerized departments and production units and corporate
       office is connected through intranet.
   8. Committed work force guided by technically skilled superiors, maintaining warmness
       in relation helps in delivering a combined effect.
   9. Stringent quality measures adopted, backed by a strong quality control and R & D
       team.

Weakness:

   1. Organization in flexibility (Flexible working hours and Policies for flexible working).
   2. Limited branches.
   3. Lack of access to the key distribution channels (Not concentrating in the rural areas of
      south India where there are lot of business possibilities in agriculture sector. Now the
      organization is concentrating mainly in the construction Industry).
   4. Advertisements are done through print media only.




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Opportunities:

   1. PVC pipe industry is in growth stage so PVC pipe industry has a greater opportunity
       to grow.
   2. Immense opportunities as infrastructure development in India are growing at a faster
       pace.
   3. There are large untapped opportunities in Government sector(E.g. Government is
       giving subsidies to the farmers for buying agriculture equipment‟s).
   4. Growth of real estate on account of nuclear families.
   5. Agriculture promotion schemes by government and other agencies.

Threats:

   1. Sudden fluctuations in crude price, causing fluctuations in raw material price makes
       difficult in pricing strategy.
   2. Industry is one among those with greater competition.
   3. In the changing world of technology, sometimes a better substitute over PVC may
       emerge.
   4. All the competitors (Hycount Pipes, A-One Polymers, and Finolex Industries etc.) are
       changing their strategies and formulating new ones to capture new markets.
   5. As PVC is a plastic which is not biodegradable cause‟s environmental pollution, may
       face a ban in future.




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       CHAPTER VI

 FINDINGS AND
  SUGGESTIONS



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Findings:

Star Plastics is the number one PVC pipe fitting manufacturer in south India and it has
received the best ISI mark for quality. In August 2001, Star became the first PVC fittings
manufacturer in south India to receive the ISO 9002 certification.

    International Standard that is being followed as far as the quality of the products is
       concerned.
    Has well trained employees to operate the machines.
    Provides excellent services to its employees like canteen, medical facilities,
       transportation etc.
    Premises are huge and designed in such a way that the raw materials can easily
       transferred from one department to another.
    Safety is given main preference.
    Discipline is being followed.
    Pollution level is low.
    Quality of the products is assured by doing nine different quality tests.
    Everyday feedbacks are taken.
    Excellent training and development system.
    Employee performance appraisal system.
    No discrimination for race, religion, decision making and actions.


Suggestions:




           Ramaiah Institute of Management Studies45SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings               Internship 2011




    Problems can be detected early and treated to prevent deterioration welfare and cost
       reduction.
    Annual medical checkup for all workmen and employees. A small amount can be
       deducted from the salary one time.
    Cleanliness and orderliness has to be further improved.
    Improve security measures by using electronic devices at all gates.
    Advertisement need improvement (currently advertisements is done through print
       media only, need to be done in visual media also).




   CHAPTER VII

      CONCLUSION

           Ramaiah Institute of Management Studies46SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings                   Internship 2011




                                      CONCLUSION

The study conducted at STAR GROUP OF COMPANIES THRISSUR which is the pioneer
and market leader in the PVC pipe product in South India, helped in getting a wider outlook
about the business environment and managing an organization. Organization has six
production centers and five marketing branches spread all over South India and Middle East
Asia, with operation all over the world.

It was a general study regarding all functions and aspects of STAR. The company has seven
functional departments through which it was operating. It is found that company has a good
working environment and cordial relationship is maintained between all departments for the
smooth functioning and achievement of the organization goal of maintain the company‟s
brand image among the customers. Porters Five Forces Model is done in the period of study
to analyze the threat of the entry of new competitors and substitute products or services, the
bargaining power of the customers and the suppliers and the intensity of competitive rivalry.
SWOT analysis is also done to analyze the Strength, Weakness, Opportunities and Threats of
the organization.

Star has made are of most advance technology and up to date knowledge. Fully automated
production has been put to use long time ago U.S made microprocessor controlled machinery
is used to for production. Star received the ISI mark for quality and ISO 9002 certification for




           Ramaiah Institute of Management Studies47SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings              Internship 2011




quality by TUV Germany, and ISO 14001: 2001 certification. All the products are of
International standard. At present company is able to later about 10% of the market
requirements. In order to later the complete needs the company is planning to increase the
production level to maximum extent possible. The company is planning to increase the
present product level of Dubai units. The research and development team of STAR group is
engrossed in developing new product for the international markets. This has helped them to
gain valuable insight that prompt the group to search alternative ways for manufacturing
better products in a cost effective manner.




   CHAPTER VII


           Ramaiah Institute of Management Studies48SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings             Internship 2011




   BIBILIOGRA
                                  PHY




                                   BIBILIOGRAPHY

Books Referred:

    Philip Kotler, Jha, and Koshy: “Marketing management”.
    Roger. A. Kerin, Steven. W. Hartley, Eric. N. Berkowit, William Redlius: “Marketing
       Management”.

Websites Referred:

    www.wikipedia.com
    www.stargroupind.com
    www.google.com



           Ramaiah Institute of Management Studies49SBS Swiss Business School
Organisation Study Report on Star PVC pipes & fittings            Internship 2011




Journals:

    Star Plastics Company Magazine.




           Ramaiah Institute of Management Studies50SBS Swiss Business School

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MBA Internship Report

  • 1. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CONTENTS CHAPTER CONTENTS PAGE NO EXECUTIVE SUMMARY 2 Chapter I INTRODUCTION 3 1.1 Industry Profile 4 1.2 Company Profile 5 Chapter II STRUCTURE OF THE ORGANISATION 11 2.1 Organizational Structure 12 2.2 Organizational Chart 12 2.3 Organizational Outlook 13 2.4 Duties and Responsibilities of Dept. Heads 13 Chapter III FUNCTIONAL DEPARTMENTS 16 3.1 Finance Department 17 3.2 Accounts Department 18 3.3 Marketing Department 18 3.4 Human Resource Department 26 3.5 Production Department 27 3.6 Purchase Department 29 3.7 Systems Department 31 Chapter IV PORTERS FIVE FORCES MODEL 32 Chapter V SWOT ANALYSIS 40 Chapter VI FINDINGS AND SUGGESTIONS 43 Chapter VII CONCLUSION 45 Chapter VIII BIBILIOGRAPHY 47 Ramaiah Institute of Management Studies1SBS Swiss Business School
  • 2. Organisation Study Report on Star PVC pipes & fittings Internship 2011 EXECUTIVE SUMMARY The organizational study was conducted at STAR Plastics, Thrissur, Kerala. The objective of the study is  To study the organizational structure.  To study about the structure and functioning of various departments.  To study how the management control various departments for the attainment of the organizational objectives. The organization is into PVC pipes and fittings manufacturing. PVC is an organochlorine, which was first patterned in 1913 by Fritz Klatte. However, its development for hindered by pure PVC‟s chemical instability and its low workability. During the 1930‟s, German experiments with various stabilizers and softeners lead to the first useable forms of PVC. By the early 1950‟s PVC was second only to polythene, as the most important synthetic product in Germany. It is now the single largest use for chlorine today, using about 1/3 of all global production. About 40 million tons of chlorine is produced by the chemical industry every year. PVC development was part of the huge expansion of the chlorine industry after the Second World War. PVC, Dichloro Diphenyl Trichloroethane (DDT) and Chloro FluoroCarbons (CFC‟s) are all products of post war boom in the chlorine industry. Currently there are over 11,000 oregano chlorines now in commercial use. Organo chlorines are useful to industry because they tend to be very stable and the resist natural breakdown process. Star Plastics have seven functional departments and it‟s the leader in PVC pipes & Fittings in south India. Star Plastics is the first PVC pipe fittings manufacturer in south India to receive ISO 9002 certification. While globalization and economic slowdown in the world markets threw up new challenges the STAR group is busy chalking out plans to translate these challenges in to opportunity. The company is going to make a centralization system of the software network that the progress of work at any levels, at any units, at any centers can be viewed from the corporate office itself. Each and every aspect of the business can be checked from the corporate office.At present company is able to later about 10% of the market requirements. In order to later the complete needs the company is planning to increase the production level to maximum extent possible. The company is planning to increase the present product level of Dubai units. The research and development team of STAR group is engrossed in developing new product for the international markets. Ramaiah Institute of Management Studies2SBS Swiss Business School
  • 3. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTER I INTRODUCTIO N Ramaiah Institute of Management Studies3SBS Swiss Business School
  • 4. Organisation Study Report on Star PVC pipes & fittings Internship 2011 1.1Industry Profile Plastics, in the modern meaning of the word, are synthetic materials that are capable of being formed into usable products by heating, milling, molding and similar processes. The term is derived from the Greek plastic, to form in simplest terms; plastics can be described as resins in their molded form. The wonders of plastics cut across all sectors of society. It is a material of choice due to its versatility, its physical strength, its economic viability; its easy process ability and also its attractiveness and durability of all weather condit ions. With the globalization of Indian economy and television entering into homes and tiniest villages and communications demand for the materials for suitable functional use more economic packing, durable all weather products has meant increasing demand for plastics. Packing of cement bags, the end user is demanding plastics instead of conventional jute, because it prevent transits loses and wastages. The hilly regions of East India or drought prone districts of Rajasthan, Gujarat, and Tamil Nadu demand auto molded tanks in thousands each day. The agriculturists of Himachal Pradesh insist on plastic pipes for irrigation to their farms, the floriculturists of Karnataka and Maharashtra cannot thrive without ultraviolet stabilized polythene wide width films for huge tunnels and green polymers consumption and import. The Plastic industry in India has made significant achievements ever since it made a modest but promising start by commencing production of polystyrene in 1957. The potential market has motivated Indian entrepreneurs to acquire technical expertise. Achieve high quality standards and build capacities in various facts of the booming plastic industry. Phenomenal development in the plastic machinery sector coupled with matching development in petrochemical sectors, both of which Ramaiah Institute of Management Studies4SBS Swiss Business School
  • 5. Organisation Study Report on Star PVC pipes & fittings Internship 2011 supports the plastic processing sectors, have facilitated the plastic processors to build capacities to service both the domestic market and overseas. The chronology of manufacture of polymers in India is summarized as under. 1957 : poly styrene 1959 : LDPE 1961 : PVC 1968 : HDPE 1978 : polypropylene The economic reforms launched in India since 1991, joint ventures, foreign investments, easier across to technology from developed countries etc. have opened up new vistas to further Indian plastic industry are exported to over 150 countries round the globe with major trading partners being USA,UAE, Italy,UK,Russia, Honkong, Germany etc. The plastic processing sector comprises of over 30000 units involved in producing a variety of items through injections molding, blow molding, extrusion and calendaring. The capacities built in most of this industry coupled with inherent capabilities have made us capable of servicing the overseas markets. The development of plastics took place in 1920‟s with the introduction of cellulose acetate, polyvinylchloride and nylon. Polyethylene evolved out of the need for a superior insulating material could be used for such applications as radar during World War II. The decade of the 1950‟s saw the introduction of poly propylene and the development of acetyl and polycarbonate. In 1960‟s and 1970‟s a sub group of plastic family started to emerge ,called high temperature plastics, which includes polyamides, aromatic polyesters, polyether siphoned etc. 1.2Company Profile a) Background of the company: The history of STAR is the history of pipe fittings production in south India. In 1983, Vikas plastics and Star plastics amalgamated to form Star plastics, Ramaiah Institute of Management Studies5SBS Swiss Business School
  • 6. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Mullurkara that is 20kms away from Thrissur town, the cultural capital of Kerala. In 1988, star became the number one PVC pipe fitting manufacture in south India it has received the best ISI mark for quality. In 1994 star began the production and marketing of flexible hoses under the brand name STAR FLEX. In 1998 taking advantage of the wings of globalization star started star impex and forayed into the global market. Growth being as the key strategy the visionary Mr.P.K.Paul nurtured star plastics into a corporate level. After the demise of Mr. P K Paul his eldest son Mr. Bobby Paul took the charge of the chariot. His brother Mr. Anto Paul also assists in the day to day activities of the company .Presently the group consists of various companies like Star Plastics, Star Flex, Shine Star, Star Exporters& Fine Polymers, A new group venture of star group of companies for the purpose of exporters In the year 2000, to take on the challenge of globalization, star set up a core team and applied core ISO certification. In August 2001, star became the first PVC fittings manufactures in south India to receive the IS O 9002 certification. Star plastic is the market leader in Kerala, Tamilnadu & the market challenger in Andhra Pradesh and Karnataka. The company has made its presence significantly in Middle East market having a branch office at Dubai. It is a multi -core, multi-Product Company which has been deeply involved in the manufacture, distribution, sale, and installation and servicing to bring the customer satisfaction and social responsibilities. In the last one decade unparalleled growth was witnessed in star gr oup of companies to emerge as a leader in the PVC fitting and to diversify into the manufacture of suction hoses, drainage fittings and PVC pipes. Star plastics are a group of companies with a turnover of 30 crores per annum and with manpower strength of 450 employees including 50 high caliber professionals. It has a32% growth due to the young and dynamic MD‟s expansions and growth plans. The company increased its production capacity over 50% in just two years incurring huge additional investments. Presently it is enjoying the benefits. At the end of current half year a growth rate of 35% when compared with the last year is witnessed. The company‟s operations include manufacturing of PVC fittings and allied products in clearly defined core business areas at home and overseas. The star group of companies is the single largest plastic industry in private sector over the years, Ramaiah Institute of Management Studies6SBS Swiss Business School
  • 7. Organisation Study Report on Star PVC pipes & fittings Internship 2011 star group has steadily developed in to a professionally managed company comprising of 8 manufacturing unit in 3 production centers wit h a total installed capacity of 3850 meter per annum- 8divisions and effective centralize support services wholly dedicated to the most existing standards of quality and customer services, constantly motivated by the need to ensure total product satisfacti on. b) Star group of companies: Star Plastics: - star plastics, the parent company of the group was incorporated in 1983, and within these 21yrs it has grown up as one of the largest pace fittings manufacturing companies in India and its products are approved by these authorities. Shine Star: -shine star is another unit of star plastic, which is manufacturing pipe fitting. This has been started as another manufacturing fitting unit. Star Flex: - star flex is totally a new venture, manufacturing flexible s olution and delivery hoses ranging from ¾ to 4 sizes. As on today the above companies are making a combined sales turn over approximately worth of 30 crores per year. Star Polymers: -It is the unit of star plastics. It is manufacturing pipe fittings. Star Plus: - star plus is another unit of star plastics. It is also manufacturing pipe fittings. The different units had been given different names in terms of marketing. c) Nature of business carried: STAR – This word is the combination of basic concepts and fundamentals believed by its founder and carried over across the years, it has sailed hitherto and for the future such as S - Service T- Transparency A - Accountability R - Reliability d) Star which means: Ramaiah Institute of Management Studies7SBS Swiss Business School
  • 8. Organisation Study Report on Star PVC pipes & fittings Internship 2011  Provider of basic requirement of all PVC related fittings, pipes, and allied products.  Unstinted and continued supply and service since last 2 decades.  Believer and Promoter of quality products than giving simple propaganda.  The First PVC pipe fittings manufacturer in south India who is operational and reaching newer heights year after year.  The First PVC pipe fittings manufacturer in south India to have received ISI mark.  The First PVC pipe fittings manufacturer in south India to have received ISO mark.  An entity who gave to its customer‟s qualitative products & value added services.  To have received the best appreciation from its people. e) Vision, Mission and Quality Policy: “Our vision is to maintain the hegemony as the most reliable provider of high quality PVC products to meet the diverse requirements of potable water distribution, domestic plumbing, bore wells and lift irrigation purposes. We aim to make each of our products a paragon of quality and technical excellence. Through our constant Endeavour‟s of research and innovation we strive to come up with new products that help architects and builders keep ahead of the times” Mission: - serve water projects, construction activities and agriculture on global level to ensure customer satisfaction. Quality policy: To manufacture and market goods, which comply with the consumers requirements. To achieve customer satisfaction is the basic philosophy of the organization. In the last one decade, unparalleled growth was witnessed in STAR group of companies to emerge as a leader in the PVC fittings and to diversify in to the manufacture of suction, drainage fittings and PVC pipe. STAR PLASTICS is a group of companies with a turnover of 75 cores per annum and with a manpower strength of 450 employees including 50 high caliber professionals. Ramaiah Institute of Management Studies8SBS Swiss Business School
  • 9. Organisation Study Report on Star PVC pipes & fittings Internship 2011 f) Product/Service profile: Star plastic product constitutes plumbing equipment materials such as PVC pipes, fittings, S.W.R fittings and PVC adhesive. Star fitting is leading names fittings over all the states. STAR PVC pipe fittings are manufactured from the finest grade PVC resin trusted and acclaimed all over the-country for quality. Due to high tensile strength and reliability used in industry, homes etc. STAR fittings are available in above 10 shapes and measures vary from 20mm to 200mm. These are also available in 3 different colors. Injection modulated STAR PVC pipe fittings confirm to ISI specification and assure totally safe, non-toxic water for all purposes. g) STAR-Plastic-Products: The company concentrates on the manufacturing of a wide range of PVC pipes and fittings and allied products. Their products are basically categorized as STAR Drainage fittings BS 4514 STAR Pressure Fittings BS4344 STAR Pressure Fittings STAR SWR Fittings STAR Flex section & Delivery Hose STAR Solvent cement STAR PVC pipes h)Production centers: STAR plastics Mullakkara, Thrissur STAR plastics, the parent company of the group was the incorporated in 1983, and within these 24 years it has grown up as one of the largest PVC fittingsmanufacturing companies in India and its products are approved by ISI authorities. Manufactures the PVC pipe fittings, drainage fittings, SWR fittings, Pressure fittings, solvent cement. Lisna Inc. is situated in same premise. Shine Star Minaloor, Thrissur Ramaiah Institute of Management Studies9SBS Swiss Business School
  • 10. Organisation Study Report on Star PVC pipes & fittings Internship 2011 STAR manufactures the PVC pipe fittings, SWR fittings, Pressure fittings. Also manufactures PVC granules mainly master batches. SILVERSTAR, NEW STAR, FINE POLYMERS, LISNA TECH are situated in the same premise. Star Flex, Velappaya, Thrissur STAR Flex manufactures the PVC flexible hoses, suction and delivery hoses ranging from 0.75 to 4 inch diameter. Star Pipes, Choolissery, Thrissur STAR pipes manufacture the rigid PVC pipes for plumbing and electrical purpose. It‟s a semi-automatic manufacturing unit which manufactures rigid PVC pipes ranging from 20mm to 200mm. Star pvc pipe fitting (p) ltd, sri perumbathur, chennai Manufactures the rigid PVC pipes for plumbing and electrical purpose it‟s a semi- automatic manufacturing unit which manufactures rigid PVC pipes ranging from 20 mm to 200mm.This unit does the production for TAMILNADU and KARNATAKA. Star Implex industries llc, Dubai, UAE Manufactures the rigid PVC pipes for plumbing and electrical purpose it‟s a semi- automatic manufacturing unit which manufactures rigid PVC pipes ranging from 20 mm to 200mm. also manufactures the PVC pipe fittings and solvent cement. This unit does the production for the Middle East Asia, Africa and Europe. Each division is self-reliant in its activities of research and development, Manufacturing and marketing, now moving for total automation and integration. STAR group of company is structured in to business units comprising synergistic group of responsibility centers, division backed up by an extensive marketing infrastructure and front line support services. Ramaiah Institute of Management Studies10SBS Swiss Business School
  • 11. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTER II STRUCTURE OF THE Ramaiah Institute of Management Studies11SBS Swiss Business School
  • 12. Organisation Study Report on Star PVC pipes & fittings Internship 2011 ORGANISATIO N 2.1 Organizational Structure The STAR group follows absolute dedicated approach. The organization of its manufacturing operations is based on product divisionalisation in to group of products in which are similar in technology or manufacturing process. Each group is constituted by divisions or profit centers. Each of these group, are led by absolute manager. A central manager leads the corporate function. Some of these functions in turn are reported to the managing director. 2.2 Organizational Chart Ramaiah Institute of Management Studies12SBS Swiss Business School
  • 13. Organisation Study Report on Star PVC pipes & fittings Internship 2011 DIRECTOR MG- DIRECTOR GENERAL MANAGER HR FINANCE PURCHASE PRODUCTION MARKETING ACCOUNTS SYSTEM ASST FIANCE PURCHASE PRODUCTION MARKETING CHEIF MANAGER MANAGER MANAGER MANAGER MANAGER ACCOUNTANT (SYSTEMS) 2.3 Organizational Outlook Managing Director - BOBBY PAUL Other Directors - Anto Paul & Rosy Paul General Manager - K.B. Suresh Kumar Marketing Manager - C.L.George Finance Manager - Biju Thomas Accounts Manager - A.C. Chummar Established in - 1984 Main production - PVC pipe fittings and adhesives Ramaiah Institute of Management Studies13SBS Swiss Business School
  • 14. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Raw materials for production - Resin and other chemicals Production range - Wide range of products Present production - Best in southern India with 85 percent Of total production Number of machines - 202 machines with generation backup Number of office staff - 50 Number of workers at factory - 400 Trade discount - 50% Special discount for Payment within one week - 5% 2.4Duties and Responsibilities of Departmental Heads 1) Finance Manager He is responsible for financial matters in the organization. He prepares financial plan. He assesses the financial needs of the organization and sources of the finance. He should be an expert in the field of financial management. He should know different tools used in the financial management ratio analysis, fund flow analysis, cash flow analysis, Budgeting etc. All these are necessary to prepare a sound financial policy for the organization. He is also responsible for financial planning, raising necessary fund, controlling the use of funds, appropriation of profits etc. Other functions include financial forecasting and planning, procurement of funds, investment decision, management of income, management of cash, deciding upon borrowing policy, negotiations for new financing, analysis and appraisal of financial performance, advising the top management, co-coordinating and control, helping in valuation decisions, and tax administration. 2) Accounts Manager He is responsible for keeping the details of day book, ledger and P.F registers. Moreover, he should record and maintain all the details of the sales tax calculation and related documents and produce them on demand. Ramaiah Institute of Management Studies14SBS Swiss Business School
  • 15. Organisation Study Report on Star PVC pipes & fittings Internship 2011 3) Marketing Manager He is charge of the marketing department of the organization. The marketing department aims to increase the turnover of the organization, market share, and profitability of the organization. The marketing manager should be tactful. He should know marketing concepts product mix, promotion mix, price mix, distribution mix etc. He should be known the strength and weakness of the firm‟s products. He is also able to design and implement market strategies to enhance turn over and capture new markets. 4) Human Resource Manager A human resource manager occupies a very important position in an organization. The duty of the human resource manager is to recruit and develop Personnel required by the organization. They are involved in manpower planning, training, maintenance, compensation etc. The other responsibilities of the human resource manager are formulation and development of personnel policies, employees training and development, transfer, promotion, etc., maintaining personnel records of each employee in the organization, establishment of good relation with employees, effective communication of the personnel policies and programmers of the management to employees, responsible for advising line manager, responsible for welfare activities and responsible for solving the problem of employees. 5) Production Manager He is responsible for the production of goods services in the organization. He looks after the purchasing function and manages the production design and process. He is called in different names such as production engineer, plant engineer, operation engineer etc. They are responsible for plant layout, inventory management, production control and quality control. 6) Purchase Manager Duties and responsibilities of the purchase manager are:  Prepare purchase budget.  Receive purchase requisition, and ascertain the material requirements.  Ascertain the sources of supply.  Invite tenders from the approved suppliers.  Select the supplier offering the best terms and conditions.  Issue purchase order to the supplier selected. Ramaiah Institute of Management Studies15SBS Swiss Business School
  • 16. Organisation Study Report on Star PVC pipes & fittings Internship 2011  Follow-up the purchase order to avoid any delay in delivery.  Receive goods received note and the inspection report.  Return the material which are not according to specifications or secure adjustment with the supplier.  Verify the invoice with regard to quality, price and other relevant particulars and pass it for payments.  Send the invoice to the accounting section. Ramaiah Institute of Management Studies16SBS Swiss Business School
  • 17. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTER III FUNCTIONAL DEPARTMENTS 3.1 Finance Department Ramaiah Institute of Management Studies17SBS Swiss Business School
  • 18. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Finance department manages the fund available for the operations of the business, by making a balance between the fund inflow and fund outflow. The management of all activities related to finance requires considerable expertise and specialized knowledge of banks, financial institutions, the different sources of finance and ways to profitability utilize these funds. Finance Manager directly does the planning, organizing, directing and controlling financial activities in the society. Organization Structure:- GENERAL MANAGER FINANCE MANAGER FACTORY MANAGER BRANCH MANAGER Finance department is headed by finance manager. Finance manager reports to the General Manager and in certain strategy and urgent issues directly report to managing director and take decisions. Finance Manager works in the coordination with chief accountant, production manager, marketing manager, branch managers. Sources of Finance:- STAR Plastics find sources of finance through banks and other private financial institutions. As it is a partnership firm, the partners contribute their funds to make capital requirements and other expenditure with the help of banks and financial institutions. STAR Plastics deals all finance requirements with South Indian bank, Kerala State Financial Enterprises (KSFE) and State Bank of India. Vehicle loans are provided by Cholamandalam finance. Company’s Financial Policies:-  Low cost of operation of funds.  Efficient receivable management, through acceleration of funds.  Faster sourcing of funds from institutions. Functions of Finance Department:- Ramaiah Institute of Management Studies18SBS Swiss Business School
  • 19. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Finance function is concerned with all aspects of business operations. It is very difficult to set limits to the finance function. The key activities under finance department are:  Management of firm‟s assets structure.  Financial analysis, planning and control.  Management of firm‟s financial structure.  Estimating capital requirement.  Determining sources of fund.  Utilization of fund.  Disposal of surplus.  Management of cash.  Financial controls. 3.2 Accounts Department Accounts department deals with day to day book keeping, daily collections, salaries of all employees, etc. Accounts department is headed by chief accountant. He is assisted by four assistant accountants. In each production centers and marketing branches have an accountant and cashier which does the daily function at the places Chief accountant works in coordination with finance manager, on the fund flow issues and in case of any shortage of cash occurs. Finance manager canalized the shortage from financial institutions in case of emergency and normal cases, chief accountant tightness the payment collections from the whole sellers and other sources. Other main function of accounts department is tax payments. They deal with the central sales tax, K VAT, excise and other department. Monthly returns are prepared by the accounts department. 3.3 Marketing Department Marketing department is entrusted with the function of planning and executing the conception, pricing, promotion and distribution of ideas goods services, to create exchanges that satisfy individual and organizational boards. In simple terms the marketing function is catered around the customer and his needs. Organization Structure: Ramaiah Institute of Management Studies19SBS Swiss Business School
  • 20. Organisation Study Report on Star PVC pipes & fittings Internship 2011 MARKETING MANAGER BRANCH MANAGER SALES EXECUTIVE REPRESENTATIVES Marketing Policy: STAR Lights to reduce the number of intermediaries, so they have no distributors. Billing is directly done to the wholesalers and retailers. In case of other state sales, it‟s a one through the branch offices. No direct export to any customers. STAR is operating by exporting to the branch office at Dubai, STAR IMPEX INDUSTRIES L.L.C. and billing directly to the customers. In the case of logistics the supply of products is done through company owned feet of vehicles. Same policy followed with inter-state also. Functions of Marketing Department in Star Plastics: The major functions are explained below: 1. Demand Forecasting 2. Marketing Research 3. Marketing Control 1.Demand Forecasting Demand forecasting is the main function of marketing in STAR plastics .It should be done through sales force in the company such as sales representatives‟ sales executives‟ etc. collecting information from customers. On the basis of this information demand forecasting is to be done. 2. Marketing Research Ramaiah Institute of Management Studies20SBS Swiss Business School
  • 21. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Marketing research is more comprehensive composing all the functions of a marketing manager that is it covers product, price, sales, market, promotion, distribution policies. It is commonly says that marketing research begins where manufacturing ends. In fact it commences well before the product is fabricated. It goes in to operation even before erecting the factory. It covers analysis of competitive advantage, market share analysis and new product development. The main objectives of market research are:  To know buyers.  To measure the impact of promotional effort.  To know consumer response.  To know market costs and profits.  To master external forces.  To design and implement marketing control. 3. Marketing Control Various tools used for marketing control are cost control and a market share analysis. Cost control is one task for monitoring the cost of marketing and it is compared with planned cost standard, so as to identify deviations and take corrective action. Market share analysis is also used for marketing control. Objectives of Marketing: The basic objectives of marketing are to satisfy human wants. The important objectives of marketing are briefly explained below: 1. Customer Satisfaction through Quality Products Marketing activities aims at achieving customer satisfaction by offering quality products. It is also help more increasing profit, increasing goodwill, increasing image of the organization etc. 2.After Sales Service This another objective of marketing company provides after sales services to its customers. The service of the company does not end with process of distribution the company has been waited until good result comes by giving their products to consumer and they always rendered their services at the time needed by the customers. The marketing and sales Ramaiah Institute of Management Studies21SBS Swiss Business School
  • 22. Organisation Study Report on Star PVC pipes & fittings Internship 2011 department keeps their eyes and ears to open to know changes in the market. The complaint and suggestions if any are well accepted by the company from their customers. There is any complaint about the sold product the company will take it back at the company‟s costs.  Method Of After Sales Service: For providing after sales service company may use thefollowing methods:  Sending special staff to the customers.  Arranging service with dealers/agents.  Appointing in depending service specialists. 3. Maintaining Price Leadership: Company‟s important objective is to maintain price leadership. Company is always trying to become a price leader. It does not like become a price follower. 4. Achieving Maximum Market Share: Companies another objective is to achieving maximum market share. In order to achieve maximum market share, company will spend more on advertising and offering quality products to the customers. 5. Other Objectives: Other objectives include:  Increasing firms sales.  To guarantee firms survival.  To fortify better resource utilization.  To meet customer needs. Present market condition: For their products STAR is facing demand higher than supply, which is a healthy situation. In case of seasonal products like suction and delivery hose, demand exceeds supply. It tries to later products to major customers. It is the main reason for expansion of production facilities. Market Segmentation: Ramaiah Institute of Management Studies22SBS Swiss Business School
  • 23. Organisation Study Report on Star PVC pipes & fittings Internship 2011 STAR is the dominant player in the South India. Geographically the market is segmented into five regions and branch officers are responsible for marketing activities in their regions. 1. Bangalore (Karnataka) 2. Chennai (TN) 3. Dubai (Middle East, Russia, South Africa etc.) 4. Nagari (AP) 5. Thrissur (Kerala) As per the consumers, market is segmented into three: 1. Government Works 2. Household Consumers 3. Builders Presently highly concentrated on the builders, as the construction industry is booming, appointed two sales executives exclusively for this sector and have a considerable market share in the other two segments. Promotion: In STAR PLASTICS promotion is done in the case of sale of products, in the case ofdealers, and in the case of sale force. 1. In the case of sale of products Sales promotion includes short term incentives like‟s discounts, free gifts and contests to stimulate sale of products. Sales promotion builds a bridge between the products and consumers. In the case of STAR, sales and brand promotion is done by providing information about the products through advertisement, demonstrations, organizational shows etc. 2. In the case of dealers Company provides incentives to their dealers and also provides dealers with discount at the time of purchasing the product from the company. The company also provides after sale services to dealers. It is based on the nature of product the company offers their dealers with replacement facility after checking the product. Ramaiah Institute of Management Studies23SBS Swiss Business School
  • 24. Organisation Study Report on Star PVC pipes & fittings Internship 2011 3. In the case of sales force: Company provides incentives to sales force. This includes the activities which induce and motivate sales person. The aim of sales forces promotion is to make the sales men‟s effort most effective. The various schemes of sales promotion are:  Bonus to sales force.  Sales force contest.  Sales meetings, convention and conferences. Advertisement: In the case of STAR advertisement is the most glamour element of the promotion mix. It covers all the activities connected with the giving of publicity regarding goods and services offered for sale. Advertising is transmitting through mass media such as television, newspapers, magazines etc. Advertising Policy: „Each potential customer must see an advertisement’ Brand awareness is not much with the customers. Brand awareness to be created, it‟s in growth stage. Advertisement focused on creating the brand image and promoting the STAR brand for their entire product. Earlier advertisement (Hoarding) were exhibited at district headquarters and important junctions. Presently, apart from above mentioned places, at areas of potential customers, each retail and whole sale outlet etc. Mode of Advertisement: 1. Earlier as wall paintings, banners etc. now changed to huge flex hoardings. Reason for change is: a. Attractiveness. b. New technology acceptance with change in market. c. Real and clear image of product. d. Quality advertisement gives better company image. Ramaiah Institute of Management Studies24SBS Swiss Business School
  • 25. Organisation Study Report on Star PVC pipes & fittings Internship 2011 2. Newspapers: heading Malayalam newspaper, The Hindu, Indian Express. 3. Website. 4. Sponsoring cultural and institutional programs, management and dealers meet, plastic manufactures association and export promotion counsels meetings. 5. Presently no visual media. Advertisement Budget: Budget of advertisement depends mainly on market needs as it‟s the growth stage need to promote the brand. Once established the budget could be reduced followed poly is 3-5% of net profit. Distribution Channel: Pricing Strategy: In STAR pricing strategy is a special kind of plan formatted in order to meet the changes of external factors particularly from the policies of competitors. Pricing strategies change with competitive situation. Some of the common pricing strategy followed STAR plastics are: 1. Competitive pricing. 2. Premium pricing. 1. Competitive pricing: It depends upon market condition competitor‟s price, seasonal variation etc. customers are very much aware of the quality and price of the product. 2. Premium pricing: Ramaiah Institute of Management Studies25SBS Swiss Business School
  • 26. Organisation Study Report on Star PVC pipes & fittings Internship 2011 In the case of suction and delivery hose, adopted a premium price strategy to utilize the ISI marking and brand image. As the brand awareness is less with customers market will still depends on price of the product. In the case of new product: Following pricing strategy followed in the case of new products: 1. Skimming price policy: Company adopts skimming price policy in the case of new products. This is done with the basic idea of gaining a premium from those buyers who always ready to pay a much higher price than others. The main reason for adopting this strategy is to attract the consumers of high income group. . 2. Penetration price policy: Sometimes company adopt penetration price policy that means changing low price from beginning in order to stimulate the growth of the market and to capture a large share of it. Since the customers with low income are able to purchase it. Price Fixation: Price of the product depends on two components: a. Cost of raw material - variable. b. Operational &Processing cost - fixed. Product price changes with change in raw material price, which is considered as a variable. Minimum period of two weeks taken for price revision, though in some cases raw materials price fluctuates each day. Risk Involved: Usually bad debts may occur in a business concern. But in STAR PLASTICS till now no bad debts have been incurred. The usual credit period given to customers is 15 days. If one customer delays the payment, they collect the amount by the way of sending reminders to him, although they are keeping some amount as reserve for bad and doubtful debts. The society is keeping large quantities of direct materials as stock because the price of such Ramaiah Institute of Management Studies26SBS Swiss Business School
  • 27. Organisation Study Report on Star PVC pipes & fittings Internship 2011 materials is growing day by day. Therefore these excessive raw materials don‟t result in loss though some heavy investment is required in it. To avoid the risk involved in transportation of goods to customers outside Kerala, the goods are insured accordingly. It helps the society to avoid the risk involved in transporting goods to distant places. 3.4 Human Resource Department Human resource management involves personnel management, personnel administration, employee welfare, manpower planning, industrial relations etc.Human resource department is headed by General Manager and assisted by all the department heads, factory managers, and branch managers. STAR does pro-active approach to managing people in the organization. It constitutes a series of integrated decisions that helps to consolidate the employment relationship and believes that their quality contributes to the efficiency of the organization and helps the employees to achieve their objectives. In the case of production centers, factory manager manages all personal staff and creates a good relationship with office staff and workers. He undertakes their wants. He will motivate entire unit as a whole. Each unit works as an independent unit with its own modes of training, induction, performance, appraisal etc. All the functions are done in consultation with the production manager and the general manager. In the branch offices Branch manager maintains the warmth employee relationship and assessment and training is provided by branch manager in consultations with marketing manager and the General Manager. Ramaiah Institute of Management Studies27SBS Swiss Business School
  • 28. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Organization Structure: HUMAN RESOURCE MIDDLE SUPERVISORY OPERATIONAL TOP MANAGEMENT MANAGEMENT MANAGEMENT MANAGEMENT BOARD OF DIRECTORS DEPARTMENTAL HEADS SENIOR SUPERVISORS SKILLEDWORKERS CHEIEF ACCOUNTANT DIVISIONAL HEADS INTERMEDIATE SEMI- SKILLED WORKERS FINANACIAL SUPERVISORS SECTIONAL HEADS UNSKILLED WORKERS DIRECTORS Working Hours in STAR: Office time begins with 9 A.M up to 5.30 P.M. In that time all transactions and official function of that day are completed. All functions are controlled by HR Manager. HR Manager handles many planning process they are:  Forecasting future manpower requirement, it is estimated based upon specific future plans of the company.  Identifying present manpower resources and analyzing the degree to which these resources are employed optimally.  Anticipating manpower problems by projecting present resources into the future and comparing them with the forecast of the requirement, to determine their adequacy, both quantitatively and qualitatively.  Planning the necessary programs of requirement, selection, training and development, utilization, transfer, promotion, motivation and compensation. So that future manpower requirement will be met. 3.5 Production Department Production is the core function concerned with STAR as it has wide range of products and production take place in plants located at faraway places. More over as faced with stiff competition, the only way to increase the profit is by the cost reduction, as price increase is not at all possible. So each unit has its own research and development facilities working for Ramaiah Institute of Management Studies28SBS Swiss Business School
  • 29. Organisation Study Report on Star PVC pipes & fittings Internship 2011 the better production functions to increase the efficiency in a way result in cost reduction. Production takes place in six production centers located at different place. Each division is self-reliant in its activities of manufacturing, quality control, research and development production center is headedby factory manager‟s reports to a production manager at the corporate office. Organization Structure: PRODUCTION MANAGER FACTORY MANAGER ASST. MANAGER PRODUCTION QUALITY IN CHARGE STORE IN CHARGE (ADMINISTRATION) SUPERVISORS (TECH & R&D) ACCOUNTANT WORKER CASHIER CLERK, RECEPTION The Company‟s production department handles the production of PVC pipe fittings. The main raw material for product is „Resin‟ and other related components like chemicals. 95% resin and 5% other chemicals are used for the production. The plant is set up in process layout. The raw materials go through the various processes for development of final product. Other than company fittings Company also produce solvent cement and in different measures. There are 20 machines in production plant, each costing up to 35 lacks. Depending upon the type of products, the production process is divided in to three:  Extrusion: - For rigid pipes and flexible hoses.  Injection Molding: - For PVC Pipe Fittings.  Mixing: - For solvent cement. Ramaiah Institute of Management Studies29SBS Swiss Business School
  • 30. Organisation Study Report on Star PVC pipes & fittings Internship 2011 3.6 Purchase Department The purchase department is entrusted with the function of purchasing row materials. In the present scenario with the cut throat competition, cost reduction is practiced in every sphere of the business and purchase is one of the important functions where cost can be highly controlled. High quality materials with lower cost became the motto of every organization for a meaningful survival, for this organizations practice supplier rating and vender management. There is a centralized purchase department headed by purchase manager who is responsible for taking purchase decisions for all units. The decisions are made on the basis of following factors: Market conditions Availability of raw materials Price of raw materials Organization Structure: PURCHASE MANAGER SENIOR ASSISTANT OFFICE ASSISTANT The purchase manager concerns with the factory managers regarding the technical specifications, manufacturer, quality standards, cost of materials, availability, time delay etc. In case of engineering goods, testing equipments, speciality chemicals, instruments etc the purchase manager seeks help from the engineers and the other technical persons working with the research and development. Purchase manager also works in coordination with the chief accountant, to know the position and about the credit position with the suppliers. Ramaiah Institute of Management Studies30SBS Swiss Business School
  • 31. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Role of Purchase Manager:  Raw materials purchase.  Purchase of consumables and stores.  Negotiation of prices of raw materials with the supplier. Procurement and Issue of Materials:  Purchase.  Store. A.Purchase The production department, usually factory manager informs the purchase department about the requirements of materials. The information is passed through the purchase intent issued by factory manager to the purchase manager. In case of regular product like stationary and small purchase, the store in charge issues the purchase intend giving a copy to the factory manager item specification, required quantity, name of the manufacture, approximate costs etc. are mentioned in the purchase intend. The purchase department then enquires with the suppliers and invites quotation. From the received quotation mentioning the offered price, mode of payment, discount if any, time need for dispatches etc., purchase department chooses the most appropriate by considering all the criteria. Purchase manager consults with accounts department about the availability of cash, payment condition, balance of any paid, whether the account with the supplier crossed the credit limit etc. with the approval of accounts department, purchase manager then sends a purchase order to the supplier. In case of new materials or new supplier, purchase department insist or samples to be supplied before the purchase. These samples are tested within house laboratories. Orders are given only when the sample confirms to the required quality levels. B.Store Store is very important to arrange different items of materials in a systematic manner. Store records information relating to receipts and issue of materials and products. Proper storage is essential for material cost control. Store is headed by the store in charge who report to the factory manager and purchase manager. Each production center has its own store. Material purchasing is done as a centralized activity and then it is supplied to stores at production centers. Store is divided into three: Ramaiah Institute of Management Studies31SBS Swiss Business School
  • 32. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Raw material stores. Engineering Stores (electrical suppliers). Finished goods store. 3.7 Systems Department STAR started the computerization of its department‟s way back. Personal computers with UNIX as the operating system were used in the late 1980‟s. But the computers of various departments are not networked. In the year 1999, STAR went to upgrade its EDP setup further. Costume made ERP software was developed for its units and head office. The installation of ERP software made the work of the departments of STAR easier. Being costume made this ERP software, with SQL RDBMS, Front end on Visual basic and windows NT 2000 and XP, seamlessly had integrated all function of the organization VIZ, production, inventory billing. Payroll, Accounting etc. The head office at Thrissur has three servers and forty nodes running the application. One server is networked and other is kept as back up, another one is used as internet server. Other units totally have about eight servers and about 50 nodes. Their latest plants at DUBAI, CHENNAI has computerized control room for monitoring and production controlling. In addition with ERP system, STAR also had implemented an electronic messaging solution with its organization, which is centered on the company‟s website. This messaging solution obviates the communication bottle neck of company. Ramaiah Institute of Management Studies32SBS Swiss Business School
  • 33. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTERIV PORTERS FIVE FORCES MODEL Ramaiah Institute of Management Studies33SBS Swiss Business School
  • 34. Organisation Study Report on Star PVC pipes & fittings Internship 2011 PORTERS FIVE FORCES MODEL Porter's Five Forces is a framework for industry analysis and business strategy development formed by Michael E. Porter of Harvard Business School in 1979. It draws upon Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Attractiveness in this context refers to the overall industry profitability. An "unattractive" industry is one in which the combination of these five forces acts to drive down overall profitability. A very unattractive industry would be one approaching "pure competition", in which available profits for all firms are driven down to zero. The Five Forces are 1. The threat of the entry of new competitors. 2. The threat of substitute products or services. 3. The bargaining power of customers (buyers). 4. The bargaining power of suppliers. 5. The intensity of competitive rivalry. For plastics producers worldwide, India represents a range of highly new opportunities for growth. The plastics industry in India has made significant achievements ever since it made a modest but promising beginning by commencing production of polystyrene in 1957.The Indian plastic industry conforms to the levels of sophistication required to produce plastic and plastic products of international quality standards. The consumption of plastics 1999 is estimated at twelve million tons by the year 2010. The demand for plastics is growing approximately @ 22% annually and plastic consumption in India is expected to increase from almost 2.7 million tons of various commodity plastics in 1998 to almost fifteen million tonsby 2010. During the organizational study undertaken in Star Plastics, Kerala, the information collected regarding its competitors, products, the bargaining power of customers and the suppliers and Ramaiah Institute of Management Studies34SBS Swiss Business School
  • 35. Organisation Study Report on Star PVC pipes & fittings Internship 2011 the intensity of competitive rivalry has been analyzed using Porters five forces model and is as follows: 1. The Threat of the Entry of New Competitors Profitable markets that yield high returns will attract new firms. This results in many new entrants, which eventually will decrease profitability for all firms in the industry. Unless the entry of new firms can be blocked by incumbents, the abnormal profit rate will tend towards zero (perfect competition). The history of star is the history of pipe fittings production in south India. In 1983, Vikas plastics and Star plastics amalgamated to form Star plastics, Mullurkara that is 20kms away from Thrissur town, the cultural capital of Kerala. In 1988, star became the number one PVC pipe fitting manufacture in south India it has received the best ISI mark for quality. Afterwards more organizations came into the plastic manufacturing industry and so that the competition also becomes huge. The main competitors for Star in the market now are: Hycount Plastics & Chemicals. Hycount Plastics & Chemicals was commissioned two decades ago at Kollam. HYCOUNT PIPE - One of the brand PVC pipes in the country and the market in Kerala in its kind with an installed capacity over 12,000 Metric tons per annum produced at different locations in Kerala. A-One Polymer Ltd. A-One Polymer Ltd. is yet another glorious contribution of the century old Anwar Group of Industries in strengthening the developing industrial base of Bangladesh. Manufactured in strict compliance with ISO 3633:2002 & BS Standard 4514, „A-One u PVC Fittings‟ possess attributes equivalent to any international premier quality pipe-fittings. A-One Polymer, established in 2006 with uPVC pipe & fittings manufacturing facility, is also in production of 50MT of PTFE Thread Seal Tape per month, making it the first manufacturer of this product in Bangladesh. With the aim to diversify its product range further, A-One Polymer seeks to manufacture a wide range Ramaiah Institute of Management Studies35SBS Swiss Business School
  • 36. Organisation Study Report on Star PVC pipes & fittings Internship 2011 of plumbing related materials (PVC, uPVC, cPVC) in the years to come. Already serving the world market, A-One polymer plans to further expand its production capacity by 150MT/month to strengthen its export market in 2013. Finolex Industries Ltd. Finolex Industries Ltd is the largest manufacturer of rigid poly vinyl chloride (PVC) pipes and fittings in India having a market share of nearly 10 per cent. The company's manufacturing capacity of 36,000 tons for PVC pipes and fittings is likely to be increased to 50,000 tons by the end of next year. Recently, FIL commissioned an ultra-modern PVC pipes plant at Ratnagiri in Maharashtra. The company also has a plant in Pune. Nediyara Group "SHAKTHIMAN SUPER". "SHAKTHIMAN SUPER" is the flagship brand of Nediyara Group, a synonym for plastic processing in Kerala. The headquarters of the group is at Kodanad,A picturesque village on the banks of river Periyar. Besides PVC pipes, the group churns out a myriad of plastic products like Soft PVC Garden Hoses, ISI Marked Electrical Wiring Pipes, Printed Food Packaging Containers, Water Storage Tanks, Toilet Seat Covers, Cisterns etc. Launched in 1974. Eurotech Pipes and Fittings. Eurotech Pipes and fittings are made from VESTOLEN P9421 polypropylene random co polymer specially developed for this use. Eurotech is a system of pipes and fittings made from VESTOLEN P9421 random copolymer polypropylene, specially developed for this use. The system‟s characteristics make it suitable for the construction of heating and water supply systems of the most widely varying forms with outstanding reliability over time. Eurotech office in Kerala: Thrissur Road, Chagarakulam, and Kerala. Some Other Companies in Thrissur I. UNIVERSAL DISTRIBUTORS, Masjid Road, Kokkalai, Thrissur. II. Moyalan HDPE -PVC Pipes, Market Rd, PB-76, Ollur P O, Thrissur. Ramaiah Institute of Management Studies36SBS Swiss Business School
  • 37. Organisation Study Report on Star PVC pipes & fittings Internship 2011 III. MazPolymers, Industrial Development Plot, Athani P O, Peringandoor Thrissur. 2. TheThreat of Substitute Products or Service The threat of substitute is high when the price of that substitute product falls or it is easy for consumers to switch from one substitute product to another or when buyers are willing to substitute. Star Plastic product constitutes plumping equipment materials such as PVC pipes, fittings, SWR fittings and PVC adhesive. Star fitting is leading names fittings over all the states. STAR PVC fittings are manufactured from the finest grade PVC resin trusted and acclaimed all over the country for quality. Due to the high tensile strength and reliability used in industry, homes etc. STAR fittings are available in above 10 shapes and measures vary from 20mm to 200mm. They are also available in 3 different colors. Injection molded STAR PVC pipe fittings confirm to ISI specification and assure totally safe, non- toxic water for all purposes. The development of PVC pipes and all type of Plastic fittings and equipment‟sall over the world is by using the organochlorine called Poly Vinyl Chloride (PVC). STAR is also developing all type of pipe products (rigid pipes, flexible hoses etc.) using the same organochlorine PVC. The competitors are also using the same technology. So there is no substitute products made from other organochlorine, the plastic products are all made from the same organochlorine PVC. 3. The Bargaining Power of Customers (Buyers) Buyers or customers can exert influence and control over an industry in certain circumstances. This happens when: There is little differentiation over the product and substitutes can be found easily. Customers are sensitive to price. Switching to another product is not costly. Ramaiah Institute of Management Studies37SBS Swiss Business School
  • 38. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Nowadays customers have the buying power and they have the choice in the market to choose the product what they want. In 1994 Star began the production and marketing of flexible hoses under the brand name STAR FLEX. Before that Nediyara group came with Soft PVC Garden Hoses and it has a good name among the customers and has a good market also. So when Star came with flexible hoses, it is difficult to market the product. But while comparing to other company‟s products, Star have international standards and also have the ISI certification and the product flexible hose is for both domestic and industrial use. This made Star to gain supremacy of the products over others products, market ascendancy was not difficult. Star now is a ubiquitous presence in the entire Middle-East and South Africa. In 2001, STAR received the ISO 9002 Certification, yet again the first in South India. The customers of STAR are satisfied with their products. They continue to use the product and will purchase them in future. Quality is the main factor that helps STAR to compete with other brands. Advertisements were done in print media only. 4. The Bargaining Power of Suppliers Suppliers are also essential for the success of an organization. Raw materials are needed to complete the finish product of the organization. Suppliers do have power. This power comes from: If they are the only supplier or one of few suppliers who supply that particular raw material. If it costly for the organization to move from one supplier to another (known also as switching cost). If there is no other substitute for their product. STAR plastics have suppliers all over South India. STAR plastics concentrates there market in India mostly in southern region. STAR has a monopoly market in southern area. The company can market their product very smoothly through the market segmentation. The company is selling their products by dividing the market state wise. The company concentrates in Tamil Nadu, AndhraPradesh, Karnataka and Kerala. In North India the company continues marketing of their products. To be more precise, the product of the company makes its presents felt in the following counties: Ramaiah Institute of Management Studies38SBS Swiss Business School
  • 39. Organisation Study Report on Star PVC pipes & fittings Internship 2011 INDIA UAE RUSSIA IRAN AFGHANISTAN MUSCAT QATAR BAHRAIN SAUDI ARABIA EGYPT SUDAN ETHIOPIA SOMALIA SOUTH AFRICA 5. The Intensity of Competitive Rivalry If entry to an industry is easy then competitive rivalry will likely to be high. If it is easy for customers to move to substitute products for example from coke to water then again rivalry will be high. Generally competitive rivalry will be high if: There is little differentiation between the products sold between customers. Competitors are approximately the same size of each other. If the competitors all have similar strategies. It is costly to leave the industry hence they fight to just stay in (exit barriers). In India the PVC industry is going through high competitive rivalry. As too many organizations are coming to PVC pipes & Fittings manufacturing industry yearly, the competition is also becoming higher. In the last one decade unparalleled growth was witnessed in Star group of companies to emerge as a leader in the PVC fitting and to diversify into the manufacture of suction hoses, drainage fittings and PVC pipes. The companies operation includes manufacturing of PVC fittings and allied products in clearly defined core business areas at home and overseas. The Star group of companies is the single largest plastic industry in private sector over years, star group has steadily developed into a Ramaiah Institute of Management Studies39SBS Swiss Business School
  • 40. Organisation Study Report on Star PVC pipes & fittings Internship 2011 professionally managed company comprising of 8 manufacturing unit in 3 production centers with a total installed capacity of 3850 meter per annum-8 divisions and effective centralize support services wholly dedicated to the most existing standards of quality and customer services, constantly motivated by the need to ensure total product satisfaction. In the year 2000, to take the challenge of globalization, star set up a core team and applied core ISO certification. In August 2001, star became the first PVC fittings manufacture in south India to receive the ISO 9002 certification. Now Star Plastics is the market leader in South India. The company has made its presence significantly in Middle East market also. Strategy persuaded by Star PVC is:  Produces good quality product.  Makes use of modern techniques for production to meet the demands mostly with the help of pop‟s.  Assigning targets to each store manager and as such rewarding then with attractive prizes.  Everyday feedbacks are taken. The value which exists in Star PVC is:  No discrimination for race, religion, decision making and actions.  To develop a sense of respect for oneself in other‟s mind.  Discipline is given great importance. These all help them to overcome the intensity of competitive rivalry in the PVC pipes & Manufacturing industry. Ramaiah Institute of Management Studies40SBS Swiss Business School
  • 41. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTER V SWOT ANALYSIS Ramaiah Institute of Management Studies41SBS Swiss Business School
  • 42. Organisation Study Report on Star PVC pipes & fittings Internship 2011 SWOT analysis is a strategic planning tool used to evaluate the strengths, weakness, opportunities and threats involved in a project or in a business venture. It involves specifying the objectives of the business venture or project and identifying the internal and external factors that are Favorable and unfavorable to achieve the objectives. Strength: 1. The company has a good brand image among the consumers. 2. Products accepted all over the world for its quality. 3. Multi – Unit Multi – Product organization catering all products in PVC pipe industry. 4. Global presence in Middle East Asia, Europe, Africa. 5. The company has the direct marketing network with well established distribution system 6. Dedicated marketing force with effective promotion strategy. 7. The company has fully computerized departments and production units and corporate office is connected through intranet. 8. Committed work force guided by technically skilled superiors, maintaining warmness in relation helps in delivering a combined effect. 9. Stringent quality measures adopted, backed by a strong quality control and R & D team. Weakness: 1. Organization in flexibility (Flexible working hours and Policies for flexible working). 2. Limited branches. 3. Lack of access to the key distribution channels (Not concentrating in the rural areas of south India where there are lot of business possibilities in agriculture sector. Now the organization is concentrating mainly in the construction Industry). 4. Advertisements are done through print media only. Ramaiah Institute of Management Studies42SBS Swiss Business School
  • 43. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Opportunities: 1. PVC pipe industry is in growth stage so PVC pipe industry has a greater opportunity to grow. 2. Immense opportunities as infrastructure development in India are growing at a faster pace. 3. There are large untapped opportunities in Government sector(E.g. Government is giving subsidies to the farmers for buying agriculture equipment‟s). 4. Growth of real estate on account of nuclear families. 5. Agriculture promotion schemes by government and other agencies. Threats: 1. Sudden fluctuations in crude price, causing fluctuations in raw material price makes difficult in pricing strategy. 2. Industry is one among those with greater competition. 3. In the changing world of technology, sometimes a better substitute over PVC may emerge. 4. All the competitors (Hycount Pipes, A-One Polymers, and Finolex Industries etc.) are changing their strategies and formulating new ones to capture new markets. 5. As PVC is a plastic which is not biodegradable cause‟s environmental pollution, may face a ban in future. Ramaiah Institute of Management Studies43SBS Swiss Business School
  • 44. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CHAPTER VI FINDINGS AND SUGGESTIONS Ramaiah Institute of Management Studies44SBS Swiss Business School
  • 45. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Findings: Star Plastics is the number one PVC pipe fitting manufacturer in south India and it has received the best ISI mark for quality. In August 2001, Star became the first PVC fittings manufacturer in south India to receive the ISO 9002 certification.  International Standard that is being followed as far as the quality of the products is concerned.  Has well trained employees to operate the machines.  Provides excellent services to its employees like canteen, medical facilities, transportation etc.  Premises are huge and designed in such a way that the raw materials can easily transferred from one department to another.  Safety is given main preference.  Discipline is being followed.  Pollution level is low.  Quality of the products is assured by doing nine different quality tests.  Everyday feedbacks are taken.  Excellent training and development system.  Employee performance appraisal system.  No discrimination for race, religion, decision making and actions. Suggestions: Ramaiah Institute of Management Studies45SBS Swiss Business School
  • 46. Organisation Study Report on Star PVC pipes & fittings Internship 2011  Problems can be detected early and treated to prevent deterioration welfare and cost reduction.  Annual medical checkup for all workmen and employees. A small amount can be deducted from the salary one time.  Cleanliness and orderliness has to be further improved.  Improve security measures by using electronic devices at all gates.  Advertisement need improvement (currently advertisements is done through print media only, need to be done in visual media also). CHAPTER VII CONCLUSION Ramaiah Institute of Management Studies46SBS Swiss Business School
  • 47. Organisation Study Report on Star PVC pipes & fittings Internship 2011 CONCLUSION The study conducted at STAR GROUP OF COMPANIES THRISSUR which is the pioneer and market leader in the PVC pipe product in South India, helped in getting a wider outlook about the business environment and managing an organization. Organization has six production centers and five marketing branches spread all over South India and Middle East Asia, with operation all over the world. It was a general study regarding all functions and aspects of STAR. The company has seven functional departments through which it was operating. It is found that company has a good working environment and cordial relationship is maintained between all departments for the smooth functioning and achievement of the organization goal of maintain the company‟s brand image among the customers. Porters Five Forces Model is done in the period of study to analyze the threat of the entry of new competitors and substitute products or services, the bargaining power of the customers and the suppliers and the intensity of competitive rivalry. SWOT analysis is also done to analyze the Strength, Weakness, Opportunities and Threats of the organization. Star has made are of most advance technology and up to date knowledge. Fully automated production has been put to use long time ago U.S made microprocessor controlled machinery is used to for production. Star received the ISI mark for quality and ISO 9002 certification for Ramaiah Institute of Management Studies47SBS Swiss Business School
  • 48. Organisation Study Report on Star PVC pipes & fittings Internship 2011 quality by TUV Germany, and ISO 14001: 2001 certification. All the products are of International standard. At present company is able to later about 10% of the market requirements. In order to later the complete needs the company is planning to increase the production level to maximum extent possible. The company is planning to increase the present product level of Dubai units. The research and development team of STAR group is engrossed in developing new product for the international markets. This has helped them to gain valuable insight that prompt the group to search alternative ways for manufacturing better products in a cost effective manner. CHAPTER VII Ramaiah Institute of Management Studies48SBS Swiss Business School
  • 49. Organisation Study Report on Star PVC pipes & fittings Internship 2011 BIBILIOGRA PHY BIBILIOGRAPHY Books Referred:  Philip Kotler, Jha, and Koshy: “Marketing management”.  Roger. A. Kerin, Steven. W. Hartley, Eric. N. Berkowit, William Redlius: “Marketing Management”. Websites Referred:  www.wikipedia.com  www.stargroupind.com  www.google.com Ramaiah Institute of Management Studies49SBS Swiss Business School
  • 50. Organisation Study Report on Star PVC pipes & fittings Internship 2011 Journals:  Star Plastics Company Magazine. Ramaiah Institute of Management Studies50SBS Swiss Business School