Bajaj GroupThe BCG Matrix

Introduction

• Jamnalal Bajaj – Founder

• The group comprises of 27 companies and was founded in the year 1926. Bajaj Auto is the flagship of the Bajaj group of companies.

• It started as a sugar manufacturing factory in 1931, has grown to become one of the country’s largest business houses.

A Group

Built on

Trust...

Bajaj Electricals Ltd. Mukand International Ltd.

Bajaj Auto Ltd. Mukand Engineers Ltd.

Bajaj Hindustan Ltd. Bachhraj Factories Pvt. Ltd.

Mukand Ltd. Mukand Global Finance Ltd.

Maharashtra Scooters Ltd. Bajaj Consumer Care Ltd.

Bajaj Auto Finance Ltd. Bajaj Auto Holdings Ltd.

Hercules Hoists Ltd. Jamnalal Sons Pvt. Ltd.

Hind Lamps Ltd. Jeevan Ltd.

Bajaj Sevashram Pvt Ltd. Bachhraj & Company Pvt. Ltd.

Bajaj Ventures Ltd. The Hindustan Housing Co Ltd.

Bajaj International Pvt Ltd. Baroda Industries Pvt Ltd.

Hind Musafir Agency Pvt Ltd. Stainless India Ltd.

Bajaj Allianz General Insurance Company Ltd.

Bombay Forgings Ltd.

Bajaj Allianz Life Insurance Company Ltd.

Bajaj Electricals

• A part of the Shekhar Bajaj Group.

• Bajaj Electricals (BEL) is a 69-year-old Engineering company, with interest in Lighting, Luminaires, Appliances, Fans, and Engineering & Projects.

• It has 19 branch offices, a chain of 600 distributors, 3000 authorized dealers, over 1,20,000 retail outlets and over 200 service franchises spread across the country.

Corporate Vision of Bajaj Electricals

“We aim to bring greater happiness to our customers by improving their

quality of life, while enhancing stakeholder value”

Core Values of Bajaj Electricals

• Build Trust:

We will conduct all our business dealings with fair and ethical business practices and strive to build trust in the minds of all our stakeholders.

• Belief in Excellence:

We believe in setting higher levels of Excellence in all our actions and will recognize and reward the excellence achieved by our team members.

• Delighting Customers:

We will delight our customers by providing them world-class products and services and thereby enhance their quality of life.

Core Values of Bajaj Electricals

• Ensuring Accountability:We will work in a transparent, performance oriented environment and define clear accountability for our employees, while empowering them to achieve their performance goals with speed and efficiency.

• Encouraging Teamwork:We will ensure dignity and respect for the individual while encouraging Teamwork.

• Personal Growth:Every employee will be enabled to learn at the work place with significant opportunities for Personal Growth and Contribution to the organization.

Present Scenario…

• Bajaj Electricals has reported a 31% growth in net sales to Rs 304.89 crore.

• The Net Profit recorded a growth of 117% at Rs.20.96 crore.

• BEL has 5 Strategic Business Units namely –

a) Lighting

b) Lumanries

c) Appliances

d) Fans &

e) Engineering & Projects.

Lighting

• The Lighting BU markets a wide range of lamps and tube lights, which includes General Lighting Service (GLS) filament lamps, Fluorescent Tube Lights (FTL), Compact Fluorescent Lamps (CFL), miniature lamps and special purpose lamps.

• A strong distribution network exists for marketing these lamps both in urban and rural areas.

Lighting

• The BU has continued to improve its retail presence by expanding its network and reaching in over 165000 outlets.

• The consumer durables division has reported revenue growth of 36% to Rs 257.90 crore contributing 46% to the total revenue and the segment PBIT

• It continues to dominate the Iron category by achieving a record sale of over 1 million Irons in a financial year.

Lighting

• Bajaj Electricals has acquired 32% Stake in Starlite Lighting, CFL Manufacturer, due to which, the company will grow its lightning business in a big way.

• Starlite has a production capacity of 10 million CFL’s per annum, of which more than half is consumed by Bajaj Electricals.

Fans

• Currently, Crompton Greaves is the market leader in India for fans, followed by Usha, Orient, Khaitan, and Polar.

• Bajaj Electricals, has recently restructured its businesses into separate strategic business units (SBUs), has seen the fan business posting a growth of 40 percent in the past 7 months as against an industry growth of 5 percent.

• The company has embarked upon a strategy to play the volume game by bringing in fans at lower price points and is presently having 12% market share.

Appliances

• Bajaj Electricals is looking to acquire premium brands in appliances in its pursuit of growth.

• The Rs 1,100-crore company plans to double its turnover in two years and quadruple it in six years, through acquisitions in its existing businesses and foraying into new areas that may include tie-ups with international players.

• The company has already tied up with Italian appliances major, Nardi, to market its gas-based cooking appliances in India. The range includes gas stoves and chimneys and this would be extended to premium and ultra premium offerings.

• The premium products will be brought in as completely built units and the company will explore the possibility of making some of the components or assemblies in future.

Engineering & Projects

• The ever increasing demands from the Infrastructure, & Power Transmission has offered significant opportunity.

• This division contributed 26% to total revenue and 40% to total PBIT of the company by Rs 80.50 crore compared to Rs 59.20 crore and a segment PBIT of Rs. 11.66 crore as against Rs 5.58 crore.

• In FY 2007, this division produced 2,970 nos. of Highmasts and 17,181 nos. of Poles as against 1,760 nos. and 14,951 nos. respectively in the previous year (06).

Engineering & Projects• It has maintained its capacity utilization of 100%.

• The Unit also manufactured 25,223 MT of transmission line towers as against 22,822 MT in the previous year (06).

• The Unit continues to enjoy dominance in Highmast business with over 65% market share.

• This BU has received prestigious orders from BHEL for power plant illumination and the work at 14 different power station sites is under execution.

• The continued focus of the government on infrastructure offers a good opportunity to this BU's various business portfolios viz. Power Transmission, Highmast Street Lighting and Special Projects, to improve its growth and profitability in the future too.

BCG Matrix

Stars Question Marks

Cash Cows Dogs

Low

High

High Low

BCG Matrix of Bajaj Electricals

• According to us, out of all the 5 SBU’s of Bajaj Electricals - Luminaries, Engineering & Projects and Lighting are the Stars of the Company as they have high Market Share and Market Growth.

• Appliances are Question Marks as the company it has high growth rate but low market share, due to which it is planning to tie-up with other international brands.

• Fans are also Question Marks, as it has low market share its position is 6th in the market.

BCG Matrix

StarsLuminaries, Lighting

& Engineering & Projects

Question MarksFans & Appliances

Cash Cows DogsLow

High

High Low

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