Download - Extended Essay Manan-final
Extended Essay
Business and Management
Research Question:
How has BHARAT WIRE ROPES positioned itself effectively to compete with other
rope manufacturers in India?
________________________________________________________________________
Candidate Name: Manan Mittal
IB Candidate Number: 004733010
School Name: D.Y. Patil International School
School Number: 4733
Adviser: Mr Husien
Date Submitted: 6/3/2013
Word Count:3948
Manan Mittal 004733010
2
Abstract
BWR is a 40-year-old company, which has been newly taken over by a set of
professionals who are the best in their fields. I have conducted this Extended Essay to see
how well has Bharat Wire Ropes(BWR) established itself in the market and are there any
immediate threats to the company. In this essay I have analyzed a few strategies adopted
by BWR and also have suggested new strategies, which BWR could use in order to
compete efficiently in the wire rope market. Hence my research question-“How has
BHARAT WIRE ROPES positioned itself effectively to compete with other rope
manufacturers in India?”
In order to conduct my analysis I have used tools like SWOT, Ansoff Matrix, Marketing
Mix and Market Mapping. Each tool helped me to analyze the company in an efficient
manner. The market positioning helped me efficiently position BWR along with other
companies on the basis of factors like Quality and Price these were then used as a base
for comparison with major competitors like Usha Martin , Mahavir Wire Rope and
Vikrant Wire rope. All the data for the Market Mapping was collected by conducting
secondary research on a number of websites and also by interviewing a number of clients
of wire rope companies.
Manan Mittal 004733010
3
By conducting my research on BWR I finally concluded that the company had managed
to effectively establish in the market as compared to the other dominant players in the
market.
Word count-237
Manan Mittal 004733010
4
TABLE OF CONTENTS:
1. Introduction……………………………………………………………………..…5
2. Rationale…………………………………………………………………….…….8
3. Methodology………………………………………………………………………9
4. SWOT………………..……………………………………………………………10
5. Ansoff Matrix……………………………………………………………….…….18
6. Market Mapping (Positioning)………………………………………...………….21
7. Analysis of Marketing Mix……………………………………………………….23
• Promotion
• Product
• Price
• Place
• Process
8. Conclusion…………………………………………………………………………30
9. Work sited………………………………………………………………………….31
Manan Mittal 004733010
5
Introduction
Bharat Wire Ropes began its operations in the year 1986 as a partnership firm by the
Shah family. Over the years they expanded their operations significantly and today they
are a multi million-dollar enterprise.
“The company’s product portfolio covers ropes with a diameter of 6mm to 84mm, which
caters to a range of industries such as fishing, elevators, cranes, mining, construction,
shipping and offshore/onshore oil exploration. Bharat Wire Ropes Limited has a diverse
mix of clients ranging from Overseas Consumers, Private Players, the entire Indian
Defense Segment and Government and Semi – Government Organizations”1
“Some of their top clients are:
• Private Players: Suzlon, ABG Cranes, TATA, Kone Elevators, Bhushan, JSPL, MSL.
• Defense Segment: Ministry of Defense, Indian Army, Indian Naval Force, Material
Organization, Indian Air Force etc.
1 economic times. N.p., n.d. Web. 3 Oct. 2012. <http://m.economictimes.com/news/news-by-
industry/indl-goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms>.
Manan Mittal 004733010
6
• Government and Semi – Government Organizations: Indian Railways, Major Port
Trusts, Electricity Boards, Shipping Corporations, ONGC, ISRO, Coal India Limited
and its subsidiaries, BHEL, BEML etc.”2
“The quality management system(QMS) at Bharat Wire Ropes Limited has led to their
accreditation by reputed agencies such as the British Standard Institute and ANSI –
ASQNational Accreditation Board.”3
The company has also formulated its own rating scale to rate all the vendors that supply
material to them. The ratings are based on criteria’s such as – product quality, service
quality, responsiveness and customer service. The vendors are subjected to thorough
quality checks at periodic intervals &the ones who fall short of expected standards are
rejected. This procedure ensures that all products the company manufacturers are of the
highest quality, safe and reliable (this is extremely important keeping the end use of the
wire ropes in mind – elevators / mining / construction).
Mr. M.L. Mittal is presently the Managing Director at Bharat Wire Ropes Limited. He
has been a corporate Finance expert and has over two decade experience with the
2 bharat wire ropes. N.p., n.d. Web. 25 Nov. 2012. <http://bharatwireropes.com/About%20Us/M__12>.
3bharat wire ropes. N.p., n.d. Web. 25 Nov. 2012. <http://bharatwireropes.com/About%20Us/M__12>.
Manan Mittal 004733010
7
Welspun Group4. “In the year 2010, Mr. Mittal along with two other entrepreneurs
acquired Bharat Wire Ropes for INR 200 crore through a SPV (Special Purpose Vehicle)
Gaji Mercantile”.5
Post the takeover; a number of professional stalwarts were brought in the company to
head its different divisions.
“These professionals have held held top positions in flagship Companies of India in
different verticals such as pipes, terry towel, power, banking, finance and wire
ropes.Bharat Wire Ropes Limited with the amalgamation of the exceptional talent,
experience and resources aims to create a world-class organization that would provide
unmatched value for its customer’s and a platform for its people to dream & achieve
their goals.”6
4 welspun. N.p., n.d. Web. 17 Oct. 2012.
<http://www.welspun.com/content.asp?Submenu=Y&MenuID=1&SubmenuID=14>.
5The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
6bharat wire ropes. N.p., n.d. Web. 24 Dec. 2012. <Bharat Wire Ropes Ltd. "About Us." Bharatwireropes.com. N.p., n.d. Web. 24 Dec. 2012. <http://bharatwireropes.com/About%20Us/M__12>.>.
Manan Mittal 004733010
8
Rationale
The vertical in which the company Bharat Wire Ropes (BWR) Limited operates in is a
very competitive one. It’s been two years since the new management has been running
the affairs of the company (post the takeover in 2010). Through this essay, I would like to
evaluate how have they have positioned themselves to effectively compete with other
rope manufacturers in the market.
The aim of the three individuals who got together to take over this company (in 2010)
was to transform this company and make it a global leading supplier of wire ropes. Since
its been two years post the takeover, this essay will analyze BWR’S performance in terms
of positioning themselves appropriately in the market and if not, what steps could they
take to ensure their vision & mission is achieved.
My father was part of the team that took over this company and the company’s line of
operations is of a great personal interest to me.
Manan Mittal 004733010
9
Methodology
Primary research for this essay has been obtained from interviews of BWR director-
Mr. Mayank Mittal and interviews of some customers of BWR. Along with secondary
data (on quality) helped me position BWR and its competitors.
Secondary research for this essay has been obtained from the company website, news
websites and the company presentation.
Three tools have been used to conduct this research:
1. Market Mapping – This tool has assisted me in analyzing the current positioning
of all major wire rope manufacturers in India (including BWR)
2. Marketing mix- I have analyzed the marketing mix elements of BWR and also
compared the same with its competitors.
3. Ansoff matrix –The Company is now considering changing its strategy (in terms
of clients that it targets). This tool enabled me look at this strategy and also
evaluate the pros and cons of their new plan.
4. SWOT – SWOT Analysis helped me ascertain the company’s strengths and
weaknesses and also gauge the opportunities and threats it faces in this market.
Manan Mittal 004733010
10
SWOT
SWOT stands for strength, weakness, opportunities and threats, strengths and weakness
are internal factors whiles as opportunities and threats are external. SWOT helps a
business to understand where it stands and helps to create aims and objectives for the
future.
Strengths
1. BWR holds 15 certifications and licenses7, which are basically to ensure the
quality of the product (“certifications include ISO, RDSO Approvals, BIS
Licenses, DGMS Approval, MMD Approval”4 to name a few). Its due to their
reputation of providing high quality products (that these certifications assure) they
have a strong client base. These certifications have been earned over a period of 4
decades. Each approval is not easily gained. It takes a long time for any new
entrant to get these approvals because of the bureaucracy and red tapism involved.
BWR is one of the few wire rope manufacturers that have these approvals in place
and this gives them a distinct competitive advantage.
2. BWR was established almost two decades ago. The company through the supply
of high quality wire ropes has built a strong image and reputation in the market. It
7bharat wire ropes. N.p., n.d. Web. 25 Nov. 2012.
<http://bharatwireropes.com/About%20Us/M__12>.
Manan Mittal 004733010
11
has also developed a loyal customer base and this is their biggest strength as a
company.
3. Post the takeover of the company, the new management team brought in a number
of professional stalwarts to head different divisions of this company.8 This
increases specialization & professionalism in the company, making the company
run more efficiently.
4. The top management of BWR has a combined work experience of 200 man-years
and this experience aids them in running the company efficiently.
5. Bharat Wire Ropes has a diverse product mix9 which increases the customer base.
They not only manufacture wire ropes but also make slings and supply strands.
Diversified portfolio helps the company to not be dependent on any one customer
/ industry. Thus saving them from the cyclical downturn in any one industry at
any given time
6. BWR has been a recipient of several awards.10 This not only helps in building the
image of the company with customers but also with other stakeholders such as
8bharat wire ropes. N.p., n.d. Web. 25 Nov. 2012. <http://bharatwireropes.com/About%20Us/M__12>.
9Bharat wire ropes. N.p., n.d. Web. 8 Jan. 2013.
<http://bharatwireropes.com/Product%20Brochure%20by%20Application/M__38>. 9Refer to appendix 7
10Bharat wire ropes. N.p., n.d. Web. 30 Dec. 2012.
<http://bharatwireropes.com/Achievements%20and%20Awards/M__19>. 10Refer to appendix 4
Manan Mittal 004733010
12
employees. There is a sense of pride that employees get by working for a
company that is recognized as a leader by external organizations like EEPC (that
confer the awards).11
7. BWR is one of the biggest wire rope companies in India. Their installed capacity
is 10,000 tonnes12. This ensures significant economies of scale for the company.
Weakness
1. Post the takeover of BWR, the company is now run in a very different way than
the erstwhile owners ran it. Earlier it was run more like a family owned business.
With professionals coming in, the functioning of the company has undergone a
change, along with the organizational structure. Workers have started feeling
insecure about their jobs.13 The main reason being that the new management
stresses a lot on quality and low rejections. Thus the feeling amongst a section of
11 Refer to Appendix 4 & 5 12The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
13 Refer to Appendix 2
Manan Mittal 004733010
13
workers is that the company or supervisors can ask them to leave if there are
rejections over and above the tolerance limit in the division they are working in.
2. BWR is a privately owned company. Raising resources is therefore a challenge
for the company. Raising funds is possible only through private sources or
through bank term loans. However, bank term loans are a very expensive source
of finance. BWR’s main competitor, Usha Martin is a public limited company14
giving it access to finance that is not available to BWR.
3. BWR relies on its network of suppliers for the raw materials required for
manufacturing the wire ropes. There have been several occasions in the past
where the suppliers have not been able to meet the timelines for delivery and this
has led to delays in productions and lost orders. Further, under some contracts
BWL has had to pay penalty charges to its customers for late delivery and This
eats into their margins
14Usha Martin. N.p., n.d. Web. 5 Jan. 2013. <http://www.ushamartin.com/>.
Manan Mittal 004733010
14
4. BWR’s plant is located in Maharashtra. This state is presently the most expensive
state in India for the supply of electricity.15 Electricity prices therefore are very
high and some of their competitors are based in investor friendly states of India
wherein the charges for commercial usage of electricity are low. This again gives
them a significant cost advantage over BWR.
Opportunities
1. BWR’s plant is located near Mumbai (Maharashtra), a port city. This location has
a distinct advantage with respect to exports. Further, the distance from BWR to
Jawaharlal Nehru Port in Mumbai is around 94.6km16. Thus the transport cost
from its plant to the port is minimal.
2. BWR’s plant is located in an area that is identified by the local government as an
industrial zone. The company is eligible for various subsidies because of this
location and this helps them cut the cost of production.
3. The demand for wire rope has been increasing, especially “from leading
international players in oil& gas, mining, elevators and the infrastructure
15Mercindia. N.p., n.d. Web. 3 Jan. 2013. <http://www.mercindia.org.in/pdf/Order_SRParanjpe_62000142002.pdf>. 16 Refer to Appendix- 11
Manan Mittal 004733010
15
sector,”17. In order to cater to such demand BWR is planning to open a new unit
in Chalisgaon, which will increase the production capacity from 10,000 tonnes to
76,000 tonnes.18
Threat
1. The wire rope market is very price sensitive. Chinese companies act as an
immediate threat cause their labor cost is equal to/less than the labor cost in India.
The Chinese government also offers many subsidies in order to promote their
domestic companies. This decreases the cost of production significantly for
Chinese companies.
2. Usha Martin is BWR’s biggest competitor in India. Usha Martin is backward
integrated as it not only manufactures wire rope but also extracts raw materials,
which contribute in making these ropes.19They are into power, coal, iron and steel
17The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
18 The Economic Times. N.p., n.d. Web. 30 Dec. 2012. <http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>. 19Usha Martin. N.p., n.d. Web. 2 Jan. 2013. <http://www.ushamartin.com/>.
Manan Mittal 004733010
16
mining that are the main raw materials for wire strands which in turn is the main
raw material for wire ropes. This gives Usha Martin a competitive advantage, as
they are not dependent on suppliers for raw materials. Deliveries are on time and
hence they are able to manufacture and supply ropes to their clients on time.
3. The German wire rope companies are more advanced and have better quality of
ropes therefore they are a threat in an international market, where buyers are very
quality conscious. BWR is looking at increasing their supplies to overseas
markets, and to do so it must ensure that it competes on quality than on price.
Evaluation:
“India will lead the global economy in real GDP growth in 2013, outpacing neighboring
China, according to the Rapid Growth Market (RGM). Forecast released on Monday by
Ernst & Young (E&Y).”20 Further, “the Planning Commission of India has projected that
investment in infrastructure would almost double at US$ 1,025 billion in the Twelfth Five
Year Plan (2012-17), compared to US$ 514 billion in the Eleventh Plan.”21
These factors coupled together will ensure that demand for wire ropes will continue to
increase. BWR has been operating in this market for over two decades now and they have
202point6billion. N.p., n.d. Web. 1 Feb. 2013.
<http://www.2point6billion.com/news/2011/10/27/report-india-to-be-world%E2%80%99s-fastest-growing-economy-after-all-10351.html>.
21http://www.oifc.in/secrs/infrastructure
Manan Mittal 004733010
17
a very good understanding of the market and customers needs and wants. A diversified
portfolio enables them to meet the needs to different types of consumers/industries.
Further, with their investment of Rs 500 crore in a new plant in Maharashtra, their
installed capacity will increase significantly (from 10,000 tonnes to 76,000 tonnes)22
Keeping the infrastructure growth of the country in mind, the increase in capacity will
enable BWR to meet demand effectively. With professionals being brought in to head the
different divisions, in the long run the company will start seeing the benefits with
improved quality and lower rejections. This will also enable them increase their supplies
to export markets.
Under the new management, the company has started to show positive signs in terms of
growth and investment (the Rs 500 crore investment to increase capacity).
22The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
Manan Mittal 004733010
18
Ansoff Matrix
Existing Product New Product
Existing Market Market Penetration Product Development
New Market Market Development Diversification
The Ansoff Matrix is an analytical tool that helps the managers to strategize their product
according to the market growth. The reason I’m using this analytical tool is to see which
business strategy is adopted by Bharat wire ropes .BWR uses the market development as
the product already exists but BWR is entering new markets in order to increase their
customer base.
Market development
“Market development is the medium risk growth strategy where the businesses sell
existing products in a new market.”23Post the takeover BWR is shifting its customer’s
base from government orders to private orders
BWR entering new market with existing products.
• BWR will significantly increase its market share
23 Hoang, Paul. Business And Management. Melton: IBID, n.d. Print.
Manan Mittal 004733010
19
• This medium risk strategy of entering new market will be beneficial to BWR as
BWR can focus on efficiency and attracting private customers thereby making the
business more profitable. At present, the company mainly focuses on government
orders. However, with increased bureaucracy and red tapism and low margins,
they are contemplating targeting private customers in a big way. Though, they
presently supply products to this market, the share is miniscule compared to
government orders.
• New markets would translate into spreading the risk for BWR. Thus, any
slowdown or lack of funding from government orders can still be offset from the
diversified customer portfolio
Evaluation
There is a change in BWR’s clientele, before the take over in 2009 70% of orders were
government orders and over time there has been an increase in the private orders from
20% to 32% and exports from 10% to 24%. Currently BWR is taking orders from small
private companies and few big private companies, however now BWR is aiming to take
orders from big private companies since they place bulk order, which would lead to
higher profits for BWR.
BWR can target more private customers in a variety of ways:
Manan Mittal 004733010
20
Geographical Diversification-BWR could increase their customer base by initially
appointing distributors / agents in areas where the demand is substantial. This (i.e.
demand) could be determined with the help of Google analytics24 as BWR can pinpoint
where their potential customers are. Further, since wire ropes aren’t sold in retail stores,
appointing distributors is very important if private customers are to be targeted.
Pricing strategies- The domestic wire rope market is a highly price sensitive market.
Thus, BWR should use predatory pricing in order to capture a customer base. BWR could
use this strategy as their cost of production is low (as they enjoy significant economies of
scale due to their large installed capacity which will be further increased with their new
plant).
24 Google analytics is a software offered by Google which helps a company to have detailed statistics about website traffic with its location
Manan Mittal 004733010
21
MARKET MAPPING
The above market mapping displays how the major companies in the wire rope market in
India are positioned. The criteria’s used for positioning of the said companies are Quality
and Price as these are the two most important criteria’s that customers in this market use
for placing orders with companies. The positioning of each firm represented above is
determined mainly on feedback from customers and awards received (as awards would be
Manan Mittal 004733010
22
one of the main indicators of the quality of the products of a particular firm).25 Based on
this mapping, it is evident that Bharat Wire Rope is perceived by customers as being a
company that supplies high quality products at low prices. Keeping the price sensitive
Indian customer in mind, this positioning is apt for the Indian market. Also the customers
perceive the quality of BWR’s ropes to be better than Usha Martin (its biggest
competitor). This again highlights that the changes in the management have had a
positive impact and the company’s internal quality control system is to be credited for the
same.
Usha Martin though is positioned very close to BWR and given their size and installed
capacity (both being bigger than BWR), they do pose a significant threat to BWR’s
position in the market. The SWOT analysis, showed that the company faces delivery lags
from its suppliers that results in delayed production and hence imposition of penalties by
customers. This is an area that requires immediate attention by the BWR management to
maintain their dominant position in the Indian Rope Market. This also will ensure that the
company’s margins are not under pressure (due to payment of penalties for late
deliveries).
25 Please refer to appendix 1 for customer responses and appendix 16 for list of awards obtained by each company
Manan Mittal 004733010
23
Marketing Mix
The marketing mix is an integral part of a firm’s positioning strategy. The way in which a
consumer perceives a company depends greatly on the way the marketing mix of a
company is designed. Keeping the positioning of the company in mind (from the market
mapping analysis), the company’s existing marketing mix is analyzed and changes are
suggested to ensure they continue maintaining their dominant position in the Indian wire
rope market.
Promotion
The current promotional strategies used by BWR are:
1) Website - BWR has just redesigned their website making it more user friendly
and having a more appealing interface. The interface also enables potential
customers to know about the company, facilities, products etc very easily.
Keeping in mind the export market, the website also has options where all the text
can be translated into different languages. Customers can also download BWR’s
Product Brochure26 thereby giving them all the information they need with a
single download..
26Bharat wire ropes. N.p., n.d. Web. 8 Jan. 2013.
<http://bharatwireropes.com/Product%20Brochure%20by%20Application/M__38>.
Manan Mittal 004733010
24
2) Compact Disc – Every year BWR releases a specially designed CD that has
information on the company, latest developments, details of awards they have
received, marquee client list etc. This is sent to potential customers to increase
awareness about BWR. This is a very cost effective way of spreading awareness
amongst the target market.
In addition to the above, BWR could incorporate the following promotional strategies to
continue to maintain their position in the market:
1) Google ads 27- BWR should subscribe to Google’s advertising service wherein if a
customer types wire rope manufacturer in India in Google’s search engine their
(BWR’s) listing will be in the top three to four hits. This will enable them
generate more inquiries.
2) Exhibition28- “Messe Düsseldorf is an organizer who hosts a wire rope exhibition
in Mumbai and across the globe”29 BWR should register and actively participate in
such exhibitions, as this is an excellent platform to build networks with potential
clients (especially private ones) and also enhance brand awareness. These exhibitions
27 Refer to Appendix 2 28 Refer to Appendix 2 29Tradefairdates. N.p., n.d. Web. 9 Jan. 2013. <http://www.tradefairdates.com/Wire-Cable-India-
M1903/Mumbai.html>.
Manan Mittal 004733010
25
are very cost effective compared to advertisements, which are very expensive.
Further, the former is attended by BWR’s target market, making it much more
effective
3) Free samples 30– Prior to the takeover of the company, BWR had a bulk of
government orders and very few private orders. Post the takeover, the company is
actively considering to increase their sales in the private sector. To enter this
competitive segment, it is essential customers get an idea on the quality and the
value proposition offered by BWR. They should provide free samples of their
ropes to customers to let them test the quality of the product and once they are
satisfied, come back and place an order. BWR’s biggest competitor uses this
strategy too. 31
Product
• BWR’s product portfolio comprises of different types of ropes that cater to different
industries such as mining, oil and gas, etc. Each industry has their own specification and
requirements. BWR presently has the facilities to make over 3000 different kinds of ropes
and on an average they make 50-60 different types of ropes in a month. 32Not many
30 Refer to Appendix 2 31 Refer to Appendix 2 32 Refer to Appendix 2
Manan Mittal 004733010
26
company’s in this market can boast of the same. This (product portfolio) enables them to
maintain a competitive advantage. Further, quality is very essential as human life is at
stake here. At BWR, their quality control processes ensure that wire ropes manufactured
meet the highest quality and safety standards. They have been awarded the following
awards in the past w.r.t. their quality:
“
o Awarded by DRDO for indigenization of Missile Loaders, Armored
Cables.
o ISO 9001 / 2008
o Award for Highest export performance by EEPC in 2003-2004.
o Award for Highest export performance by EEPC in 2008-2009.
o Recognized as a Life Member of Friends of Environment. ”33
The above list of awards is a testimony to their firm commitment to their consumers of
supplying the highest quality product at the most competitive price.
33Bharat wire ropes. N.p., n.d. Web. 30 Dec. 2012.
<http://bharatwireropes.com/Achievements%20and%20Awards/M__19>.
Manan Mittal 004733010
27
PLACE
As BWR was catering more towards government orders, they do not have a very
effective distribution strategy in place. Since, the focus is now more on private
consumers, it is very essential for BWR to have an effective distribution strategy in place.
Keeping the nature of this product in mind, the best way to distribute would be in the way
to appoint agents and distributors. The advantage with agents / distributors is that they
know the needs and wants of consumers, they have a ready rapport with them. Through
their network, BWR can target many more private consumers. Though the commissions
to be paid would reduce the margins, the volumes generated would more than
compensate for this.
Price
BWR has been following penetration-pricing strategy. This was because with
government orders, the tender is given to the company that bids the lowest and hence
price is the most important determinant for getting an order. Since BWR is looking at
moving away from this segment to the more lucrative private consumer segment, they
must continue their pricing strategy, Pricing depends on few important factors such as:
Manan Mittal 004733010
28
Competition- the number of suppliers of wire rope ropes with established consumer base
is very high and therefore the wire market is very price sensitive. BWR should therefore
keep prices low and the quality high to establish themselves in this segment (private
orders).
Cost of production- the cost of production is one of the only factors that can help BWR to
reach profit maximization. Since the company is considering opening a new unit in
Chalisgaon, which will increase the production capacity from 10,000 tonnes to 76,000
34tonnes. This will help them to achieve greater economies of scale hence reduce cost of
production and thus improve margins and profitability
Process
BWR has a consumer feedback system in place to gauge consumer experience. Feedback
plays a very important role in improving systems and processes and also ensures repeat
orders from clients (if feedback is acted upon). Though the system is in place, feedback is
not actively pursued and sometimes once it is received it is not passed on in a timely
manner to the supervisor / managers. The company needs to have a consumer feedback
34 The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
Manan Mittal 004733010
29
cell wherein feedback is monitored and also tracked (to ensure that feedback received is
acted upon by respective manager / plant supervisor). The consumer feedback cell in-
charge should report directly to the Director to ensure everyone understands the
importance of the same. This will also ensure rejections are minimized.
Manan Mittal 004733010
30
Conclusion
After analyzing BWR’s positioning aided with different tools, I have come to the
conclusion that BWR is positioned appropriately in the market. The customer perception
also is a testimony to this fact.
Usha Martin act as a immediate threat to the company as it is positioned very close to
BWR. BWR need to enhance their distribution channels since they are now considering
changing their target market. The new plant in Chalisgaon is again a step in the right
direction keeping the immense growth this sector is witnessing. With increased capacity,
effective distribution channels and penetration pricing strategy they should be able to
attract private customers that will enable them to maintain this dominate position in the
market.
Manan Mittal 004733010
31
Works Cited
2point6billion. N.p., n.d. Web. 1 Feb. 2013.
<http://www.2point6billion.com/news/2011/10/27/report-india-to-be-
world%E2%80%99s-fastest-growing-economy-after-all-10351.html>.
bangkokpost. N.p., n.d. Web. 6 Feb. 2013.
<http://www.bangkokpost.com/58years/usha.html>.
bharat wire ropes. N.p., n.d. Web. 24 Dec. 2012. <Bharat Wire Ropes Ltd. "About Us."
Bharatwireropes.com. N.p., n.d. Web. 24 Dec. 2012.
<http://bharatwireropes.com/About%20Us/M__12>.>.
bharat wire ropes. N.p., n.d. Web. 25 Nov. 2012.
<http://bharatwireropes.com/About%20Us/M__12>.
Bharat wire ropes. N.p., n.d. Web. 24 Dec. 2012. <Bharat Wire Ropes Ltd. "About Us."
Bharatwireropes.com. N.p., n.d. Web. 24 Dec. 2012.
<http://bharatwireropes.com/About%20Us/M__12>.>.
Bharat wire ropes. N.p., n.d. Web. 29 Dec. 2012.
<http://bharatwireropes.com/Products/M__7>.
Bharat wire ropes. N.p., n.d. Web. 30 Dec. 2012.
<http://bharatwireropes.com/Achievements%20and%20Awards/M__19>.
Manan Mittal 004733010
32
Bharat wire ropes. N.p., n.d. Web. 8 Jan. 2013.
<http://bharatwireropes.com/Product%20Brochure%20by%20Application/M__38
>.
The Economic Times. N.p., n.d. Web. 30 Dec. 2012.
<http://economictimes.indiatimes.com/%20news/news/by/industry/indl/goods/svs
/engineering/bharat-wire-ropes-to-invest-rs-500-crore-in-new-plant-in-
maharashtra/articleshow/17320504.cms/articleshow/17320504.cms>.
economic times. N.p., n.d. Web. 3 Oct. 2012. <http://m.economictimes.com/news/news-
by-industry/indl-goods/svs/engineering/bharat-wire-ropes-to-invest-rs-500-crore-
in-new-plant-in-maharashtra/articleshow/17320504.cms>.
google analytics. N.p., n.d. Web. 10 Nov. 2012.
<https://accounts.google.com/ServiceLogin?service=analytics&userexp=signup&
hl=en>.
google maps. N.p., n.d. Web. 10 Feb. 2013.
<https://maps.google.co.in/maps?hl=en&authuser=0&tab=wl>.
The hindu businessline. N.p., n.d. Web. 6 Dec. 2012.
Hoang, Paul. Business And Management. Melton: IBID Press, n.d. Print.
Mercindia. N.p., n.d. Web. 3 Jan. 2013.
<http://www.mercindia.org.in/pdf/Order_SRParanjpe_62000142002.pdf>.
Mittal, Myank, comp. Approvals Earned by BWR. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
33
Mittal, Myank, comp. Awards Earned by BWR. Rep. Mumbai: BWR, 2011.
Mittal, Myank, comp. BWR's Top Clients. Rep. Mumbai: BWR, 2011.
Mittal, Myank, comp. Increasing Global Demand. Rep. Mumbai: BWR, 2011.
Mittal, Myank, comp. Location of New Plant to Location of the Existing. Rep. Mumbai:
BWR, 2011.
Mittal, Myank, comp. Product Mix of BWR. Rep. Mumbai: BWR, 2011.
Mittal, Myank, ed. The Industry Size of Wire Rope Market. Rep. Mumbai: BWR, 2011.
oifc. N.p., n.d. Web. 5 Mar. 2013. <http://www.oifc.in/sectors/infrastructure>.
Tradefairdates. N.p., n.d. Web. 9 Jan. 2013. <http://www.tradefairdates.com/Wire-Cable-
India-M1903/Mumbai.html>.
Usha Martin. N.p., n.d. Web. 2 Jan. 2013. <http://www.ushamartin.com/>.
Usha Martin. N.p., n.d. Web. 5 Jan. 2013. <http://www.ushamartin.com/>.
vikrantropes. N.p., n.d. Web. 5 Feb. 2013.
<http://www.vikrantropes.com/vrweb/index.php?catagory=about>.
welspun. N.p., n.d. Web. 17 Oct. 2012.
<http://www.welspun.com/content.asp?Submenu=Y&MenuID=1&SubmenuID=1
4>.
Manan Mittal 004733010
34
Appendix
Appendix- 1- Interviews with customers – Draft
Name:___________________
Company working for:__________________
Position in the company:________________________
(a) What purpose do you buy wire ropes for?
(b) Which company/supplier do you purchase wire ropes from?
Manan Mittal 004733010
35
(c) What factors are important for you in deciding from which supplier to procure wire
ropes from
❏ Quality
❏ Delivery as per timeline committed
❏ Price
❏ Reputation of supplier
❏ Diverse product portfolio (with availability of a wide variety of wire ropes
(d) What would you rate the following wire rope companies in terms of Quality? (scale
ranging from 1-5)
• Bharat wire ropes (BWR)
• Usha Martin
• Vikant wire ropes
• Mahavi wire ropes
Manan Mittal 004733010
36
(e) How would you rate the following wire rope companies in terms of Price?
• Bharat wire ropes (BWR)
• Usha Martin
• Vikant wire ropes
• Mahavi wire ropes
(f) Reason for not choosing BWR (if not client)/Reason for choosing BWR (if client)
Manan Mittal 004733010
37
Client 1
Name: Ram Tarneja was interviewed on 2/02/2013
Company working for: Otis Elevator Company (India)
Position in the company: Director
(a) What purpose do you buy wire ropes for?
OTIS is one of the largest manufactures of moving products such as elevators and wire
ropes acts as one of the major components used in an elevator making Otis one of the
biggest clients in wire rope market
(b) Which company/supplier do you purchase wire ropes from?
We purchase most of our wires from Usha martin as they are established worldwide
Manan Mittal 004733010
38
(c) What factors are important for you in deciding from which supplier to procure wire
ropes from
❏ Quality
❏ Delivery as per timeline committed
❏ Price
❏ Reputation of supplier
❏ Diverse product portfolio (with availability of a wide variety of wire ropes
(d) What would you rate the following wire rope companies in terms of Quality? (scale ranging from 1-5)
• Bharat wire ropes (BWR) – 4
• Usha Martin - 4
• Vikant wire ropes - 3
• Mahavi wire ropes - 2
Manan Mittal 004733010
39
(e) How would you rate the following wire rope companies in terms of Price?
• Bharat wire ropes (BWR) – low priced
• Usha Martin – low priced
• Vikant wire ropes- competitive
• Mahavi wire ropes – high price
(f) Reason for not choosing BWR (if not client)
The main reason we are not clients of BWR is because we have been placing orders to
their competitor Usha Martin and are satisfied with their service, also BWR is only
positioned in India, making it difficult to transport every order from India. Being clients
of Usha Martin gives us an advantage as we save on the transportation cost as Usha
martin is located world wide also huge orders helps us to get discounts.
Manan Mittal 004733010
40
Client 2
Name: Amit Rao was interviewed on 13/02/2013
Company working for: Ministry of Defense- all government segments
Position in the company: contractor
(a) What purpose do you buy wire ropes for?
Indian government require wire ropes to transport heavy military gear and also helps in flights take off.
(b) Which company/supplier do you purchase wire ropes from?
We are currently customers of BWR for most of the wire ropes required for military purposes
(c) What factors are important for you in deciding from which supplier to procure wire ropes from
❏ Quality
❏ Delivery as per timeline committed
❏ Price
❏ Reputation of supplier
❏ Diverse product portfolio (with availability of a wide variety of wire ropes
Manan Mittal 004733010
41
(d) What would you rate the following wire rope companies in terms of Quality? (scale ranging from 1-5)
• Bharat wire ropes (BWR) -4
• Usha Martin -4
• Vikant wire ropes - 3
• Mahavi wire ropes -3
(e) How would you rate the following wire rope companies in terms of Price?
• Bharat wire ropes (BWR) – lowest price in Indian market
• Usha Martin – relatively low price
• Vikant wire ropes- high priced
• Mahavi wire ropes –highly priced
Manan Mittal 004733010
42
Reason for choosing BWR? (if client)
Being a government order it works on a tendor system. The order goes to the company who quotes the lowest price
Client 3
Name:Sreelakshmi Menon was interviewed on 25/02/2013
Company working for KONE Elevators
Position in the company: Director Marketing & Communications
(a) What purpose do you buy wire ropes for?
KONE Elevators is one of the largest manufactures of elevators and a wire rope is one of the major components used in an elevator.
(b) Which company/supplier do you purchase wire ropes from?
BWR is our current supplier
Manan Mittal 004733010
43
(c) What factors are important for you in deciding from which supplier to procure wire ropes from
❏ Quality
❏ Delivery as per timeline committed
❏ Price
❏ Reputation of supplier
❏ Diverse product portfolio (with availability of a wide variety of wire ropes
(d) What would you rate the following wire rope companies in terms of Quality? (scale ranging from 1-5)
• Bharat wire ropes (BWR) - 4
• Usha Martin- 4
• Vikant wire ropes - 3
• Mahavi wire ropes- 2
Manan Mittal 004733010
44
(e) How would you rate the following wire rope companies in terms of Price?
• Bharat wire ropes (BWR) – low price (very competitive)
• Usha Martin - low price (very competitive)
• Vikant wire ropes – highly priced
• Mahavi wire ropes –highly priced
(f) Reason for choosing BWR (if client)
BWR uslike Usha martin and Vikant has comparatively less late deliveries and the wire ropes don’t break/rust in the case of BWR as their packaging is very efficient.
Manan Mittal 004733010
45
Appendix- 2 - Interview with BWR director Mayank Mittal
Could you provide me with some company background?
Bharat Wire Ropes began its operations in the year 1986 as a partnership firm by the
Shah family.In the year 2010, Mr. Mittal along with two other entrepreneurs acquired
Bharat Wire Ropes for INR 200 crore through a SPV (Special Purpose Vehicle) Gaji
Mercantile.
What different types of ropes you can manufacture?
BWR presently has the facilities to make over 3000 different kinds of ropes and on an
average they make 50-60 different types of ropes in a month
Who are you major competitors?
Our major competitors are Usha martin, Vikrant wire ropes, Mahavir wire ropes
Who are your major clientele?
• Our major clientele Suzlon, ABG Cranes, TATA, Kone Elevators, Bhushan, JSPL,
MSL etc. until the change in management BWR catered to mostly the government
companies like Defense Segment: Ministry of Defense, Indian Army, Indian Naval
Force, Indian Railways, Major Port Trusts, Electricity Boards, Shipping Corporations.
Manan Mittal 004733010
46
However now we have private clienteles like TATA, Kone Elevators and also
increased export orders. Now we are aiming to increase our private clientele bigger
companies like OTIS because they place bulk order giving us the benefit of
economies to scale.
How does BWR price its products?
Before our main focus was on government orders so we used penetrating pricing to
price the products, looking at the private markets we need to increasing the quality of
the product at low prices
How has the workers responded to the change in management?
After the change in management, the workers were a bit rebellious, there were a
number of stakes in the beginning but now they have adjusted to the working of the
new management.
What kind of promotional strategies do you use?
We have recently redesigned our website so that customers from all over the world can
see what we are offering, also we have come up with a new compact disc which we send
to all our current and potential clients to let them know about the current working of the
company and the progress of the company.
Manan Mittal 004733010
47
What kind of below the line promotion strategies do your competitors use?
Our biggest competitor Usha Martin uses strategy like free samples, Exhibition, Google
ads, which is an effective way to promote a product at minimal costs
Could you tell me about your new plant?
We are establishing a Rs500 crore plant in Maharashtra, which will significantly increase
the production capacity from 10,000 tonnes to 76,000 tonnes. This plant will be the 3th
largest in asia and the 5th largest in the world when it comes to the wire rope market.the
quality of a product will significantly increase as all the machines will be imported from
Germany.
Manan Mittal 004733010
48
Appendix- 3 -The industry size of Indian wire rope companies35
35 Mittal, Myank, ed. The Industry Size of Wire Rope Market. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
49
Appendix 4 – Awards earned my BWR36
36 Mittal, Myank, comp. Awards Earned by BWR. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
50
Appendix 5 – Certificates/ Approvals earned BWR 37
37 Mittal, Myank, comp. Approvals Earned by BWR. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
51
Appendix- 6 -‐ the Increasing global demand38
38 Mittal, Myank, comp. Increasing Global Demand. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
52
Appendix- 7 - Product mix of BWR39
39 Mittal, Myank, comp. Product Mix of BWR. Rep. Mumbai: BWR, 2011
Manan Mittal 004733010
53
Appendix- 8 - location of new plant to the location of the existing40
40 Mittal, Myank, comp. Location of New Plant to Location of the Existing. Rep.
Mumbai: BWR, 2011.
Manan Mittal 004733010
54
Appendix- 9 -‐ BWR’s Top Clients41
41 Mittal, Myank, comp. BWR's Top Clients. Rep. Mumbai: BWR, 2011.
Manan Mittal 004733010
55
Appendix- 10 -‐ Approvals earned by BWR 42
42 Mittal, Myank, comp. Approvals Earned by BWR. Rep. Mumbai: BWR, 2011
Manan Mittal 004733010
56
Appendix- 11 - Distance of the current plant for the port in Mumbai43
4.6
43 google maps. N.p., n.d. Web. 10 Feb. 2013.
<https://maps.google.co.in/maps?hl=en&authuser=0&tab=wl>.
Manan Mittal 004733010
57
Appendix- 12 - the certification earned by Vikrat ropes44
44 <http://www.vikrantropes.com/vrweb/index.php?catagory=about>. welspun. N.p., n.d. Web. 17 Oct. 2012.
Manan Mittal 004733010
58
Appendix- 13 - awards and certificates earn by Usha Martin45
45 bangkokpost. N.p., n.d. Web. 6 Feb. 2013. <http://www.bangkokpost.com/58years/usha.html>
Manan Mittal 004733010
59
Appendix 14- Google analytics based on city 46
46 google analytics. N.p., n.d. Web. 10 Nov. 2012.
<https://accounts.google.com/ServiceLogin?service=analytics&userexp=signup&hl=en>.