Introduction

1954 - The Company was incorporated on 6th September at Mumbai. The Company was promoted in 1954 by M/s. Volkart Brothers and Tata Sons Pvt. Ltd., to take over the Engineering & Import Division of M/s. Volkart Brothers in India.

1956 - Shares sub-divided. 1, 05,000 Rights shares then issued at par in prop. 7:10.

1963 - The Company promoted Scottish Indian Machine Tools Ltd., in Collaboration with Scottish Machine Tool Corporation of Glasgow for the manufacture of machine tools.1979 - With effect from 1st July, Tata-Merlin & Gerin Ltd. (TMG), and the National Electrical Industries Ltd. (NEI), were amalgamated with the Company.1982 - The Company proposed to set up an electrical business unit at Pune.

1988 -The material handling business group successfully introduced up-to-date warehousing equipment to further enlarge its product range. Air-conditioning and refrigeration business group received Government's approval for the technical collaboration agreement converging large-sized efficient compressors.1990 - Approval was also received for extending Hitachi collaboration to the manufacture of absorption refrigeration machines.1993 - The cooling appliances business launched four new products viz., water coolers filled with purifiers ductable and slim-line 3 tone air-conditioners, ceiling mounted split in 1.5 and 3 tone capacities and 2 tone room split units.1995 - The cooling appliances business division is to introduce new room air-conditioners to Toshiba design in October. Voltas gets Good corporate citizen award.

1997- A whole range of new products was launched both in the room air conditioning and split segments. The heavy equipment and packaged system division launched ozone-friendly centrifugals and superior quality energy efficient steam, fired vapor absorption machines with Hitachi’s `Paraflow' technology. - Voltas has been manufacturing thermostat for refrigerators And air conditioners at thermostat unit under a technical collaboration agreement with Robert Shaw, a subsidiary of Seibe.1998-Voltas commissioned Dadra plant, which has a capacity to produce about 40,000 units per annum if it worked one shift. Voltas, India's largest air conditioner manufacturing company, has launched a new range of air conditioners named Voltas Vectra,Voltas Verdant, Voltas Vertis and Voltas Vosionarie.2005 -Voltas introduces new series of ACs, may set up plant in Uttaranchal2008- It launched elegant, new range of Room Air Conditioners in 2008.2009-Voltas' overseas MEP business achieved professional recognition at the highest levels, at the MEP Middle East Awards 2008.

Background

Profile

Voltas is one of the world's premier engineering solutions providers and project specialists. Founded in India in 1954, Voltas Limited offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, materials handling equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality.The Company's strengths lie principally in:-

1. management and execution of electro-mechanical projects, including air conditioning and refrigeration

2. the design and manufacture of industrial equipment, cooling appliances and materials handling equipment

3. sourcing, installation and servicing of diverse technology-based systems serving Indian industry through representation of global technology leaders

Organization

Voltas' operations have been organized into three independent business-specific clusters. Each of these has its own facilities for market coverage and service to customers.

Electro-Mechanical Projects & Services  • Electrical, Mechanical & Refrigeration Solutions   • Electrical & Mechanical Solutions (international)   • Water Management & Treatment

Engineering Products & Services   • Textile Machinery  • Mining & Construction Equipment  • Materials Handling Equipment

Unitary Cooling Products  • Air Conditioners   • Commercial Refrigeration  • Water Coolers & Dispensers

Projects

Over the years, Voltas has built up a substantial reputation and is actively engaged in turnkey projects in fields such as  • electro-mechanical works comprising HVAC, electrical systems for buildings, plumbing,

fire fighting, ELV and specialized systems, building security and other utilities  • electrical power projects  • environmental and water pollution control, pumping stations and water supply,  and water

and waste water treatment projects.

The Company has ISO 9001 - 2000 standards certification in its projects businesses, and has successfully undertaken and executed prestigious high-value projects in the Middle East, Far East and South East Asia, CIS countries, Africa and India.

Manufacturing

With manufacturing units at Thane, Dadra and Pantnagar, Voltas possesses total capability in the manufacture of room/split air conditioners, industrial air conditioning and refrigeration equipment, water coolers, commercial refrigerators, visicoolers and freezers, as well as fork-lift trucks, cranes, warehousing and construction equipment. All these products bear the stamp of state-of-the-art plant, machinery and processes, resulting in consistently high quality and reduced costs.

Sales & service

Voltas' sales and service operations cover:  • in-house manufactured products, including air conditioning equipment, materials handling

and warehousing solutions, and unitary cooling products  • products of principals represented, including textile machinery, warehousing and cargo

handling equipment, and mining and construction equipment  • In all these sectors, the company demonstrates its specialised engineering expertise, as well

as its extensive network for global sourcing

Awards   • 2008-09 Top industry honours at UAE

Voltas' overseas MEP business achieved professional recognition at the highest levels, at the MEP Middle East Awards 2008.

The award is one of the most prestigious in the Middle East, and its honours are highly coveted. Voltas (UAE) held its own against the most daunting competition to walk away with two key awards: for 'MEP Project Manager of the Year' and 'Health & Safety'.

'MEP Project Manager of the Year' rewards outstanding individual talent and commitment, as seen in actual project outcomes achieved through extraordinary skills and efforts.

The 'Health and Safety' award is conferred on the firm that has made special efforts to improve health and safety standards on projects through focused initiatives, such as in training, methodology employed to reduce risk and accidents at site, or manpower utilization.

    

Silver LEED certification

The Rajiv Gandhi International Airport, Hyderabad, for which Voltas has executed world-class MEP (Mechanical, Electrical & Public Health) engineering, has been awarded the Silver LEED (Leadership in Energy and Environmental Design) certification by the US Green Building Council (USGBC). It is the first airport in Asia and the second in the world to gain this certification.

       • 2006-07

Export excellence award

Voltas very recently won the Export Excellence Award, as 'Star Performer (Medium Enterprise)' in the product group of Project Exports - for its outstanding contribution in

engineering exports in 2006-07. The award was received from the Engineering Export Promotion Council (EEPC) India - Western Region.

       • Project Export Promotion Council (PEPC)  • 2005-2006

'Maximum foreign exchange earned and repatriated to India from overseas construction and engineering projects'

  • 'Maximum foreign business attempted'

  • Second place in the category of 'maximum turnover in overseas construction and engineering projects'

  • 2004-2005'Maximum foreign business attempted'

  • 2003-2004'Maximum foreign works secured in new areas'

  • Second-best performance in the category of 'maximum turnover from overseas construction contracts'

  • 2002-2003'Maximum foreign exchange earned & repatriated to India from overseas construction contracts'

  • 'Maximum foreign business attempted'

  • Second-best performance in the category of 'maximum turnover from overseas construction contracts'.

  • 2001-2002'Maximum overseas construction contracts secured'

  • Second-best performance in the category of 'maximum foreign exchange earned and repatriated to India from overseas construction contracts'.

  • 'Maximum foreign works secured in new areas'  • 1999-2000

Second-best performance in the category of 'maximum foreign exchange earned and repatriated to India from overseas construction projects'

  • 1998-1999Maximum turnover in overseas construction projects

  • Maximum foreign exchange earned and repatriated to India from overseas construction contracts

  • 1997-1998Second-best performance in the category of 'foreign exchange earned and repatriated to India from overseas construction contracts'

  Engineering Export Promotion Council (EEPC)

  • 2003-2004Top exports in the category of 'project exporters (regional award)'

  • Highest exports in the category of 'industrial project exports (national award)'

  • 2002-2003Top exports in category of 'project exporters (regional award)'

  • 2001-2002Highest exports in the category of 'services (national award)'

  • 2000-2001Highest exports in the category of 'services (regional award)'

     Others  • Mumbai Chamber of Commerce and Industry's Good Corporate Citizenship Award, 1995-96  • International Public Relations Associations' Golden Trophy for Excellence in Customer

Service, 1994-95  • United Nations' Grand Award for Excellence in Public Service Worldwide, 1993-94.

Nationwide & global network   • Head office in Mumbai   • Zonal HQ in Mumbai, Delhi, Chennai and Kolkata  • Branch/area offices in Ahmedabad, Baroda, Bangalore, Calicut, Coimbatore, Chandigarh,

Delhi, Ghaziabad, Indore, Jaipur, Jamshedpur, Kochi, Kolhapur, Lucknow, Ludhiyana, Madurai, Panjim, Pune, Secunderabad, Surat, Tirupati, Tirupur, Vijaywada and Visakhapatnam

  • Overseas offices in UAE (Abu Dhabi, Dubai), Bahrain, Qatar (Doha), Kingdom of Saudi Arabia (Jeddah) and Singapore

  • Factories: Thane (Maharashtra), Dadra (Union Territory) and Pantnagar (Uttaranchal)

Management

Board of Directors

Chairman : Ishaat Hussain

Managing Director : Sanjay Johri

Director : Nasser Munjee

: Ravi Kant

: N D Khurody

: N N Tata

: Jimmy Bilimoria

: S N Menon

  : Nani Javeri

  : R. N. Mukhija

Corporate Management

Managing Director : Sanjay Johri

President : A.K. Joshi

Executive Vice President & CFO

: M M Miyajiwala

Executive Vice President -Corporate Affairs &CFO (Designate)

: Anil George

Executive Vice Presidents & COO

: M. Gopi Krishna

  : Shaukat Ali Mir

  : Milind M. Shahane

Sr. Vice President & Dy. COO

: Pradeep Bakshi

Engineering Products & Services

Milind Shahane : Executive Vice President & COO

Textile Machinery

Sudhir Sharma :  Vice President (Operations)

Mining & Construction Equipment

Anindya Ganguly : General Manager (Operations)

Materials Handling Solutions

S K Sharan : General Manager (Operations)

Unitary Cooling Products

Pradeep Bakshi : Sr. Vice President & Dy. COO

Service Departments

Electro-Mechanical Projects & Services

A K Joshi : President

Electro-Mechanical & Refrigeration Projects

M Gopi Krishna : Executive Vice President & COO

Electro-Mechanical Projects (International)

Shaukat Ali Mir :  Executive Vice President & COO

Water Management & Treatment

Prasanna Pahade : General Manager

Finance and Commercial

M M Miyajiwala : Executive Vice President & CFO

Human Resources & Administration

Milind M. Shahane : Executive Vice President & COO

Business Improvement Group & Property Development Cell

Prashant Karkare : Vice President

Corporate Communications & Investor Relations

B N Garudachar : General Manager

Company Secretariat & Taxation

V P Malhotra : General Manager

Internal Audit

P D Vakil : Chief Internal Auditor

Corporate Planning

Jayant Balan : General Manager

Based on the recommendations of the Tata Strategic Management Group (the management consultancy that's part of the Tata Group), Voltas began an internal regeneration drive. A detailed study was made on how the market would shape up, the competitors, their offerings, strategies, the market spread - in short, everything related to the Indian AC market. The recommended solution: transform Voltas from engineering to a marketing company.Air Conditioners – highlighting the situation

According to Hindu Business Line (6 March 2007)

Voltas Ltd would spend Rs 20 crore to market its new line of air-conditioners and an additional Rs 6 crore for retail expansion, according to Mr K.J. Jawa, senior Vice President, Unitary Products Business Group. The investment would go into advertisements and other below the line activities. The company plans to add 1,500 dealers to its existing network, making it a total of 3,500 in the country, as also to strengthen the franchisee spread from 350 to 500 this year.

Mr Jawa said that the domestic air-conditioner market size is about 15 lakh units (Rs 2.7 crore approximately), out of which Voltas has a 16 per cent market share, while LG the market leader has 33 per cent, and Samsung about 13 per cent. He said that the company is aiming to attain a 20 per cent market share in FY 2006-07.

Voltas has built a manufacturing plant in Uttaranchal at an investment of Rs 120 crore. The plant, set to begin operations on May 1, will have a manufacturing capacity of 3 lakh units per annum, which would increase the overall capacity to 5 lakh units. The company plans to export about two lakh units next year, he said. The new range of air-conditioners includes split air-conditioners priced between Rs 14,500 and Rs 36,000.

Mr Jawa said that the popularity of split air-conditioners has increased over the last two years from 25 per cent of the units sold to about 50 per cent of the units sold in the South. Overall, South India accounts for about 28 per cent of the market, followed by the West at 27 per cent

Competitive Analysis

Today Voltas is having 3 competitors namely: Hitachi:

Hitachi Home & Life Solutions (India) Ltd. (HHLI), a subsidiary of Hitachi Appliances Inc, Japan, is a listed company at BSE & NSE exchanges. Since its inception HHLI has focused on developing and supplying high-quality products and technology that contribute to the overall prosperity of the society, HHLI manufactures various kinds of products including Room Air-conditioners and Commercial Air-conditioners, and are into trading of VRF Systems, Rooftops, Chillers, and Refrigerators.

Headquartered in Ahemdabad, Gujarat, the company's manufacturing facility at Kadi, Gujarat, is among the ten Hitachi air-conditioner facilities worldwide. With a total installed capacity of 400,000 units in a year, HHLI is amongst the top air-conditioning companies in India. It has a strong nationwide

distribution consisting of 18 Branches, 159 Exclusive Sales and Service Dealers, more than 1000 Showroom Dealers and 350 Service Points.

HHLI has always pioneered in technology and innovation and has been ahead of the competition in introducing newer concepts and features in air-conditioning due to its high spending on R&D. HHLI with dedicated team of 518 employees has a distinct edge, and with a better understanding of the local market conditions, is the finest example of Indo-Japanese collaboration.

LG: LG is comprised of five business units ;

Home Entertainment Home Appliance Air Conditioning Business Solutions Mobile Communications

Main Product

Plasma TV, LCD TV, LCD Monitor, Commercial Monitor, CD-ROM Drives, DVD-ROM Drives, CD Rewritable Recorder, VCR, DVD Player, DVD Recorder, Portable DVD, Home Theater, Notebook, Air Conditioner, Refrigerator, Microwave Oven, Washing Machine, Vacuum Cleaner, Compressor for Air Conditioner, Compressor for Refrigerator, Air Purifies, HomNet, Built-in Appliances.

Videocon:

Videocon is an Indian company. The company's principal activity is to manufacture consumer electronics

and home appliances. The company is dealing in Oil & Gas, Thomson CPT, Glass, and Consumer

Electronics. It has an employee base of around 11,054.

videocon has acquired Electrolux brand in India. Also, with the acquisition of Thomson Displays by

Videocon in Poland, China, and Mexico, the company is marking its international presence.

Videocon's Products

TV

DVD

Multimedia Speakers

Refrigerators

Washing Machines

Microwave Ovens

Air Conditioners

Financial Implications

Note: refer to the exhibit for the annual report for Voltas Ltd.

4 P’s

1) Product:

There are mainly five types of air conditioner:

Window mounted: These are air conditioners that are usually fixed through the windows, which have been designed typically for double hung windows. And it is one of the most commonly used air conditioners as this is best for cooling a single room for the simple reason that these are easy to install, cheaper and works with almost all the wiring system of your home. The price range varies from Rs. 12,000 to Rs. 27, 000 on an average for room size the range varies from 10 meter square - 84 meter square

Split Air conditioner: Is best suited for rooms whose area is up to 60 meter square and might cost you (approx) around Rs.16,000 to Rs.35,000 on an average (multi-split system). It consists of two parts: the indoor unit which is also called as the evaporator unit and the outdoor unit which is known as the external condenser box and is installed outside the room or the building. And this is one main reason why most people opt for split AC’s, as during the operation, it doesn’t make any noise which might distract your attention or annoy you. Split AC’s are permanent systems which can either be installed at the floor level or on the walls or on the ceiling.

Cassette Air Conditioner: These are usually fixed into the sealing. This ultra thin air conditioner can be installed in any narrow ceiling. These are usually fit in places where it is not possible to fit either a Window or Split Air conditioner. The price range varies from Rs. 68,500 to Rs. 86,500on an average

Slimline Air Conditioner: It has been one of the most popular types for certain reasons. One major reason is that they can be easily moved from one room to the other and is often referred to as a mobile air conditioner .Being portable, it is easier to store when the summer season wears off .It is best suited for smaller rooms and for those people who moves their houses very frequently. The only minus point is that they arequite expensive and the exhaust tube needs to be fitted each time. It has a separate indoor and outdoor section. It is recommended for rooms whose area is up to 35 meter square.

Ductable Split Air Conditioners: Ductable air conditioners are those that are used to condition more than one room, in the same building. These kind of air conditioners are usually seen in institutions, big organizations, hotels etc. Ductables comes in different tonnages depending upon the space needed to be cooled. The prices of ductables vary depending upon the tonnage. Out of all the above mentioned air conditions the maximum selling would be the Split air conditioners .Though window a/c will cost less and is easier to install. The downside is you will loose your view through the window and you will have more air leakage than a split unit. A window unit will be less efficient than the split also a slit a/c is much quieter than a window a/c. The split unit will add more value to the home and will be quieter.

2)Pricing

Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, Quality of product.

Following is the price list of different air conditioner of Voltas:

3)Place:

Logistics is the art and science of managing and controlling the flow of goods, energy,information, and other resources like products, services, and people, from the source of production to the marketplace. It is difficult to accomplish any marketing or manufacturing without logistical support.

Logistic management: is the part of the supply chain, which plans, implements , and control the effective forward and reverse flow and storage of goods and services . the related information between the origin point and the point of consumption in order to meet customers requirements

5 R’s of logistics followed by voltas: Right place Right time Right condition Right cost Right handling

5 S’s of warehouse: Sweeping Sorting Systematic Arrangement Simplification Self discipline

In warehouse , the products are pinuped with 3-color paper to get the knowledge about the delivery:

Red card: To stop the product going into the market Green card: To allow the products for delivery into the market Yellow card: After the product is labelled with green ,allow to move into the market

Delivery time: Local delivery: 24 hrs Upcountry delivery: 48 hrs

Within 200 kms: 24 hrs Beyond 200 kms: 48 hrs

4)Promotion:

Retailers communicate with customers through five vehicles • Advertising• Sales Promotion• Publicity• Store Atmosphere &• Personal selling

Advertisement: Are the form of paid communication to customers using mass media like TV, Newspaper, and Radio. Here the ad spend is something that had to be very carefully planned. In the months preceding summers (April to June & October) the aggressive approach needs to be adopted, as the AC market in India is seasonal. The key here is to provide information to the customer when he is on the look out.. Its ad campaigns like “Jagmag Desh Mera” & “India ka dil… India ka AC” are emotional appeals to Indians.

Sales promotion: Paid impersonal communication activity that offers incentive to customer to purchase a product like coupons, contests, discounts etc. in the bigger outlets like Vijay Sales there are invariably schemes offered on the purchases, which include free tour packages, discount coupon schemes etc. which increase the footfalls in the showroom thus increasing the probability of sales. The showrooms that offer such schemes are of prime importance to the company as the awareness regarding such showrooms is very high amongst the customers.

Publicity: Is communication through significant unpaid presentation about the retailer. For example the newspaper coverage of any special event conducted by the retailer. In newspapers like the Midday there are a lot of Ads give by the retailers for their showrooms along with the brands of AC, this also fetches important publicity to the AC companies. Store atmosphere: paid impersonal communication is combination of stores physical characteristics like signs, displays, color, lighting etc, which create an image about stores service, pricing, fashion ability of merchandise. This is one of the areas that we covered under our project. The figures for store atmosphere are- of the total 50 outlets for the Mumbai Region 22 had the POP Material for Voltas Air Conditioners.

Joint Ventures &

Tie ups

1. The Voltas Board, at the meeting held on 10th April 2001, has approved the proposal for the merger of Voltas International Limited (VIL), - a wholly owned subsidiary of Voltas Limited – with Voltas Limited, effective 1st April, 2001. The merger is subject to required statutory formalities and sanction of the High Court.

2. Voltas's subsidiaries include Metrovol FZE, VIL Overseas Enterprises BV, Voice Antilles NV, Weathermaker, Jebel Ali (Dubai), Simto Investment Company and Auto Aircon (India).

3. Company had also earlier decision of Tata-Merlin & Gerin Ltd. (TMG), and the National Electrical Industries Ltd. (NEI), were amalgamated with the Company.

4. Tie Up with Hitachi & LG for distribution & Operations etc.

Voltas Ltd. M&A History

Voltas Ltd acquires a minority stake in Rohini Industrial Electricals  Aug 31, 2010Voltas Ltd acquires a minority stake in Rohini Industrial Electricals  Aug 25, 2009DKSH India Pvt Ltd acquires Voltas-Chemicals Trading Bus from Voltas Ltd  Mar 31, 2009Voltas Ltd acquires Saudi Ensas Co Ltd from Undisclosed JV Partner  Feb 04, 2009Voltas Ltd acquires Rohini Industrial Electricals  Sep 04, 2008Voltas Ltd acquires Universal Comfort Prod Pvt Ltd (pending)  Dec 10, 2007Voltas Ltd acquires Weathermaker Ltd (pending)  Apr 10, 2006Voltas Ltd acquires remaining interest in Voltas Air International (pending)  Nov 01, 2002Sermo Groupe acquires Indian Perfect Moulds Ltd from Voltas Ltd  Apr 23, 2002Tata Sons Ltd acquires a minority stake in Voltas Ltd (pending)  Mar 21, 2002Sheth Group acquires Voltas Switchgear(Voltas Ltd) from Voltas Ltd (pending)  Sep 28, 2001Gujarat Samchar Group acquires a minority stake in Voltas Ltd  Sep 04, 2001Electrolux AB acquires remaining interest in Electrolux Voltas from Voltas Ltd (pending) 

Dec 29, 1999

Conclusion

The strategy aimed to revitalize every facet of the AC business - product, channel, systems, service, costs, and brand.

The high profit margins that the company had enjoyed until the early 1990s had become a thing of the past, due to the price war unleashed by the MNCs.

Therefore, in order to improve margins, Voltas either had to increase prices or

reduce costs.

While the former was not really an option owing to intense competition, Voltas set out to secure economies of scale.

This meant that it would have to sell in large volumes. "Volumes became critical for survival.

Questions1) Can Voltas AC will sustain for the longer period or not! Give your views.2) According to the scenario in AC Market, competition is growing and getting tough for

the companies, so what can be the Unique Strategy for the Voltas to differentiate from others?

3) Being a marketing manager of Voltas what would you do for increasing the sales?

A CLOCKING GROWTH

STORY - VOLTAS AC

Exhibit: 1

Exhibit :2