Strategic Movement Analysis of

Bharat Heavy Electricals Limited

Presented by

Prasun Kanti Guria,

Patha Masanta & Arpan Goswami
PGDM , 1ST YEAR, JSB
 Case Overview
 BHEL is a largest engineering and manufacturing enterprise in
India established in the year 1956.
VISION
Its vision is to be ‘a world class enterprise committed to
enhancing stakeholders value.’
MISSION
Its mission statement is ‘to be an Indian multinational
engineering enterprise providing total business solutions
through quality products, systems, and services in the field of
energy, industry, transportation, infrastructure, and other
potential areas.’
 Case Overview
 BHEL is one of the Navaratnas among the public sector
enterprises in India.
 Involved in manufacturing of

 Acquires technology from abroad and develop its own

technology at its research and development centre
 Case Overview
• In 06-07-Achieved the turnover of 18,739crore
• Registering a growth of 29% and increase in net profit by
44%
• Forecasted growth in exports
• Envisages an investment of
Rs. 3200 crore to increase
manufacturing capacity from
10000MW to 15000 MW
• Targeted turnover of Rs. 45000 crore by 2012.
 Strategic overview
• Strategy is driven by a combination of Organic and
inorganic growth

• Organic growth – Capacity and capability enhancement

to leverage companies core areas

• Inorganic growth – Mergers, acquisition and joint venture

to grow operation in domestic and overseas market.

• Positioning as a reputed engineering, procurement and

construction (EPC) contractor globally
Concentration Strategy
Ansoff’ Product-Market Matrix
Product
Present New

Market
Market Product
Present Penetration Development

Market
New Development Diversification
 Concentration & Integration
 Joint venture with NTPC – in power sector to perform EPC
activities

 Management contract for Bharat Pumps and Compressors Ltd.

 Joint Ventures with GE of US and Siemens AG of Germany for

overseas business.
 Problem areas
• Lack of horizontal integration and diversification strategy.
• Direct political intervention in managerial decision.
making.
• Conflict between the power and heavy industries
ministry.
• Opportunity loss for incapability in fulfilling the
requirements of power sector equipments.
• Stiff competition from international players.
 Diversification and Integration
Strategy
• They must diversify into supplying the electrical
equipment for renewable energy sector and making the
electrical appliances run by the renewable energy.
• They can also move forward in producing the renewable
energy.