WOXSEN SCHOOL OF BUSINESS, HYDERABAD

Post Graduate Diploma in Management (PGDM)

Batch 2018-20
(Approved by AICTE)

Project Report
ON

B2B MARKETING

Report Prepared By: -

Chinthala Chandrakanth

1821051
st
31 march 2020
 Executive Summary

This is an attempt to know the theories can be applied to practical

situation. It’s been a wonderful opportunity to know how well we
can negotiate the plans and identify the opportunities. It is part of
study for everyone in this course. I got the opportunity to study on
Balkrishna industries ltd.

In the first part of the project report, the general information of the
company has been collected. Information is gathered through the
primary and secondary source as well.

In the second part of the project report, contains the specialized

subject and each area of study. Objective of the project is to work on
the different areas and come across the internal and external
environments of the company and its business units.

Goals indicate what a business unit wants to achieve. Strategy is an

action plan for getting the goals. Every Business must design a
strategy for achieving its goals, Consisting of a Marketing strategy,
and a compatible technology strategy with proper sourcing strategy.
 TABLE OF CONTENTS

S.No. CONTENT Page no

Executive Summary 2
1
Introduction

1.1 Objectives of this report

1.2 Major findings

2
Company profile

2.1 About the company

2.2 Strategic business units

3
Evidence of Servitization

3.1 Product Analysis

3.2 Servitizing products of company

4
Future Scopes of Servitization

4.1 New possibilities of servitization

4.2 Identify servitization of products

5
Conclusion
About the Company

Balkrishna Industries Limited (BKT) is a leading manufacturer in the Off-

Highway tire market. Headquartered in Mumbai, India.

Since its founding in 1987, BKT has successfully focused on specialist segments
such as agricultural, construction and industrial vehicles as well as
earthmoving, port and mining, ATV, and gardening applications. As a result,
BKT has developed into a global player in the Off-Highway tire industry with a
6% market share and a sales volume of 850 million US dollars corresponding to
a 30% increase over the last five years.

Presently, they have four subsidiaries in Europe and North America assisting
our head office in sales and marketing activities: BKT Europe S.r.l. in Seregno,
Italy, BKT Tires USA Inc. in Akron, Ohio, BKT Tires Canada Inc. in Toronto, and
BKT Tires, Inc. in Brentwood, Tennessee. They sell our products in 130
countries worldwide through a network of national distributors. Thier five
state-of-the-art production sites in Aurangabad, Bhiwadi, Chopanki, Dombivali
and Bhuj employ more than 7,000 people

Mission and Vision

BKT supports and sustains customers in the growth of their business. They are
committed to always offering new quality solutions that are able to satisfy the
most demanding user needs for any application. They believe that consistent
and continuous investment into technological development is the key to high-
performance and functional tires.

The commitment to mutual growth with their partners in terms of both

efficiency and productivity is perfectly illustrated in our claim, “Growing
Together”. This philosophy has been inspiring all their production processes
and business activities since their inception.

Considering it part of thier social responsibilities, they have adopted the

strictest measures for safeguarding the environment. And it goes without
saying that they show great respect for their people working every day with
passion to achieve the corporate goals.

It is their intention to be the leader and benchmark in the global Off-Highway

tire market, in particular in the specialist segments such as agricultural,
construction and industrial vehicles as well as earthmoving, port and mining,
ATV, and gardening applications. The achievement of the mission and vision is
based on a functional corporate structure led by an effective management.

OHT Market
The global annual tyre market is worth more than $160 billion. OHT makes up
for just 10% of the overall market and also the business dynamics are very
different compared with the PV/CV tyre business. OHT tyres are made-to-order
and in very small batches. Compare this with PV tyre companies, which carry a
few SKUs and can produce million units. Mass production in the OHT business
is extremely difficult and, hence, automation is not a threat.

Products

Balkrishna Industries Limited is engaged in offering pneumatic tires. The

Company offers tires, tubes and tire flaps. It focuses on manufacture of a range
of off-highway tires (OHT). These tires are mainly meant for agricultural,
industrial and construction, earthmover and port, mining, forestry, lawn and
garden and all-terrain vehicles (ATV). It offers tires for compact loader,
compact utility tractor, cotton picker, forwarder, go-kart, golf kart, harvester,
hay harvester/baler, mower, orchard harvester, pivot irrigator, rotor rake,
rototiller, sprayer, spreader, tanker, tractor, trailer, trencher, universal vehicle
and vineyard harvester. The Company offers tires for backhoe loader, compact
dumper, compactor, container handler, excavator, mobile home and skid
steer. It also offers tires for dozer, haul train, load haul dump (LHD) and
underground mining vehicles.

Its products include

1)AGRIMAX RT 855,
2)PL 801,
3)EARTHMAX SR 41,
4)EM 934,
5)AGRIMAX TERIS
6) EARTHMAX SR 30
Objective of the company

BKT deals with everything concerning tire technologies and innovation: from
designing a product novelty, to creating new compounds to improve tire
performance, and to implementing more efficient manufacturing processes.

Within the BKT R&D Centre, there are different facilities, such as the Analytical
and the Chemical Laboratories, the Physical Laboratory, the outdoor testing
track and a special engineering unit for All Steel radial tire prototypes. All these
teams work in close cooperation with one another in every phase of the
process.

Code of Governance

Bal Krishna Industries Limited has over the years followed best practices of
Corporate Governance by adhering to practices of trusteeship, transparency
and accountability. The Company continues to focus its resources, strengths
and strategies to achieve the vision of becoming a Global leader while
upholding the core values of Quality, Trust, Leadership and Excellence.

The Company’s governance framework is based on the following principles:

• Optimum composition, combination and structure of Board with each

member bringing in expertise in their respective domains;
• Practice of fairly and timely disclosure of material operational and
financial information to the stakeholders;
• Promote ethical and responsible decision-making;
• Proper system in place to identify, mitigate, avoid and manage risk;
• Systems and processes in place for internal control; and
• Availability of information to the members of the Board and Board
Committees to enable them to discharge their fiduciary duties.

Tyre Demand, Product Mix to Drive Bal Krishna

BKT’s volume growth is supported by its rising market share in the mining tyres
segment with its new product launches and network expansions through tie-
ups with mining service providers. The segment, in which the company enjoys
a low single-digit market share, shows strong growth potential.
On the margin front, the company is taking multiple steps to expand margin
further. The company is setting up carbon black plant at its Bhuj plant with an
annual capacity of 60,000 MT at an investment of Rs 150 crore. The new plant
will help to reduce 10 per cent carbon black sourcing cost. Currently, the
carbon black accounts for nearly 27 per cent of the total raw material basket.
The backward integration exercise is expected to increase 2 per cent to overall
EBITDA margins. The operating profit margin (EBITDA) expanded 500 basis
points to 31.9 per cent on the sequential basis in the September 2017 quarter.
Also, the rising proportion of OTR tyres, the southward trend in the rubber
prices, favourable hedges and lower fixed cost per unit will support margin
expansion

Manufacturing Units
Manufacturing Plants

B-66, Waluj MIDC, Waluj Industrial Area, Aurangabad 431 136 (Maharashtra)

SP-923, RIICO Industrial Area, Phase-III, P.O. Bhiwadi 301 019 Dist: Alwar
(Rajasthan)

A-300-305 & E-306-313 RIICO Industrial Area, Chopanki P.O. Bhiwadi 301 707,
Dist: Alwar (Rajasthan)

Bhuj Bhachau Road, S.H.No.42, Village Padhdhar, Taluka Bhuj 370 105, Dist:
Kutch (Gujarat)
Market capitalisation

Balkrishna Industries Ltd. key Products/Revenue Segments include Tyres &

Tubes which contributed Rs 5068.01 Crore to Sales Value (96.63 % of Total
Sales), Export Incentives which contributed Rs 160.27 Crore to Sales Value
(3.05 % of Total Sales), Scrap which contributed Rs 13.60 Crore to Sales Value
(0.25 % of Total Sales) and Other Operating Revenue which contributed Rs 2.62
Crore to Sales Value (0.04 % of Total Sales) for the year ending 31-Mar-2019
Directors

Arvindkumar Poddar- Chairman

Shri. Arvindkumar Mahabirprasad Poddar is Executive Chairman of the Board,
Managing Director of Balkrishna Industries Limited., since 30th May, 2012. He
served as Executive Vice Chairman of the Board of the Company. He holds
Bachelor of Commerce.

Bansatkumar Bansal
Shri. Bansatkumar G. Bansal is a Director - Finance, Whole Time Director of
Balkrishna Industries Limited, effective February 11, 2012. He is Bachelor of
Commerce and Associate Chartered Accountant.

Rajiv Poddar
Shri. Rajiv Arvindkumar Poddar is Joint Managing Director, Executive Director
of the Company. He holds B.A Hons Business Management from Kingston
University.

Vijaylaxmi Poddar
Smt. Vijaylaxmi Poddar is Executive Director of Balkrishna Industries Limited.,
since May 2012. She holds B.Com. She is Director of Balgopal Holdings &
Traders Limited; Sanchna Trading & Finance Limited; Oxemberg Fashions
Limited.

Vipul Shah
Shri. Vipul R. Shah is Compliance Officer, Company Secretary, Whole Time
Director of Balkrishna Industries Limited. He holds B.Com, ACS.

Pannkaj Ghadiali
Shri. Pannkaj Chimanlal Ghadiali serves as Additional Independent Director of
the Company. He has more than 35 years of experience in the field of
accountancy and auditing.

Shruti Shah
Ms. Shruti Shah is Additional Independent Woman Director of the Company.
Ms. Shruti Shah has experience in the field of lncome-Tax / Advisory for
Corporates, Estate Planning, etc.
Sanjay Asher
Shri. Sanjay K. Asher is Non-Executive Independent Director of Balkrishna
Industries Limited. He holds B.Com, C.A & Solicitor. He holds Ashok Leyland
Limited; Bajaj Allianz General Insurance Company Limited; Bajaj Allianz Life
Insurance Company Limited; Kryfs Power Components Limited; Mandhana
Industries Limited; Repro India Limited; Sharp India Limited; Shree Renuka
Sugars Limited; Sudarshan Chemicals Industries Limited; Tribhovandas Bhimji
Zaveri Limited; Innoventive Industries Limited; Sanghvi Movers Limited.

Sachin Chaturvedi
Shri. Sachin Nath Chaturvedi is Non-Executive Independent Director of
Balkrishna Industries Limited. He holds B. Tech, F.C.A M.B.A, D.I.S.A. He is
Director of Jai Corp Limited, Jai Realty Venture Limited. Balkrishna Paper Mills
Limited. N R Agarwal Industries Limited.

Laxmidas Merchant
Shri. Laxmidas Merchant is Non-Executive and Independent Director of
Balkrishna Industries Limited. He holds B.Com, C.A.

Ashok Saraf
Shri. Ashok M. Saraf is Non-Executive Independent Director of Balkrishna
Industries Limited. His directorship includes with Saraf Chemicals Limited
Servitization in Manufacturing

Servitization directly links revenue generation to asset availability, reliability,

and performance. Many industry-leading manufacturers are offering pay-per-
use contracts, where the user does not own the equipment, but only pays for
the time and amount of usage. With strong focus on product and service
outcomes, manufacturers are able to servitize their products across the entire
business life cycle.
This creates:
• A completely new value system for customers that helps lock in long-term
customer relationships and lock out competition.
• A competitive advantage, specifically in areas where scope for product
differentiation is eroding and customer expectations of performance is
increasing.
• Mutual incremental value creation between manufacturers and customers
that extends beyond a one-time sales transaction and paves the way for repeat
sales.

Challenges in Implementing Servitization

While servitization promises to ensure potent competitiveness with rapid

growth, revenue and profit-making opportunities, the real-world scenario
reveals that it is often difficult to achieve the desired ROI in services. This is
mainly due to the fact that ROI on building and maintaining products for
servitization require a high utilization of equipment and services. These are
some challenges confronting manufacturers:
• Shifting mind-sets for a transformed organizational strategy
Managing time scales while designing the service
• Facilitating functional and organizational realignment
• Supporting overarching organizational change
• Managing geographical and cultural diversity
Conclusion

Servitization is a profitable business proposition for manufacturers, which

opens up
Channels for forging longstanding customer relationships. With necessary
investments in personnel and technology, manufacturers are able to provide
differentiated offerings with services across the product lifecycle, and prepare
for servitization with innovation. In the emerging world of servitization, value
creation and delivery is an ongoing process. Equipped with this strategic
competitive differentiator, manufacturers are empowered with the capability
of transforming product creation and servicing processes, and redefining value
exchange with customers.

Major Businesses of BKT

The global OHT market is worth $12 Billion and consists of off-road tyres and
agriculture tyres. Balkrishna industries exports nearly 90% of it's output
overseas. Agriculture applications contribute nearly two-thirds to it's sales
volume while the rest is derived from the OTR segment which includes
construction, mining and industrial applications. Balkrishna industries has a
market share of about 3% in the OTR segment and 10% in agriculture segment
globally.

As the company is major into the exports to overseas. There is not yet
practices of servitization in the company. But the probably can venture into the
following services:
1) Tubeless Repair
2) Wheel Alignment
3) Wheel Balancing
4) Tyre Changing