Professional Documents
Culture Documents
Swami Vivekanand Universty, Sironja (Sagar)
Swami Vivekanand Universty, Sironja (Sagar)
(SAGAR)
I would like to thank my classmates and all those who directly or indirectly
helped me in one or the other way in the successful completion of the project.
INTRODUCTION OF COMPANY
1. Nature of business.
3. Organization structure.
4. Production structure.
5. Organizational strategies.
INDUSTRIAL ANALYSIS
3. Key competitors.
MARKETING STRATEGIES
1. Products of company.
4. Distribution channels.
5. Promotion strategies.
FINANCIAL ANALYSIS
1. Sources of finance.
2. Ratio analysis
Findings
Bibliography
Reference Books, Journals, Newspapers, Web Sites, Reports etc. are to be listed
out here.
INTRODUCTION OF COMPANY
1. Nature of business.
3. Organization structure.
4. Production structure.
5. Organizational strategies.
INTRODUCTION
Videocon Industries Ltd. was one of the initials companies that made it to the World.
Videocon Electricals captured the initial Indian Electrical market and topped the charts for its
products such as Refrigerators, television etc. before other players such as Samsung,
Whirlpool etc. entered Indian market. Videocon was one of the first Electronic Company to
Collaborate with Japanese Toshiba Ltd as early as 1985.
It is one of the biggest Indian Electrical brands not only in India but also globally. Indeed,
Videocon is one of the fastest paced Electrical Products worldwide. Videocon thus posed an
exciting opportunity to study a brand that is automatically associated with youth and
technology.
Videocon deems it a privilege that it is in a position to prolong instances of joy and spirit.
And lend much needed variety and flair in everyone's life.
An Indian multinational, a global force in display technologies and a group on the threshold
of even bigger things. There are new horizons to breach, new frontiers to conquer and simply
no pause buttons on the Videocon play. Expect the unexpected, the uncharted and the
unlimited.
NATURE OF BUSINESS
Manufacturer & Exporter of Conventional Color TV and LCD TV Receiver Sets, D2h Set
Top Box, VCD/MP3 Players, Air Coolers, Music Systems, Air conditioners, Home Theaters
like Refrigerators, Automatic & Semi-Automatic Washing Machines, Dish Washers,
Microwave Ovens, Mixer, Grinders and Water Purifier like TV, DVD/MP3 & Audio
Components, Glass Shells for Color Picture Tubes, Populated PCBs, Tuners, Monitors for
Computer, Compressors and other Electronic Assemblies and Sub-Assemblies like Digital
Diaries, Kiddy PC, Data Projector, Power Inverter, Digital MP3 Player and Palm Top like
ISP, Content and Web Solutions. Crude Oil Extraction 50000 Barrels per Day.
1050MW Power Generation. Videocon LCD TV, Videocon Air Conditioners, Videocon
Refrigerators, Videocon Washing Machine.
Videocon enjoys a pre-eminent position in terms of sales and customer satisfaction in many
of our consumer products like Color Televisions, Washing Machines, Air Conditioners,
Refrigerators, Microwave ovens and many other home appliances, selling them through a
Multi-Brand strategy with the largest sales and service network in India. Refrigerator
manufacturing is further supported by our in-house compressor manufacturing technology in
Bangalore. Videocon has the largest distributed manufacturing base across India – 12
facilities. It has the Capacity to manufacture 4 million CTVs, 2.5 lacs washing machines, 1
Mn. DVD players, 4.8 Mn refrigerators.
Display industry and its components
With the Thomson acquisition Videocon has emerged as one of the largest Color Picture tube
manufacturers in the world operating in Mexico, Italy, Poland and China, continuing to lead
through new innovative technologies like slim CPT, extra slim CPT and High Definition 16:9
format CPT.
LOGO LOGIC
This is the new Videocon symbol. It reiterates the ethos of a company dedicated to
maintaining the highest international standards of excellence through quality, technology and
innovation. For over a decade now, Videocon has been bringing the latest and very best in
Consumer Electronics and Home Appliances. Successfully adapting the best of international
technology to suit Indian needs, and crafting it to improve the quality of life – as millions of
satisfied customers will agree.
The new symbol of Videocon asserts its passion for global impact, and the two ‘E’s on either
side represent the Group’s wide spectrum of interests ranging from ‘Electronics to Energy’.
Along with the steely glint, this communicates the group's global ambition, its strength,
sterling credentials and innovative drive. A symbol that proclaims a paradigm shift. A sign
that represents the new force that is Videocon. Thus, recapitulating our principle of reaching
out and touching the lives of millions of people Worldwide.
OWNERSHIP PATTERN
Number of shares
Sr. Number of Total number As a % As a % of
Category of shareholder held in de
No shareholders of shares of (A+B) (A+B+C)
materialized form
(A)
Shareholding of Promoter and Promoter Group
(1) Indian
(2) Foreign
(c) Institutions 0 0 0 0 0
Sub-Total 0 0 0 0 0
(A)(2)
(1) Institutions
(2) Non-institutions
(b) Individuals
Production structure
Cost cutting – Videocon was better positioned to shift the activities to low-cost locations and
also it could integrate the operations with the glass panel facility in India with the CPT
manufacturing facilities acquired from Thomson S.A. Videocon wanted to leverage its
position in the existing parts of the business and this acquisition would give it a strong
negotiation position and could reduce impact of glass pricing volatility. Videocon could also
reduce the costs by upgrading and improving the existing production lines.
Vertical Integration – The acquisition helped Videocon in vertically integrating its existing
glass-shell business where it had been enjoying substantially high margins.[8] Videocon’s
glass division had the largest glass shell plant in a single location. This gave the company an
unrivalled advantage in terms of economies of scale and a leadership position in the glass
shell industry. The acquisition also gave Videocon a ready-market for its glass business and it
was part of Videocon’s long-term strategy to have a global vertically-integrated
manufacturing facility.
Rationalization of Product Profile – Videocon modified its product profile to cater to the
changing market needs like moving away from very large size picture tubes to smaller ones.
Apart from the overall strategy Videocon also had a plan on the technological front. It wanted
to improve the setup for the production line and line speed post-merger. Its focus was to
increase sales while reducing the costs and thereby improving the productivity of the existing
line. The company also wanted to foray in a big way into LCD panels back-end assembly. On
the sales front the company wanted to leverage on the existing clients of Thomson and build
relation as a preferred supplier to maximize sales. Also, Videocon could benefit from OEM
CTV business with the help of Videocon’s CTV division, invest for new models and
introduction of new technologies.
Videocon has not been able to turn the plant around in Italy still. However, it is getting
support from the local governments (which want to prevent job cuts) in form of grants. The
government is in fact trying to set up a Greenfield venture in form of a LCD manufacturing
facility in partnership with Videocon. The banks are also supporting Videocon and with help
from all these quarters Videocon expects to turn around the plant in Italy.[13] The Thomson
plant has not turned around in Mexico as well and in fact production has been reduced over
there.InPoland,the situation is more promising and Videocon hopes that plant over there will
get in black in the very near future.[14] However the surprise has been in the Chinese market
.Despite facing a highly competitive market Videocon has managed to turn a plant around
while the other is on its way. In China Videocon is adopting a different strategy for
manufacturing CTVs as the local players dominate the market .It plans to supply these players
by taking advantage of low-cost nature of mainland(the number targeted by it about 6 million
CPT,s)
VIDEOCON STRATEGIES
• Multi-brand strategy
Videocon International was the first Indian company to adopt the strategy of multi-brands.
Apart from its mid-priced brand Videocon, the company now hawks Toshiba, a premium
brand, and the low-priced brands Akai and Sansui. The multi branding technology paid off as
Videocon managed to hold on to a combined market share of around 19.6 percent, with LG at
25.9 percent and Samsung at around 13.8 percent.
Overall, the shift in the power to trade is probably one of the defining developments. It is
important since the TV companies themselves have taken it seriously and embarked on
crafting longer-term strategies to accommodate this development. The effectiveness of their
strategy and the responses of the other players promise to deliver a few more years of
enterprising developments in the Indian TV market.
• Backward Integration
Videocon integrated backwards by getting into manufacture of components such as electron
guns, metal parts and deflection yokes for CTVs and compressors, and electric motors and
plastic components for households’ appliances such as washing machines, refrigerators and
Air conditioners. The group integrated further to get in to manufacture of glass panels and
funnels, the key components for the manufacture of color picture tubes.
“Videocon enjoys a unique synergy in the global CTV business from glass to CRT (Cathode
Ray tubes) to CTVs. - (From Sand to CTV). Together with other components for households
appliances. This high degree of backward integration bestows upon the company a unique
benefit over competition.
INDUSTRIAL ANALYSIS
3. Key competitors.
4. Environment scanning
COMPANY’S PROFILE
An important asset for the group is its Ravva oil field with one of the lowest operating costs in the
world producing 50,000 barrels of oil per day. The group has ambitious plans for expansion in this
sector globally.
Current issue of Videocon
Description:
Videocon V1688 Twist & Turn is the new stylish and well-designed mid-range mobile phone by
Videocon which has just been launched in the market. The mobile comes loaded with lots of attractive
and impressive features as well as dimension. This mobile is priced at Rs. 6,995/- in Indian market
which is affordable than other mobiles having same features.
Videocon V1688 Twist & Turn is the 90 degree rotted full QWERTY keyboard impressive mobile
phone that has 3.2 inches touchscreen display screen. This display screen of the device generates
resolution of 320x480 that shows pictures of better quality.
This amazing designed mid-range mobile has all the music features such as MP3 and MP4 with
formats of 3GP, AVI, RMVB video etc. It is boasted with a 2 mega pixel of camera that can capture
photographs at resolution of 1600x1200 pixels and video recording at format of 3GP and 15fps. It is
also loaded with dual speakers for loud music and a 3.5 mm audio jack.
The mobile supports Java language, EDGE & GPRS and stereo Bluetooth streaming (A2DP), while
comes pre-loaded of popular social networking sites like MSN, Yahoo, Facebook and Skype. The
mobile comes pre-installed a 2GB microSD while its memory can be upgraded up to 4GB through
using a memory card.
The mobile, Videocon V1688 Twist & Turn, supports dual SIM (GSM+GSM) that provides excellent
networking facility. This impressive handset is corporate with a solid 1000 mAh battery that allows
long talk and standby time. The mobile is available in Red, Yellow and Silver color shades.
Important Competitors
LG ELECTRONICS
SAMSUNG
ONIDA
Its popular devil ad although had engendered a strong emotional pull towards the
brand, technologically it represented no advancement. The company plugged the gap
by touting its digital technology. Like Videocon, it has also been able to hold its
market share. The world-class quality of Onida has enabled the company to make a
breakthrough on the export front. It has technical tie- up with the Japan Victor
Company, better known as JVC. So focused is Onida on positioning itself on the
premium, high- tech plank that it is even planning to push its own envelope on
obsolescence, much. The strategy is aimed at further broad basing the product
offering of the company, which has largely dominated the top-end of the television
market, across multiple market segments.
VIDEOCON
Videocon has always been a price player and has an image of a low price brand. This
entails providing more features at a given price vis-à-vis competitors. It has taken
over multinational brands to cater to unserved segments, like Sansui- to flank the
flagship brand Videocon in the low to mid priced segment, essentially to fight against
brands like BPL, Philips, Onida and taken over Akai- tail end brand for brands like
Aiwa.
Videocon is one of the largest manufacturers of television and its components in
India and thus has advantages of economies of scale and low cost due to
indigenisation. It has the widest distribution network in India with more than 5000
dealers in the major cities. It also has a strong base in the semi-urban and rural
markets. Due to its multi-brand strategy, it has at present multiple brands at the same
price point. This has led to a state of diffused positioning for its brands. It has also led
to a cannibalisation of sales among these brands. The flagship brand Videocon has
lost market share due to the presence of Sansui in the same segment. Because of
reduction in import duties on CPT the cost advantage of Videocon is also on the
decline. Hence it is facing rough weather and also trying to boost exports.
Besides understanding the strategy adopted by different players, several other factors-
industry growth, concentration and balance, corporate stakes, fixed cost, and product
differences need to be analysed to determine the extent of rivalry between the
existing Players.
ENVIRONMENTAL SCANNING
PEST ANALYSIS
1. Political Factors
2 . Economical Factors
• Emergence of organized retail market with large players like Croma, Next, Reliance
Digital - leading to lower prices and higher varieties
3 . Social Factors:
4 . Technological Factors:
PORTERS MODEL
Potential entrants
(Threat of
Entry)
Industry
Suppliers Buyers
Competitors
(Supplier (Buyer
Power) (Segment rivalry) Power)
Substitutes
(Threat of
substitutes)
In order to understand the industry better, we analyze the industry using Porter’s Five Force
Model-
- Threat to entry
- Rivalry of among existing firms
- Bargaining power of buyers
- Bargaining Power of Suppliers
- Threat of Substitutes
Threat to Entry-
• Entering the CTV market isn’t very easy. One of the most important features needed
is a good distribution system which isn’t something that can be developed overnight.
• Also, a television today is a style statement. Therefore, the brand plays an important
role in influencing the purchase decision. For a new company then entering this
market, not having a recognized brand name is a threat to entry.
• This increased competition has ensured that advertising costs are an integral part of
the players’ total cost. A lack of product differentiation means that price is a
competitive feature that intensifies rivalry. The highest price reductions during 2002-
03 to 2005-06 were in the 20inch and 21inch CCTV category.
• With the future being in LCDs, this market is likely to see price reductions future.
• This bargaining power of the buyer has forced the players to offer credit facilities on
sale, to provide lower EMIs and excellent after-sales service.
• The intense dealer competition also benefits the consumer in terms of prices and
offers available.
• Inventory carrying costs for television companies are high. This is a boon for the
consumers as it translates into higher bargaining power for the consume
Threat of Substitutes-
• For a television, the substitute can only be a functional substitute. The functional use
of a television is to watch programs, live events etc. This today can also be done on a
computer.
• Today with various multiplexes and theaters providing screenings of live events such
as sports telecasts etc. along with the luxury of good food and the opportunity to
enjoy the event with a number of other enthusiasts, the TV can be substituted if the
TV is bought only to watch certain events.
• PCBs (Printed Circuit Boards) & CRTs (Cathode Ray Tube) are key raw materials in
the production of CTVs.
• CRT accounts for 46-48 per cent of the total raw material costs of a CTV. PCBs and
housing components account for 33-39 per cent of total raw material costs.
• Domestic CPTs prices tend to follow Global price trends. Therefore, the suppliers do
not have much of bargaining power in this regard.
• Cabinets are sourced from plastic manufacturers and as these manufacturers supply to
different industries, they therefore do have a bargaining power, especially in
comparison to CRT suppliers.
MARKETING STRATEGIES
1. Products of company.
4. Distribution channels.
5. Promotion strategies
1.Products of company
CONSUMER ELECTRONICS
PLASMA
SPILT AC
WINDOW AC
MOBILE PHONES
WASHING MACHINE
REFRIGERATOR
HOME THEATER
MICROWAVE
DISH TV
LCD TELEVISION
4P’s
Product Mix
Product mix is the set of all product and items a particular seller offers for sale. Product mix
consists of various product lines.
The width of a product mix refers to how many different product lines the company carries.
The Videocon television has product mix width of five lines. I.e. plasma, LCD, Slim, flat and
Conventional.
The length of a product mix refers to the total number of items in the mix.
i.e. for the line of LCD the length is 2 as it has two items 50” PDP and 42” PDP.
The depth of the product mix refers to how many variants are offered of each product in the
line, i.e. For LCD the depth will be 2. As Videocon is offering only one product in 50” PDP
and 42” PDP.
The three product-mix dimensions permit the company to expand its business in three
ways.
• It can add new product lines, thus widening its product mix.
• It can add more product variants to each product and deepen its product mix.
Width, Length & Depth
20” LCD
19” LCD
Length 5 2 3 3
In the product mix of Videocon, it is having 37 different models, which gives them their
product line Depth.
PLASMA
Plasma television technology is similar to the technology used in a fluorescent light bulb. The
display itself consists of cells. Within each cell two glass panels are separated by a narrow
gap in which neon-xenon gas is injected and sealed in plasma form during the manufacturing
process.
The main advantage of Plasma over CRT technology is that, by utilizing a sealed cell with
charged plasma for each pixel, the need for a scanning electron beam in eliminated, which, in
turn, eliminates the need for a large Cathode Ray Tube to produce video images. This is why
traditional televisions are shaped more like boxes and Plasma televisions are thin and flat.
Advantages of Plasma Television:
• Superior Contrasts.
• Versatile.
50" PDP
Integra 50
10000:1 Contrast Ratio
3:2 & 2:2 Pull Down
HDMI Compatible
3-D Video Noise Reduction
PC Input
42" PDP
29" SLIM
21" SLIM
Flat
29" TFT
21" TFT
15" TFT
Conventional TV
21" FFST
20" CONV
14" CONV
Pricing
Place
Seasonal offers
Trip to Germany during FIFA world cup
Videocon bonanza offer (har din Diwali) during Diwali
Chance to win car, motor bike and LCD TV'
(STP)
SEGMENTATION:
Market segmentation is the process in marketing of dividing a market into distinct subsets
(segments) that behave in the same way or have similar needs. Because each segment is fairly
homogeneous in their needs and attitudes, they are likely to respond similarly to a given
marketing strategy. They are likely to have similar feelings and ideas about a marketing mix
comprised of a given product or service, sold at a given price, distributed in a certain way and
promoted in a certain way.
The process of segmentation is distinct from targeting (choosing which segments to address)
and positioning (designing an appropriate marketing mix for each segment). The overall
intent is to identify groups of similar customers and potential customers; to prioritize the
groups to address; to understand their behavior; and to respond with appropriate marketing
strategies that satisfy the different preferences of each chosen segment.
Segments based on Income
Plasma: Income group of more than 50,000
LCD: Income bracket of Rs 20,000 and above
Slim: Consumer in the income bracket of Rs 9000-15000
Flat: Consumer in the income bracket of 7000-12000
Conventional: income bracket of Rs 3000-6000
Benefit Segmentation:
Conventional, Flat screen Slim, LCD, and Plasma can also segment on the basis of benefits
that an end consumer would receive from them.
User Status:
TV market can be classified into non users of TV and potential users in term of graduating to
a higher segment like slim, LCD, Plasma from basic conventional TV.
Loyalty status:
On the basis of Loyalty status
Hardcore Loyal: brand loyal to Videocon for a long time in terms of purchasing products of
Videocon
Shifting Loyal: who shift loyalty from other brands to another
Switchers: not loyal to any brands so attract them to Videocon and convert they brand loyal.
TARGETING:
Once the firm has identified its marketing-segment opportunities, it has to decide how many
and which ones to target. Marketers are increasingly combining several variables in an effort
to identify smaller, better-defined target groups.
The decisions involved in targeting strategy include:
* Which segments to target?
* How many products to offer
* Which products to offer in which segments
In premium segments like flat screens and FDPs the growth in sales has been many times the
industry growth. More importantly, high end product sales are no longer restricted to metros.
Consumer in tier-2 cities seems to be as evolved in lifestyle needs. The consumer profile, too,
has changed. Higher disposable incomes, greater aspirations and younger demographic have
increased demands for the technologies. And Videocon is targeting this segment.
POSITIONING:
Positioning has come to mean the process by which marketers try to create an image or
identity in the minds of their target market for its product, brand, or organization. It is the
'relative competitive comparison' their product occupies in a given market as perceived by the
target market. once the competitive frame of reference for positioning has been fixed by
defining the customer target market and nature of competition, marketers can define the
appropriate points-of-difference and points-of parity associations.
Points of Parity (POPs) are associations that are not necessarily unique to the brand but may
in fact be shared with other brands. They represent necessary-but not necessarily sufficient-
conditions for brand choice.
The Refrigerator companies in the industry use different distribution channels to reach the
customer. These are as follows:
1.In this type of channel, the company uses its sales representatives to deal with the dealers
directly.
2.The dealers place the order through the sales representatives who visit them periodically,
and the products are delivered directly from the company.
Some companies appoint Direct Dealers who act as their Franchisee Outlets or their
Exclusive showroom.
2. In this channel of distribution the company appoints distributors on the basis of District/
Population /No of Dealers to be handled by one distributor. The area of operation and its
potential is also taken into consideration.
Some of the companies make the distributor totally responsible from appointing the dealers to
providing after sales service.
3. In this channel of distribution the company appoints Distributors as well as Direct
Dealers. The company appoints distributors to deal with small dealers who order small
quantities. With the dealers who have good potential and sales the company deals directly.
The Korean Multinational follow this channel where they appoint Distributors for upcountry
towns and direct dealers for big cities and major towns eg. Ahmedabad.
4. In this channel the company appoints a C&F agent who acts on behalf of the company.
The C&F agent is totally responsible for appointment of Distributors and Direct Dealers. He
sells to both the Distributors and the Direct Dealers at the same rates.
PROMOTION STRATEGIES
Product strategy
1. Stop all curved CPT production
2. Shift focus to LCD CTVs; target: by December 2007.
3. Launch Slim21” and focus Slim 29” immediately. Target is to have almost all CRTs
production shifted to Slim by 2007
4. Take full advantage of Digital and HDTV revolution, gain leadership in HDTV Slim
TV segment through OEM and model mix worldwide strategy.
5. Study unique product range / pro large to fill market gaps in markets such as Asia and
Eastern Europe / CIS / South America
6. Focus on reduction of costs through reduction of glass, shift to AK mask and
reduction of process rejection.
Sales Strategy
Industrial Strategy
Cost Strategy
Product Development
1. i-TV – web enabled TV at the price of 13,900 with exchange offer for an older
version.
2. TVs With hard disk to store programs.
3. Wall mounted Flat CTVs at the price of 12,990.
4. Aimed at fulfilling needs of customer who can not buy LCDs but prefer to do away
with CTV models which occupy space in living rooms.
5. CTVs with inbuilt set top box
6. Tie up with DTH player and provide annual subscription offer.
7. to provide Direct to home services.
FINANCIAL ANALYSIS
1. Sources of finance.
2. Ratio analysis
Sep '05 Sep '06 Sep '07 Sep '08 Sep '09
Net Cash from Operating Activities -1792.99 1351.72 1133.68 -1193.44 647.41
Opening Cash & Cash Equivalents 0.28 1396.01 1136.26 889.11 388.28
Closing Cash & Cash Equivalents 1396.01 1136.25 889.11 388.28 498.51
INCOME STATEMENT
Income Statement
30-Sep- 30-Sep- 30-Sep-
09(12) 08(12) 07(12)
Profit / Loss A/C Rs Mn 10% Rs Mn 10% Rs Mn I0%
Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05
Sources of funds
Owner's fund
Equity share capital 229.41 229.30 220.95 220.84 206.53
Share application money 95.00 - - - 65.24
Preference share capital 46.01 46.01 46.01 46.01 -
Reserves & surplus 6,929.63 6,538.49 5,357.91 3,847.63 3,420.56
Loan funds
Secured loans 6,735.04 4,401.25 3,343.50 3,608.39 2,776.10
Unsecured loans 2,349.51 3,604.34 1,916.14 1,352.80 473.47
Total 16,384.59 14,819.39 10,884.50 9,075.67 6,941.90
Uses of funds
Fixed assets
Gross block 9,004.95 8,947.78 8,083.16 7,127.93 5,578.62
Less : revaluation reserve - - 53.52 924.57 951.84
Less : accumulated depreciation 4,298.83 4,310.63 3,376.67 2,847.09 2,286.77
Net block 4,706.12 4,637.15 4,652.98 3,356.27 2,340.00
Capital work-in-progress 1,314.15 1,289.52 612.98 608.28 699.23
Investments 3,064.90 2,695.59 2,092.50 1,781.17 338.79
Net current assets
Current assets, loans & advances 8,820.90 7,641.68 5,142.49 4,425.46 4,449.32
Less: current liabilities & provisions 1,521.48 1,444.55 1,616.44 1,095.51 885.44
Total net current assets 7,299.42 6,197.13 3,526.05 3,329.96 3,563.88
Miscellaneous expenses not written - - - - -
Total 16,384.59 14,819.39 10,884.50 9,075.67 6,941.90
Notes:
Book value of unquoted investments 3,056.96 2,524.79 1,906.24 1,618.68 321.18
Market value of quoted investments 10.83 214.72 230.38 94.13 51.79
Contingent liabilities 122.93 178.17 112.59 81.65 207.72
Number of equities shares outstanding
(Lacs) 2294.07 2294.51 2210.94 2209.86 2065.26
SOURCES OF FINANCE IN THE COMPANY
Equity share capital, Preference Share Capital and Loan Funds are divided into Two parts:
1. Secured Loans
2. Unsecured Loan
In September 5 Company Equity Share capital is 266 and it continuously increasing in
subsequent date of this month, but company does not increase Preference Share Capital, it is
constant in subsequent date of this month. Company is also increasing their Secured and
Unsecured Loan. Company taking secured Loan on September 05 was 277.10, but it showed
a large increase in September 09, it increased by 233.79. Secured Loan also increasing in
September 05 to September 08, but in September 09 it is decreased by 1245.83
FINANCIAL RATIOS
Operating Profit Per Share (Rs) 41.44 60.65 75.63 104.26 81.69
Net Operating Profit Per Share (Rs) 264.3 326.66 374.75 425.09 399.42
Free Reserves Per Share (Rs) 151.7 161.05 231.68 274.10 285.35
Profitability Ratios
Adjusted Net Profit Margin (%) 8.95 8.62 9.10 9.99 4.35
Adjusted Return on Net Worth (%) 13.50 15.48 13.56 15.59 6.66
Return on Long Term Funds (%) 8.63 11.28 12.94 12.71 8.31
Long Term Debt Equity Ratio 0.82 1.14 0.83 1.10 1.23
293.7
Number of Days In Working Capital 166.06 153.21 228.73 286.78
1
WORKING NOTES:
2007 5142.49/1616.44=3.18
2008 7641.68/1444.55=5.29
2009 8820.90/1521.48=5.79
2006 9075.67/220.84=41.09
2007 10884.50/220.95=49.26
2008 14819.39/229.30=64.62
2009 16384.51/229.41=71.42
QUICK RATIO:
2005 206.53/6941.90=0.0297
2006 220.84/9075.67=0.0243
2007 220.95/10884.50=0.0202
2008 229.30/14819.39=0.0154
2009 229.41/16384.59=0.0140
In 2005 current ratio is 5.02 but it decreased in 2007-2008. It shows that a low ratio
indicates that the enterprise may not be able to meet it current liabilities on time and
inadequate working capital, but it is increasing in September 2008-2009 which shows the
other hand, a high ratio indicates fund are not used efficiently and are lying ideal. It indicates
poor investment policies of the management. The current ratio thus, through a good light on
the short-term financial position and policy of a firm.
In 2005 quick ratio is 5.02, but it is decreasing in 2007-2008, it shows that the high
liquidity ratio compared to current ratio may indicate under stocking while a low liquidity
ratio indicates overstocking, but it is increasing September 2008-2009 which shows quick
ratio is considered a better measure to judge the short-term financial position of the business
as compared to current ratio.
EARNINGS: Videocon, July- September net profit Rs.1.6 ban, up 7% on year Videocon
Industries Ltd Thursday reported net profit of Rs. 1.6 billion for Jul-Sep, up 7.14% from a
year ago. In a news release, the company said its net sales in the quarter were Rs. 29.85
billion, up 14% from a year ago. Total expenditure for the quarter stood at Rs. 25.95 billion,
up 14.7% from a year ago. Raw material cost expanded 17.6% to Rs. 10 billion and employee
cost stood at Rs. 499.4 million, up 47.8% from a year ago. Revenue from the consumer
electronics and home appliances segment was at Rs. 27.31 billion, up 18.6% from a year ago
and revenue from crude oil and natural gas segment was down 20.3% at Rs. 2.54 billion. The
company said it has extended its current accounting year by three months and thus the current
year will be of 15 months beginning Oct 1, 2009 and ending Dec 31, 2010.
Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05
Income
Operating income 9,163.04 9,753.65 8,285.42 7,218.82 5,460.25
Expenses
Material consumed 5,614.40 5,291.05 4,954.79 4,162.74 3,070.27
Manufacturing expenses 773.74 1,285.85 988.23 986.28 916.22
Personnel expenses 126.42 115.82 105.35 94.70 49.53
Selling expenses 550.04 505.07 470.62 412.12 360.47
Adminstrative expenses 224.47 163.62 94.21 222.71 207.96
Expenses capitalised - - - - -
Cost of sales 7,289.07 7,361.40 6,613.19 5,878.56 4,604.44
Sep ' 09 Sep ' 08 Sep ' 07 Sep ' 06 Sep ' 05
Operating profit 1,873.97 2,392.25 1,672.24 1,340.26 855.81
Other recurring income 27.39 71.92 71.55 127.21 35.66
Adjusted PBDIT 1,901.37 2,464.18 1,743.79 1,467.47 891.47
Financial expenses 665.75 431.86 337.17 254.75 244.96
Depreciation 577.15 660.21 418.39 484.00 320.15
Other write offs - - - - -
Adjusted PBT 658.46 1,372.11 988.23 728.72 326.36
Tax charges 177.68 312.67 227.68 95.16 -166.03
Adjusted PAT 480.78 1,059.43 760.55 633.56 492.40
Nonrecurring items -80.12 -205.14 94.67 -139.82 -152.50
Other non-cash adjustments 73.68 0.72 3.54 0.30 2.36
Reported net profit 474.34 855.01 858.76 494.04 342.26
Earnings before
2,536.34 2,306.65 1,696.84 932.95 602.36
appropriation
Equity dividend 46.25 22.95 80.30 77.35 55.19
Preference dividend 3.68 3.68 3.68 3.39 2.50
Dividend tax 8.49 4.53 14.27 11.32 8.09
Retained earnings 2,477.92 2,275.49 1,598.59 840.89 536.58
Profit and Loss account of this firm show that operating income of this firm is
increasing. It was 5460.25 in Sept 2005, but on Sept 2006 it increasing to 7218.82. This
increase shows the growth of this firm. On the other hand, expenses Sept 2005 is 3070.27 Rs.
it was also increasing to 4162.74. But expense of this firm continuously increasing on the
other hand operating income increasing in Sept 2008- 2009 by 590.62.it show that firm
growing rate falling. In short, we can say that firm expenditure rate is more than income rate.
it shows that firm is doing strongly in the market.
Videocon holds 25% market share in the consumer goods market in India. It is one of the
largest CPT manufacturers globally, with operations in India, Mexico, and Italy
Videocon, founded in 1985, is today one of the largest corporate groups in India. It is now
venturing into power and telecom. It is one of the largest manufacturers of Colour Picture
Tube (CPT)globally. It has close to 25% market share in home appliances segment in India
and aims to double this business in next five years. Apart from its core businesses, the
company is aiming to grow its power and telecom (handset and services) businesses
aggressively through large scale investments.
Market Share (%) for FY09
• Display industry and its components: Manufactures colour picture tubes at its
facilities in Italy, Poland and China
• Colour Picture Tube (CPT) Glass: Operates manufacturing facilities in India and
Poland
The Company, through its wholly owned subsidiaries and JVs, is engaged in exploration
activities in oil & gas fieldsinBrazil, Mozambique, East Timor, Oman and Australia
• Entry into the Telecom business: In March 2010, Videocon Telecommunications Ltd,
a unit of Videocon Industries Ltd, launched mobile services based on the global
system mobile (GSM) platform
• Plans to set up three more thermal power generating units with a combined capacity of
4,800MW in Maharashtra, Chhattisgarh and Asansol, with a total investment of
USD6.5bn
• The equity shares of the Company are listed on the Bombay Stock Exchange and
National Stock Exchange of India; the Global Depository Receipts (GDR) and
Foreign Currency Convertible Bonds (FCCB) issued by the Company are listed on
the Luxembourg Stock Exchange and Singapore Exchange Trading Securities
respectively
Company
SWOT ANALYSIS
SWOT Analysis
Strengths:
1. Technological skills
2. Distribution Channels
3. Customer Loyalty/ Relationships
4. Production Quality
5. Scale
6. Management
Weaknesses:
Opportunities:
Findings
FINDINGS
With strategically located manufacturing bases and an enviable distribution network of
around 90 branch offices, 10,000 distributors & 400 after-sales service centers across India,
VIL enjoys a unique 80% plus penetration in the market place.
A high degree of backward integration ensures that VIL has most of the vital components
under its control and bestows upon it unique benefits over competition – uninterrupted
supply, shorter turnaround time, cost advantage and quick adaptation to changing customer
needs.
VIL is looking to strengthen its presence through a host of big ticket acquisitions/asset
buyouts – Daewoo Electronics (South Korea), Chunghwa Picture Tubes (Taiwan), Pioneer
(Japan) and other brown-field expansions will help VIL expand its horizons.
VIL’s glass division, VNG, is the largest single location glass shell plant, enjoying economies
of scale and a leading position in the global glass shell industry. Additionally, integration of
its acquired Thomson Colour Picture Tube (CPT) plants with its Indian business would not
only reduce the cost of production, but also give its glass shell units a ready market.
The Thomson acquisition includes R&D centres and access to over 2,000 patents, which
would enable VIL to launch new products as well as counter the threat posed by the
conventional TV market being rapidly overtaken by hi-tech products in overseas markets.
Increasing demand & high prices in the oil & gas industry will not only lead to improved
realizations, but along with low operating costs that the Ravva oil & gas field enjoys, it can
translate into a bonanza for VIL.
VIL has earmarked USD 13 MM (FY07) & USD 24 MM (FY08) as capex for its oil & gas
business, in order to increase the extraction from the field. It has also embarked upon Infill
Well Drilling and exploration & production of three new blocks; LM-403, Back Fault Block
& LO-110, all in the Ravva field. The probable reserves in the Ravva Oil field are estimated
to be as high as 400 MM barrels, of which only about 160 MM barrels have been produced.
Thus, a huge upside potential exists for the company.
VIL is exhibiting substantial panache by fruitfully working towards bidding for and more
often than not, attaining exploration and production rights in many countries around the
world. It is well on its way to earning remarkable profits & achieving a prominent global
standing.
Competition for intellectual leadership for new ideas that create new advantages.
Competition for translating these ideas into product/service faster than others.
Come out with state of the art, feature packed affordable and competitive advantageous
products.
Wear out competition through trend setting, inimitable tactical moves based on our
infrastructure strengths.
We have so far identified the various areas on which Videocon and other major Indian
companies need to improve upon to achieve the desired level of competitiveness. Only these
improvements would give Videocon and the other Indian companies base to compete with the
MNCs and help the Indian companies to reduce the impact of MNCs on the Indian Market in
the future. Indian manufacturers will have to react quickly because any delay in reacting to
the threat posed by the MNCs would only give the MNCs time to establish themselves in the
market. With their expertise and financial capacity, they would be nearly impossible to
compete with once they get a firm foot hold in the market. The future
But the battle has only started, and the foreign companies are here for the long term. They can
sustain losses for years to come in order to gain market share. What they are doing at present,
is building up distribution networks to cover every nook and corner of the country and,
setting up manufacturing facilities.
Only those Indian manufactures which have a strong focus on manufacturing and
technological up gradation will survive in the long run, although with a much smaller market
share than they have at present. Small companies will be side-lined totally and will exit from
the CTV market altogether.
Videocon has always been driven by its Value -for-money strategy. The company needs to
identify critical success factor and work assiduously towards achieving it.
SUGGESTIONS
To strengthen and maintain & its leadership status, the Videocon group has clearly charted
out its course for the future. Aggressive development is in full swing at the R & D Centres to
bring out state-of-the-art technologies including True Flat, Slim, Extra Slim, Plasma & LCDs,
at the earliest. Cost rationalization processes - are in various stages - including rationalizing
factories in Europe, increasing automation and improvement of efficiency in China, accessing
floss shells from India for international CPT facilities and a lot more - are in various stages of
implementation Internationally all existing client relationships are being strengthened. The
cost competitiveness and increase in capacity in Poland has opened up big opportunities in
the OEM business. Last but not the least, in the domestic market consolidation with multiple
brands paves the way for an unassailable lead in the market.
In the Oil & Gas business, having all the basic operator capabilities of a prospecting entity,
the group is looking to add more explorations and production depth as also oil-bearing assets.
The group will also get into gas distribution in India significantly.
BIBLOGRAPHY
• http://en.wikipedia.org/wiki/Videocon
• http://www.videoconworld.com/
• http://www.google.co.in/
• www.branders.com
• www.viewcentral.com
• www.eventmarketer.com
• www.mobilemarketingjoblist.com