AN INITIAL REPORT

ON

SUBMITTED TO: SUBMITTED BY:

MRS. SUMAN VIJ RICHA RAI
FACULTY GUIDE 7NBDH025
 PRESENTING
3C REPORT
ON

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WHAT IS 3C?...............
AN INTRODUCTION

THE 3C REPRESENTS…….
 CUSTOMERS
IT COVER THE ECONOMIC VALUE TO THE CUSTOMER, IT NOT ONLY INCLUDES THE
INDIVIDUAL CUSTOMER BUT IT ALSO INCLUDES THE MARKET IT IS CONCENTRATING
ON AND THE PRODUCTS IN WHICH THEY DEAL.

 COMPANY ITSELF
COMPANY INCLUDES BOTH THE ECONOMICS AND FIT WHERE IN ECONOMICS IT
INCLUDES COST, PROFITABILITY, EXPERIENCE CURVE, CAPACITY AND IN FIT IT
INCLUDES STRATEGY AND VISION, STRENGTH AND WEAKNESS, ITS CULTURE AND ITS
STRUCTURE

 COMPETITORS
IT COVERS THE DIFFERENT FORCES WHICH BEING HELPFUL TO ANALYSE THE
INDUSTRIAL ENVIRONMENT LIKE MARKET SHARE OF THE COMPETITORS, CORPORATE
GOALS, ECONOMIES OF SCALE AND SCOPE BOTH AND RELATIVE PRODUCT
POSITIONING

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ABOUT NATIONAL OILWELL VARCO (nov)
…….
 NOV IS US BASED COMPANY WHICH DEALS IN MANUFACTURING OIL DRILLING
EQUIPMENT.

 NOV OPERATES IN OVER 20 COUNTRIES WORLDWIDE THROUGH ITS WHOLLY OWNED

SUSDIARIES AND JOINT VENTURES. NOV CONTINUES TO GROW AND EXPAND LARGELY
THROUGH ACQUISITIONS, MERGERS AND FORMATION OF JOINT VENTURES.

 RECENTLY THE COMPANY HAS ANNOUNCES THAT IT HAS AQUIRED GREAT PRIDECO
INC, A DRILLING PRODUCT MAKER FOR USD 7 BILLION.

 NOW ITS ACHIEVEMENTS LET IT TO REACH AT THE FOURTH LARGEST OIL DRILLING
SERVICES IN THE WORLD.

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 ABOUT NOV SARA……………

 NOV Sara is a joint venture which is 76% owned by NOW(Asia), a

wholly owned subsidiary of NOV.

 The remaining 24% of NOV Sara is owned by local management.

 The NOV Sara joint venture was formed July 31, 2007

 Prior to this, the company operated under SARA SAE PRIVATE LTD

 NOV Sara manufactures and sells oilfield related equipment and

parts to customer located in India and abroad , largely to US
customers , both third party and related companies.

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 JOURNEY ALL THE WAY…………………………
 1978 : ESTABLISHED AS SARA SERVICES AND ENGINEERS PRIVATE LTD WITH NET CAPITAL OF
RS.25000

 1981-84: ENTERED INTO FOLLOWING TECHNICAL COLLABORATIONS AGREEMENTS FOR

MANUFACTURING IN INDIA WITH
 KOOMY
 ECKEL
 VARCO BJ
 CAMCO

 1982: PLANT SET UP AT PRESENT LOCATIONS OF DIV II

 1990: ESTABLISHED VARCO SARA AS A 60:40 JOIN VENTURE WITH VARCO BJ FOR
MANUFACTURING OF HANDLING TOOLS IN INDIA.

 2002: ESTABLISHED STS HOUSTON FOR DISTRIBUTION IN US

 2007: MERGED INTO NATIONAL OILWELL VARCO.

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CUSTOMER………………………………
NOV SARA CATEGORIES ITS CUSTOMER ACCORDING TO THE THREE DIFFERENT
SEGMENTS
INDIGENOUS EXPORT RELATED EXPORT UNRELATED
CUSTOMER
JOHN ENERGY STS PRODUCTS LTD 3C METAL INT

OIL INDIA LTD NOV JUBEL ALI DRILLTOOLS EQUIPMENT

ONGC SEAHARVEST FREE ZONE A&P

INTERNATIONAL,PERU
ABAN LOYD CHILES ATOM SUPPLY, AUSTRALIA

V-LINE HYDROLIC FIRST HOSE

POWERFLEX R B PIPETECH

ESSAR OILFIELD VALVE WORKS, USA

NIKO RESOURCES ENRON OIL AND GAS

VARCO SARA DOSCO, NETHERLANDS

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COMPETITORS……………………
WHEN WE TALK ABOUT THE NOV SARA IT HAS ITS DOMINATING POSITION IN
INDIAN MARKET FOR THE FOLLOWING MAIN PRODUCTS:

 BLOW OUT PROJECTORS(BOP)

 HYDRAULIC POWER TONGS

IT HAS SOME COMPETITORS IN MANUFACTURING HAMMER UNIONS AND RING

JOINT GASKET
 M/S PRAVEEN LTD

WORLD WIDE COMPETITORS FOR NOV ONLY

 SCHLUMBERGER
 BAKER HUGES
 HALLIBURTON

WORLD WIDE COMPETITORS FOR NOV SARA

 LOW COST PRODUCER ALL OVER THE WORLD.

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WHO’S WHO?................................
NAME DESIGNATION
MR. PETE MILLER CHAIRMAN PRESIDENT AND CEO
OF NOV
MR. V.K. DHAWAN MANAGING DIRECTOR AND
CHAIRMAN
MR. P. K. DHAWAN VP OPERATIONS AND
RESPONSIBLE FOR UNIT I
MR. SUMIT DHAWAN VP FINANCE AND RESPONSIBLE
FOR UNIT II
MR. SAMIR DHAWAN VP PRODUCTION
MR. DENNIS CHIN CFO, REPRESENTING NOV
MR. SENGUPTA CFO , STARTING APRIL 15 , 08
MR. VIKRAM KAPOOR SENIOR MANAGER OF FINANCE &
ACCOUNTS, CSA

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MARKETING
OVERVIEW
PRODUCT OVERVIEW……………
 BOP ACCUMULATOR UNITS VETCO (ABB) , USA TYPE 80 LINE AP 16D ACCREDITATION

 HYDRAULIC TONGS , ECKEL, USA LINE , API 7K ACCREDITATIONS

 FLANGES , SPOOLS AND RING JOINTS GASKET, API 6A ACCREDITATION

 HAMMER UNION , VARCO BEST LINE , WECO INTERCHANGEABLE

 SWIVEL JOINTS VARCO BEST LINE , API 16C ACCREDITATION

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FACILITIES AND LOCATIONS
DISTRIBUTION SERVICES

HOUSTON , TEXAS, USA MUMBAI

EDMONTON , CANADA INDONESIA

BOGOTA, COLUMBIA DUBAI

BERGEN, NORWAY KUWAIT

MUMBAI , INDIA OMAN

SINGAPORE

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 FINANCE
OVERVIEW

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FINANCE……………………………..
PROJECTING THE TARGET OF SALES WITH THE PAST RESULTS

SALES US $ MM

2006-07 23.50

2007-08 31.90
FORECAST

2008-09 81.50
BUDGET

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 HUMAN RESOURCE
MANAGEMENT
OVERVIEW

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 MANPOWER EMPLOYED………….

TOTAL 800
STRENGTH

ENGINEERS 140

SKILLED 400
WORKERS

SERVICE 20
PERSONNEL

REST WORKERS 240

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SWOT ANALYSIS
A BRIEF REPORT
ON
STRENGTH, WEAKNESSES
OPPORTUNITY AND THREATS
OF
STRENGTHS………………………….
WHAT LET THE NOV SARA TO MAKE ITS OWN STANDING

 TECHNICAL KNOW HOW

 COST EFFECTIVENESS APPROACH TO PRODUCE COMPONENTS REQUIRED

THROUGH IMPORT.

 DOMINANT POSITIONING IN MANUFACTURING BOP ACCUMULATOR AND

HYDRAULIC POWER TONGS.

 SEPARATE UNIT FOR EXECUTION OF PRODUCTION FOR EACH DOMINANT

PRODUCT.

 SUPPORT OF TECHNICAL COMPANIES LIKE:

 KOOMEY
 ECKEL
 AND LASTLY THE MAJOR ONE NOV WHICH ACTS AS BACKBONE FOR
RESTRUCTURED SARA ENGINEERING AND SERVICES.

o SOUND CUSTOMER DATABASE

o LOW COST OF PRODUCTION

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WEAKNESSES………………………….
MAJOR LOOPHOLES……………………….

BESIDE HAVING A LOT OF ADVANTAGES AND STRENGTH, NOV SARA HAS ALSO SOME
NOTICEABLE WEAKNESSES, WHICH CAN AFFECT ITS WORKING AND FUNCTIONS

 SWITCHING OVER OF EXPERIENCED EMPLOYEES DUE TO CHANGES IN INDIAN

MARKET.

 SHORTAGE OF SPACE FOR INBOUND LOGISTIC SYSTEM.

 SHORTAGE OF TECHNICAL ENGINEERS WHICH IS CAUSED BY GROWTH OF NOV SARA

WHICH BEING A NEED TO ENJOY THE COMPETITIVE ADVANTAGES.

 THERE IS NO UPDATED SYSTEM FOR QUANTITY CONTROL MANAGEMENT

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OPPORTUNITIES……………………..
LOOK FORWARD TO WIDEN THE SCOPE AND CAPTURE THE MARKET

 FRANCHISE AGREEMENT WITH DRILLTOOLS IN DUBAI.

 FUTURE PLANS TO CREATE OWNED STOCKS IN DUBAI TO CATER TO ALL

REQUIREMENT ORIGINATING IN MIDDLE EAST AND NORTH AFRICA.

 PLANS TO ENTER INTO PRICE AGREEMENT WITH NDC USING FARIS INTERNATIONAL AS
AGENT.

 RECTIFICATION OF ACCUMULATOR UNITS TO BE PROMOTED WITH KOC AND JOINT

OPERATIONS.

 NEW AGREEMENT TO BE ENTERED WITH AET.

 14 STATIONS UPGRADE OFFER SIGNIFICANT POTENTIALS.

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THREATS………………………….
FACING CHALLENGES REGARDING SOME ASPECTS

 INTERNATIONAL MARKET

 PRICING STRATEGY OF THE COMPETITORS

 SWITCHING OVER OF THOSE EMPLOYEES TO WHOM THE COMPANY HAS A VERY LONG
TERM RELATIONSHIP. SO THE MAIN THREAT IS TO HOLD THE MAN POWER.

 POLITICAL ENVIRONMENT

 MAINTAINING THE STANDARDS AND NORMS OF NOV.

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BUSINESS OBJECTIVES
PREPARATION OF ALL SUPPORTING DOCUMENTS OF THE FOLLOWING:

 TRANSFER PRICING
 PRODUCT AND PRICE VARIATIONS
 INVENTORY COSTING
 JOB COSTING
 INVENTORY OBSOLECENCE

ALL THROUGH COST ALLOCATION METHOD

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WEEKLY EXPECTATIONS
 TO GAIN AN UNDESTANDING OF NOV, BUSINESSES OF NOV SARA, PRODUCTS
MANUFACTURED, TRANSFER PRICING AND ISSSUES UNDERSTANDING.

 BEGIN ANALYSIS OF COST OF GOODS SOLD AND GROSS MARGIN FOR

UNIT II

 COMPLETE ANALYSIS OF COST OF GOODS SOLD AND GROSS MARGIN OF UNIT II

 ANALYSE PREPARE COMPLETE COST ALLOCATION SCHEDULE FOR ONE EXPENSE

ACCOUNTS

 GAIN AND UNDERSTANDING OF UNIT II PURCHASING CYCLE AND DOCUMENT THE

PROCESS

 REVIEW THE DOCUMENTATION.

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