2. Established in 1992
Distributor of HINDALCO Aluminium Extrusions
Started a factory to manufacture Aluminium doors, windows and
ladders in 2007
Factory forms part of XXX ALU SYSTEMS PVT. LTD.
In house designing facility
Collaboration with Italian companies for technology transfer
3. Enterprise Resource Planning
To analyze the effectiveness of the ERP
implementation started in 2007 and around 75
percent complete till date.
Marketing
To analyze the reasons behind low retail sales of Aluminium
furniture from the Aluminium gallery situated at Navyug Market,
Ghaziabad.
To design an advertising strategy for ABC’s products.
Finance
To explore different methods of raising finance for the company’s
expansion in the market (in operations and marketing)
6. Application Function
New Group To be displayed as a part of Asset, Liability, Revenues or
Expenses
New Ledger New customer/vendor accounts
Journal Voucher Transactions not covered under Purchase and Sales
applications
Receipt – Payment Payments in the form of Cash/Bank Cash are recorded
Contra Voucher Transfer of funds between cash/bank cash of different
bank accounts
7. Phased implementation
Customization of the ERP according to business
processes
Over-budgeted by 50-100 %
No ERP consultant hired by the company
ERP has increased sales and employee productivity
10. The reporting has become easy.
The applications are easy to understand.
There does not exist any visibility across all departments.
The ERP cannot handle unexpected issues.
All are unhappy with the speed and reliability of the
software.
11. Enterprise Resource Planning
To analyze the effectiveness of the ERP implementation started in
2007 and around 75 percent complete till date.
Marketing
To analyze the reasons behind low retail sales
of Aluminium furniture from the Aluminium
gallery situated at Navyug Market, Ghaziabad.
To design an advertising strategy for ABC’s
products.
Finance
To explore different methods of raising finance for the company’s
expansion in the market (in operations and marketing)
12. Sample Residents of NCR
Respondents 21, all in age group 20-30
Method Internet questionnaire
Null Hypothesis There is no relation between material preference and
attribute preference of a furniture
Description Questions on different furniture material followed by
attribute specific questions on Aluminium furniture
14. Chi-Square Tests
Value df Asymp. Sig.
Pearson Chi-Square 19.720 12 .073
Linear-by-Linear Association 5.423 1 .020
N of Valid Cases 21
• On the test for the relation between material and attribute -> The significance level is .073
• Hence on 90 % confidence interval, material and attribute display significant relation.
• Preference -> Wood and Attribute -> Style frequency is more than expected count.
• Aluminium’s anti-corrosive property is not known by many respondents.
Mean score = 2.29 out of 5 (max).
Thus Aluminium as a commodity need to be marketed.
15. Main products – Aluminium doors, windows and ladders
Differentiated products – Alu wood products, Energy saving
products (most likely to be advertised)
Targets – Business customers, affluent retail customers
Market – National Capital Region
Expenses – Preferable at Rs. 50,000 per month. In any case, not
more than Rs. 75,000 per month
16. OOH Media (India) Pvt. Ltd - broadcast ads & content by strategically placing
High Definition LCD/Plasma screens across India
1050 screens across 198 locations in National Capital Region
Rationale
- Provides segmentation by flexi-casting (different ads for different locations)
- Targeting by displaying ads in TV screens situated in right locations (like
Kingfisher buses, Subway restaurants, Max hospital etc.)
- Better measurability of impact by collaboration with the agency
- OOH provides in-house creative team to prepare ads
17. Locations Address Network Clusters
No of
Screens
Live
Exposure
per week Footfalls
Kingfisher First
Coach Airport
Business
Network Kingfisher buses 4 2280 54156
Kingfisher Coach Airport
Business
Network Kingfisher buses 12 6840 12600
Olympia Gym GK 1
Leisure
Network Gymnasiums 6 1260 2400
Statesman House CP new delhi
Business
Network
Commercial
buildings 3 1080 18000
Rohit House
Connaught Place New
Delhi
Business
Network
Commercial
buildings 2 840
8750
Subway GK1 Market
Leisure
Network Restaurant 1 217 TBC
Subway GK2 Market
Leisure
Network Restaurant 1 217 TBC
Max Hospital Peetampura Delhi
Business
Network Hospital 5 2100 TBC
DCM Building Barakhamba road CP
Business
Network
Commercial
buildings 2 660 TBC
36 15494 95906
18. Enterprise Resource Planning
To analyze the effectiveness of the ERP implementation started in
2007 and around 75 percent complete till date.
Marketing
To analyze the reasons behind low retail sales of Aluminium
furniture from the Aluminium gallery situated at Navyug Market,
Ghaziabad.
To design an advertising strategy for ABC’s products.
Finance
To explore different methods of raising finance
for the company’s expansion in the market (in
operations and marketing)
19. Financial Ratios 2008-09 2007-08
Current Ratio (times) 1.272 1.30835
Working Capital (in INR) 1503115 526300.4
Quick Ratio (times) 0.029182 0.821209
Asset Turnover Ratio (times) 0.495525 0.076127
Profit Margin% 2.564 8.5312
Inventory Turnover Ratio (times) 1.802071 0.943981
Return on Assets% 1.2705 0.6495
Net Worth (Rs.) 11684131 4858511
OPBDIT (Rs.) 1631996 182536
PBIT/Sales% 9.2022 15.8789
PBIT/Interest (times) 1.487578 2.641411
Total Debt/Net worth (times) 0.882129 1.225125
ROCE% 5.5087 1.3298
RONW% 3.0008 1.7189
NWC/Revenue% 10.7204 53.7083
Creditor turnover (times) 2.47 0.574
Gearing Ratio (times) 1.35 1.6
20. Supply Excess and any deficit can be imported at low rates of duty.
Currently, domestic production comfortably meets domestic requirements.
Demand Demand estimated to grow at 6%-8% per annum.
Low per capita consumption in India.
Barriers to
entry
Large economies of scale. Consequently, high capital costs.
Bargaining
power of
suppliers
Most domestic players operate integrated plants. Bargaining power is limited in case of
power purchase, as Government is the only supplier. However, increasing usage of captive
power plants (CPP) will help to rationalize power costs to a certain extent in the long-term.
Bargaining
power of
customers
Being a commodity, customers enjoy relatively high bargaining power, as prices are
determined on demand and supply.
Competition Competition is primarily on quality and price, as being a commodity, differentiation is
difficult. However, the recent spate of consolidation has reduced the competitive pressure
in the industry. Further, increasing value addition to aluminium products has helped some
companies protect themselves from the high volatilities witnessed in this industry.
21. Highly concentrated industry, 5 major producers
Per capita consumption still low in India, around 1 Kg
India world’s 5th largest producer
Consumption dominated by Power sector (44 %)
HINDALCO biggest player with 39% market share
Aluminium production in ‘000 tonnes Aluminium consumption in different industries Source : IBEFSource : IBEF
22. Industry Risks
Business Risks
Market Risks
Operational Efficiency
Management Risks
Character
Ability
Capacity
Financial Risks
23. SMERA CRISIL
CRISIL SME Rating Definition
SME 1 Highest
SME 2 High
SME 3 Above Average
SME 4 Average
SME 5 Below Average
SME 6 Inadequate
SME 7 Poor
SME 8 Default
24. Key Rating Drivers Risks
Competent and qualified promoters Working capital management needs vast
improvement (high creditor days, high
inventory days)
Good business customer base Interest cover is low @ 1.4878 times
In-house designing facility Return on Capital Employed low @ 5.5 %
Imported technology from European
companies
Inadequate profitability as shown by the
profit margin of only 2.564 %
ERP implementation augurs well for
operational efficiency
Return on Net worth low at 3.00%
Good relations with main supplier Less cash in hand (0.029 times)
25. Injects long term equity finance which provides a solid capital base for future
growth.
Are rewarded by business success and the capital gain.
Provide practical advice and assistance to the company based on past experience
with other companies which were in similar situations.
Also has a network of contacts in many areas that can add value to the company.
May be capable of providing additional rounds of funding should it be required to
finance growth.
CC Hill
26.
27. Minimum IPO application size of Rs. 1 lakh.
Companies exempted from eligibility norms like profitability.
If paid up capital > 10 & < 25 Crore, company has the option to get
listed on BSE or NSE.
If paid up capital > Rs. 25 Crore, have to be listed on NSE or BSE.
Preparation and submission of financial results on half-yearly
basis.
Minimum no. of investors shall be specified for IPO.
28. Need to retain employees
Recruit experienced Marketing managers, ERP consultant
Lock-in period can be of 2 years
Need to get listed as early as possible for better valuation
ESOP loans are offered at easy rates by financial institutions
Employees will feel ownership to perform
29. ERP needs to bring more value to the company.
Business processes must be in sync with the ERP
applications.
Aluminium Gallery will be shut down shortly.
Marketing through Digital OOH seems a viable
option. The company seems optimistic about it.
ABC is hopeful of better financial results (FY 2009-
10). It may approach CRISIL soon. Listing in SME
exchange is also an attractive option.