core competence-and-diversification

1. Presented by:
Swarupananda Deogharia
Jyoti Bhagchandani
Abhijeet Sharma
Krishna Mourya
Urvi Parekh
Amit Gala

2.  Adani Group is Gujarat based Indian conglomerate company
headquartered in Ahmedabad, Gujarat, India
 It was founded by Gautam Adani, in the year 1988.
 The core businesses of the group are commodities trading, edible
oil manufacturing, Mundra port operations and distribution of
natural gas
 Apart from its core businesses, the Adani Group has also
diversified into Real Estate, Ports, Special Economic Zones and IT
enabled services

4. Resources Logistics Energy

5. Coal Trading
Business of Adani
Trading activities Adani Global Pte Ltd.
Enterprises Ltd
of Adani Singapore (100%)
Enterprises Ltd Power Trading
Business of Adani Adani Global
Enterprises Ltd FZE,Dubai(100%)
Adani Mining Pvt Ltd
Coal Mining
(100 %)
Adani Power Ltd (70.25
Power Generation %)
City Gas
Distribution Adani Gas Ltd (100 %)
Oil and Gas Adani Welspun
Projects of Adani Exploration Exploration Ltd (65 %)
Enterprises Ltd Adani Infrastructure and
Mundra Port and Developers Pvt Ltd
SEZ Ltd (MPSEZ) (95%)
Edible Oil Refining Adani Wilmar Ltd (50%)
Adani Agri Logistics Ltd
Grain Silos
(100%)
Controlled
Adani Agri Fresh Ltd
Atmospheric
(100%)
Storage Facility

6.  Resources comprises coal mines and trading, and will include oil and gas in
future;
 Logistics denotes a large network of ports, SEZs and multi-modal logistics,
railways
 Energy involves power generation and transmission and gas distribution.

7.  Starting with the plastic polymer import, it gained a foothold in the
commodities trading business .This large scale trading business
provided Adani Exports with
 Ability to aggregate demand
 Access large Capital
 Well-oiled distribution mechanism
 Knowledge of international business
 Possible Political connections
 Experience in supply chain management

8. Market capitalisation (in $ million)
16441
18000
16000
14000
12000
10000
5210
8000 3694
6000
1303
4000
2000
0
2008 2009 2010 2011
Power capacity (in MW) 20000
20000
18000
16000
14000
12000
10000
8000
3960
6000 660
4000
2000
0
2010 2011 2020

9. Coal imported (in million MT)
35 31.48
28.76
30
25 22.25
20
10.99
15
10
5
0
2008 2009 2010 2011
Coal mined (in million MT)
3 2.52
2.32
2.5
2
1.5 1.22
1 0.64
0.5
0
2008 2009 2010 2011

10. Strength
Opportunity:
•The diversified nature of the Adani Group • Can diversify into Hydro-electric
helps in the growth of Adani Power power generation.
• significant opportunity for Adani Power
•Strong Project - Execution record to expand its operations and compete with
other contenders
•Since the largest supplier of coal is Adani • Opportunity to establish presence in
Enterprises, this reduces the cost of coal to other parts of the country
Adani Power
Threat
Weakness
Present only in very few states namely • Changes in International prices of coal.
Gujarat, Maharashtra and Haryana.
Changes in International policies regarding
import of coal.
Facing delay problem in security clearances
from GOVT in different ports

11.  Adani Enterprises Ltd
Mar 05, 2012: Adani Enterprises To Supply Coal To NTPC's Power Stations

Jan 19, 2012: Aries Completes Design, Supervision And Commissioning
Services On Solar PV Power Plant In Gujarat, India

Dec 26, 2011: Adani Enterprises Announces Tenders For Selection Of LSP
For Transportation And Delivery Of Coal From Mahaguj Collieries

Aug 10, 2011: Adani Enterprises Reports Net Sales Of INR95.96 Billion In
Fiscal 2011

Jan 25, 2011: Adani Group Signs MoU To Explore Possibility Of Lignite
Based Power Plant In Indonesia

12. Adani Foundation
Mundra Tiroda Ahmedabad Dahej Shimla
Rural
Development
Rural Adani DAV Rural Health and
Development public school Development Sanitation
Education and Adani Vidya
Education medical grants Mandir
Community Health
Sustainable Livelihood
Rural Infrastructure Development

13. Competitive strategy Corporate strategy
how a firm competes within a particular where a firm competes is the overall plan
market concerned with the use of for a multi-business unit company.
resources and capabilities to create company adds value through the
competitive advantages configuration and organization of its
multi-market activities
What business the
•Cost leadership corporation should
•Differentiation be in
•Focused
differentiation How the corporate
Or office should
Focused on Niche manage the array of
Market business units

14. An advantage that a firm has over its competitors, allowing it to generate greater sales
or margins and/or retain more customers than its competition..
ability to produce ability to sell its
generate a larger
cost advantage good or service at good or service at
margin on sales
a lower cost a lower price
A differential advantage is created when a firm's products or services differ from its
competitors and are seen as better than a competitor's products by customers.
“Providing something unique that is valuable to the
buyer beyond simply offering a low price .” (M. Porter)
THE KEY IS TO CREATE VALUE FOR THE CUSTOMER

16. Mundra Tiroda Kawai
Adani Power Maharastra
(APL) is implementing
Limited (APML) is Adani Power Rajashthan
4620 MW Power Plant
implementing 3300 MW Limited (APRL) is
Phase -1 : 2 x 330 MW
Power Plant. implementing 1320 MW
Phase - 2 : 2 x 330MW
Phase -1 : 2 x 660 MW Power Plant.
Phase - 3 : 2 x 660 MW
Phase -2 : 3 x 660 MW Phase-1 :2 x 660 MW
Phase - 4 : 3 x 660 MW

17. 
Mundra - Dehgam transmission line of 430 Kms, which is the
longest dedicated transmission line by private sector.
 This will be the first HVDC transmission line by private sector in the
country. APL is also setting up another 1000 Kms 500 KV HVDC
transmission system for supply of power to HPGCL.
 50km 400kV Mohindergarh-Bhiwani transmission line for supply of
power to HPGCL.
 Adani Power Maharashtra Limited (APML), a subsidiary of APL, is
developing a 221km 400kV Tiroda-Warora Transmission Line

18.  2640 MW Coal based Thermal Power Project at Dahej, Gujarat through its
subsidiary company Adani Power Dahej Limited.
 1320 MW Coal based Thermal Power Project at Chhindwara, Madhya Pradesh
through its subsidiary company Adani Pench Power Limited
 3300 MW Coal based Termal Power Project at Bhadreshwar, Gujarat through its
subsidiary company Kutchh Power Generation Limited
 100 MW Solar Power Project at Surendranagar, Gujarat through its
subsidiary company Adani Renewable Energy LLP

19. Strengths Weakness
• Strong execution track record on • delays in coal supplies from Adani
the back of the huge success of Enterprises as it is Adani Power’s
Mundra Port holding company
• The diversified nature of the Adani
Group • Other private owned companies are
•Great distribution channel of raw also in power generation
material handling system
•Coal mine resources
Opportunities Threats
• Adani group’s presence in domestic • The rising Maoist insurgency
coal mining will reduce coal cost as could result in delays and higher costs
currently Adani Enterprises is the
biggest supplier of coal to Adani Power Increase in private sector power
generation

20. 20

21. THREATS OF NEW ENTRANTS
LOW
High capital investment
Resource scarcity BUYERS
BARGAINING regulatory approvals BARGAINING
POWEROF POWER
SUPPLIERS (LOW)
Bargaining power Buyers group is not
of supplier is high Rivalry is very less powerful
Company has also
The major rivals of the Shortage of
company are NTPC, Power electricity supply
gone for forward Grid Corp, Reliance
integration Power, Tata Power, Less numbers of
Suppliers can‘t Price of electricity is more suppliers
integrate forward or less same in the entire (electricity
industry producers)
i.e. produce
Industry growth is high
electricity because Consumers are less
of the huge entry price sensitive
barriers. Majority of
consumers are
THREAT OF SUBSTITUTES households
sources of renewable energy
Hydro and nuclear power producing
companies
and solar power

22. Operational capacity(MW) APL JSWEL
FY10 1320 1295
FY11 1980 3140
FY12 6600 3140

23. Corporate Strategy is the way a company adds value through the
configuration and organization of its multi-market activities
The definition has three important aspects:
 Value Addition - the generation of superior financial performance from
multi-market activities that create corporate advantage
 Configuration - the multi-market scope of the corporation
(product/market diversification, geographic focus, and vertical boundaries)
 Organization - the management of the inter-linkages between businesses
and the head office
The goal of corporate strategy is to build corporate Advantage so as to
earn above normal returns

24.  A firm is diversified if it is in two or more lines
of business
Vertical Integration
Degree of relatedness between the business units
is often determined by comparing their value
chains
 when certain stages of the value
chains “fit” each other, we consider
such diversification related
 No or little strategic fit = unrelated
Diversification
(product lines)

25.  With the increased export and import, Adani group
was facing port infrastructure problems that affected
its business negatively.
 This prompted Adani group to undertake private port
development in Mundra.

26.  Adani group undertook another “related” diversification in SEZ
by developing an integrated SEZ in Mundra so that the Mundra
port could be utilized to the full capacity.
 The Adani power plant is located very close to a coal-jetty
which lowers the transportation cost of the raw material. Close
proximity to the sea ensures water for steam generation and
cooling.

27. Diversification
Port and SEZ Edible Oil Power Generation
•Increased export and import • Leverage its own • Availability of cost-
• Private port development in distribution network to effective fuel sources
Mundra give them a competitive • One of the major
• Adani group undertook advantage commodities Adani
another “related" group imports is coal
• One of the major areas
diversification in SEZ where one could get a • The coal imported
• The key success factors in through the Mundra port
competitive advantage was is being used by Adani
setting up a port include – in managing the supply power
 tie-ups with major chain • Currently, coal powers
container lines • Transportation accounted more than half of India’s
 a balanced import and for about 70% of the total electricity plants
export cargo mix supply chain cost • Adani Power had twin
• Consumption patterns of aims–
• The Mundra port adopted  exploit growth potential
various edible oils differ
modern cargo handling in the power sector
from region to region
facilities which are more  satisfy the energy needs
operationally efficient of Mundra SEZ.

28. Reasons For Diversification
Edible Oil: Ports Adani Energy
Huge market Indian ports(Kandla and cost-effective fuel sources
potential, AWL has more Mumbai ports )were throughout the lifetime of
than 45% of market share getting congested which in the project
turn affected exports and
India the largest importer imports through Adani The coal imported through
of edible oils in the world Exports. the Mundra port is being
more than 4 mn tonnes. used by Adani power.
 State government came Currently, coal powers more
A growing up with a policy on port than half of India’s
population, increasing privatization in 1995 electricity plants
rate of consumption .
increase the demand for  To facilitate trading to The power plant is located
edible oil. make smooth and well very close to a coal-jetty
integrated supply chain which lowers Generation
Power the
Transportation accounted transportation cost of the
for 70% of total supply  Providing strategic raw material.
chain cost. competitive advantage • Av
over competitors in Close proximity to the sea
related businesses will ensure water for steam
generation and cooling

29. What businesses that
we are not in, but
should be in?
What businesses that
we are in, but
should not be in?

30. ADANI OIL & GAS
EXPLORATION
ADANI RETAIL
ADANI STEEL
ADANI REAL ESTATE