SlideShare una empresa de Scribd logo
1 de 25
Prepared by G. Gururajan
Presentation date : 26th April’ 2013
Topic : Growth Strategy – Case study
• An organization substantially broadens the scope of one or
more of its business in terms of their respective customer
group, customer functions and alternative technologies to
improve its overall performance.
• Strategy aimed at winning larger market share, even at the
expense of short-term earnings. Four broad growth strategies
types are
• Acquisition
• Merger
• Joint Venture
• Strategic Alliance.
Growth Strategy - Definition
• Acquisition is also known as a takeover, is buying of one
company by another company.
• Acquisition is a deal when one company takes over
another company and buyer becomes sole proprietor.
• In legal terms, the target company ceases to survive.
The buyer swallows the company and the buyer's stock
continues to be traded.
Acquisition
• Gain Market share
• Enter new markets
• Acquire technology
• Strategic objective
• Utilization of surplus funds
Need for Acquisition
Acquisition – Case study
acquired
• In 1992 Hutchison Whampoa and its pure business partner
established a company that was awarded a license to
provide the mobile services in Mumbai
• In 2004, Hutchison Whampoa has acquired six mobile
telecommunication operator providing the services in 13 of
India’s 23 telecom circle in 2006.
• By acquiring the BPL cellular services in 2006, the numbers
have increased to 16 out of 23 circles in India.
• Hutchison held 67% of stake and remaining 33% was with
Essar limited and thus it was named as “Hutchison Essar
India Limited”
• Hutch was often praised for their award winning Ads
Facts - Hutch
• Operations - 1992
• Circles – 16 circles + license for 6 circles
• Revenue - $ 1282 million
• EBIDTA - $ 413 million (Earning before
interest, depreciation, tax & amortization)
• Operating profit - $ 313 million
• Subscriber base – 29.2 million
• ARPU - Rs. 340.15 (Average Revenue
Per User)
Revenue
• In the year 2008, Vodafone acquired the Hutch stake
Hutchison Essar for US$ 11.1 billion.
• It was fourth largest of the year 2007
Vodafone – Hutch deal
Why take over
• Vodafone want to expand their business in Asian
markets.
• India had the 2nd largest market for mobile.
• Growth rate of Indian mobile market was 6 million
subscriber per month.
• Increases vodafone’s presence in higher growth
emerging markets
• Hutch wanted to quit Indian operations to finance
their other country operations.
• Hutch – Essar mutual distrust
• Growth of ARPU was relatively less compare the
global market even though the it was increasing trend.
Why Hutch want to sell
In merger two firms, agree to move ahead and exist as a single new
company. Merger can be,
• merger of equals : both companies are of equal sizes.
• merger of unequal's : large company merge with smaller one
Voluntary process :
consent of both companies. Name of new merged entity is usually a
combination of both parent companies.
Types of Merger :
 Horizontal Merger
 Vertical Merger
 Concentric Merger
 Conglomerate Merger
Mergers
Merger – Case study
Since more
no. of private
players
entered
Aviation
sector, there
was a need
for
consolidation
Low cost carriers
Low cost carriers
Low cost carriers
High cost carriers
High cost carriers
High cost carriers
• E-ticketing
• Cut on the Complementary service
• No separate staff
• Outsourcing of ground operations
• Saving operating cost, landing cost & sales tax
• Sale of food inside the aircraft
• Selling Advertisement
• Differential ticket pricing
• Non refundable tickets
• No bulk discounts
• Paid initial training to staff
Facts – Air Deccan (Low cost service)
• Carved a niche for itself in a short span of time
• Only airline offering premium 1rst class service on domestic
routes
• Modeled on the lines of US carrier Jet Blue
• Targets Sec A and socio-economic classes.
• Great in-flight experience
- Personal valet assistance in luggage handling at airport
- Personalized in-flight entertainment system
- Fashion models as flight attendants
- Designer flight interiors
-Extendable footrests
-3course gourmet cuisine
Facts - Kingfisher
• Ever Increasing Cost
• Compromise on quality
hits the brand
• Unviable pricing
• Competition
• Cash crunch
• Leveraging
management and HR
Motivation for merger
• Increasing costs
• Difficulty in maintaining brand
image
• Competition from low-cost
airlines
• Competition from International
Airlines
• Routes network
• License to fly internationally
• A joint venture (JV) is a business agreement in which parties agree
to develop, for a finite time, a new entity and new assets by
contributing equity. They share revenues, expenses and assets.
• It is necessary to have a strategic plan in place. In short, both
parties must be committed to focusing on the future of the
partnership, rather than just the immediate returns.
• Joint venture is a separate business entity.
– Participants continue as separate firms
– May be organized as partnership, corporation, or any other
form of business
– Formal long-term contract of 8 to 12 years duration
Joint Venture
Maruti Suzuki Joint venture
• Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor
Corporation (SMC), Japan, is a leading manufacturer of
passenger vehicles in India, contributing to about 45% of the
total industry sales in India.
• The Company, formerly known as Maruti Udyog Limited, was
incorporated as a joint venture (JV) between the Government
of India and Suzuki Motor Corporation on 24th February, 1981.
Its first car, the Maruti 800, was rolled out of the Gurgaon
facility on 14th December, 1983.
• The largest automobile manufacture in South Asia founded in
1981
• Until recently, 18.28% of the company was owned by the Indian
government, and 54.2% by Suzuki of Japan.
• The success of JV led Suzuki to increase the equity from 26% to
40% in 1987, 50% in 1992 and further to 56.2 in 2011.
• As of May 10, 2007, Govt. of India sold its complete share to
Indian financial institutions. With this, Govt. of India no longer
has stake in Maruti Udyog.
• During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024
were exported.
• Revenue – US$ 3.5 billion (2009)
• In all, over six million Maruti cars are on Indian roads since the
first car was rolled out on December 14, 1983.
Facts – Maruti Suzuki
• Suzuki Motor corporation, the parent company is a global leader
in mini & compact cars for 3 decades.
• Suzuki is technical superior, light weight diesel engine and fuel
efficient.
• Nearly 75,000 employees were directly employed by Maruti
Suzuki and its partners
Benefits of JV - Maruti
Benefits of JV - Suzuki
• Larger Indian market
• Monopolistic trade in Indian automobile industry.
• Availability of resources.
• Market entry -A strategic alliance can ease entry into a
foreign market.
• Share risk & expenses -firms involved can share risks. Eg: In
early 1990’s film manufacturers Kodak and Fuji joined with
camera manufacturers Nikon, Canon, and Minolta to create
cameras and film for an "Advanced Photo System.
Strategic Alliance
• Virgin Group
– one of the world's most recognized and respected brands
• Tata Tele Services Ltd. (TTSL)
– one of India’s leading private telecom service providers
– offers integrated telecom solutions under the TATA Indicom
brand
– uses the latest CDMA technology for its wireless network
• Virgin Mobile India - Virgin-TTSL Strategic alliance:
– a ‘brand franchise’ agreement with TTSL
• Target
– break even in 3 years, at a subscriber base of 5mn
Strategic Alliance – Virgin Mobile & TTSL
Growth strategy 1

Más contenido relacionado

La actualidad más candente

Inorganic Growth - Is it the right strategy ?
Inorganic Growth - Is it the right strategy ?Inorganic Growth - Is it the right strategy ?
Inorganic Growth - Is it the right strategy ?
Nupur Bhardwaj
 
Mahindra case study scorpio By Harvard business school.
Mahindra case study scorpio By Harvard business school.Mahindra case study scorpio By Harvard business school.
Mahindra case study scorpio By Harvard business school.
Aswin Roy
 
Equity Research on Mahindra & mahinra 205
Equity Research on Mahindra & mahinra 205Equity Research on Mahindra & mahinra 205
Equity Research on Mahindra & mahinra 205
Manali Deshmukh
 
Automotive industry in india
 Automotive industry in india  Automotive industry in india
Automotive industry in india
Chitra Ashok
 

La actualidad más candente (20)

Toyota Indus motor
Toyota Indus motorToyota Indus motor
Toyota Indus motor
 
Ppt (1)
Ppt (1)Ppt (1)
Ppt (1)
 
Inorganic Growth - Is it the right strategy ?
Inorganic Growth - Is it the right strategy ?Inorganic Growth - Is it the right strategy ?
Inorganic Growth - Is it the right strategy ?
 
Mahindra & Mahindra
Mahindra & MahindraMahindra & Mahindra
Mahindra & Mahindra
 
Suzuki Motor Corporation, Pakistan
Suzuki Motor Corporation, PakistanSuzuki Motor Corporation, Pakistan
Suzuki Motor Corporation, Pakistan
 
INDIGO AIRLINES casestudy
INDIGO AIRLINES casestudyINDIGO AIRLINES casestudy
INDIGO AIRLINES casestudy
 
Nissan Creating Operational Resiliency
Nissan Creating Operational ResiliencyNissan Creating Operational Resiliency
Nissan Creating Operational Resiliency
 
Ashok Leyland
Ashok Leyland Ashok Leyland
Ashok Leyland
 
Maruti Suzuki Supply Chain Management
Maruti Suzuki Supply Chain Management Maruti Suzuki Supply Chain Management
Maruti Suzuki Supply Chain Management
 
Presentation hrm
Presentation hrmPresentation hrm
Presentation hrm
 
Maruti
MarutiMaruti
Maruti
 
maruti suzuki overview
maruti suzuki overviewmaruti suzuki overview
maruti suzuki overview
 
International Market Entry Strategies
International Market Entry Strategies International Market Entry Strategies
International Market Entry Strategies
 
Marketing case study on Indigo Airlines
Marketing case study on Indigo AirlinesMarketing case study on Indigo Airlines
Marketing case study on Indigo Airlines
 
Potential of survival after entering the automobile industry
Potential of survival after entering the automobile industryPotential of survival after entering the automobile industry
Potential of survival after entering the automobile industry
 
Mahindra case study scorpio By Harvard business school.
Mahindra case study scorpio By Harvard business school.Mahindra case study scorpio By Harvard business school.
Mahindra case study scorpio By Harvard business school.
 
Equity Research on Mahindra & mahinra 205
Equity Research on Mahindra & mahinra 205Equity Research on Mahindra & mahinra 205
Equity Research on Mahindra & mahinra 205
 
Joint venture
Joint ventureJoint venture
Joint venture
 
Automotive industry in india
 Automotive industry in india  Automotive industry in india
Automotive industry in india
 
Engineering logisitics toyota.pptx,, final
Engineering logisitics toyota.pptx,, finalEngineering logisitics toyota.pptx,, final
Engineering logisitics toyota.pptx,, final
 

Destacado

SWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
SWOT ANALYSIS OF HYPERMART JOGJA CITY MALLSWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
SWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
Arief Rachmandi
 

Destacado (14)

SWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
SWOT ANALYSIS OF HYPERMART JOGJA CITY MALLSWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
SWOT ANALYSIS OF HYPERMART JOGJA CITY MALL
 
Financial management (mergers and joint ventures)
Financial management (mergers and joint ventures)Financial management (mergers and joint ventures)
Financial management (mergers and joint ventures)
 
Developing A Comprehensive Online Communications Strategy
Developing A Comprehensive Online Communications StrategyDeveloping A Comprehensive Online Communications Strategy
Developing A Comprehensive Online Communications Strategy
 
Empty shops in Lancaster City Centre
Empty shops in Lancaster City CentreEmpty shops in Lancaster City Centre
Empty shops in Lancaster City Centre
 
Online Communication Strategy in Business
Online Communication Strategy in BusinessOnline Communication Strategy in Business
Online Communication Strategy in Business
 
A brief background & development history on klcc
A brief background & development history on klccA brief background & development history on klcc
A brief background & development history on klcc
 
Smart Business, Social Business: A Playbook for Social Media in Your Organiza...
Smart Business, Social Business: A Playbook for Social Media in Your Organiza...Smart Business, Social Business: A Playbook for Social Media in Your Organiza...
Smart Business, Social Business: A Playbook for Social Media in Your Organiza...
 
Petronas twin towers malaysia
Petronas twin towers malaysiaPetronas twin towers malaysia
Petronas twin towers malaysia
 
How to Grow Your Audience & SEO Through Images and Video - Semrush Webinar on...
How to Grow Your Audience & SEO Through Images and Video - Semrush Webinar on...How to Grow Your Audience & SEO Through Images and Video - Semrush Webinar on...
How to Grow Your Audience & SEO Through Images and Video - Semrush Webinar on...
 
presentation on petronas twin tower
 presentation on petronas twin tower presentation on petronas twin tower
presentation on petronas twin tower
 
E Business Introduction
E Business IntroductionE Business Introduction
E Business Introduction
 
Shopping Mall Development & Management - Maximizing Asset Value - Thoma...
Shopping Mall Development & Management - Maximizing Asset Value -   Thoma...Shopping Mall Development & Management - Maximizing Asset Value -   Thoma...
Shopping Mall Development & Management - Maximizing Asset Value - Thoma...
 
GROWTH STRATEGIES
GROWTH STRATEGIESGROWTH STRATEGIES
GROWTH STRATEGIES
 
Mergers, acquisitions and joint ventures
Mergers, acquisitions and joint venturesMergers, acquisitions and joint ventures
Mergers, acquisitions and joint ventures
 

Similar a Growth strategy 1

Country evaluation and entry strategies
Country evaluation and entry strategiesCountry evaluation and entry strategies
Country evaluation and entry strategies
Zahra Khan
 
M & a for tata jlr
M & a for tata jlrM & a for tata jlr
M & a for tata jlr
vihang41
 
Vodafone hutch (1)
Vodafone hutch (1)Vodafone hutch (1)
Vodafone hutch (1)
Prithvi Ghag
 

Similar a Growth strategy 1 (20)

Market entry strategies part 1
Market entry strategies part 1Market entry strategies part 1
Market entry strategies part 1
 
Tata motors
Tata motorsTata motors
Tata motors
 
Country evaluation and entry strategies
Country evaluation and entry strategiesCountry evaluation and entry strategies
Country evaluation and entry strategies
 
Tata motors horizonext strategy
Tata motors horizonext strategyTata motors horizonext strategy
Tata motors horizonext strategy
 
Revival of air india
Revival of air indiaRevival of air india
Revival of air india
 
M & a for tata jlr
M & a for tata jlrM & a for tata jlr
M & a for tata jlr
 
Merger & acquisition of tata jaguar & land rover & demerger of hero honda
Merger & acquisition of tata jaguar & land rover & demerger of hero hondaMerger & acquisition of tata jaguar & land rover & demerger of hero honda
Merger & acquisition of tata jaguar & land rover & demerger of hero honda
 
CEAt Finance ppt
CEAt Finance pptCEAt Finance ppt
CEAt Finance ppt
 
MARUTI SUZUKI PRODUCT ANALYSIS
 MARUTI SUZUKI PRODUCT ANALYSIS MARUTI SUZUKI PRODUCT ANALYSIS
MARUTI SUZUKI PRODUCT ANALYSIS
 
Hindustan Motors
Hindustan MotorsHindustan Motors
Hindustan Motors
 
hm-150201110411-conversion-gate02 (1).pdf
hm-150201110411-conversion-gate02 (1).pdfhm-150201110411-conversion-gate02 (1).pdf
hm-150201110411-conversion-gate02 (1).pdf
 
Tata Mergers
Tata MergersTata Mergers
Tata Mergers
 
Honda's strategic management
Honda's strategic managementHonda's strategic management
Honda's strategic management
 
Honda strategy ppt
Honda  strategy pptHonda  strategy ppt
Honda strategy ppt
 
Non-Equity Modes to enter International Market
Non-Equity Modes to enter International MarketNon-Equity Modes to enter International Market
Non-Equity Modes to enter International Market
 
Vodafone hutch (1)
Vodafone hutch (1)Vodafone hutch (1)
Vodafone hutch (1)
 
Automobile industry (1)
Automobile industry (1)Automobile industry (1)
Automobile industry (1)
 
Strategic Management
Strategic Management Strategic Management
Strategic Management
 
MRF Tyres Strategy Analysis
MRF Tyres Strategy AnalysisMRF Tyres Strategy Analysis
MRF Tyres Strategy Analysis
 
Growth Strategies.pptx
Growth Strategies.pptxGrowth Strategies.pptx
Growth Strategies.pptx
 

Último

1029-Danh muc Sach Giao Khoa khoi 6.pdf
1029-Danh muc Sach Giao Khoa khoi  6.pdf1029-Danh muc Sach Giao Khoa khoi  6.pdf
1029-Danh muc Sach Giao Khoa khoi 6.pdf
QucHHunhnh
 
Salient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functionsSalient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functions
KarakKing
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
ciinovamais
 

Último (20)

How to Manage Global Discount in Odoo 17 POS
How to Manage Global Discount in Odoo 17 POSHow to Manage Global Discount in Odoo 17 POS
How to Manage Global Discount in Odoo 17 POS
 
Single or Multiple melodic lines structure
Single or Multiple melodic lines structureSingle or Multiple melodic lines structure
Single or Multiple melodic lines structure
 
Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024Mehran University Newsletter Vol-X, Issue-I, 2024
Mehran University Newsletter Vol-X, Issue-I, 2024
 
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17  How to Extend Models Using Mixin ClassesMixin Classes in Odoo 17  How to Extend Models Using Mixin Classes
Mixin Classes in Odoo 17 How to Extend Models Using Mixin Classes
 
Making communications land - Are they received and understood as intended? we...
Making communications land - Are they received and understood as intended? we...Making communications land - Are they received and understood as intended? we...
Making communications land - Are they received and understood as intended? we...
 
Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)Accessible Digital Futures project (20/03/2024)
Accessible Digital Futures project (20/03/2024)
 
On National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan FellowsOn National Teacher Day, meet the 2024-25 Kenan Fellows
On National Teacher Day, meet the 2024-25 Kenan Fellows
 
1029-Danh muc Sach Giao Khoa khoi 6.pdf
1029-Danh muc Sach Giao Khoa khoi  6.pdf1029-Danh muc Sach Giao Khoa khoi  6.pdf
1029-Danh muc Sach Giao Khoa khoi 6.pdf
 
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptxSKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
SKILL OF INTRODUCING THE LESSON MICRO SKILLS.pptx
 
Salient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functionsSalient Features of India constitution especially power and functions
Salient Features of India constitution especially power and functions
 
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptxBasic Civil Engineering first year Notes- Chapter 4 Building.pptx
Basic Civil Engineering first year Notes- Chapter 4 Building.pptx
 
Google Gemini An AI Revolution in Education.pptx
Google Gemini An AI Revolution in Education.pptxGoogle Gemini An AI Revolution in Education.pptx
Google Gemini An AI Revolution in Education.pptx
 
Graduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - EnglishGraduate Outcomes Presentation Slides - English
Graduate Outcomes Presentation Slides - English
 
Key note speaker Neum_Admir Softic_ENG.pdf
Key note speaker Neum_Admir Softic_ENG.pdfKey note speaker Neum_Admir Softic_ENG.pdf
Key note speaker Neum_Admir Softic_ENG.pdf
 
Spatium Project Simulation student brief
Spatium Project Simulation student briefSpatium Project Simulation student brief
Spatium Project Simulation student brief
 
Kodo Millet PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
Kodo Millet  PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...Kodo Millet  PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
Kodo Millet PPT made by Ghanshyam bairwa college of Agriculture kumher bhara...
 
Unit-IV; Professional Sales Representative (PSR).pptx
Unit-IV; Professional Sales Representative (PSR).pptxUnit-IV; Professional Sales Representative (PSR).pptx
Unit-IV; Professional Sales Representative (PSR).pptx
 
Activity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdfActivity 01 - Artificial Culture (1).pdf
Activity 01 - Artificial Culture (1).pdf
 
Introduction to Nonprofit Accounting: The Basics
Introduction to Nonprofit Accounting: The BasicsIntroduction to Nonprofit Accounting: The Basics
Introduction to Nonprofit Accounting: The Basics
 
Fostering Friendships - Enhancing Social Bonds in the Classroom
Fostering Friendships - Enhancing Social Bonds  in the ClassroomFostering Friendships - Enhancing Social Bonds  in the Classroom
Fostering Friendships - Enhancing Social Bonds in the Classroom
 

Growth strategy 1

  • 1. Prepared by G. Gururajan Presentation date : 26th April’ 2013 Topic : Growth Strategy – Case study
  • 2. • An organization substantially broadens the scope of one or more of its business in terms of their respective customer group, customer functions and alternative technologies to improve its overall performance. • Strategy aimed at winning larger market share, even at the expense of short-term earnings. Four broad growth strategies types are • Acquisition • Merger • Joint Venture • Strategic Alliance. Growth Strategy - Definition
  • 3. • Acquisition is also known as a takeover, is buying of one company by another company. • Acquisition is a deal when one company takes over another company and buyer becomes sole proprietor. • In legal terms, the target company ceases to survive. The buyer swallows the company and the buyer's stock continues to be traded. Acquisition
  • 4. • Gain Market share • Enter new markets • Acquire technology • Strategic objective • Utilization of surplus funds Need for Acquisition
  • 5. Acquisition – Case study acquired
  • 6. • In 1992 Hutchison Whampoa and its pure business partner established a company that was awarded a license to provide the mobile services in Mumbai • In 2004, Hutchison Whampoa has acquired six mobile telecommunication operator providing the services in 13 of India’s 23 telecom circle in 2006. • By acquiring the BPL cellular services in 2006, the numbers have increased to 16 out of 23 circles in India. • Hutchison held 67% of stake and remaining 33% was with Essar limited and thus it was named as “Hutchison Essar India Limited” • Hutch was often praised for their award winning Ads Facts - Hutch
  • 7. • Operations - 1992 • Circles – 16 circles + license for 6 circles • Revenue - $ 1282 million • EBIDTA - $ 413 million (Earning before interest, depreciation, tax & amortization) • Operating profit - $ 313 million • Subscriber base – 29.2 million • ARPU - Rs. 340.15 (Average Revenue Per User) Revenue
  • 8. • In the year 2008, Vodafone acquired the Hutch stake Hutchison Essar for US$ 11.1 billion. • It was fourth largest of the year 2007 Vodafone – Hutch deal Why take over • Vodafone want to expand their business in Asian markets. • India had the 2nd largest market for mobile. • Growth rate of Indian mobile market was 6 million subscriber per month. • Increases vodafone’s presence in higher growth emerging markets
  • 9. • Hutch wanted to quit Indian operations to finance their other country operations. • Hutch – Essar mutual distrust • Growth of ARPU was relatively less compare the global market even though the it was increasing trend. Why Hutch want to sell
  • 10. In merger two firms, agree to move ahead and exist as a single new company. Merger can be, • merger of equals : both companies are of equal sizes. • merger of unequal's : large company merge with smaller one Voluntary process : consent of both companies. Name of new merged entity is usually a combination of both parent companies. Types of Merger :  Horizontal Merger  Vertical Merger  Concentric Merger  Conglomerate Merger Mergers
  • 12. Since more no. of private players entered Aviation sector, there was a need for consolidation Low cost carriers Low cost carriers Low cost carriers High cost carriers High cost carriers High cost carriers
  • 13. • E-ticketing • Cut on the Complementary service • No separate staff • Outsourcing of ground operations • Saving operating cost, landing cost & sales tax • Sale of food inside the aircraft • Selling Advertisement • Differential ticket pricing • Non refundable tickets • No bulk discounts • Paid initial training to staff Facts – Air Deccan (Low cost service)
  • 14. • Carved a niche for itself in a short span of time • Only airline offering premium 1rst class service on domestic routes • Modeled on the lines of US carrier Jet Blue • Targets Sec A and socio-economic classes. • Great in-flight experience - Personal valet assistance in luggage handling at airport - Personalized in-flight entertainment system - Fashion models as flight attendants - Designer flight interiors -Extendable footrests -3course gourmet cuisine Facts - Kingfisher
  • 15. • Ever Increasing Cost • Compromise on quality hits the brand • Unviable pricing • Competition • Cash crunch • Leveraging management and HR Motivation for merger • Increasing costs • Difficulty in maintaining brand image • Competition from low-cost airlines • Competition from International Airlines • Routes network • License to fly internationally
  • 16.
  • 17. • A joint venture (JV) is a business agreement in which parties agree to develop, for a finite time, a new entity and new assets by contributing equity. They share revenues, expenses and assets. • It is necessary to have a strategic plan in place. In short, both parties must be committed to focusing on the future of the partnership, rather than just the immediate returns. • Joint venture is a separate business entity. – Participants continue as separate firms – May be organized as partnership, corporation, or any other form of business – Formal long-term contract of 8 to 12 years duration Joint Venture
  • 18. Maruti Suzuki Joint venture • Maruti Suzuki India Limited (MSIL), a subsidiary of Suzuki Motor Corporation (SMC), Japan, is a leading manufacturer of passenger vehicles in India, contributing to about 45% of the total industry sales in India. • The Company, formerly known as Maruti Udyog Limited, was incorporated as a joint venture (JV) between the Government of India and Suzuki Motor Corporation on 24th February, 1981. Its first car, the Maruti 800, was rolled out of the Gurgaon facility on 14th December, 1983.
  • 19. • The largest automobile manufacture in South Asia founded in 1981 • Until recently, 18.28% of the company was owned by the Indian government, and 54.2% by Suzuki of Japan. • The success of JV led Suzuki to increase the equity from 26% to 40% in 1987, 50% in 1992 and further to 56.2 in 2011. • As of May 10, 2007, Govt. of India sold its complete share to Indian financial institutions. With this, Govt. of India no longer has stake in Maruti Udyog. • During 2007-08, Maruti Suzuki sold 764,842 cars, of which 53,024 were exported. • Revenue – US$ 3.5 billion (2009) • In all, over six million Maruti cars are on Indian roads since the first car was rolled out on December 14, 1983. Facts – Maruti Suzuki
  • 20. • Suzuki Motor corporation, the parent company is a global leader in mini & compact cars for 3 decades. • Suzuki is technical superior, light weight diesel engine and fuel efficient. • Nearly 75,000 employees were directly employed by Maruti Suzuki and its partners Benefits of JV - Maruti Benefits of JV - Suzuki • Larger Indian market • Monopolistic trade in Indian automobile industry. • Availability of resources.
  • 21.
  • 22.
  • 23. • Market entry -A strategic alliance can ease entry into a foreign market. • Share risk & expenses -firms involved can share risks. Eg: In early 1990’s film manufacturers Kodak and Fuji joined with camera manufacturers Nikon, Canon, and Minolta to create cameras and film for an "Advanced Photo System. Strategic Alliance
  • 24. • Virgin Group – one of the world's most recognized and respected brands • Tata Tele Services Ltd. (TTSL) – one of India’s leading private telecom service providers – offers integrated telecom solutions under the TATA Indicom brand – uses the latest CDMA technology for its wireless network • Virgin Mobile India - Virgin-TTSL Strategic alliance: – a ‘brand franchise’ agreement with TTSL • Target – break even in 3 years, at a subscriber base of 5mn Strategic Alliance – Virgin Mobile & TTSL