STEEL INDUSTRYGlobal scenario:The steel industry is often considered to be an indicator of economic progress because of the critical role played by steel in infrastructural and overall economic development. The global steel industry is highly cyclical, very competitive and still fragmented in terms of market share. Currently the industry is at the height of the business cycle and is going through a consolidation phase, which might result in the smaller players being acquired by the larger ones. The total output from the industry exceeds 1.4 billion tons in 2005, most of it augmented by the increase in output from China. This is expected to increase further, making steel output from China among the largest in the world. The steel industry demonstrates a high degree of variability, both in terms of earnings and production. The factors attributable for driving this variability are global economic conditions with a particular sensitivity to the performance of the automotive, construction, capital goods and other industrial products industries. The commodity nature of steel, the producers and consumers limited control on price, and the demand and supply disparity have made steel prices volatile. Significant increases in prices for metals and energy over the past two years have also contributed to increased variability in the industry.

Brief Company Overviews as of FY 2006

Current Scenario:World crude steel output reached 1,343.5 million metric tons (MMT) for the year 2007. This is an increase of 7.5% on 2006. The total represents the highest level of crude steel output in history and it is the fifth consecutive year that world crude steel production grew by more than 7%. While the overall output remains high, 2007 has seen a small slowdown in the growth rate, year-on-year growth peaking at the end of the first quarter. This slowdown in growth was seen in nearly all the major producing countries and regions including China, EU, CIS and the US. The exception was in the Middle East where production growth accelerated during the second half of the year.

Chinas steel production in 2007 reached 489 mmt, a 15.7% increase on 2006. This represents a growth reduction from the 18.8% achieved in 2006, 26.8% in 2005 and 26.1% in 2004. The slowdown in 2007 was most apparent during the last quarter, with an 8.6% growth rate. However, China remains the driving force behind the still strong world production figures. Without China world crude steel production would have only grown at 3.3%. Other BRIC countries also maintained relatively high growth, with India and Brazil recording 7.3% and 9.3% increases respectively. In Russia production growth was flat from the end of the second quarter leading to an annual growth figure of 2%. The BRIC share of world production has been growing rapidly since 2000. It has grown from 31% of total in 2001 to 48.2% in 2007.Steel production in the EU (27) from the second quarter remained stable, with year-end figures of 210.3 mmt, a 1.7% growth over 2006. In the US steel production showed negative growth in the first three quarters but showed a turnaround in the fourth quarter with three consecutive months of growth. Total crude steel production for the US was 97.2 mmt, a 1.4% reduction on 2006 figures.

CASE STUDYMittal taking over Arcelor: On the consolidation front, the steel industry was focused on Mittals bid to gain control over Arcelor. Mittals victory in the battle for global steel industry control is giving the steel industry a new direction. The worlds number one and two producers have combined and this will go a long way to push consolidation. The now combined ArcelorMittal would produce more 10 percent of the world output, close to 100 million tons of steel. This would give an increased pricing power for producers and suppliers, and decrease the fragmentation. Arcelor-Mittal have become the largest steel maker in the world by turnover as well as by volume. The new steel company will have about 334,000 employees worldwide, and revenues close to $70 billion. Arcelor-Mittal is more than three times larger in terms of production of and revenue from steel, than its nearest rival Nippon Steel Corp. of Japan. The combined company will now have a significant advantage in setting prices and negotiating the terms of various contracts with key customers. Tata taking over Corus: When the news came out that Tata is taking over Corus it was not accepted by the public or rather the investor in a positive way. The stock price fell by around 7% in 15 days time. The deal was finalized at about 18.2 billion dollar. This proposed acquisition represents a defining moment for Tata Steel and is entirely consistent with the strategy of growth through international expansion This made Tata the 5th largest steel producing country in the world. The sales have increased to Rs 63,587/- crores for the first half of FY08.

Price reduction undertaken by Tata Steel (Aug 23, 2004):Tata Steel cuts price by Rs 2,000 per tone. "It is expected that this price reduction by Tata Steel will, in turn, contribute in arresting or moderating the pressures on price increases by major users on their products," company chairman Ratan N Tata said in a statement. Hoping that other steel manufacturers and members of the steel trade would also display a sense of corporate responsibility by rolling back their prices in the interest of curbing inflationary trends. Only Ispat Industries came out in support, admitting there was a case for a reduction in prices in the domestic market to control inflation Global market demand and supply: Demand rose from 850mmt in 2000 to 1060mmt in 2005 to 1155mmt in 2007 whereas supply rose from 840 in 2000 to 1070 in 2005 to 1185 in 2007 the main reason for this change is due to the rising demand for the steel all over the world. The main reason is due to the rising demand for steel in China other Asian countries. Future of steel industry: A demand forecast for the so-called BRIC economies (Brazil, Russia, India, China), which comprise rather disparate outlooks as regards steel consumption. According to the IISI, the BRICs will jointly contribute roughly three quarters of global consumption

growth in both 2007 and 2008. In Brazil, steel use is expected to expand 15.7% in 2007 and 5.1% in 2008. For Russia, the figures are an astounding 25% in 2007 and 9.5% in 2008. For India the conjectures for the two years are respectively 13.7% and 11.8%, and for China 11.4% and 11.5%.

TELECOM INDUSTRIESOverview of telecom industriesThe cellular phone industry is one of India's rapidly growing industries. Since the industry came into being in the mid 1990s, its average per annum growth rate has been a phenomenal 85 percent. By the end of 2002, the Indian cellular phone industry had over 10 million subscribers. The industry has undergone a number of changes over the years. The National Telecom Policy 1999 was an important landmark in the development of the cellular telecom industry in India; the tariff rationalization and policy regulation introduced in the Policy helped the industry grow at the pace it did. The years 2001 and 2002 saw an increase in level of competition in the industry with more operators being given licenses, and fixed line providers also entering the mobile market. Central government raising the FDI limit in the Indian telecom sector from 49% to 74% increased foreign investments and global telecom big wigs are due shortly. Telecom Regulatory Authority of India (TRAI) has estimated that the country will need about 350,000 telecom towers by 2010, as against 125,000 in 2007. Growth in the telecom sector can be achieved through focusing on semi urban and rural areas. It is expected that market size of the Indian telecom sector will be around US$40US$45 billion by 2010, with 500 m subscribers and 20 m broadband subscribers. India added 8.17 million telecom subscribers in December 2007, taking its total telecom subscriber base to 272.88 million at the end of December, according to data released on Tuesday by telecom regulator TRAI. The overall teledensity stood at 23.89% at the end of December 2007, against 23.21% in November. The country had seen addition of 8.2-million subscribers in November and total subscribers stood at 264.77 million at the end of the month. The wireless segment saw an addition of 8.17 million subscribers in the month of December, against 8.32 million in November. The total wireless subscriber base, including GSM, CDMA & WLL (fixed), stood at 233.63 million at the end of December 2007. The wire line segment saw a fall in total number of subscribers. The subscriber base declined to 39.25 million in December 2007, against 39.31 million subscribers in November 2007. Total broadband subscriber base crossed 3 million to touch 3.13 million by the end of December 2007, against 2.87 million by the end of November. Among wireless

operators, Bharti Airtel added 2.2 million subscribers in December, taking its total base to 55.16 million. Vodafone Essar added 1.3 million subscribers and its subscriber base totaled 39.86-million at December-end. Idea Cellular, with a total subscriber base of 21.05-million at December-end, added 0.83-million subscribers in the month. Reliances total wireless subscribers, including WLL (F), stood at 40.96-million after adding 1.57 million subscribers during the month. Among wireline operators, state-run telco BSNL saw its subscriber base decline by 0.14million in December to 31.7 million. MTNL, too, saw its wireline base dip by about 0.02 million to 3.59-million. Bharti Airtel added 0.04 million subscribers in December to take its total wireline subscriber base to 2.17-million

CDMA GSM SubscribersGSM AnnualCDMA Subscribers Year Annual (millions) growth (millions) growth 2000 3.1 94% 2001 5.05 76% 2002 10.5 91% 0.8 2003 22.0 110% 6.4 700% 2004 37.4 70% 10.9 70% 2005 58.5 57% 19.1 75% 2006 105.4 80% 44.2 131% 2007 180.0 71% 85.0 92%

CASE STUDY:Handset-driven expansion strategies: Reliance Info com Ltd. (Reliance), India's leading postpaid mobile services provider, entered the prepaid mobile services segment by offering subscription schemes that allowed customers to make use of a digital mobile phone service at an affordable price. For a price of Rs. 3,5003 for a CDMA enabled Motorola handset, a subscriber could get a free Reliance India Mobile (RIM) prepaid connection and recharge vouchers worth Rs. 3,240. This connection was valid for six months with a grace period of another six months during which the subscriber could receive SMS and incoming calls without having to recharge the account. Similar subscription offers were made on other RIM handsets also. If a subscriber purchased an LG handset worth Rs. 6,500, he/she got a free RIM prepaid recharge voucher worth Rs. 6,480 valid for six months. The prepaid subscription offers were seen as a revolutionary step towards making communication and data services affordable to a wider range of customers. Apart from their price, these offers included several value added services like three way conference call, national roaming, SMS based data services, STD and ISD facility, call forward and voice message service at local mobile rates, etc. Also, RIM prepaid was the only prepaid mobile service in the country that provided data applications and internet connectivity. Commenting on the innovativeness and superiority of these services, S P Shukla, President, Wireless Products and Services, Reliance, said, RIM Prepaid raises the bar for innovation, quality of service and value added services in prepaid segment of mobile telephony market. Industry observers felt that by providing high-end services at affordable prices, Reliance was creating value for its customers... Currently Reliance Communications (RCOM) recently launching ultra budget handsets with prices starting at Rs 777, While CDMA players like RCOM and Tata Teleservices have adopted handset-driven expansion strategies to drive up subscriber base, this is the first time that a GSM player is venturing into this space on a pan-India level. Bharti joins race, to bundle handsets with connections on 22 Jun, 2007. In a major shift in strategy, Indias largest mobile operator Bharti Airtel is set to bundle handsets with mobile connections. This means that the company will provide a handset with a new connection at partly subsidized rates. Vodafone Essar, which will spend nearly Rs 250 crore on a high-profile brand transition from Hutch to Vodafone being unveiled on Thursday, is poised to launch cheap cellphones in India under the Vodafone brand. It will also launch co-branded handsets sourced from major global vendors. Bhartis move follows the recent announcement by its main competitor in the GSM space Vodafone. This said it will launch a series of ultra low-cost bundled handsets to get a bigger pie of the rural Indian market and increase its market share. He also dismissed the argument that Bhartis foray into the bundled space was driven by its desire to counter Vodafones entry into India with ultra-cheap handsets.

Lifetime plan Tata Teleservices, which pioneered lifetime pre-paid services in October 2005, saw a rapid increase in subscriber base at a time when it was struggling for stability in the fastgrowing sector. Soon, other operators including Bharti and RCOM too launched such services. In between Airtel has introduced first lifetime plan with installment plan to attract the lower and middle class people which is later on followed by Reliance. Right now Reliance has introduced lifetime plan in 199 which will lead to cost leadership. Roaming rate February, TRAI reduced the roaming charges, as per which, the maximum permissible charge for roaming calls, irrespective of terminating networks and tariff plans, was set at Rs 1.40 per minute for outgoing local calls, Rs 2.40 for outgoing national long distance calls and Rs 1.75 for incoming calls. The telecom regulator had already removed rentals. Telecom major Bharti Airtel has reduced roaming tariffs by up to 56 percent and also scrapped the rental for roaming services. May 22: Starting a price war, Reliance Communications has slashed its roaming rates by about 70 per cent at the lowest 40 paise a minute on some select plans, while incoming has been made just Re 1 per minute. The public-sector telecom operators, MTNL and BSNL, have slashed national roaming charges to Re 1 for incoming calls and Re 0.40 for outgoing calls within any visiting network as part of a new post-paid plan to be launched on June 3. ISD rates to US, Gulf In May, leading private player Bharti Airtel dropped ISD charges to the US and Canada after which an Airtel mobile user could call at Rs 1.99 per minute with the Airtel STD and ISD Calling Card worth Rs 2,245. Rel-Comm also had cut its rates to the US and Canada to Rs 1.99 per minute on its 'Reliance Global Call Card' of Rs 1,900. It had recently cut call charges to the Gulf to Rs 6.99 per minute. Triggering another price war in the ISD segment, state-run telecom major BSNL has reduced call rates to the US, Canada and the Gulf to Rs 1.75 per minute and Rs 6.75 per minute, respectively, slightly lower than the rates offered by private firms.

MOSER BEARINTRODUCTION Moser Baer is a world leader in the development and manufacture of removable data storage media. Incorporated in 1983, it is today one of India's leading technology companies and ranks among the top three media manufacturers in the world. Based in New Delhi, India, it has a broad and robust product range of floppy disks, compact discs (CDs) and digital versatile discs (DVDs). A pioneer among globalizing Indian firms, Moser Baer has a presence in over 82 countries, serviced through six marketing offices in India, the US and Europe, with strong tie-ups with all major global technology brands. Simultaneously, with the launch of the 'Moser Bear PRO' label in India, the company has emerged as the preferred choice in this burgeoning captive market. Continuous emphasis on efficient and integrated manufacturing, coupled with the Indiaspecific advantage of high-quality, best-value human resources and lower per-unit capital cost has made Moser Bear one of the most successful manufacturers of optical media in the world Fast Facts about Moser Baer

India-based company with nearly two decades' experience in removable data storage Among the top three media manufacturers in the world (market share of 17.5%) #1 in the fast-growing Indian market R&D-focused company Focused on optical and magnetic data storage media Services the requirements of all the leading storage media brands in the world. Revenue growth at a five-year CAGR of 42%

Summary Financials: For the financial year ending March 31, 2006 Net Sales Operating Profits Net Profit Earnings Per Share Rs. 16641.20 Million Rs. 32.92 Million Rs. 46.44 Million Rs. 0.42

Moser Bear To Go Aggressive on CD-Rs & CD-RWs Moser Bear India Ltd, an OEM of optical storage products, have aggressively market the product in the country. The products are targeted at both the entry-level as well as the premium buyers. Moser Bear has been running a series of road shows, creating excitement and pull towards the brand by meeting its channel partners and imparting knowledge of its products to both the channel partners and consumers.

A senior official of the company said, "Our road shows and advertisements have created enough noise and excitement among consumers and channel partners. Though it will take some time to shift brand loyalty, the process has well begun." Though creating noise and excitement is not enough for brand shifts, the official said, "Our products are of superior quality and we offer 100 percent replacement warranty in case of any manufacturing defects, which no other vendor would provide.

CASE STUDYMoser Baers DVD Play Ignites Price War: There is a price war happening on the home video front. Following Moser Baers aggressively priced DVD entry into the home entertainment marketplace; its competitors too are not taking chances. Moser Baer priced its DVDs at Rs 34 for a pop while VCDs at Rs 28. The company also recently launched some 75 Hindi titles, besides hundreds of titles in regional languages. Now the competition has responded. T-Series has cut DVD prices to Rs 45 on select movies and is offering a package of three films for Rs 75. Ultra has brought down the price of its old catalogues from Rs 300 to Rs 45 even before Moser Baer started the war. Another company Shemaroo Entertainment says it may follow suit Another company Shemaroo Entertainment says it may follow suit. Taurani, managing director, Tips Industries, says he will see how the response to Moser Baer pans out, and will decide a future course of action. Moser Bear's Pricing Strategy: The New Anti-Piracy Model: Moser Bear, an Indian leader in digital media manufacture (DVD's and VCD's) is helping change the piracy paradigm. In a laudable initiative, they are acquiring copyright licenses to a wide range of movies and selling DVD's/VCD's for rock bottom prices. A normal DVD version of a movie costs around Rs 200 (USD 5) or upwards in India, whereas the version sold by Moser Baer costs around Rs 30-50 (USD 1).With such low margins, pirates will find it hard to survive!! "Pulling down prices may curb the price-sensitive piracy-a movie being copied and sold for 10-20% of the original price.But what will be hard to tackle is the time-sensitive piracy, which happens because, according to law, there has to be a time lag between the theatrical and home-video release of a film." Moser Baer would have to work with movie producers and film distributors to shorten the time to market a new movie release and allay their fears that the home video market could affect their business. Moreover, Moser Baer could find it difficult to provide low prices for the latest movie releases as the rights would be costlier when compared to old movies.

AUTOMOBILE INDUSTRYGLOBAL AUTOMOBILE INDUSTRYThe global automotive industry is a highly diversified sector. It is considered to be highly capital and labor intensive. It comprises of manufacturers, suppliers, dealers, retailers, original equipment manufacturers, aftermarket parts manufacturers, auto electricians etc. It is one of the important industries in the world, which provides employment to 25 million people in the world. Top five automobile manufacturing nations are : United States, Japan, China, Germany and South Korea The United States of America is the worlds largest producer and consumer of motor vehicles and automobiles. It represents nearly 10% of the $10 trillion US economy. It has a market share of $432.1 billion Size of the automotive industry The automotive industry occupies a leading position in the global economy, accounting for 9.5% of world merchandise trade and 12.9% of world export of manufacturers. Leading automobile manufacturing corporations are:Leading automobile companies and their market share are General Motors (24.1%), Ford Motor Company (17.1%), Toyota (14.9), Daimler Chrysler (14 %) others (29.9%). These corporations have their presence in almost every country. Major Segments Of Automotive Industry Four Wheelers industry is one of the largest segments of global automotive industry that produces different type of four wheelers namely cars, passenger cars, jeeps, vans etc. The key manufacturers of four wheelers in the world are General Motors, Toyota, Ford, Volkswagen AG, Daimler Chrysler AG, Nissan Motor Company Ltd., Honda, and PSA Peugeot. Two wheelers industry comprises of four broad segments i.e. scooters, motorcycles, mopeds and bicycles. Japan, India and China are the largest producers of two wheelers in the world. India produced 7600801 two wheeler in 2005-06. Commercial Vehicles industry comprises of units engaged in manufacturing and selling of commercial motor vehicles. The commercial vehicles include light commercial vehicles, rigid vehicles, articulated trucks, buses and non-freight carrying truck. United States, Japan and China are the largest manufacturers of commercial vehicles in the world.

Utility Vehicles industry consists of units engaged in manufacturing and selling of Sports Utility Vehicle and the Multi Utility Vehicles. The key utility vehicles manufacturing regions of the world are North America, Europe, China and India.

INDIAN AUTOMOBILE INDUSTRYIndia is on every major global automobile player's roadmap. India is the second largest two-wheeler market in the world Fourth largest commercial vehicle market in the world 11th largest passenger car market in the world Fifth-largest bus and truck market in the world (by volume) Expected to be the seventh largest automobile market by 2016 and world's third largest by 2030, behind only China and the US. Spurred by a huge demand due to increasing purchasing power, new product launches, coupled with attractive finance schemes and booming exports, the Indian automobile industry has been growing at a frenetic pace. During 2006-07, it produced a wide variety of vehicles including over 2.06 million four wheelers (passenger cars, light, medium and heavy commercial vehicles, multi-utility vehicles such as jeeps), and over 9 million two and three wheelers (scooters, motor-cycles, mopeds, and three wheelers). Table below shows projected demand in Automobile Industry is Year 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-2011 2011-2012 Cars 545,026 588,628 635,718 686,575 741,501 800,821 864,887 934,078 1,008,804 1,089,508 1,176,669 MUVs 131,227 136,476 141,935 147,613 153,517 159,658 166,044 172,686 179,593 186,777 194,248 Scooters 906,062 97,715 102,601 107,731 113,117 118,773 124,712 130,948 137,495 144,370 151,588 3Wheelers 236,425 262,432 291,300 323,343 358,910 398,390 442,213 490,856 544,850 604,783 671,309 Tractors 188,326 204,334 221,702 240,547 260,993 283,177 307,247 333,363 361,699 392,443 425,801 Total 2,007,066 1,289,585 1,393,256 1,505,809 1,628,038 1,760,819 1,905,103 2,061,931 2,232,441 2,417,881 2,619,615

Key players in Indian automobile industry and their market share are: Maruti (50.37%), Hyundai (19.17%), Tata Motors (17.19%), Honda (5.33%), others (5.73%) In recent years there is increasing number of global players entering Indian market by way of joint ventures, collaborations or wholly owned subsidiary. Sudden interest of

major global players has made Indian auto industry very competitive as India provides twin benefit of ready market and Low cost manufacturing base for them.

Some details about the players in the Indian auto markets are as follows: Maruti Ltd is one of India's leading automobile manufacturers and the market leader in the car segment, both in terms of volume of vehicles sold and revenue earned. Tata Motors Limited is India's largest automobile company, with revenues of Rs. 32,426 crores (USD 7.2 billion) in 2006-07. General Motors India (GM India) is a wholly owned subsidiary of General Motors Corporation, the largest automaker in the world. It offers products under the Chevrolet brand in the country. GM India is confident of achieving 10 % of the market share by 2010. Mahindra & Mahindra is the market leader in utility vehicles in India since inception and currently accounts for about half of Indias market for utility vehicles. Hyundai Motor India Limited (HMIL) is a wholly owned subsidiary of Hyundai Motor Company, South Korea and is the second largest and the fastest growing car manufacturer in India. HMIL presently markets 20 variants of passenger cars in six segments.

CASE STUDYOligopoly model GLOBAL SCENARIO (During 1980s) During 1980s there were three major players in automobile sector, General Motors, Ford and Chrysler. In pricing, GM served for decades as the industry's price leader, setting prices in public utility fashion in order to obtain a predetermined rate of return, with Ford and Chrysler adopting GM's prices as their own. In some cases there is actual identity in price to the last dollar, in the majority of instances the companies are within a few dollars of each other. In one famous example, Ford announced its new prices first, GM followed with a price hike twice that announced by Ford, to which Ford responded by reraising its prices in line with the higher prices set by GM--a mutually-interdependent pattern indicating that "conformity to GM's prices is considered more important to its principal competitor than competitive price advantage." This avoidance of price competition persisted for decades during 1960s. The three major producers tend to copy each other's price moves. One of

the players initiated the process by announcing its "preliminary" prices, while the others would follow by publicly disclosing their "tentative," "anticipated," or "expected" prices.

INDIAN SCENARIO Price Leadership Modal On 30 December 1998, Indica the passenger car developed by Telco. The standard petrol car was priced at Rs 259,000, and standard diesel car at Rs 285,000. Presenting Indica, Ratan Tata, Chairman of Telco, said, "We started the Indica project with a commitment to develop a car for the Indian market that could be benchmarked against the world's best in terms of features, looks and performance-and yet offers a great value proposition. A car designed for India rather than one adapted for India." Following the TATA Indica announcement on 31 December 1998 Maruti slashed prices to retain lead in middle class dream to own a car a wink away from reality'. Maruti Udyog Limited announced it has slashed prices by 5-12 per cent of its popular, topselling models like Zen, Omni and Maruti 800 small cars. The prices of its largest selling model, Maruti 800, had been reduced by almost Rs 24,000 to Rs 185,000 from Rs 209,000. Maruti's managing Director, conceded that the price-cuts would impact negatively on Maruti's profit margins. He said ``certainly our profits will go down. But we hope to make up for this by increased sales volumes.'' A new model, Maruti 800 EX, was launched with coil spring suspension and radial tyres priced at Rs 209,000. Seeing all these, in Bombay, Telco's chairman Ratan Tata told the gathering at Indica's launch party: ``Even for those who do not own or buy an Indica, there is good news. We've triggered price drops in Maruti, and made the car market a friendlier place for the consumer. We have done our level best to produce the bigger small car, taking into account our concern for him.''

Current UpdatesTATA has come up with Rs 1 lakh car. This has created price war once again between leading players in automobile industry. Ford India managing director and President said Nissan-Renault combine would develop a $3000 car using Indias frugal engineering expertise. Bajaj is also experimenting with the concept of a small car. In near future, due to price war, many car companies will come up with cheap cars that will give competitions to Tata Rs 1 lakh car. FUTURE OUTLOOK The automotive industry is witnessing tremendous and unprecedented changes these days. This industry is slowly and gradually shifting towards Asian countries, mainly because of saturation of automobile industry in the western world and also due to ASEAN free trade area under which the export tariffs are very less. The future seems encouraging for this industry in terms of the expected surge in global demand and

upsurge in investments. Several trends such as over-capacity in developed markets, globalization, technology advances, regulation and environmental consideration, and market fragmentation and product proliferation will result in the rapid growth of this sector. CONCLUSION: Oligopolistic competition can be said to be beneficial as it ensures, that management would keep their organization innovative and efficient over the long run. For example: Tata Nano, consolidation happening in steel industry. Oligopoly also has the tendency to convert the industry into the monopolistic firm because it allows them to retain a degree of competition without ceding too much control.