INTERNTIONALISATION OF

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(PARTICULARLY IN INDIA)AS THE TARGET MARKET

A presentation submitted in part requirement for the award of

MBA (FINANCE) 2013/14Presented to Dr. Hulya Oztel (Supervisor) & Mr. Pritesh

MadlaniBy John Fernandes [Masters in law]

Module Code: LBPG5002Date of Presentation: 3rd October, 2014

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OUTLINE Objectives to be achieved - Expand globally (India being the target market) - Administering cost effective methods for marketing & distribution Organisations background Market analysis of LED products & its competitors Porter’s five forces analysis PESTLE & SWOT analysis of India as a market Critical success factors Capability and Resources Four actions frame work Strategies ▪ Short term Strategies ▪ Long term Feasibility & Suitability Conclusion

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Organisations background

UK based company, incorporated on 20th November, 2012.

Hasled indicates dealing with LED lighting, locally.

HA-represent s, ‘Home Automation’, S-represents ‘Solar’ and LED- Lighting Emitting Diodes.

Main objective ‘Whole seller’.

Main stake holders

- Retailers through Direct marketing (John Lewis)

- Virtual merchants (Amazon.com) through E-marketing & E-

commerce.

Market analysis of LED products & its competitors

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The Industry Life Cycle

C

Introduction

Time

Growth DeclineMaturity

Incandescent lighting Fluorescent lighting LED lighting

Source: Adapted from (Obembe, 2014, p4) Global lighting industry has to offer 80% of its market share to LED lighting industry

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LED vs. CF vs. Incandescent

Source: Davidson, K. (2014)

Porter’s five forces analysis

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INDUSTRY RIVALRY FOR LED LIGHTING: - (low)Competitors like Philips, Toshiba, Sharp etc., and local brandsIt has to offer 80% market share of the global lighting industry

BARGAINING POWER OF BUYERS: - (low)Price sensitivity (few manufacturers)Less differentiated products

BARGAINING POWER OF SUPPLIERS: - (high)Less differentiated products (more demand less supply)Investments in marketing and distribution will raise product costLong term and exclusive dealing contracts

COMPETITION FROM SUBSTITUTE - (high)Product costProduct awareness is low

THREATS OF NEW ENTRANTS:- (high)Nascent industryDoes not require very high investment (for distribution)Global demand for the products

PESTLE & SWOT analysis of India as a market

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TSTRENGTHS• Young with population with growing disposable income ( 50% under 25 years & 70% below 36 years)• Availability of products, raw materials and human resources (GATT in about 1990s) • Huge demand for diverse products and changing lifestyle

PESTLE• Favourable political conditions (IKEA in Telangana, India)• Second largest emerging economy after China (1.3 billion)• Growing need for technology• Advancement in laws and regulation (Contract Law)• Need for eco-efficiency• Demand for energy efficient products due to high energy prices (reduce world energy consumption by 50%)• Lack of access to electricity (40% of the villages have almost no electricity)

OPPORTUNITIES• Rising income of the middle class (14 states in HIS) • Investment opportunities (FDI-100%)• Rapidly changing socio – economic lifestyle (rural high & middle income to grow by 60m)• Rising organised retail market (10%)

THREATS• Delay in implementation of policies (FDI)• Lack of products and brand awareness• Rising grey market activities (JCB)• Lower literacy in rural and semi- urban areas

WEAKNESS• Lacking in infrastructure facilities (IMF)• Undeveloped rural market• Neglected manufacturing sector (13 m)• Unfriendly labour and tax laws

Capability and Resources (Hasled)

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Source: Adapted from (Johnson, et. al., 2011)

Critical success factors

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Four actions frame work

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Price

Brand, Slogan for promotion and alliances

Finance

Distribution Rights of

Manufacturers

Source: Kim, W.C. and Mauborgane, R. (2005, p114)

Strategies ▪ Short term

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ORGANISED RETAIL SECTOR (10%)

Registered Trade MarkRegistered Trade Mark

Partnering with e-commerce websites (Flipkart.com, junglee.com,

eBay.in)

Approaching under construction building societies (Manu Realty)

Partnering with agents, interior decorators, event managers,

suppliers, lighting

contractors etc.

Demos to be displayed in schools, universities, residential societies,

hotels,

restaurants, hospitals, business houses etc.

UN-ORGANISED RETAIL SECTOR (90%)

Merchant communities (Banias, Marwaries, Khatris and Parsis)

- targeting the lower middle class

SloganSlogan

Exclusive distribution rightsExclusive distribution rights

Raise financeRaise finance

Potential business partner with capabilities and resources Potential business partner with capabilities and resources having having related diversification parenting advantage (Manugraph)related diversification parenting advantage (Manugraph) for providing for providing

- Global network (including India) for marketing and distributing its - Global network (including India) for marketing and distributing its

productsproducts

- Infrastructure for manufacturing products on a large scale basis- Infrastructure for manufacturing products on a large scale basis

- Develop new products by investing in R&D - Develop new products by investing in R&D

Strategies ▪ Long term

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Feasibility , Acceptability & Suitability

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Low competition (to gain 80% of the global lighting market industry)

Hasled’s knowledge in LED products

Hasled’s acquaintances with the LED manufacturers

The goodwill earned by Hasled through its retailers

Hasled’s products are affordable and suitable for the middle class in India

Rising demand for LED products in India ($30 billion investment in green

buildings)

Multiple usages of the LED products (health, education, street, housing,

agriculture)

India need to bring lighting to its villages (40% without electricity) Demand of energy efficient products to reduce energy prices (A/C & Refrigerators by 65% and 30% in other consumer products)

Conclusion

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Right time to expand globally (particularly India)

- Political stability (Stable government & economic development)

- Advancement in laws (FDI-100%, Contract labour, Customs duty etc)

- Huge domestic consumption (rural middle and high income to grow by 60m, 5 times more than its urban counter part )

- Opportunities for investing in R&D for LED products (Intel India $2

billion , “Do –it yourself “Maker” culture)

- Drastic need for reducing greenhouse gases and high energy prices

- growing middle class with high disposable income (14 states in HIS

list)

- Urgent need for development in infrastructure facilities (Recession)

- encouraging manufacturing “Make in India” project

- Availability of resources

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“ As Businesses quest towards creating synergy,

Strategy's quest in creating value ”