metal products india limited

7/29/2019 Metal Products India Limited

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METAL PRODUCTS

INDIA LIMITED


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Metal Products India Limited(MPIL)

Metal Products India Limited (MPIL)established in 1987 is one of the leadingmanufacturers of MS (mild steel) metal

sections MS is most commonly used in construction,

furniture, rolling shutters and industrial sheds

The factory is located at Whitefield, on theoutskirts of Bangalore

Set up by parent company Madhya Bharat

Metal Sections Limited (MBMS) in Bhilai


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Case Overview

MPIL was setup for improving the distributionin South

MPIL is losing its market share in NorthKarnataka

Solely dependent on Bangalore Metal Traderfor distribution in Karnataka

New entrants operated with the sub dealers ofMPIL


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Metal Industry

Complete market size of 40,000 metric tones(MT)

Annual growth rate of 6 percent

Major Players

Karnataka Metal Sections (KMS)

Adarsh Metals (AM) Mahavir Metal Sections (MMS)


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Comparison with others

On the basis of product quality

On basis of pricing & discounting

On the basis of distribution & availability On the basis of brand name & reputation of the

company


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Characteristics Of Environment

Previously MPIL was market leader in southIndia

Environment was favorable for MPIL

Business was attractive

New entrants increased the competition


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Distribution Channel of MPIL

MPIL has dealers at all the important locationsin the South

For Karnataka, has only one dealer-BangaloreMetal Traders (BMT) based at Bangalore

Appointed new dealers at Vijayawada, Calicutand Erode

The price to dealers is decided by MPIL

Depending on the volume discount offeredvaried between 3 to 7 %


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Market Structure

Bangalore Metal Traders (BMT) waslargest dealer in South India with offtake of 2000 MT per annum

BMT had more than 50% of marketshare in Karnataka

Transactional Relationship/MutualUnderstanding

MPIL didnt appoint dealers at othercenters in Karnataka

BMT didnt dealt with other


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Market Structure - Contd

Karnataka Metal Sections (KMS)operated Bangalore market throughKavery Agency

More than 80% of market wasshared by MPIL & KMS


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Strategy of new entrants

AM and MMS found it difficult tocompete with BMT and KaveryAgencies, which were well-

established in the market and hadexclusive arrangements with theirprincipals

To penetrate the market, AM andMMS adopted a different strategy ofoffering material direct to customers

in Bangalore


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Present Problems for MPIL

Loosing sub dealers in northKarnataka

Loss in market share new entrantscaptured more than 50% of themarket in Hubli and Belgaum

Strategies adopted by competitorsi.e. new entrants

Discount rate for the sub dealers

Distribution network


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Recommendation

MPIL should not solely depend onBMT

MPIL should promote their productthrough hardware dealers to capturethe market of north Karnataka

Restructuring of discount in interestof sub dealers

Applying condition to deal only withMPIL products


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Problems With SuggestedRecommendations

Might lose business with BMT

Cant offer high margin as AM andMMS

Time constraint in appointing newsub dealers

Cost involved in studying market bynew sub dealers


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THANK YOU

metal products india limited

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