new microsoft office word document[1]-nidhi

8/18/2019 New Microsoft Office Word Document[1]-Nidhi

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PREFACE

As the part of the syllabus of MBA program. We are assigned some practical and theoretical work in

partial fulfilments of the segments for the Semester Third. We have to prepare a comprehensive report

on any one industry for subject Management !esearch "roject that is also known as M!" # $.

The basic purpose of this project is to enhance the knowledge of students about the industry in its

totality and appreciate the use of an integrated approach in understanding the environmental issues and

problems. This makes students more aware about $ndustry and its position and makes student capable in

analy%ing the $ndustry&s position in all shares. This may also enhance student&s analytical ability.

So far as the selection of the industry is concerned' on Macro analysis of Air (onditioner $ndustry in

$ndia.. So we have selected this $ndustry to gain better knowledge of the state of $ndustry its key success

factors which makes this industry an essential part of consumers life.

So our aim is to analy%e the industry and know its forces which run the industry. To know the

technological changes those have taken place in the industry. We also have analy%ed "olitical'

)conomical' Social and Technological *actor of $ndustry and then found out strength' weakness'

opportunity and threat of the industry.

This research really enhances our knowledge about industry and its various undertaking. We gained lot

of knowledge from this project. We hope this will also help in future.

+AT) , march -' /0-1 2AM) , kinjal v gosai -

"3A() ,patan !itu S "atel 4

2idhi 5 !ajrav 64


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EXECUTIVE SUMMARY

Air conditioner industry is one of the industries which have shown moderate growth over the period of

years. Although the liberali%ation of the $ndian economy have seen the emergence of many leading

players' the air conditioner industry consists of only a few companies like Blue Star' 5itachi 5ome

Appliances' 7odrej Appliances' +aikin Air (onditioner' 37' Samsung' (arrier Air# (onditioning' etc.which account for the major market share in the industry.

Air conditioner industry is bound to be affected by the policies occurring in the consumer durables

industry as the air conditioner industry is a part of white goods section of the consumer durables. With

the consumer durables industry set to increase at a rate of -0 #-68 because of rise in living standards'

easy access to consumer finance' and wide range of choice' as many foreign players are entering in the

market and hence increasing the competitive rivalry among the firms. All this aspects of consumer

durable are covered in this report with the aid of a complete industry analysis in terms of the following

abstracts.


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Index

Sr.No Title Name Page No.

1 Chater 1 INTR!"UCTI!N

-.- 5istory

-./ 9verview

-.4 Major players

-. "roduct application

-.6 Technology and involvements

# Chater # Mar$et "%nami&'

( Chater( )o*ernment Intiati*e

+ Chater+ PEST Anal%'i'

, Chater, Porter-' Fi*e For&e'

/ Chater/ S0!T Anal%'i'

, Chater C!NC2USI!N

/ Chater 3 4i5liograh%


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1.Introd6&tion o7 ind6'tr%


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1.1 8i'tor%

$nventors who came before Willis 5aviland (arrier tinkered with cooling machines. But it was (arrier&s

creation that launched the modern idea of air conditioning. To mark the --0th anniversary of his

invention' we look back at the long story of a:c.

1,3 All li;uid evaporation has a cooling effect. Benjamin $ invented everything *ranklin and

(ambridge 6-'

imagining his invention cooling buildings all over the world. But without any financial backing' his

dream melts away.

1331 After an assassin shoots "resident =ames 7arfield on =uly /' naval engineers build a bo?y

makeshift cooling unit to keep him cool and comfortable. The device is filled with water#soaked cloth

and a fan blows hot air overhead and keeps cool air closer to the ground. The good news, This device

can lower room temperature by up to /0 *. The bad news, $t uses a half#million pounds of ice in two

months@ and "resident 7arfield still dies.

1:9# Willis (arrier invents the Apparatus for Treating Air for the Sackett#Wilhelms 3ithographing and

"ublishing (o. in Brooklyn' 2.. The machine blows air over cold coils to control room temperature

and humidity' keeping paper from wrinkling and ink aligned. *inding that other factories want to get in

on the cooling action' (arrier establishes the (arrier Air (onditioning (ompany of America.

1:9/ Stuart (ramer' a te?tile mill engineer in 2orth (arolina' creates a ventilating device that addswater vapor to the air of te?tile plants. The humidity makes yarn easier to spin and less likely to break.

5e&s the first to call this process air conditioning.


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1:1+ Air conditioning comes home for the first time. The unit in the Minneapolis mansion of (harles

7ates is appro?imately feet high' 1 feet wide' /0 feet long and possibly never used because no one

ever lived in the house.

1:(1 5.5. Schult% and =.C. Sherman invent an individual room air conditioner that sits on a window

ledgeDa design that&s been ubi;uitous in apartment buildings ever since. The units are available for

purchase a year later and are only enjoyed by the people least likely to work up a sweatDthe wealthy.

EThe large cooling systems cost between F-0'000 and F60'000. That&s e;uivalent to F-/0'000 to

F100'000 today.G

1:(: "ackard invents the coolest ride in town, the first air#conditioned car. +ashboard controls for the

a:c' however' come later. Should the "ackard&s passengers get chilly' the driver must stop the engine' pop

open the hood' and disconnect a compressor belt.

1:+# The


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1.# !*er*ie;

Air


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Blue Star was founded in -H4 by an entrepreneur' and has very recently teamed up with another global

company' 5itachi. The air conditioners of this company are popular and high in demand because of the

latest technology used in the A(s and the affordable prices tagged on to them. Their air conditioners are

ideal for use as they have been developed and e;uipped to suit a consumers re;uirements to the fullest.

+. Carrier

Bills (arrier invented this global company in -H/0' which has become one of the most reliable and

efficient air conditioner brands in the world. Weathermaker is a sub brand of (arrier which specials in

producing the best air conditioners using their proprietary operating system' the A(). (arrier as a

company is known to produce some of the best and world class appliances through reduced gas

emissions and energy and water consumption.

,. 0hirlool

Whirlpool is another brand of air conditioners whose head;uarters are located in Michigan'


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Noltas is an $ndian multinational company established in -H6. The head;uarters are located in Mumbai'

$ndia and this company has been e?clusive with its production in air conditioners and other cooling

systems. +ue to their focus on just one type of electrical appliance' Noltas has gained the trust of

millions of people across the globe' the evidence of which could be seen in the tallest building of the

world' the BurjOhalifa' which is completely air conditioned by Noltas air conditioners.

. Pana'oni&

"anasonic is a company founded in =apan in -H-> and was earlier known as Matsushita )lectrical

$ndustrial (o. 3td. This =apanese company has produced and given the world some of the most

developed air conditioners' which have the best kind of technology e;uipped within it. The advanced

features in their air conditioners include )conavi and nanoe#g' which basically makes sure that once you

switch on your A(' the air conditioner functions automatically and handles its operations itself with

giving any manual commands.

3. 2.).

Another yet remarkable company originated from South Oorea' 3.7.' 3ifes 7ood has climbed the

ladder of success pretty fast and ;uick' and also efficiently. Their efficient and effective use of

technology and e;uipments has enabled them to produce some of the best household appliances' the

most sought after among them being their air conditioners. Their air conditioners are e;uipped with

various technologies such as jet cooling system' plasma filtration and inverter technology' which has


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made their A(s stand out at the global market and brining in huge revenues in the company. The

minimal usage of "olyvinyl (hloride E"N(G for the air conditioning duct is also one of the reasons as to

why this company is so desirable.

:. Sam'6ng

This South Oorean company had begun with its first manufacturing unit in 2oida' $ndia' and since then

there has been no stopping by for Samsung. Samsung is now one of the largest companies in the global

market and has e?panded to various different countries to establish their presence. Apart from offeringvarious household appliances such as television and phones' the air conditioners of this company are

widely known for their uni;uely developed technologies such as humidification' star rating and turbo

cleaning.

19. Ele&trol6x

)lectrolu? has come a long way with their wide range of kitchen and home appliances for the global

population on a large scale. This global company can provide you with almost every household item you

re;uire' and their air conditioners are one of the products which are moving at a rapid speed and

increasing this companys sales and revenue. )lectrolu? has come up with both split as well as windowair conditioners. The uni;ue selling point f their air conditioners is the o?yguard' which is a three stage

filter providing great cooling effect in window A(. Their split air conditioners are modified and

developed with air cleaning technology' thus making this brand one of the most desirable.

1.+ Prod6&t ali&ation

8o; "o Air Conditioner' 0or$

Air conditioners EA(G work on a scientific principle known as phase conversion. $t states that when a

li;uid converts to gas' it absorbs heat. Thus' in the absence of heat the surroundings becomes cool. The

A( circulates air evenly across all corners to maintain the cool temperature. $n an air conditioner' the

onus of phase conversion is on a li;uid called as a refrigerant. +uring the continuous phase conversion

process' this refrigerant cools the surroundings by absorbing heat and sending it outside. Thus' the basic

functioning of an air conditioner depends on a scientific principle and efficient engineering.


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$mportant parts and components of an A( are a (ompressor that is known as the heart of an A('

(ondenser (oil' which is a network of tubes' an )vaporator that absorbs heat' an Air filter' an Air

5andling


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Ad*antage'

P $nternal unit takes up less space for installation

P


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+. Ca''ette AC

These space#saving A(s are shaped like cassettes and are designed to be installed on ceilings. The panel

of these air conditioners is designed to blend with all kinds of home dQcor. They are stylish' and areknown to deliver fantastic performances. Most cassette type air conditioners re;uire no ducting. They

are perfect for large spaces where windows or split A( may not reach out.

Ad*antage'

P Best at saving space

P Able to cool large areas where other A(s dont reach out

P Blends with deco

,. C65e Air Conditioner

This fairly new design introduced by "anasonic can be mounted close to a ceiling or at the window

level. Basically' this is a smaller version of the split type air conditioner and costs less than the former.

The indoor unit features a newly designed diagonal propeller fan for efficient and fast cooling. $mproved

blade shape curvature and larger intake grill further aid for efficient performance.


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Ad*antage'

P (an be mounted close to the ceiling or at window level

P 2ewly designed diagonal propeller fan for fast cooling

P $mproved blade shape curvature for efficient performance

>e% di77eren&e' 5et;een ?0indo;?@ ?Slit? and a ?&a''ette? air &onditioner'

AC Parameter' 0indo; AC Slit AC Ca''ette AC

-. Suitable *or Small rooms with a

window sill

Any room with or

without a window

3arge indoor

spaces

/. 2oise !elatively on the

higher side

Minimal noise Silent operation

4. (apacity range 0.6 ton to / ton 0.> to / ton - ton to ton

. Advanced features 5umidity control' dust

filter

5umidity control' dust

filter' bacteria filter

5umidity control'

dust filter' bacteriafilter

6. $nterference withhome decor

Slight possibility to

interfere with windowcurtains and drapes

+esigner indoor units

blend well with walldecor

Barely interferes

with interior decor

1. )ase of installation Minimal effort

re;uired

$ndoor and outdoor

units need someamount of effort forinstallation

2eeds specialised

false ceiling

1.+.#Feat6re'

1. Tonnage

The tonnage of an A( needs to be decided depending on the rooms area. The following table will give

you an idea regarding the apt tonnage for your room.

Tonnage Area 'B. 7t.D

0.6 Below -/0

- -/0 K -60

-.6 -60 K /60


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/ /60 K 00

#. Energ% E77i&ien&%

The ever#increasing electricity bills have made it necessary for A(s to be energy efficient. This can be

easily verified by checking the A(s rating. )very A( comes with )nergy )fficiency !atings E))!G that

have been standardi%ed by the Bureau of )nergy )fficiency EB))G. More number of stars for an A('higher the energy efficiency.

(. 4a'i& F6n&tion'

Adjustable louvers' digital controls' remote control and user#friendly modes are basic functions that

every modern day A( must possess. A sleep mode and an auto restart function are also common and

essential. 9ne can easily change the settings according ones preference.

Air Filter

Air filters weed out dust' pollen and bacteria during the cooling process. They ensure that the A( works

hygienically. They need to be cleaned from time to time for better health of the A( as well as inhabitants

of the room where it is placed. Air *ilters are governed by Minimum )fficiency !eporting Nalue

EM)!NG ratings' higher the ratings better the air filter.

"eh6midi7i&ation


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A(s dehumidification feature is essential to minimi%e the humidity level in your room. This feature

reduces the moisture level while cooling' to ensure better comfort especially during humid days.

Noi'e 2e*el

7enerally' A(s operates at a 60dB noise level. Many A(s fall in the range of 40#10dB. To put this in perspective' on an average a vacuum cleaner functions at a 0dB noise level.

A&&e''orie'

While accessories like a brush and a cover are handy' others like a replacement filter and an e?tra remote

might work in your favor during trying circumstances.


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The conventional device is controlled by switches' which makes fast refrigeration:heating difficult to

implement. The direct current inverter technology aims to solve speed overshoot issues. This type of air

conditioner is controlled by digital signal processing' using advances controlling technologies and direct

current fre;uency conversion rotary compressor. The digital signal processing is in a position to control

temperature accurately to save time and power. The closed#loop controlled circuit of interior flow fan

makes the entire method stable.

# Net;or$ &ontrol te&hnolog%<

The controlling interface of internet is added to the e?isting inverter air conditioner. The remote control

and remote diagnosis can be had through the internet. Meanwhile' the centrali%ed control is also

optimi%ed by this technology. The controlling signal is transmitted by telephone lines or optical fiber

cables. The signal is displayed on the screen to implement remote control' remote diagno'i'@ or

'o7t;are 6dating.

( Noi'ele'' te&hnolog% and rela&ement te&hnolog% 7or re7rigeration material<

2oiseless technology optimi%es the interior construction of the device' imitating the flow direction of

natural wind and minimi%ing the noise level. The replacement technology for refrigeration is under study

to safeguard the environment much better. The material used in traditional devices is harmful to

o%onosphere and should be forbidden all over the world.

+ Air '6l% te&hnolog% and ;ellne'' te&hnolog%<

The super air supply system is applied in advanced devices. The airflow control technology can also

supply air from each direction. The application of the wellness technology creates a new idea' namely'

negative o?ygen ion' noiseless' antisepsis' and other technologies.


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#.1 Mar$et "%nami&'

Noltage E3ow and MediumG

"ower !ating E3ow' Medium and 5igh "owerG

Application E"umps' *ans' (ompressors' (onveyors' )?truders' and 9thersG

The Alternate (urrent EA(G drive is an electronic device that controls the speed of an electric motor by

changing the voltage' fre;uency' and magnetic flu? in a motor circuit. $ts advantages are primary

increased energy savings and reduced motor wear. $t is majorly used for variable tor;ue application in

industries such as oil L gas' water L wastewater' and mining.

Advantages like enhancing efficiency with optimum energy consumption through high potential A(

drives creating a huge opportunity for the manufacturing industry. $n addition' stringent government

regulations to reduce carbon emissions during electricity production and consumption can add to therising demand for the device. $ncreasing urbani%ation and industriali%ation is e?pected to drive the

global A( +rives Market to


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The market study covers A( drives by application which includes pumps' fans' compressors' conveyors'

e?truders and others. 9n the basis of end#use industry the A( drives market has been segmented into oil

L gas' water L wastewater' power generation' building automation' food L beverage' metals L mining'

chemicals L petrochemicals and others which constitute industries such as cement' te?tile' and "ulp L

paper industries.

$n terms of region' the market is segmented into 2orth America' South America' )urope' Asia#"acific'

and the Middle )ast L Africa. )ach segment has been analysed with respect to its market drivers'

growth trends' and future prospects.

9il L gas is the largest end#user of A( drives market and accounted for a share of -68 in /0-. The

water L wastewater is e?pected to have a high growth rate' owing to rapid urbani%ation and

industriali%ation' especially in developing regions such as Asia#"acific and the Middle )ast L Africa.

Asia#"acific currently holds the largest market share in terms of value on the account of rapid

urbanisation and industrialisation from the region.

#.# To 19 Air Conditioner AC 4rand' in India

Air (onditioners EA(sG in $ndia have become a necessity for the middle class and' of course' above. The

scorching heat during summer is unbearable and fans and coolers no longer seem to solve the problem.

With constant growth in the demands of the middle classes for lu?ury commodities' air conditioners are

finding their way into almost every $ndian home. +ue to long and dry summer season' $ndia is racing up

the ladder in terms of the number of air conditioner users. There are numerous A( brands in $ndia that

offer a sea of choices at absolutely affordable prices.

+ue to the increasing competition in the air conditioning market in $ndia' all the top brands are

continuously introducing new models that are e;uipped with the latest features. The latest features that

are driving the nation cra%y about A(s are environment#friendliness' fragrance emission and advanced

))! E)nergy )fficiency !atioG.

A5o6t the Air Conditioner Ind6'tr% in India

The top A( brands in $ndia in terms of popularity are Noltas' Samsung' +aikin' 37' Whirlpool' Nideocon' Blue

Star and 5itachi. Most of the A(s introduced by these companies are known for advanced ))!' ;uick cooling'noiseless functioning and longevity of compressor and condenser.

Noltas air conditioners top the chart as far as market popularity is concerned. They are known for their sleek

contemporary designs' energy efficiency and high cooling capacities. Samsung and +aikin are also among the top

A( brands in $ndia. (ounted among the most reliable and trusted air conditioning brands in $ndia' these two

electronic product manufacturing companies are best#known for selling superior ;uality air conditioners at

absolutely competitive rates.


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2i't o7 To 19 AC 4rand' in India

1. Volta'

The $ndian A( major Noltas is the most favourite A( brand of $ndian people. $t is offered by an $ndian

conglomerate K the Tata 7roup. The product is manufactured by Noltas 3imited' a subsidiary of the Tata

7roup' head;uartered in Mumbai' Maharashtra. The Noltas A(s are famous for their performance and

high durability. Noltas All Weather Smart A(s are becoming increasingly popular day by day. Noltas is

popular in $ndia as well as abroad alike. The price range of Noltas is !s. /6'000 K !s. 66'000. Some of the

most popular Noltas A( models are mentioned below,

P Noltas All Weather A(

P Noltas =ade# 6 Star E SeriesG

P Noltas enith# 6 Star Ea SeriesG

P Noltas (lassic# 6 Star Eu SeriesG

P Noltas Magna# 6 Star E SeriesG

#. Sam'6ng

This South Oorean private conglomerate is spreading its wings in $ndia further and further everyday. The

air conditioners from Samsung are amongst the most sought after and most popular in $ndia. Samsung

A(s are famous for their features and the level of comfort they offer. The prices range of Samsung is !s.

/0'000 K !s. 0'000. Some of the most famous Samsung A( models are mentioned below,

P Triangle $nverter A(

P A!->=N6+AWO22A -.6 T!

P A!->=(65AT"22A

P A!->=N65ATC22A


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(. "ai$in

+aikin is a =apanese major operating for almost a century now. This speaks volumes of +aikin&s success

in the world market. The brands popularity has increased manifold ever since it started operating in $ndia.

The brand owes its popularity to its high#;uality products and affordable rates. The prices range of +aikin

A(s is !s. ->'000 K !s. 60'000. Some of the widely sold A( models from +aikin are mentioned below,

P *TU! Series

P *TU7 Series

P *TU! Series

P +TOM Series

P ATOM Series

+. 2)

Another South Oorean brand that enjoys great command in $ndian consumer appliances market is 37.

37&s air conditioners are appreciated for ;uality. Apart from that' great service and performance'

affordable price and smart cooling are what 37 boasts of. The price range of 37 air conditioners varies

between !s. ->'000 and >'000. Some of the most popular A( models from 37 are mentioned below,

P BSA->$MA

P BS#C->1(>A


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P BSA-/$MA

P BS#C-/1B>!>

,. 0hirlool

Whirlpool is a multinational manufacturer of home appliances based in Michigan' and has grown to be one of the most favourite brands as far as homeappliances are concerned. Whirlpool air conditioners rely on the turbo cooling technology to deliver high

performance. The price range of Whirlpool A(s is !s. 4/'000 K !s. 66'000. The most popular Whirlpool

A( models are mentioned below,

P *A2TAS$A $2N E-.6 TG

P *A2TAS$A $2N E- TG

P 4+ (993 +3U $$$ E/ TG 4 Star

P MA7$(993 +3U $$$ E-.6 TG 4 Star

P 4+ (993 "3T N E-.6 TG 6 Star

/. Video&on

Nideocon is an $ndian multinational major manufacturer of consumer electronics and a household name in

$ndia. $t was founded in -HH and is head;uartered in Mumbai' Maharashtra. Nideocon not only makes

e?cellent air conditioners but also is rated amongst the best in the industry in terms of refrigerators' TNs'


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microwave ovens and so on. The prices of Nideocon A(s start from !s. /0'000 and go till !s. 1>'000.

Some of the best Nideocon A( models are mentioned below,

P NSC66.+T4#M


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P unoh 400f

P unoh /00f

P Oa%e 2eo

P Oashikoi 00i

P Oashikoi /00i

P Summer TM

P OA) !eidan E5 L (G

:. 8aier

5aier from (hina is rated amongst the leading consumer electronic brands in $ndia. $t produces' sells and

markets a wide range of consumer goods such as air conditioners' refrigerators' washing machines and the

likes. 5aier A(s are lauded for their e?cellent cooling' longevity and superior performance. Moreover'

low energy consumption and reliability are the features that set 5aier apart from the rest. 5aier A(s

prices range is !s. ->'000 K !s. 6'000. Some of the most trusted 5aier A( models are mentioned below,

P 5S(O(SE!/+G

P 5S


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service to its users on a consistent basis. 9 7eneral A(s price range is !s. /6'000 K !s. 10'000. Some of

the most popular 9 7eneral A( models are mentioned below,

P AS7A0HBMTA # 0.6 Ton

P AS7A-/BMTA # -.0 Ton

P AS7A->*MTA # -.6 Ton

P AS7A/*MTA # / Ton

P AS7A->*TTA # -.6 Ton

#.( In*e'tment related a'e&t'

At present' the market si%e in $ndia is 4.6 million units with a penetration of around three per cent.The market si%e of room air conditioners EA(sG in $ndia is likely to reach -0 million units by /0/0 with

a penetration rate of -- per cent' said a top official of air conditioning and commercial refrigerationmajor' Blue Star 3td.

At present' the market si%e in $ndia is 4.6 million units with a penetration of around three per cent.

The market si%e of !oom A(s globally is over -00 million units with a penetration of 40 per cent and

(hina has the highest market si%e in the world at 60 million units' penetration of over /6 per cent. $ndia

offers significant potential for growth in room A(s and it should touch -0 million by /0/0' B

Thiagarajan' e?ecutive director and president' A(L! "roducts Business' Blue Star told media persons

here.

The room A( market in $ndia has grown by about -0 per cent in this fiscal in volume terms and value

wise' the growth rate is pegged at about /0 per cent. We e?pect the market to grow by about -6 per cent

in the ne?t fiscal' he added. $f the market grows by -6 per cent by value' Blue Star as a company will

grow by /6 per cent' he hoped. The market si%e of residential segment of room air conditioners is

pegged at around !s H'000 crore in $ndia. 9n the e?pectation from the ensuing 8 higher efficiency for star#rating on split -.6 ton A(s and higher

• Mobile#based application launched to help consumers calculate energy consumption

• Technological improvements driving higher energy efficiency in the 5NA( industry

http://www.business-standard.com/search?type=news&q=Air+Conditionershttp://www.business-standard.com/search?type=news&q=Blue+Starhttp://www.business-standard.com/search?type=news&q=Blue+Starhttp://www.business-standard.com/search?type=news&q=Ac%26rhttp://www.business-standard.com/search?type=news&q=Air+Conditionershttp://www.business-standard.com/search?type=news&q=Blue+Starhttp://www.business-standard.com/search?type=news&q=Ac%26r


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( )!VERNMENT INITATIVES

)nergy "erformance Standards for Air (onditioners (omprehensively 8 higher efficiency for star#rating on split -.6 ton A(s and higher

Mobile#based application launched to help consumers calculate energy consumption

Technological improvements driving higher energy efficiency in the 5NA( industry

2)W +)35$' May /' /0-/, The Bureau of )nergy )fficiency EB))G' a statutory body under the


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The campaign to educate consumers comprises several strategic initiatives. Air conditioner showroom

salesmen are being trained and oriented on the star labeling criterion so that they can e?plain to

consumers the tangible benefits of using energy efficient air conditioners. B)) has already trained -'6

salesmen in $ndia across 1 cities and plans to continue with this effort. These trained salesmen help

consumers make an informed choice with respect to energy efficiency while buying home air

conditioners.

)merson (limate Technologies and $nternational (opper "romotion (ouncil E$ndiaG continue to support

B)) s national education program on star labeling for air conditioners that educate consumers to use‟

higher energy efficient products.

Speaking on the occasion' +r. Ajay Mathur' +irector 7eneral' B)) said' R)nergy is critical for $ndia'

and the demand for clean and efficient energy devices is growing rapidly. We are happy that our initial

steps in introducing star labeling for air#conditioners has borne such good results. $t is our resolve to

further augment this initiative by including as wide a section of consumers as possible and to do this we

have embarked on a variety on new measures to educate and engage the public at large as well as the

manufacturers and retailers.

)merson (limate Technologies' an engineering technology innovator' has been actively collaborating

with B)) to build awareness of the star rating program. According to Mr. +eepak Takkar' Sr. Nice

"resident K Sales L 7eneral Manager K (old (hain' )merson (limate Technologies E$ndiaG "vt. 3td.'

R!esearch shows that every watt of energy saved at consumption results in four watts less energy

produced' factoring in the generation and TL+ losses. The adoption of star rating in air#conditioners

significantly supports energy conservation and improvement of power efficiencies in $ndia. 5e added'

RThe industry plays a key role in augmenting the success of 7overnment s thrust on environmental‟

protection. $n the air#conditioning industry' on the manufacturers side' we have introduced (opeland‟

ScrollV compressors in the $ndian residential A( market for the first time to provide optimum energy

savings and comply with the higher star rating. (opeland ScrollV technology has been e?tremely

successful in the commercial A( segment around the world for many years. We believe that with the

focus on empowering consumers with efficient and reliable technologies like (opeland ScrollV' and

awareness tools like the A( "ower Saver mobile app' $ndia stands to greatly improve the energy‟

situation and bridging the supply#and#demand gap.

According to Mr. Sanjeev !anjan' ()9' $nternational (opper "romotion (ouncil E$ndiaG' R$("($ has

been actively engaged since /00 with the Air (onditioner $ndustry by promoting the life cycle cost as

the main attribute to drive consumer purchase decisions. (opper s better thermal and electrical‟

properties do help in improving energy efficiency performance of air conditioners' which in turn helps

achieve higher star rating more cost effectively. $("($ as a part of (opper Alliance' led by $nternational(opper Association is working for technology advancement by focusing on reducing the material cost of

energy efficient air conditioners through the introduction of smaller diameter copper tubes for heat

e?changer. Today' with the launch of the upgraded star#rating labeling program' $ndian consumers can

now buy air conditioners that save energy and money. We do appreciate the admirable work done by

B)) and will continue to support it in its endeavor to promote and implement the star labeling program

across the country.


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The star labeling program for air#conditioners' frost free refrigerators' tubular florescent lights' and

distribution transformers began in May /001 in a voluntary phase. $n the air conditioner segment' 08

of the organi%ed players adopted it in the voluntary stage' which prompted B)) to make it mandatory

from =anuary /0-0. Since star labeling was a new concept for appliance showrooms and end users' B))

partnered with )merson (limate Technologies and $nternational (opper "romotion (ouncil E$ndiaG in

/00> to start several initiatives to educate the market on the benefits of star labeling. Training sessionswere conducted for store salesmen throughout $ndia. After the education program' a survey was

conducted across -H cities covering over -'/00 salesmen and 00 users to understand their perception on

star labeling. The survey results showed that end users cared about energy efficiency' price and brand.

The survey also indicated that salesmen needed more education and sales tools to e?plain to the end user

the concept of payback period.

About B)), The 7overnment of $ndia set up Bureau of )nergy )fficiency EB))G on March -' /00/

under the provisions of the )nergy (onservation Act' /00-. The mission of the Bureau of )nergy

)fficiency is to assist in developing policies and strategies with a thrust on self#regulation and market

principles' within the overall framework of the )nergy (onservation Act' /00- with the primary

objective of reducing energy intensity of the $ndian economy. This will be achieved with active

participation of all stakeholders' resulting in accelerated and sustained adoption of energy efficiency in

all sectors.

About )merson (limate Technologies, )merson (limate Technologies' a business of )merson' is the

world s leading provider of heating' air conditioning and refrigeration solutions for residential'‟

industrial and commercial applications. The group combines best#in#class technology with proven

engineering' design' distribution' educational and monitoring services to provide customi%ed' integrated

climate#control solutions for customers worldwide. )merson (limate Technologies innovative‟

solutions' which include industry#leading brands such as (opeland Scroll and White#!odgers' improve

human comfort' safeguard food and protect the environment

About $nternational (opper "romotion (ouncil E$ndiaG, The $nternational (opper "romotion (ouncil

E$ndiaG' member of (opper Alliance. $t is the $ndian arm of the $nternational (opper Association' the

leading not#for#profit organi%ation for the promotion and defence of copper globally. $("($ is driven by

the same objective as that of its parent organisation' which is to defend and grow markets for copper

based on its superior technical performance and its contribution to a higher ;uality of life worldwide .‟

$("($ contributes mainly through its catalytic role' accelerating changes and transforming the long#term

markets for (opper in a sustainable way through its major initiatives like Building (onstruction and

Sustainable )lectrical )nergy. $("($ s activities focus on helping end users to better understand and‟

appreciate the positive attributes of copper.


30/39


31/39

P )"(7 Ee?port promotional capital goods schemeG#%ero duty scheme allows import of capital goods for

production' pre production and post production.

P Air#conditioning also has to comply with the standards set by environmental protection agency.

P Setting of plants in ta? incentive areas like greater 2oida and "une.

,.1.# E&onomi& A'e&t'

Marketers need to consider the state of a trading economy in the short and long#terms. $mportant economic factors

are ,

P $nflation in $ndia saw a decrease from -0.6 in /0-- to .-> percent in /0-/. The decrease in inflation see

reducing of cost of raw materials and manufacturing cost which would give air#conditioning companies an

opportunity of making higher profits.

P 7+" growth Eannual 8G !ounded /0--, 18 '

7rowth in 7+" combined with increasing disposable income of consumers with their changing lifestyles and

trends in the industry will see a rise in demand for high#end segment durables' which gives an opportunity to

e?pand and invest more in its manufacturing processes.

P A( industry reversed its declining trend and grew by /08 o in C4*-4.

,.1.( So&ial A'e&t'

P "enetration of white goods across all major consumer appliances categories is more than 0 8 in urban areas

and more than 608 in rural areas

P $ncrease in the employable population in the country and more nuclear families' so more potential customers.

P 2umber of first#time users and people upgrading to better products is been increasing at a fast rate due to

increasing disposable income.

P $ncreasing competition among brands leads to decline in prices therefore higher affordability and greater

chances of people up#grading.

P (hange in consumer preferences and trends.

P They leave an impact on customers life by making it easy with 1thsense technology as consumers can achieve

significant savings in time and power usage.

P $t shows lifestyle of customers.


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,.1.+ Te&hnologi&al A'e&t'

P With the advent of new technology' more features are being added to the e?isting products.

P $ncreasing technology has helped to enhance its manufacturing and deliver more on ;uality front.

P Service (enters have been opened up to provide ;uality services post#sale and faster addressing of customer problems

/.1 Porter-' Fi*e For&e'


33/39

The following section focuses on an analysis of the competitive landscape of 5NA( systems sector of Bangladesh using the "orters 6#forces framework.

/.1.1 Cometiti*e Ri*alr% ;ithin the Ind6'tr%

There are many $ndian air conditioning business entity to assemble complete A:( units domestically in $ndia.

Authori%ed local dealers:importers of renowned global brands like, 7eneral' 37' 5aier' "anasonic' 7) etc. were

the primary competitors of +aikin in the $ndian market. 3ocal dealers were primarily retailers:wholesalers' and

lacked the depth of technical e?pertise that a full fledged manufacturing entity. The absence of capacity andcapability in terms of human resources Ee.g. e?perienced technicians:engineersG and e;uipments to provide

optimum installation' commissioning and after#sales services enabled companies to ;uickly achieve substantial B#

/#B market shares. 3arge scale A:( installation projects in industrial:commercial establishments Ee.g. commercial

buildings' banks' hospitals' universities etcG became +aikins domain of e?pertise. +elivery of prompt and precise

services' through adept technical know#how' was an instant success among corporate clientele.

(urrently the industry is dominated by a few major players. 7lobal brands such as 7eneral' 37' 5aier and

"anasonic are popular choices in the household segments. $t is notable that imported A:(s are priced substantially

above offers from +aikin' since domestic assembly provides a competitive edge through import tariff benefits.

$mport duty rates are significantly higher for finished A:( units than that of components:raw materials. Although

recognition of global brands influence the purchase decision of certain market segments' core functionalcharacteristics and price eventually determine buying patterns. )mpirical results concur with this deduction' since

an increase in demand for locally produced brands can be observed in the last decade.

/.1.# 4argaining Po;er o7 S6lier'


34/39

Many $ndian companies are the primary supplier of !aw Materials and components. This vertical integration of

the foreign supplier with the $ndian manufacturer renders a strategic competitive edge for the operations of air#

conditioner industry.

/.1.( 4argaining Po;er o7 C6'tomer'

$mportant buyer groups might play a powerful role in forcing down prices or bargaining for higher ;uality or

better terms in business. )specially two buyer groups would be the strongest positions in playing the producers

against one and other. They would therefore have bargaining power in the industry. The buyers who purchase a

large proportion of the sellers output naturally play a huge role in demand and supply' but also the buyers who

can change to alternative supplier' given that the product is standard and the switching costs low can cause stress

to the supplier.

(ustomers in the Air (onditioner industry of $ndia have a wide array of competing brands to choose from. $t can

be deduced that the bargaining power of customers is relatively high in this sector with high price elasticity of

demand. This increases the overall competitiveness of the industry' and customers are benefited through the

efforts of companies to minimi%e costs to ma?imi%e profit margins in an environment of stiff competition.

/.1.+ Threat o7 Ne; Entrant'

2ew and potential entrants for an industry mean greater capacity and greater competition for market shares' even

though they pose a threat for e?isting competitors. There e?ists a strong probability of emergence of new players

to enter this industry given the medium capital re;uirements' no barriers to entry' and relatively high profit

margins. "robability of collusive behavior among the e?isting players in the market is low' given the number of

sellers' and their strategic inclinations. Therefore' the threat of new entrants' is relatively high with the probability

of strong players Ee.g. conglomerates such as WaltonG to enter the market.

/.1., Threat o7 S65'tit6te Prod6&t'

A substitute product is one that performs the same function as the industrys product and therefore opposes a

threat. $ndia is a country of tropical monsoon climate with very hot and humid weather throughout most of the

year. )lectric appliances such as cooling fans Eceiling or desktop versionsG can be considered as substitutes' but

are seldom considered to serve the purpose of A:(s. The demand for A:(s is thereby accelerating' given the high

rates of urbani%ation and industriali%ation. As urban boundaries e?pand' constructions of new buildings take

place' resulting in stimulation of demand for A:(s. The threat of substitute products in this sector is therefore

relatively low.


35/39

.1 S0!T Anal%'i'

.1.1 Strength'

P 9ptimal )?perience and )?pertise of entrepreneurs in the 5NA( Systems industry.P )?perienced pool of technicians and engineers with advanced levels

assembling:manufacturing:trouble shooting skills and know#how.P Business entities that have started manufacturing:assembling complete air conditioner units in

india.P (ore competencies arising from the vertical integration of supplier.P $n#house manufacturing: testing: troubleshooting e;uipments and facilities.P +edicated pool of staff enhances superior after#sales service providing.

.1.# 0ea$ne''e'

P Strategic "lanning not comprehensively carried out but done on an ad#hoc basis.P Tunnel vision of the entrepreneurs e.g. lack of clear $ntegrated Marketing (ommunication Strategies.P *inancial Weaknesses arising from not being able to raise funds through issuing debt:e;uity securities in

capital Eor 9T(G markets.P +ependence upon Banks:other financial institutions for financing long#term investment projects.

.1.( !ort6nitie'

P +emand for Air#(onditioners is increasing rapidly in the $ndian conte?t.

P The hot and humid tropical monsoon climate of $ndia renders A:(s to be an indispensable re;uirement for indoor usages.

P The economic growth rate of the country has fostered the stimulation of demand for A:(s.P )conomies of scale L usage of technological innovations have driven down costs' and made the products

more affordable to the middle#class lower:medium income individuals.P $ntroduction of schemes such as hire:purchase and payment through installments have rendered

stimulated demand for A:(s among lower#middle class.P Symbiotic relationships with established corporate clienteleX increasing chances of future repeat business'

and e?pected revenue streams from providing services of installed systems.

.1.+ Threat'

P !evisions in the regulatory duty:tariff with respect to import of raw materials or A:( components.P *luctuations of )?change !ates.P "olitical turbulence in the country.P )mergence new companies following similar business models Ei.e. assembling domestically instead of

importing the finished productsGP )mergence of conglomerates with massive financial investments.P "robability of fierce price#wars predicted as competition increases.P !ising inflation resulting in increased priced causing reduced demand.


36/39

The SW9T analysis is derived from the study of the e?ternal environment in which the business operates along

with the assessment of internal core competencies EstrengthsG and weaknesses observed. The following section

focuses upon the strategic implications of the SW9T analysis' and attempts to devise and suggest measures to

address the imminent strategic issues.

/. Con&l6'ion

3ike stated before' the aim of the study was to conduct an industry analysis and a competitor analysis for

the case industry. With the help of these and other analysis a marketing plan was created according to the

strategic steps. The ;ualitative method used proved to be the best one for the research in terms of

collecting valuable data. The theoretical data gathered earlier from a variety of sources provided the

basis for the empirical part. The research findings and results alongside with the more in depth

considerations on various subjects can be found in the te?t. 5ere we will summari%e the main

conclusions and recommendations for the case industry.

$n the end' it is important to consider the primary and secondary markets together to make an overall

assessment of the competition that the market is facing. Though the primary market with very limited

barriers to entry and evenly distributed market share appears to be competitive' the same cannot be said

about the secondary market. The competitor in the primary market has the possibility of becoming a

monopolist in the aftermarket due to the costumers getting tied in to availing services from the buyer.

The level of comple?ity of the e?ternal and internal variables determining the performance of


37/39

:.4i5liograh%

1. Finan&ial anal%'i'

*$2A2($A3 MA2A7)M)2T 6th edition by $.M."anday

#. PEST @ S0!T and Portel 7i*e 7or&e model

(rafting and e?ecutive strategy ->th edition by Arthur A Thomson' Margaret A "eteraf' =ohn ) 7amble'

A = Stickland $$$' Arun O =ain.

(. A&eanal%'er

0e5'ite and 2in$

;;;.46'ine''Toda%.&om

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;;;.lg.&om

;;;.ogeneral.&om

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http://www.businesstoday.com/http://www.moneycontrol.com/http://www.bluestar.in/http://www.hitachi.com/http://www.samsung.com/http://www.daikin.com/http://www.voltas.com/http://www.lg.com/http://www.ogeneral.com/http://www.whoorlpool.com/http://www.panasonic.com/http://www.videocon.com/http://www.haier.com/http://www.businesstoday.com/http://www.moneycontrol.com/http://www.bluestar.in/http://www.hitachi.com/http://www.samsung.com/http://www.daikin.com/http://www.voltas.com/http://www.lg.com/http://www.ogeneral.com/http://www.whoorlpool.com/http://www.panasonic.com/http://www.videocon.com/http://www.haier.com/


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8i'tor%

http,::www.popularmechanics.com:home:how#to:aH6-:a#brief#history#of#air#conditioning#-0/0//H:

4,6-pm 6:--:/0-6

Ma=or la%er'

http,::top#-0#list.org:/0-:0>:-4:top#-0#best#air#conditioner#brands#in#the#world#/:/:

>:--:/0-6

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T%e' o7 a&

http,::www.cromaretail.com:air#conditioner#buying#guide.asp?

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)lo5al '&enario

http,::www.persistencemarketresearch.com:article:air#conditioning#systems#market#analysis.asp

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To 19 la%er' o7 india

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in*e'tment related a'e&t'

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-1:--:/0-6

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